The question
Whether courts deciding if a debtor's omission of a claim in bankruptcy was inadvertent or mistaken for purposes of judicial estoppel must consider the totality of the circumstances, or may limit the inquiry to whether the debtor knew the underlying facts and had a motive to conceal.
Keathley v. Buddy Ayers Construction, Inc.
What the Court decided
The Court vacated and remanded. To decide whether a debtor's failure to disclose a claim in bankruptcy was inadvertent or mistaken for purposes of judicial estoppel, courts must look to the totality of the circumstances surrounding the omission. The Court held that the Fifth Circuit erred by narrowing its inquiry to only whether the debtor knew the underlying facts and had a potential motive to conceal the claim. Because judicial estoppel is an equitable doctrine, it demands a flexible, case-by-case inquiry rather than a near-dispositive two-factor test.
How the justices split
UnanimousThe Court's opinion
Jackson, writing alone
Judicial estoppel is an equitable doctrine that protects the integrity of the judicial process by barring parties from deliberately changing positions to suit the moment. Assuming without deciding that judicial estoppel applies in bankruptcy and that inadvertence or mistake can be an exception, the Fifth Circuit's rule is both too rigid and too broad. It is too rigid because equity eschews mechanical rules and requires a case-by-case inquiry into all relevant facts, yet the Fifth Circuit permitted courts to weigh only the debtor's knowledge of the facts and potential motive to conceal. It is too broad because those two circumstances will almost always be present, making a near-dispositive criterion a poor fit for determining whether an omission actually resulted from inadvertence or mistake. Courts must instead look to the totality of the circumstances.
Concurring in the judgment
Thomas, joined by Gorsuch
Thomas filed a concurring opinion, joined by Gorsuch. The syllabus states only that he wrote separately and does not set out the reasoning of his concurrence.
Concurring in the judgment
Sotomayor, writing alone
Sotomayor filed a concurring opinion. The syllabus states only that she wrote separately and does not set out the reasoning of her concurrence.
How we know · 5 sourced claims
Jackson delivered the opinion for a unanimous Court.
Source: syllabus, lineup
Thomas filed a concurring opinion, in which Gorsuch joined.
Source: syllabus, lineup
Sotomayor filed a concurring opinion.
Source: syllabus, lineup
The Court held that courts must look to the totality of the circumstances surrounding an omission to determine whether it was inadvertent or mistaken for purposes of judicial estoppel.
Source: syllabus, Held
The Fifth Circuit erred by narrowing its inquiry to whether the debtor knew the underlying facts or had a potential motive to conceal the claim.
Source: syllabus, Held