Free Motion to Supplement - District Court of Colorado - Colorado

Case 1:03-cv-02474-WYD-PAC

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 03-CV-2474-WYD-PAC CHARLOTTE SCHNEIDER and DEAN WYMER, Plaintiffs, v. LANDVEST CORPORATION, a Kansas corporation, And DAVID MASON, individually Defendants. _____________________________________________________________________ Plaintiff's Proposed Supplemental Findings of Fact and Conclusions of Law Re: Judicial Estoppel, Submitted October 28, 2005

Plaintiff proposes the following Findings of Fact and Conclusions of Law regarding the application of the doctrine of Judicial Estoppel as it applied to this case: Conclusions of Law 1. Defendant contends that the doctrine of judicial estoppel should bar Ms.

Schneider's overtime claim on the basis that her receipt of Social Security Disability Benefits constitutes a position or statement in direct conflict with her claim that she worked over 40 hours per week during certain weeks while employed with Landvest from April 10, 2002 until April 3, 2003. Defendant supports its judicial estoppel argument by comparing the legal standard for eligibility for SSDI (that she cannot engage in any "substantial gainful work which exists in the national economy," 42 1

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U.S.C. § 423(d)(2)(A)) with Ms. Schneider's claim that she worked over 40 hours per week during weeks in which she was receiving SSDI benefits. Proposed findings at ___ 2. Based on the facts in this case, Defendant have failed to establish the

requisite elements for application of this doctrine to this case. 3. The judicial estoppel bars certain claims; it is not an evidentiary device.

As such, it is strong medicine and is confined to the "narrowest of circumstances." Johnson v. Lindon City Corp., 405 F.3d 1065, 1069 (10th Cir. 2005) ("The requirement that a previous court has accepted the prior inconsistent factual position "ensures that judicial estoppel is applied in the narrowest of circumstances.") (quoting Lowery v. Stovall, 92 F.3d 219, 224 (4th Cir. 1996)). 4. The overarching purpose of judicial estoppel is "to protect the integrity of

the judicial process," by preventing "improper abuse of judicial machinery." New Hampshire v. Maine, 532 U.S. 742, 749-50 (2001) (internal quotation marks and citations omitted). Therefore, it should be construed and applied in light of that purpose. 5. In 2001, the United States Supreme Court breathed life into the doctrine,

causing the Tenth Circuit to alter its previous minority position of refusing to apply it at all. New Hampshire v. Maine, 532 U.S. 742 (2001); Johnson v. Lindon City Corp., 405 F.3d 1065, 1068-69 (10th Cir. 2005) (noting that "this circuit has repeatedly refused to apply this principle"). 6. Acknowledging that the doctrine is not susceptible to a clear or all-

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inclusive formula, in Maine, the Court applied a three-part test in barring the State of New Hampshire from changing its position during long term litigation over water boundaries. As described by the Court: First, a party's later position must be "clearly inconsistent" with its earlier position. Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party's 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." Absent success in a prior proceeding, a party's later inconsistent position introduces no "risk of inconsistent court determinations," and thus poses little threat to judicial integrity. A third consideration is whether 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. Id. at 750-51 (citations omitted) 7. Before determining whether the doctrine applies to this case, and, if so,

whether all three elements have been satisfied by Landvest, a case with many similarities to the instant one must be discussed. 8. In Cleveland v. Policy Management Systems Corp., 526 U.S. 795 (1999),

the Court addressed the issue of whether judicial estoppel should bar an ADA plaintiff, who contended she was denied a reasonable accommodation, from also maintaining that she was a qualified individual with a disability, in light of the fact that contemporaneously with her employment she successful persuaded the Social Security Administration to reconsider her claim for SSDI benefits. In her application for benefits, she stated that she was "disabled" and "unable to work." 9. The lower courts had granted the employer's motion for summary judgment 3

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on the ground that, by having made assertions in her social security case that she was disabled and unable to work, she was estopped from maintaining in her ADA case that she was able to work with a reasonable accommodation. 10. A unanimous Court not only refused to apply the judicial estoppel doctrine

in such cases, it reversed the Fifth Circuit's award of summary judgment, holding that because her statements were made in the context of a "forum which does not consider the effect that reasonable workplace accommodations would have on the ability to work," and her statements were "accurate" at the time she made them, she should have been given an opportunity to litigate the issue of whether she could have performed the essential functions of the job with an accommodation at trial. 11. The Court noted that SSDI statements regarding ability to work and being

disabled were not purely statements of fact, such as whether the light was red or green. Rather, the Court characterized them as legal conclusions. Although it refused to bar her ADA claim, the Court also held that where there are "apparent contradictions" in two legal positions, an ADA plaintiff should be required to explain the contradiction away or risk summary judgment. 12. One of the reasons the Court refused to apply the doctrine of judicial

estoppel is that there are many situations in which there is no contradiction between applying for and receiving SSDI, and working. One example the Court gave was that "the SSA authorizes a 9-month trial-work period during which SSDI recipients may receive full benefits." The Court also recognized that an SSDI application "may not

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reflect an individual's capacities at the time of the relevant employment decision." Id. at 805. 13. the record: In this case Plaintiff was in fact working at Landvest during a trial work period as allowed by statute and rule and thus as a matter of fact there is no evidence in the record of any inconsistent claim made to the Social Security Administration. 14. record: Despite the intervening case of Maine, I find that the Cleveland case is more indicative of how the Supreme Court would rule here than Maine. Therefore, I hold that the judicial estoppel doctrine is not applicable to this case. Nor is there any reason to require Plaintiff to explain an apparent contradiction. Defendant did not move for summary judgment. While I have considered the facts offered by the Defendant set forth in its proposed findings, as impeachment evidence, as the trier of fact I do not find those facts to alter my credibility determinations. 15. Even if I applied the doctrine to the facts in this case, I would still find that Alternative 2. Should the Court not allow the proposed supplement to the Alternative 1. Should the Court accept Plaintiff's proposed supplement to

Defendant has not established the requisite elements to bar her overtime claim. 16. First, Defendant has failed to present any facts which are "clearly

inconsistent" with Ms. Schneider's evidence that she worked over 40 hours in certain weeks. That the SSA awarded her SSDI benefits, and that she was collecting them at the time she worked for Landvest, does not establish a fact which is "clearly inconsistent" with her contention that she worked over 40 hours in certain weeks. As in Cleveland, the determination of the SSA is a legal conclusion, not a fact attributable to

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a statement or position Plaintiff took before the SSA. (She may have made a contradictory statement, but we have no evidence that she did.) In Johnson, supra, the Tenth Circuit recently noted that "the position to be estopped must generally be one of fact rather than of law." 405 F.3d at 1069 (10th Cir. 2005) (quoting Lowery v. Stovall, 92 F.3d 219, 224 (4th Cir. 1996)). 17. Second, even if I were to assume (without evidence) that Ms. Schneider

represented to the SSA, at some point in time, that she was unable to engage in "substantial gainful work," there is no evidence as to when she made such a representation, other than her statement, which reasonably implies that she made it when she was 18 years of age. The fact that she made such a statement many years before her employment does not establish the type of "clearly inconsistent" representation that would support the first prong of the judicial estoppel doctrine. There is no evidence in the record that her statements at age 18, or anytime thereafter, represented that she could not engage in gainful employment during the period that she worked for the Defendant. 18. Third, there is no evidence indicating any inconsistency between Ms.

Schneider's receipt of benefits during her employment with Landvest and working more than 40 hours in a week. Landvest cites to Ms. Schneider's testimony at trial that she was receiving SSDI benefits during her work there. Her testimony was she believed she was "allowed one period of nine months where [she is] allowed to make any amount above $700.00 per month before [she is] dropped by Social Security." Not only

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is she essentially correct, but I am perplexed as to why Defendant did not bring that to my attention in making its proposed conclusions of law. In Cleveland, the Court specifically wrote: The SSA sometimes grants SSDI benefits to individuals who not only can work, but are working. For example, to facilitate a disabled person's reentry into the workforce, the SSA authorizes a 9-month trial-work period during which SSDI recipients may receive full benefits. Id. at 1069. 19. In Barnhart v. Commissioner of Social Security Administration, 535 U.S.

212 (2002), the Court specifically stated that "trial work" period allows beneficiary, who is "entitled" to Title II benefits, to perform work "without loss of benefits. Sec. 422(c)." Id. at 216. The trial work period is authorized by 42 U.S.C. § 423 (e); 20 C.F.R. §§ 404.1592 & .1596. 20. Not only is the recipient allowed to work for 9 months without loss of

benefits, under the redetermination regulation, she is also allowed to keep her benefits for an additional 3 months. See 20 C.F.R. Sec. 404.1592a. 21. Defendant did not produce any evidence that Ms. Schneider concealed her

work and income from the SSA. It produced no evidence that she did anything unauthorized by the SSA. In light of the trial-work period and the redetermination regulations, Defendant has failed to show the slightest inconsistency, much less any evidence suggestion she was gaming the system, or that "judicial acceptance of an inconsistent position in [this proceeding] would create the "perception that either the

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first or the second court was misled . . . " Maine, 532 U.S. at 750. 22. Based on the foregoing, it is manifold that Ms. Schneider has not taken "an

inconsistent position [that] would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped." 23. What Landvest has shown, however, is that it is both derelict in honoring its

obligations under the FLSA and its understanding of SSDI, as well as mendacious.

_________________________ Wiley Daniel United States District Court Judge

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