Sandra Slater v. United Steel Corporation
2017 U.S. App. LEXIS 17994
| 11th Cir. | 2017Background
- Slater sued U.S. Steel for race/sex discrimination and retaliation; after partial denial of summary judgment she filed for bankruptcy and did not list the lawsuit in her schedules and Statement of Financial Affairs.
- The bankruptcy trustee reported no distribution and the estate became presumptively administered; Slater amended her schedules the day after U.S. Steel moved to invoke judicial estoppel.
- Bankruptcy court later converted the case to Chapter 13, confirmed a plan, then dismissed the case for failure to pay (so no discharge); the trustee had been authorized to pursue the discrimination claims on behalf of the estate.
- U.S. Steel moved in district court for summary judgment invoking judicial estoppel; the district court barred Slater’s money-damages claims, inferring intent to manipulate the system from the nondisclosure alone.
- A panel affirmed under Eleventh Circuit precedent that treated nondisclosure as sufficient to infer intent; the court granted en banc review to reconsider that rule.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether judicial estoppel may bar a civil claim omitted from bankruptcy schedules | Slater: omission was inadvertent or a misunderstanding; she promptly corrected schedules and bankruptcy court acted permissively | U.S. Steel: nondisclosure (knowledge + motive) permits an inference of intent to manipulate and thus estoppel | Court: two-part test remains (inconsistent positions + intent to make mockery); but intent must be assessed from totality of facts |
| Whether the circuit’s precedents (Burnes/Barger) allow automatic inference of deceptive intent from any nondisclosure | Slater: automatic inference is improper and overbroad | U.S. Steel: existing precedent and policy support automatic inference to protect bankruptcy integrity | Held: overrules portions of Burnes and Barger that allowed intention to be inferred solely from nondisclosure; courts must consider all circumstances |
| What factors are relevant to the intent inquiry | Slater: (and majority) point to sophistication, explanation, prompt correction, bankruptcy court actions, creditor/trustee knowledge | U.S. Steel: motive and knowledge suffice; later correction is irrelevant | Held: list of non-exhaustive factors (e.g., sophistication, explanation, correction timing, trustee/creditor awareness, bankruptcy court findings) to evaluate intent |
| Whether New Hampshire v. Maine’s three-part test controls here | Slater: New Hampshire inapplicable because the civil defendant was not a party to the bankruptcy proceeding | U.S. Steel: urges adherence to existing circuit framework | Held: New Hampshire’s framework is not directly controlling where the party invoking estoppel was not a party to the prior proceeding; Eleventh Circuit’s two-part test retained but refined |
Key Cases Cited
- New Hampshire v. Maine, 532 U.S. 742 (U.S. 2001) (announces non-exhaustive three-part framework for judicial estoppel and cautions against application when prior position was inadvertent)
- Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282 (11th Cir. 2002) (previously permitted inferring intent from nondisclosure in bankruptcy)
- Barger v. City of Cartersville, 348 F.3d 1289 (11th Cir. 2003) (panel treated omission as sufficient to infer deceptive intent; partially overruled)
- Parker v. Wendy’s Int’l, Inc., 365 F.3d 1268 (11th Cir. 2004) (refused judicial estoppel where Chapter 7 trustee, not debtor, was real party in interest)
- Ajaka v. Brooksamerica Mortgage Corp., 453 F.3d 1339 (11th Cir. 2006) (examined intent beyond mere nondisclosure; reversed application of judicial estoppel)