Court Opinion: 10th Circuit Court of Appeals Opinion for Sept. 18

The 10th Circuit Court of Appeals

Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.

Saili Jr. v. Waste Management of Kansas, Inc.

Kauli Saili Jr. sued Waste Management of Kansas, Inc. on various claims of employment discrimination. The district court granted summary judgment to Waste Management. It concluded judicial estoppel should prevent Saili from pursuing his claims because he didn’t disclose them in his bankruptcy proceedings, the opinion noted. The 10th Circuit Court of Appeals out of Kansas City, Kansas, affirmed.

The parties accepted the district court’s recitation of the relevant undisputed facts. 

Saili began working for Waste Management in 2016. He filed this lawsuit in 2022. He claimed beginning in 2017 Waste Management subjected him to a hostile work environment and discriminated against him based on his race. He also claimed the company retaliated against him in 2021 for taking family medical leave.

In 2019 Saili filed for Chapter 13 bankruptcy. In his property schedule, he denied having any “claims against third parties, whether or not [he had] filed a lawsuit or made a demand for payment” or any “other contingent and unliquidated claims of every nature.” The bankruptcy court confirmed his Chapter 13 plan, which required him to pay the bankruptcy trustee $126 each month, and ordered him to “timely report to the Trustee any events affecting disposable income,” including “tax refunds, inheritances, prizes, lawsuits, gifts, etc. that are received or receivable during the pendency of the case.” He didn’t disclose his discrimination claims against Waste Management in his bankruptcy petition, and he didn’t file an amended schedule to disclose any of his claims in this lawsuit.

Waste Management moved for summary judgment in this case on the ground that judicial estoppel should prevent Saili from pursuing his employment discrimination claims because he didn’t disclose them in his bankruptcy proceedings. The doctrine of judicial estoppel seeks “to protect the integrity of the judicial process by prohibiting parties from deliberately changing positions according to the exigencies of the moment,” the opinion noted, citing the decision New Hampshire v. Maine

Three “factors typically inform the decision whether to apply the doctrine in a particular case,” according to New Hampshire v. Maine. First, courts ask if the party’s later position is “clearly inconsistent” with its earlier one. Second, courts consider whether the party persuaded a court to accept its “earlier position so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled.” Third, courts ask if “the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.”

These factors are not “inflexible prerequisites or an exhaustive formula for determining the applicability of judicial estoppel. Additional considerations may inform the doctrine’s application in specific factual contexts.” For example, “it may be appropriate to resist application of judicial estoppel when a party’s prior position was based on inadvertence or mistake.” 

After Waste Management moved for summary judgment, Saili successfully asked the bankruptcy court to appoint his attorney in this lawsuit as an agent of his “bankruptcy estate to prosecute the claims in this lawsuit.” The district court concluded all three primary factors favored estoppel. And it noted Saili didn’t attempt to show his failure to disclose this lawsuit had been inadvertent or mistaken. For those reasons, the court applied judicial estoppel to bar Saili’s claims and granted summary judgment to Waste Management. Saili appealed.

The 10th Circuit reviewed for abuse of discretion the district court’s decision to apply judicial estoppel, citing the case Eastman v. Union Pac. R.R. A court abuses its discretion if it makes a clear error of judgment or exceeds the bounds of permissible choice, or if “its decision is arbitrary, capricious or whimsical, or results in a manifestly unreasonable judgment.” 

According to the opinion, Saili made no argument on the first judicial estoppel factor — whether he took clearly inconsistent positions in his bankruptcy proceedings and in this case. Targeting the second and third factors, he argued he didn’t persuade the bankruptcy court to accept his earlier position and he wouldn’t gain an unfair advantage in the bankruptcy if he were allowed to pursue his claims in this case. The 10th Circuit held there was no reversible error.

According to the opinion, the district court didn’t abuse its discretion when it decided to apply judicial estoppel. 

The 10th Circuit affirmed the judgment.

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