Martin v. Earthlink Shared Services LLC
MEMORANDUM OPINION AND ORDER DENYING 14 MOTION for Summary Judgment, GRANTING 24 Second MOTION to Substitute Party. Signed by Judge Virginia Emerson Hopkins on 7/29/2013. (JLC)
2013 Jul-29 PM 03:30
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
JUDITH THOMPSON, as Chapter 7 )
Trustee of the Bankruptcy Estate of )
) Case No.: 4:12-CV-04193-VEH
MEMORANDUM OPINION AND ORDER
Anthony Martin (“Mr. Martin”) initiated this job discrimination lawsuit arising
under Title VII, § 1981, and the Americans with Disabilities Act (“ADA”) against
EarthLink Shared Services, LLC (“EarthLink”) on December 26, 2012. (Doc. 1). On
April 19, 2013, EarthLink filed a Motion for Summary Judgment (Doc. 14) (the “Rule
56 Motion”) asserting the affirmative defense of judicial estoppel. On this same date,
EarthLink filed its brief and supporting evidence. (Doc. 15).
Mr. Martin opposed the Rule 56 Motion (Doc. 21) on May 31, 2013. Mr.
Martin also filed a Renewed Motion To Substitute (Doc. 24) (“Substitution Motion”)
on June 5, 2013.1 The Substitution Motion seeks to substitute the Chapter 7
bankruptcy trustee, Judith Thompson (“Ms. Thompson”), for Anthony Martin (“Mr.
Martin”), as the real party plaintiff in this action.
EarthLink filed a reply brief (Doc. 25) and opposed the Substitution Motion
(Doc. 26) on June 14, 2013. Neither party filed any further briefing.
Accordingly, both motions are under submission, and, for the reasons
explained below, EarthLink’s Rule 56 Motion is DENIED, and Mr. Martin’s
Substitution Motion is GRANTED.
Summary judgment is proper only when there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law. Fed. R . Civ. P.
56(c). “[A]ll reasonable doubts about the facts” and “all justifiable inferences” are
resolved in favor of the nonmovant. Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115
(11th Cir. 1993) (internal quotation marks omitted) (quoting United States v. Four
Parcels of Real Property, 941 F.2d 1428, 1437 (11th Cir. 1991)). A dispute is
genuine “if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct.
On June 4, 2013, the court denied without prejudice Mr. Martin’s first request
for a party substitution due to a failure to follow the procedural prerequisites
contained in appendix III to the court’s uniform initial order. (Doc. 23).
2505, 2510, 91 L. Ed. 2d 202 (1986). “Once the moving party has properly supported
its motion for summary judgment, the burden shifts to the nonmoving party to ‘come
forward with specific facts showing that there is a genuine issue for trial.’”
International Stamp Art, Inc. v. U.S. Postal Service, 456 F.3d 1270, 1274 (11th Cir.
2006) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586-87, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986)).
Finally “[i]f the movant bears the burden of proof on an issue, because, as a
defendant, it is asserting an affirmative defense, it must establish that there is no
genuine issue of material fact as to any element of that defense.” International
Stamp, 456 F.3d at 1274 (citing Martin v. Alamo Community College Dist., 353 F.3d
409, 412 (5th Cir. 2003)).
Rule 56 Motion
Mr. Martin opposes EarthLink’s Rule 56 Motion on two different fronts. First,
Mr. Martin maintains that he is not subject to judicial estoppel. (Doc. 21 at 5-8).
Second, Mr. Martin contends that even if judicial estoppel applies to him, the doctrine
does not extend to the proposed substituted party, Ms. Thompson, in her capacity as
Given the nature of this court’s ruling on summary judgment, it elects not to
recite a separate statement of facts.
the Chapter 7 bankruptcy trustee, pursuant to the Eleventh Circuit’s holding in Parker
v. Wendy’s International, Inc., 365 F.3d 1268 (11th Cir. 2004). (Doc. 21 at 8-10).
Having studied both sides’ positions, the court agrees with Mr. Martin’s alternative
argument,3 finds Parker to be plainly on point in this regard, and rejects EarthLink’s
efforts to distinguish the controlling precedent and to convince this court, instead, to
apply Burnes v. Pemco Aeorplex, Inc., 291 F.3d 1282 (11th Cir. 1982).
More specifically, in Burnes, “[t]he parties agree[d] that the bankruptcy court,
the bankruptcy trustee, and Billups’ creditors never knew about the pending lawsuit.”
Thus, the court does not reach the matter of whether judicial estoppel applies
to Mr. Martin except only to point out that EarthLink’s Rule 56 Motion fails to draw
any distinction between Mr. Martin’s efforts to obtain monetary damages versus
injunctive relief (such as seeking job reinstatement and prospectively prohibiting
EarthLink from engaging in illegal employment practices) (see, e.g., Doc. 1 at 5 ¶¶
(ii) (“[M]ake Plaintiff whole by rehiring him and placing him in the position he would
have occupied in the absence of discrimination . . . .”), (iii) (“[E]njoining Defendant
. . . from further violation of Plaintiff’s rights under Title VII . . . .”)) even though the
Eleventh Circuit has reversed on the misapprehension of this issue including even in
several cases expressly relied upon by EarthLink. See, e.g., Burnes, 291 F.3d at 1289
(“We decide, then, that the important and necessary reasons that bar Billups' monetary
claims do not affect his efforts to change, through injunctive relief, Pemco’s
employment practices.”); Burnes, 291 F.3d at 1289 (“[S]ummary judgment in favor
of Pemco on Billups’ claims for injunctive relief is REVERSED and the case is
REMANDED to the district court for further proceedings on those claims consistent
with this opinion.”); Barger v. City of Cartersville, 348 F.3d 1289, 1296 (11th Cir.
2003) (“Barger’s claim for injunctive relief (i.e. her request for reinstatement) would
have added nothing of value to the bankruptcy estate even if she properly disclosed
it.”); Barger, 348 F.3d at 1297 (“However, we REVERSE the district court’s decision
to the extent that it prohibits Barger from seeking injunctive relief.”). Thus,
EarthLink’s Rule 56 Motion is underdeveloped in this regard.
291 F.3d at 1288. Therefore, unlike Parker, Burnes did not address the application
of judicial estoppel to the interests of a bankruptcy trustee who seeks to prosecute
claims connected to a bankruptcy estate, but rather applied the doctrine solely to a
debtor, who had inconsistently omitted any report of his pending district court claims
to the bankruptcy court. Further, the Burnes court cautioned that “courts must always
give due consideration to all of the circumstances of a particular case when
considering the applicability of this doctrine.” Burnes, 291 F.3d at 1286.
Parker subsequently clarified that an exception to the application of the judicial
estoppel doctrine occurs when a bankruptcy trustee’s interests are actively at stake.
See Parker, 365 F.3d at 1272 (“The correct analysis here compels the conclusion that
judicial estoppel should not be applied at all.”) (emphasis added). In finding that the
district court had inappropriately used judicial estoppel against the Chapter 7
bankruptcy trustee in Parker, the Eleventh Circuit reasoned:
In this case, Parker’s discrimination claim became an asset of the
bankruptcy estate when she filed her petition. Reynolds, as trustee, then
became the real party in interest in Parker’s discrimination suit. He has
never abandoned Parker’s discrimination claim and he never took an
inconsistent position under oath with regard to this claim. Thus,
Reynolds cannot now be judicially estopped from pursuing it.
365 F.3d at 1272 (emphasis added). Here, the same is true with respect to Ms.
Thompson’s actions as the trustee–the record confirms that she has not abandoned
Mr. Martin’s discrimination claims and, instead, as evidenced by the bankruptcy court
order dated June 3, 2013, approving the employment of a professional person (Doc.
22 at 3) as well as the pending Substitution Motion, she seeks to have Mr. Martin’s
counsel continue with the pursuit of these claims on her behalf as trustee over Mr.
Martin’s bankruptcy estate. Also, EarthLink has not shown where Ms. Thompson
ever has taken “an inconsistent position under oath with regard to [Mr. Martin’s
bankruptcy estate’s] claim[s].” Id.
Parker contrasted its judicial estoppel defense holding from other types of
valid defenses that still could bar a trustee’s pursuit of a claim post-petition. See
Parker, 365 F.3d at 1272 n.2 (“We are not holding that it is impossible for a valid
defense against a pre-petition claim brought by the trustee to arise post-petition.”);
id. (“For instance, if Parker had filed this claim after the statute of limitations had
passed, the statute of limitations defense would bar Reynolds from pursuing this
claim, just as it would bar Parker from pursuing it.”).
Parker also questioned, in dicta, whether Burnes should have been decided on
jurisdictional as opposed to judicial estoppel grounds:
Moreover, based on our analysis which follows, it is questionable
as to whether judicial estoppel was correctly applied in Burnes. The
more appropriate defense in the Burnes case was, instead, that the debtor
Parker, 365 F.3d at 1272 (emphasis added).
EarthLink suggests that a key distinguishing factor in Parker is that “the trustee
[there] received permission to intervene before the defendants ever raised the issue
of judicial estoppel.” (Doc. 25 at 6 (emphasis in original)). While, in summarizing
the trustee’s multiple contentions, the Parker court did include this procedural
history, see Parker, 365 F.3d at 1270 (“Reynolds contended that this sequence of
events also distinguished this case from Burnes because the debtor in Burnes only
moved to reopen his bankruptcy case after the defendant argued judicial estoppel.”),
this court does not interpret the mere mention of such a contention as background
material to mean that only those trustees who seek intervenor or substitution status
in advance of a defensive judicial estoppel motion are protected by Parker’s
unambiguous holding. Moreover, if the Parker court had wanted to impose such a
limitation on its holding, then it simply could have done so by expressly embracing
that particular argument advanced by the trustee. Instead, the court chose to preclude
the operation of the judicial estoppel defense to the Chapter 7 trustee without
referencing any temporal restrictions.
As legal support, EarthLink cites to no binding authorities, but instead
primarily to an unpublished opinion by the Eleventh Circuit, Jones v. United States,
No. 11-13158, 467 Fed. App’x 815 (11th Cir. Mar. 14, 2013), and a district court
decision from the Middle District of Florida, Marshall v. Electrolux Home Products,
Inc., No. 6:05-CV-1587-Orl-18KRS, 2006 U.S. Dist. LEXIS 91886 (M.D. Fla. Dec.
19, 2006). (Doc. 25 at 6-7).
The court has reviewed both of these cases and finds them to be either
inapplicable or unpersuasive. Turning first to Jones, the Eleventh Circuit’s decision
to uphold the district court’s denial of the trustee’s motion to substitute turned on the
issue of standing to pursue the appeal, and not the timing, or the merits of the
Jones also contends that the district court erred in denying the
Trustee’s motion to substitute as the plaintiff in this case. The
Government counters that Jones has no standing to challenge this order.
We agree with the Government.
Jones contends that the district court should have ruled on the
Trustee’s motion to substitute before granting the Government’s motion
for summary judgment. She points out that, under this circuit’s binding
precedent, the Trustee is not subject to the Government’s defense of
judicial estoppel. See Parker v. Wendy’s Int'l, Inc., 365 F.3d 1268, 1272
(11th Cir. 2004). But, the Trustee did not appeal the district court’s
denial of his motion to substitute, apparently deciding not to pursue this
claim. Jones lacks standing to challenge that denial.
Jones, 467 Fed. App’x at 819 (emphasis added).
Additionally, the panel in Jones acknowledged, in dicta, that, under Parker, an
“innocent” trustee is not subject to judicial estoppel even when the debtor is barred,
and, in doing so, made no reference to the timing of when a motion to substitute has
to be filed in order for a trustee’s interests to be protected under the scope of that
prior published precedent.
Here, Jones is not a party aggrieved by the district court’s denial of the
Trustee’s motion to substitute. Jones is judicially estopped from
recovering any damages; only the Trustee would have had a claim for
damages had the prosecution of this case continued. Jones cannot put
herself in the position of the innocent Trustee. And judicial estoppel can
bar a debtor’s recovery on a claim without barring the Trustee’s
recovery on that claim. See Parker, 365 F.3d at 1273 n.4 (suggesting
this result); Reed v. City of Arlington, 650 F.3d 571, 579 (5th Cir. 2011)
(en banc) (same). Because Jones is judicially estopped from recovering
on her FTCA claim, she has no interest in having the Trustee substituted
as the plaintiff in this case. Thus, she lacks standing to challenge the
denial of the motion to substitute.
Jones, 467 Fed. App’x at 819 (emphasis added).
Thus, the record in Jones established that the trustee had abandoned Jones’s
claim by choosing not to pursue the district court’s denial of the motion to substitute
on appeal. Further, nothing in Jones lends legal support to EarthLink’s proposition
that the timing of trustee’s motion to substitute is a relevant inquiry when deciding
whether judicial estoppel applies to a trustee under Parker.
While the Marshall decision does dovetail with EarthLink’s position, 2006
U.S. Dist. LEXIS 91886, at *9-10, the court simply disagrees with the district court’s
reliance upon Burnes as controlling, instead of Parker. Additionally, the Eleventh
Circuit never addressed whether the district court abused its discretion in Marshall
when following Burnes in lieu of Parker, as the ruling favorable to the defendant
apparently never was appealed.4
In sum, based upon this court’s understanding of Burnes and Parker, it would
have decided the trustee’s motion to intervene differently in Marshall and, therefore,
this court is unpersuaded by that opinion’s analysis. Further, in the absence of any
binding precedent which limits the coverage of Parker in the manner adopted in
Marshall,5 the court finds, in its discretion, that the defense of judicial estoppel does
Because judicial estoppel is a discretionary doctrine, see Burnes, 291 F.3d
at 1284 (“[W]e review the district court’s application of judicial estoppel for abuse
of discretion.”), even if the Eleventh Circuit had entertained and upheld the Marshall
decision on appeal, it does not necessarily follow that this court’s refusal to apply the
defense in the context of this case would constitute an abuse of discretion. Compare
Marshall, 2006 U.S. Dist. LEXIS 91886, at *9-10 (“In the present case, the
Bankruptcy Trustee was not informed of Plaintiff’s claims against Defendant until
almost one year after the initial state court filing.”), with Doc. 20-2 at 1 ¶ 4 (clarifying
that district court counsel for Mr. Martin first advised Mr. Martin’s bankruptcy
counsel via email on February 22, 2013, that the federal lawsuit filed on December
26, 2012, needed to be included on Mr. Martin’s bankruptcy schedules), and id. ¶ 5
(stating that Mr. Martin’s bankruptcy schedules were amended in April 2013).
The additional Eleventh Circuit published opinions footnoted by EarthLink
in its reply (Doc. 25 at 6 n.3) are inapposite because they are limited to judicially
estopping a debtor as opposed to a trustee. See De Leon v. Comcar Industries, Inc.,
321 F.3d 1289, 1292 (11th Cir. 2003) (“In conclusion, because the district court did
not err in applying judicial estoppel to De Leon’s retaliation and discrimination
claims, we affirm its grant of summary judgment to Comcar.”); Barger, 348 F.3d at
1296 (“In light of Burnes and De Leon, it is difficult to argue that Barger should not
be judicially estopped from asserting the discrimination claims she failed to disclose
in her bankruptcy petition.”).
not restrict Ms. Thompson, as trustee of Mr. Martin’s Chapter 7 bankruptcy estate,
from pursuing the job discrimination claims that are at stake in this lawsuit.6
The Substitution Motion seeks to substitute Ms. Thompson for Mr. Martin as
the real party plaintiff in this action. (Doc. 24 at 2 ¶ 2). The Substitution Motion
refers to the bankruptcy court’s order dated June 3, 2013, which approved Ms.
Thompson’s request to allow Mr. Martin’s current counsel to represent her in the
further prosecution of the bankruptcy estate’s claims that are pending before this
court. (Doc. 24 at 2 ¶ 3); (see also Doc. 22 at 3 (“The Application by Trustee for
Approval of Employment of Adam M. Porter as a Professional Person is hereby
GRANTED.”)). EarthLink opposes the merits of the Substitution Motion on the
bases of Jones and Marshall.
Consistent with the court’s analysis denying
EarthLink’s Rule 56 Motion, the Substitution Motion is GRANTED, and the Chapter
7 trustee of the bankruptcy estate for Mr. Martin, Ms. Thompson, is HEREBY
SUBSTITUTED for Mr. Martin as this lawsuit’s real plaintiff in interest.
Accordingly, all future filings shall bear the case caption set forth above.
Accordingly, the court does not need to reach the issue of whether judicial
estoppel should apply to Mr. Martin.
Accordingly, EarthLink’s Rule 56 Motion is DENIED, and Mr. Martin’s
Substitution Motion is GRANTED. Further, the clerk is HEREBY DIRECTED to
substitute the Chapter 7 bankruptcy trustee, Ms. Thompson, as the real party plaintiff
in this action.
DONE and ORDERED this the 29th day of July, 2013.
VIRGINIA EMERSON HOPKINS
United States District Judge
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