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- Title
STOP RIGHT THERE: LIMITING JUDICIAL ESTOPPEL IN THE BANKRUPTCY CONTEXT.
- Authors
MCKENNA, MARY FRANCES
- Abstract
Although judicial estoppel is a doctrine of equity, it has often produced inequitable results in the context of bankruptcy cases. The purpose of judicial estoppel is to protect the integrity of the judicial process by preventing a party from asserting inconsistent positions in different judicial proceedings. When one of the judicial proceedings is a bankruptcy case, a court invokes judicial estoppel at the request of a defendant who discovers that the plaintiff previously filed for bankruptcy but failed to schedule the potential or pending lawsuit as part of the plaintiff-debtor's estate. Despite directives from the Supreme Court that the doctrine should be invoked at a court's discretion, the majority of courts use a strict estoppel rule where a plaintiff has omitted a cause of action from her bankruptcy schedules. The majority of courts take the position that, if a plaintiff-debtor knew of a potential or pending lawsuit but failed to list it in the bankruptcy case, the plaintiff-debtor should be categorically estopped from pursuing the cause of action against the defendant. However, judicial estoppel produces an inequitable result where the plaintiff-debtor omitted a lawsuit from the bankruptcy case because of a mistake. In that case, the alleged wrongdoer prevails regardless of the strength of the plaintiff's claim or the plaintiff's culpability excluding the potential or pending lawsuit from the bankruptcy filings. This Comment will argue that using a subjective inquiry to determine when to invoke judicial estoppel would better serve the objectives of bankruptcy law and maintain the integrity of the judicial process. This subjective inquiry focuses on whether the debtor's omission was the result of inadvertence or mistake. It proposes five factors that courts should consider as part of this inquiry.
- Subjects
ESTOPPEL lawsuits; CORPORATE bankruptcy lawsuits; JUDICIAL estoppel; DEBTOR &; creditor -- Lawsuits &; claims; UNITED States. Supreme Court; UNITED States. Bankruptcy Court
- Publication
Emory Bankruptcy Developments Journal, 2015, Vol 31, Issue 2, p465
- ISSN
0890-7862
- Publication type
Article