Jones v. Savage Services Corporation
Filing
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MEMORANDUM OPINION AND ORDER SSC's motion to dismiss 24 is GRANTED solely as to Jones's claims for monetary relief. Jones is ESTOPPED from seeking monetary relief for his Title VII employment claims against SSC. Jones' motion to amen d the complaint 28 is DENIED. SSC's motion to stay discovery and other deadlines 25 is MOOT, and the Joint Motion to Extend Deadlines 30 is GRANTED. The Scheduling Order 22 is AMENDED. Mediation by 8/10/2019; Discovery due by 9/10/2019; Dispositive Motions due by 9/30/2019; Final Pretrial Conference set for 3/11/2020 at 10:15 AM; Jury Trial set for 4/20/2020 at 9:00 AM; BOTH in the Hugo L Black US Courthouse, Birmingham, AL before Judge Abdul K Kallon. Signed by Judge Abdul K Kallon on 5/19/2019. (AFS)
FILED
2019 May-09 AM 10:41
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ANOTONIO JONES,
Plaintiff,
vs.
SAVAGE SERVICES
CORPORATION,
Defendant.
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Civil Action No.:
2:17-CV-01570-AKK
MEMORANDUM OPINION AND ORDER
Antonio Jones filed this lawsuit against Savage Services Corporation
(“SSC”) alleging race discrimination, harassment, hostile work environment, and
retaliation claims under Title VII of the Civil Rights Acts of 1964, 42 U.S.C. §
2000e-2, and Section 1981 of the Civil Rights Act of 1866 as amended, 42 U.S.C.
§ 1981. Doc. 1. Before the court is SSC’s motion to dismiss Jones’ complaint due
to circumstances implicating the equitable principles of judicial estoppel and
subject matter jurisdiction. 1 Doc. 24. The motion to dismiss is fully briefed and
ripe for review, docs. 24 and 26, and is due to be granted in part.
I. STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(1) authorizes a motion to dismiss
based on the defense that the court lacks subject-matter jurisdiction. Fed. R. Civ.
1
Jones subsequently filed a motion to amend, doc. 28, to address the judicial estoppel and
jurisdiction issues SSC raises in its motion to dismiss.
1
P. 12(b)(1). Rule 12(b)(1) motions come in two forms—facial, where the inquiry
is confined to the allegations in the complaint, or factual, where the court is
permitted to look beyond the complaint to extrinsic evidence.
Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990).
Lawrence v.
When deciding a factual
challenge, the court may hear conflicting evidence and decide the factual issues
that bear on jurisdiction. Colonial Pipeline Co. v. Collins, 921 F.2d 1237, 1243
(11th Cir. 1991). In other words, “when a defendant properly [raises a factual]
challenge[ ] [to] subject matter jurisdiction under Rule 12(b)(1) ... ‘no presumptive
truthfulness attaches to plaintiff’s allegations, and the existence of disputed
material facts will not preclude the trial court from evaluating for itself the merits
of the jurisdictional issue.’” Morrison v. Amway Corp., 323 F.3d 920, 925 (11th
Cir. 2003) (quoting Lawrence, 919 F.2d at 1529). “In the face of a factual
challenge to subject matter jurisdiction, the burden is on the plaintiff to prove that
jurisdiction exists.” OSI, Inc. v. United States, 285 F.3d 947, 951 (11th Cir. 2002).
However, the court “should only rely on Rule 12(b)(1) ‘[i]f the facts
necessary to sustain jurisdiction do not implicate the merits of plaintiff’s cause of
action.’” Morrison, 323 F.3d at 925 (quoting Garcia v. Copenhaver, Bell &
Assocs., 104 F.3d 1256, 1261 (11th Cir. 1997)). Instead, “[w]hen the jurisdictional
basis of a claim is intertwined with the merits, the district court should apply a
Rule 56 summary judgment standard when ruling on a motion to dismiss which
asserts a factual attack on subject matter jurisdiction.” Lawrence, 919 F.2d at 1530.
2
This approach is designed “‘to allow jurisdictional dismissals only in those cases
where the federal claim is clearly immaterial or insubstantial.’” Garcia, 104 F.3d at
1261 (quoting Williamson v. Tucker, 645 F.2d 404, 416 (5th Cir. 1981)). Thus, “it
is extremely difficult to dismiss a claim for lack of subject matter jurisdiction,” at
least when the jurisdictional challenge is intertwined with the substantive merits of
the action. Id. at 1260. Here, SSC’s motion relies on evidence outside the
pleadings, and the court construes its jurisdictional challenge as factual.
II. FACTUAL BACKGROUND
Jones, who is African American, has worked since June 2012 at SSC. Doc.
1 at 3.
His workplace trainer Randy Brisco, who is white, allegedly made
disparaging comments about African American churches and conveyed his
preference for hiring white applicants. Id. at 4. Jones complained about these
comments to his General Manager apparently to no avail. Id. at 5. In June 2015,
after Russ Shinert became the new General Manager, Jones again complained
about Brisco and attempted unsuccessfully to contact SSC’s corporate office after
Shinert took no action. Id. That same month, SSC instructed Jones to sign a
“responsibilities duties form” following a complaint by Brisco that Jones was
purportedly leaving trucks without fuel. Id. at 6. Roughly a month later, SSC
discharged Jones for “stealing time.” Id. at 7-8. Jones disputes this allegation,
contending that Brisco, who is responsible for time cards, never raised any issues
about time entries with Jones. Id.
Jones subsequently filed a charge of
3
discrimination with the Equal Employment Opportunity Commission (“EEOC”).
Doc. 1 at 3.
Nearly a year after filing his EEOC charge, Jones filed a Chapter 13
Voluntary Petition. Doc. 24-1. In response to the required disclosure of assets,
liabilities, and creditors, Jones declared under the penalty of perjury that he was
not a party in any lawsuit, court action, or administrative proceeding and that he
had no claims against third parties, including lawsuits, employment disputes, or
rights to suits. Doc. 24-1 at 14, 32.
Approximately a year after the bankruptcy
filing, the EEOC issued Jones a notice of right to sue, and Jones filed this lawsuit
on the day after the bankruptcy court confirmed his Chapter 13 bankruptcy plan.2
Docs. 1; 24-2 at 12.
III. ANALYSIS
SSC raises two arguments in support of dismissal: (1) that Jones is judicially
estopped from pursuing this lawsuit in light of his failure to disclose it as an asset
in his bankruptcy case, doc. 24 at 5-13, and (2) that Jones lacks judicial standing
because only his bankruptcy trustee can pursue legal claims that are the property of
the bankruptcy estate, id. at 13-15. In response, Jones acknowledges his failure to
disclose and asks to amend his bankruptcy filings to reflect his EEOC charge and
2
The confirmation of a bankruptcy plan does not mean that the bankruptcy case has been
discharged. See 11 U.S.C. § 1328(h). Jones’ Chapter 13 bankruptcy docket, doc. 24-1, indicates
that his case was pending at the time that he filed this lawsuit. Although his amended
bankruptcy plan was approved September 22, 2017 and later settled on March 21, 2018, Jones
has offered no indication that his bankruptcy case has since been discharged as of the entry of
this order. Docs. 24-1 at 12; 31-1.
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this lawsuit. In lieu of dismissal, Jones asks the court to allow him to amend the
complaint to include the trustee as a party plaintiff. Doc. 26 at 1-2. The court will
address first the judicial estoppel contention in Section A, followed by the
jurisdictional issue in Section B.
A. Judicial Estoppel
The doctrine of judicial estoppel “protect[s] the integrity of the judicial
process by prohibiting parties from changing positions according to the exigencies
of the moment.” New Hampshire v. Maine, 532 U.S. 742, 749 (2001). “Judicial
estoppel applies when (1) a party takes an inconsistent position under oath in a
separate proceeding, and (2) the party’s inconsistent positions were ‘calculated to
make a mockery of the judicial system.’” Silva v. Pro Transp., Inc., 898 F.3d 1335,
1339 (11th Cir. 2018) (quoting Slater v. United States Steel Corp., 871 F.3d 1174,
1181 (11th Cir. 2017)). A plaintiff takes an inconsistent position when he “assert[s]
in the civil lawsuit that he has a claim against the defendant while denying under
oath in the bankruptcy proceeding that the claim exists.” Id.
To demonstrate Jones’ inconsistent positions under oath, SSC contends that
Jones failed to disclose his EEOC charge in his initial bankruptcy petition and also
failed to amend his financial statements to reflect this lawsuit as an additional
asset. Doc. 24 at 6-8. Indeed, the evidence indicates that although Jones filed his
EEOC charge before his bankruptcy petition, he declared under the penalty of
perjury in his petition that he had no pending claims against third parties, including
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administrative proceedings. Doc. 24-1 at 14, 32. Thus, Jones violated his initial
duty to disclose the pending EEOC charge. See Barger v. City of Cartersville, Ga.,
348 F.3d 1289, 1292 (11th Cir. 2003), overruled on other grounds by Slater, 871
F.3d at 1174 (citing 11 U.S.C. § 541(a)) (The “property of the bankruptcy estate
includes all potential causes of action that exist at the time petitioner files for
bankruptcy.”); Casanova v. Pre Sols., Inc., 228 F. App’x 837, 841 (11th Cir. 2007)
(noting that “pending EEOC charges” constitute disclosable administrative
proceedings and “other contingent and unliquidated claims.”).
Moreover, Jones also had a continuing duty to amend his bankruptcy filings.
This duty does not “end once the forms are submitted to the Bankruptcy Court;
rather a debtor must amend his financial statements if circumstances change.”
Robinson v. Tyson Foods, Inc., 595 F.3d 1269, 1276 (11th Cir. 2010) (holding that
the doctrine of judicial estoppel barred plaintiff’s action because she failed to
disclose her workers compensation claim in the initial bankruptcy petition and her
subsequently filed discrimination suit as a contingent asset). The record indicates
that Jones failed to amend his bankruptcy petition to disclose this lawsuit as a legal
or equitable interest in his bankruptcy case, and Jones never explains why he failed
to do so. Docs. 24-2; 26.
See Robinson, 595 F.3d at 1274 (noting that the
continuing duty to disclose applies in both Chapter 13 and Chapter 7 bankruptcies
alike due to the need for complete and honest disclosures in all types of
bankruptcies). Because Jones signed his bankruptcy petition “declar[ing] under
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penalty of perjury that the information provided is true and correct,” doc. 24-1 at 6,
30, the court finds that Jones maintained inconsistent positions under oath for at
least 26 months 3 in proceedings before the Bankruptcy Court and this court.
The court must now determine if Jones’ inconsistent position was designed
to make a “mockery of the judicial system.” Slater, 871 F.3d at 1180. Such a
finding requires “intentional contradictions, not simple error or inadvertence.”
Robinson, 595 F.3d at 1275. However, rather than automatically assume that “less
sophisticated debtors” intend to mock the judicial system by failing to properly
disclose assets in bankruptcy proceedings, the court must consider “all the facts
and circumstances of the particular case.” Slater, 871 F.3d at 1178. This analysis
includes
the plaintiff’s level of sophistication, whether and under what
circumstances the plaintiff corrected the disclosures, whether the
plaintiff told his bankruptcy attorney about the civil claims before
filing the bankruptcy disclosures, whether the trustee or creditors were
aware of the civil lawsuit or claims before the plaintiff amended the
disclosures, whether the plaintiff identified other lawsuits to which he
was party, and any findings or actions by the bankruptcy court after
the omission was discovered.
Id.
These factors weigh against Jones. As an initial matter, the court cannot
presume that Jones has a minimal level of sophistication. To the contrary, this was
the second bankruptcy petition in which Jones was represented by his bankruptcy
3
Jones filed for Chapter 13 bankruptcy in August 2016 without initially disclosing his EEOC
charge, and the court only became aware of bankruptcy case after SSC filed a motion to dismiss
in October 2018. See docs. 24, 24-1.
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counsel. Docs. 24-1 at 7; 24-3 at 4, 24-4 at 1.
Additionally, Jones only
acknowledged his bankruptcy petition and pending equitable interest in this lawsuit
after SSC exposed his inconsistency in the motion to dismiss. See doc. 24; Dzakula
v. McHugh, 746 F.3d 399, 401–02 (9th Cir. 2013) (“[P]articularly in light of the
timing of Plaintiff’s amendment and her choice not to file a declaration explaining
her initial error, no reasonable fact-finder could conclude that the omission was
inadvertent or mistaken.”). Moreover, Jones is only now making an effort to
amend his petition and disclose this action in Bankruptcy Court which creates an
inference of manipulation. See Weakley v. Eagle Logistics, 2017 WL 3781339, at
*5 (N.D. Ala. Aug. 31, 2017), aff’d, 894 F.3d 1244 (11th Cir. 2018) (noting that
the debtor created a “strong inference of intentional manipulation” because he
made no efforts to amend his bankruptcy petition and did little to dispel this
inference).
In light of Jones’ failure to adequately dispute the allegations of
improper disclosure, or to offer a reason for why the judicial estoppel doctrine
should not apply, the court “may infer deliberate or intentional concealment based
upon the undisputed facts in the proceedings.” Id. at * 4 (“Plaintiff’s failure to
amend his schedule of assets would not be fatal if the record supported Plaintiff’s
assertion that the omissions resulted from inadvertence or oversight.”); see De
Leon v. Comcar Indus., Inc., 321 F.3d 1289, 1292 (11th Cir. 2003) (holding that
because the plaintiff “certainly knew about his claim and possessed a motive to
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conceal it,” the court could infer from the record his intent “to make a mockery of
the judicial system”).
The court turns next to Jones’ efforts to amend his bankruptcy pleading
after-the-fact in an effort to avoid application of the judicial estoppel doctrine.
Jones asks the court to excuse his initial behavior in light of the subsequent
amendment to his complaint in this court. The court declines to do so because “the
Eleventh Circuit has not accepted a debtor’s stratagem of waiting for the opposing
side to raise the doctrine of judicial estoppel and then amending Bankruptcy
schedules as a proper means of rectifying the fault and avoiding the consequences
of judicial estoppel,” Bros. v. Bojangles’ Restaurants, Inc., 2013 WL 6145332, at
*9 (N.D. Ala. Nov. 21, 2013). Indeed, the Eleventh Circuit has said that granting
the relief Jones requests would allow debtors to “always undo the application of
the judicial estoppel doctrine [and] render it toothless.”4
Weakley v. Eagle
Logistics, 894 F.3d 1244, 1247 (11th Cir. 2018), cert. denied, No. 18-6694, 2019
WL 113407 (U.S. Jan. 7, 2019). For all these reasons, the court finds that Jones is
estopped from pursuing monetary claims in this action. See also Burnes v. Pemco
Aeroplex, Inc., 291 F.3d 1282, 1288-89 (11th Cir. 2002), overruled on other
4
Recognizing “the risk that the application of judicial estoppel will give the civil defendant a
windfall at the expense of innocent creditors,” the Eleventh Circuit instructed that “equitable
principles dictate that courts proceed with care and consider all the relevant circumstances.”
Slater, 871 F.3d at 1186. These relevant circumstances include the principles behind the
doctrine – i.e. “[j]udicial estoppel serves to prevent the perversion of the judicial process and
protect its integrity” – and the need to ensure that courts do not “render it toothless.” Weakley,
894 F.3d at 1247.
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grounds by Slater, 871 F.3d 1174, (“[J]udicial estoppel barred the plaintiffappellant from pursuing claims for monetary damages, [but] the doctrine did not
prohibit him from pursuing claims which add no monetary value to the bankruptcy
estate.”).
B. Subject Matter Jurisdiction
SSC also argues that Jones lacks standing to pursue his Title VII
employment claims because those claims belong to the bankruptcy estate and
trustee. Doc. 24 at 13-15. Although SSC is correct that Jones lacks standing for
monetary damages, see Section A, supra, the judicial estoppel doctrine does not
prohibit Jones from “pursuing claims which add no monetary value to the
bankruptcy estate,” Barger, 348 F.3d at 1297.
Additionally, in Slater, the
Eleventh Circuit noted that “when a debtor’s assets include a civil claim, the claim
will be treated differently depending upon whether the bankruptcy is a Chapter 7 or
a Chapter 13 proceeding.” 871 F.3d at 1179–80.
Although a Chapter 7 debtor
forfeits his prepetition assets to the estate thereby giving the trustee standing to
pursue civil claims, “a Chapter 13 debtor retains standing to continue to pursue the
civil claim.” Id. See also 11 U.S.C. § 1303; Fed. R. Bankr. P. 6009 (“With or
without court approval, the trustee or debtor in possession may prosecute . . . any
pending action or proceeding by . . . the debtor, or commence and prosecute any
action or proceeding in behalf of the estate before any tribunal.”). Accordingly,
SSC has failed to persuade the court it must dismiss the lawsuit in its entirely.
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IV. CONCLUSION AND ORDER
For these reasons, SSC’s motion to dismiss, doc. 24, is GRANTED solely
as to Jones’ claims for monetary relief. Consequently, Jones is ESTOPPED from
seeking monetary relief for his Title VII employment claims against SSC. Jones’
motion to amend the complaint, doc. 28, is DENIED. Jones may proceed with his
claims for injunctive, declaratory, or other non-monetary relief.
In light of this decision, SSC’s motion to stay discovery and other deadlines,
doc. 25, is MOOT, and the Joint Motion to Extend Deadlines, doc. 30, is
GRANTED. Accordingly, the Scheduling Order, doc. 22, is AMENDED as
follows:
2. Discovery: All discovery is to be commenced in time to be completed by
September 10, 2019.
12. Dispositive Motions: All potentially dispositive motions should be filed
by September 30, 2019.
15. Additional Conferences: Final Pretrial Conference will be held on
March 11, 2020 at 10:15 a.m. at the Hugo L. Black, U. S. Courthouse in
Birmingham, Alabama.
16. Mediation: In order to give the parties an opportunity to reconsider
mediation, the court will issue an order referring this case to mediation on August
10, 2019 unless a party objects.
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17. Trial: This case is set for trial on April 20, 2020 at 9:00 a.m. at the Hugo
L. Black, U. S. Courthouse in Birmingham, Alabama
DONE the 9th day of May, 2019.
_________________________________
ABDUL K. KALLON
UNITED STATES DISTRICT JUDGE
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