We will hear argument first this morning in Case 25-6, Keathley versus Buddy Ayers Construction. Mr. Garre. ORAL ARGUMENT OF GREGORY G. GARRE ON BEHALF OF THE PETITIONER
Thank you, Mr. Chief Justice, and may it please the Court: Judicial estoppel present -- prevents a party from deliberately adopting inconsistent positions to gain an unfair advantage in litigation. Because the doctrine targets intentional inconsistencies, courts have resisted its application when a party's prior position is based on inadvertence or mistake. The narrow but important question in this case is how to determine when a party's position was inadvertent or intentional in the specific context where a debtor fails to update a form to reflect a new cause of action outside of bankruptcy. The failure to update -- if the failure to update the form was simply a 1 mistake, then there's no intentional inconsistency and no basis to invoke judicial estoppel. The Fifth Circuit applies what amounts to a conclusive presumption that a debtor's failure to disclose a cause of action and update a -- through updating a form is intentional as long as the debtor knew of the facts underlying the claim and had a potential financial motive to shield the asset, something which exists almost by definition in the case of any bank -- bankruptcy. That rule flouts the flexibility that equity ordinarily demands, it grants a windfall to alleged wrongdoers have no -- who have no connection to the bankruptcy, and it unfairly penalizes honest debtors by denying them redress for real wrongs. This Court should reject the Fifth Circuit's rule and hold instead that courts must undertake a holistic analysis of all facts bearing on a debtor's intent before concluding that a debtor's failure to update a form represents an intentional position that no cause of action exists. Erasing a debtor's claim seeking 1 redress for tortious or other illegal conduct, like Petitioner's personal -- personal injury action here, imposes an enormous cost on individuals already facing hard times. There's no basis for taking that extreme step based on a conclusive presumption that may be entirely unfounded. I welcome the Court's questions.
Mr. Garre, what type of evidence should be used in your holistic approach?
So we would look to all surrounding circumstances, Your Honor, objective and subjective. It would include the debtor's own testimony typically, but that would just be one factor. You would look at the sophistication of the debtor, when and -- and the manner in which the debtor updated the form, whether the debtor told his attorney of the cause of action, whether creditors objected when a form was amended, the impact on creditors or other in the bank -- others in the bankruptcy, the bankruptcy court's own findings. These are objective factors that courts have looked to and can be applied in 1 determining a debtor's actual intent.
One factor you haven't mentioned is, of course, the impact on the judiciary, the judicial reputation, the phrases that have traditionally been used here. All that you've been talking about is between the two parties to the -- the bankruptcy and the accident. Where does that factor in? I thought that was the primary basis for the whole doctrine of judicial estoppel. You don't want to put the courts in the position of acting on the basis of a counterfactual that's -- that's -- that's not true.
Absolutely, Your Honor. That's the backbone of judicial estoppel. This Court and others have talked about playing fast and loose in the courts -- with the courts and protecting the integrity of the courts. And what -- what this Court recognized in New Hampshire is that where the integrity is impacted is where parties intentionally advance inconsistent positions in order to gain advantage in litigation. And to put the courts in the position of potentially adopting those 1 inconsistent positions is what undermines the integrity of the courts, so --
I thought it was more that they proceeded on the basis of a particular -- not assumption, but what was shown, and you don't want to put them in a position of having two different versions of reality and then proceeding on the basis of one or the other.
So I think what -- what the courts have described it as is the cold manipulation of the process, Your Honor, and that happens when an individual intentionally takes one position, secures an advantage by the adoption of that position, turns around in a different proceeding, adopts a different position, and tries to get a different advantage. If the individual didn't intentionally adopt that first position and -- and corrects it, as happens in the scenario here, where a debtor is simply unaware -- and, as the amici former bankruptcy judges indicate, bankruptcy forms are very confusing. Even with the aid of counsel, many debtors simply just don't realize 1 that a cause of action is an asset and forms have to be updated. In that situation, the debtor has made simply a mistake in failing to update the court as to the existence of the cause of action. And, there, the debtor is not actually taking the position that there is no cause of action before the bankruptcy court. He simply failed, because of his mistake, to update a form. So there is no intentional inconsistency. There's no playing fast and loose with the courts. There's no cold manipulation of the judicial process. And there's no threat to the integrity of the court. And, conversely, I mean, judicial estoppel is an extreme measure, and it's appropriate where there is a threat to the integrity of the court, but it involves wiping out a cause of action. And, here, you have a situation in which courts, without even engaging in a holistic determination as to the debtor's actual intent, whether the debtor simply made a mistake in failing to update a form, are wiping out a cause of action like Mr. Keathley's personal injury action here. 1 Respondent's own driver admitted that his brakes failed and that his truck hit Mr. Keathley's, and that action has been wiped out based on a conclusive presumption that the Fifth Circuit applies that simply because a debtor has a potential financial motive to mislead, a debtor's failure to update the bankruptcy court as to the existence of a cause of action is an intentional representation.
Mr. Garre, can I interrupt you and ask you a question? This is an Erie question. This was a diversity suit, so why does the federal law -- everyone's assumed that the Fifth Circuit's law of judicial estoppel applies. Is the Mississippi law different? And, if not, why doesn't the Mississippi law control in the diversity suit under Erie?
So I -- I think, as I understand this Court's decision in New Hampshire versus Maine, I mean, the judicial estoppel doctrine, as embraced by this Court, is, you know, a federal common-law-type rule inherent in the Court's own authority to protect its proceedings. And so I think that 1 that would be a federal baseline. I mean, state courts have applied it as well. I -- I think, here, no one has pointed to any difference in the proceedings.
I gather that it's a matter of some dispute in -- in other circuits, that -- that courts have struggled with that question. And I don't want to resolve it here. I don't think we have to resolve it here. But I certainly wouldn't want anything we said here to -- to resolve that question. I mean, I can see arguments on either side. I think what you're saying might be kind of a Byrd versus Blue Ridge, the overriding federal interest overcomes whatever we might say about the outcome-determinative prong of Erie. It just seems to me like that might be something -- I just wanted to know your reaction about it because it might be something to avoid.
So I think the Court, you know, can and absolutely should reserve that question for a later day, Your Honor. I'm not aware of any inconsistency in state or federal courts in terms of recognizing that judicial 1 estoppel doctrine wouldn't apply in the case of an honest mistake.
You know, I think courts across the board have focused on, you know, what they call the cold manipulation of the courts and the judicial process.
Okay. Just one last question then speaking of just questions to avoid. Do you see your argument as really kind of confined to how judicial estoppel plays out in the bankruptcy context in particular?
Or do you see it -- okay.
Well, that's the situation, and this has arisen. I mean, it's -- it's unique in the important respect is, typically, when judicial estoppel has applied in other contexts, like New Hampshire versus Maine, you have a party that's affirmatively adopted two different positions, and there's no question what the party, you 1 know, thinks its position is. Here, in the bankruptcy context, where a debtor has failed to update a form, the -- the position is implied by the failure to update the -- the form, but the debtor hasn't actually affirmatively said, I have no cause of action. Where judicial estoppel is invoked, there's a presumption in the Fifth Circuit that the debtor, in fact, made that representation. So -- so the context is different in important ways. In New Hampshire, this Court, in -- in outlining general principles that typically apply, recognized that additional considerations would be appropriate in specific factual contexts. So I think the context here is important. Also, in this context, you have individuals who, you know, very often are not particularly sophisticated. You have an environment, bankruptcy, where forms are complex. Again, amici, former bankruptcy judges here, themselves have talked about the complexity of the forms. They're confusing even with the aid of counsel. And so I think that's the situation in 1 particular in this context where one would be wary about there was any position at all or whether a -- a debtor simply made an honest mistake in failing to update a form.
Mr. Garre, I -- I've been having trouble trying to fit in our New Hampshire principle to the bankruptcy context where the bankruptcy, it has not terminated, meaning in a situation like this one, where the bankruptcy is still ongoing because, logically and otherwise, it should be the bankruptcy court that decides whether to impose a penalty because doing away with the personal injury suit deprives the creditors of a potential source of income for the bankruptcy. In an ongoing bankruptcy, that's a draconian effect on the creditors that the second court would be imposing. So I'm not sure how equitable estoppel really can play out on the principles set forth in New Hampshire. New Hampshire said that the court -- the first court had to be persuaded to accept that party's earlier position. But, here, with the amendment, there was no permanent acceptance of 1 a position by the bankruptcy court. It also, New Hampshire said, a court has to consider whether the party seeking to assert an inconsistent position derived an unfair advantage or imposed an unfair detriment on the opposing party. But the opposing party here, there's no unfair -- unfair detriment to the man who hit your client with a -- with a truck because he wasn't involved in the bankruptcy, and the unfair advantage was wiped away once the disclosure was made in the bankruptcy court. So I'm a little bit -- I've been perplexed when I started with this how we deal with that context --
-- in -- in -- in -- in -- in this special situation where the bankruptcy has not terminated. There's been no final determination that the bankruptcy court was misled in a way that caused detriment to the bankruptcy process, to its creditors, or to anyone.
So I'm not going to quarrel with anything that would lead to the 1 conclusion that judicial estoppel doesn't wipe out my client's claim, Your Honor. I think what I would say, though, is, in --
No, no, no, but -- but I'm trying to -- maybe this is a question for your -- for the other side.
But I'm have -- I've been having a -- a hard time understanding how this theory works in a situation in which it's different parties and not the same parties being misled.
So, in New Hampshire, the Court did reference a possibility that either the first court or the second would be misled. And I think that's probably the -- the theory that courts have applied here. I think what Your Honor's question underscores, though, is that, here, the bankruptcy court, you have a proceeding ongoing. The bankruptcy court is well equipped to take any action it determines is appropriate to protect other creditors. Other creditors can stand up as well to sanction conduct that it believes is misleading or deceitful. 1 And so there's not the need for a sort of overarching judicial estoppel check here. And that makes it all the more egregious, frankly, for the Fifth Circuit to simply disregard all that and adopt this conclusive presumption that a debtor is acting with an intent to, you know, adopt a position that no cause of action exists and to mislead the courts.
Mr. Garre, can I ask you, because I'm trying to ascertain your position with respect to what suffices for establishing inadvertence or mistake. You've talked about intentional omissions as they relate to misleading the courts, but you can imagine a world, I think, in which the debtor might have an intent to omit, perhaps to mislead, someone else. So, you know, a debtor who's, say, contemplating a divorce, they leave off the claim because they want to have less -- less exposure in the case if they decide to go through with the divorce. So it's intentional but not with the point of misleading the court. How would you say that should be taken 1 into account or should it in regard to figuring out whether there was inadvertence or mistake?
So, Justice Jackson, I think, first of all, that the key is that the court has to determine that the debtor has made an intentional -- adopted an intentional position that no cause of action exists. I -- I think that -- that the heartland in which judicial estoppel is invoked, the -- the understanding is that the debtor is trying to mislead the court to gain advantage. In your hypothetical, I -- I don't think that that would invoke the -- the heartland of judicial estoppel. Nevertheless, I think judicial estoppel, being an equitable doctrine, considering additional factors, that could be part of the mix.
I'll take it into account in terms of your holistic view. And so your -- your argument here is that the Fifth Circuit's test is too rigid because it doesn't allow for full consideration of intent or other factors that could bear on inadvertence or mistake?
That's exactly right. I 1 mean, our position is that the inquiry into the debtor's intent here as to whether they intentionally adopted a position that no cause of action exists should be undertaken --
But does it matter that their motive is different? I mean, so, in my hypothetical, they did intend, they intended to omit. So it's not inadvertent or mistaken. What -- what then? I mean, you --
So I think that -- I'm sorry, Your Honor.
I think that's a good example where, you know, really, the bankruptcy judge is in charge of his or her proceedings and can take appropriate action. In that situation, no doubt the judge would -- would think it's -- it's improper and perhaps warrant sanction that the -- that the -- that the debtor is attempting to hide his assets from his spouse or others, and so sanctions might be warranted. I don't think that that's the -- the typical fact pattern in which judicial estoppel 1 is warranted. But I think what distinguishes this case is there's just no determination that the debtor here actually intended to hide anything from the court.
Mr. Garre, on -- on that, just to follow up on it, why -- why is intent to mislead the court essential? I -- I -- you know, I -- I struggle to find that in New Hampshire. There are gestures in that direction, but couldn't sometimes a knowing -- knowing -- knowingly misleading the court plus other factors in equity be enough?
Yes. And what the intent --
Well, if that's true, if that's true, then intent isn't essential, it -- it's just one factor in your view, is that right?
So I agree it's one factor, but the intent that matters, Your Honor, is the intent to adopt inconsistent positions.
Inconsistent positions. No, I get that.
But -- but not necessarily an intent to mislead the court?
Right. I mean, there's a lot of language in the cases about cold manipulation of the courts, playing fast and loose.
But, really, what -- what I think that the court is driving at is intentionally adopting inconsistent positions. And what's different about this case is there's no -- there's been no actual determination that the debtor here intentionally adopted --
Yeah, I got you. Thank you.
-- the position that there's no cause of action.
Thank you, counsel. Justice Thomas? Justice Alito?
Well, I'm a, excuse me, a little confused by those answers. So what is required is knowledge of the fact that inconsistent positions are being 1 taken?
So I think your -- your -- Justice Alito, it -- it's -- it's the fact that the debtor has taken intentionally inconsistent positions. So, in the bankruptcy context, by failing to update the form, a determination would be made that the debtor, in fact, adopted -- intended to adopt the position that no cause of action exists as opposed to simply making a mistake in failing to update a form, and, when -- when the debtor then goes to a separate court and advances a cause of action, he's taking the separate position that the cause of action exists. And that would be intentionally inconsistent. But that intentional inconsistency doesn't arise where a debtor simply makes a mistake in failing to update a form. And in that -- in that situation, the debtor isn't adopting any position that he has no cause of action. He's simply making an honest mistake. And -- and that's -- so that's --
I'm not sure I understand that, the distinction in this 1 context, but I'll leave it at that. Does the record show why the bankruptcy attorney did not list this as an asset?
It doesn't, Your Honor. The bankruptcy attorney did, in a sworn declaration in -- in the record here, say that my client informed him of it, but he -- it doesn't explain why he didn't advise the court. I mean, that's something that potentially could come out in a holistic inquiry. But I think, here, what matters is -- is the debtor's intent in terms of whether or not the debtor was attempting to hide it.
Well, do you think that -- that the client in a judicial estoppel situation has -- is to any degree responsible for the actions of the attorney?
I don't -- not -- certainly, not in the normal sense that the court ordinarily would apply the client responsibility, Your Honor, because the key here is the -- the debtor's own intent in terms of whether the debtor was trying to hide anything because it's the debtor who's going to 1 a different court and asserting his cause of action. And so I think that that's a factor, and I think, frankly, the fact that the debtor here told his attorney promptly after the accident is a factor that cuts in his favor, that he wasn't trying to hide anything from the bankruptcy court. And there are many other factors that go to that. But what we really want is an opportunity for a holistic analysis that, under the Fifth Circuit's rule, we never -- we never got.
Would you disagree with the proposition that where there is a duty to disclose and a potential financial interest and the person who has that duty has a financial interest in not disclosing, that creates a pretty strong presumption of the -- the requisite intent or knowledge?
Not in this context, Your Honor.
Because, here, I mean, again, the -- the brief by the amici, former 1 bankruptcy judges themselves, piggybacking -- piggybacking on the American Bankruptcy Institute's own findings, emphasized that these forms are confusing, hard to follow, even with the aid of attorneys. So I think, in this context, where you're dealing with, you know, by and large, relatively unsophisticated people who lack legal training or the like, all of that factors into the judicial estoppel analysis here.
There are factors here that seem perhaps confined to the bankruptcy situation and to the way in which proceedings are often conducted in bankruptcy court, which I think are not always -- it -- it's not always a forum in which scrupulous compliance -- very meticulous compliance with all the rules apply. But I don't quite understand why the bankruptcy attorney didn't disclose. I don't quite understand why the creditors here had no interest apparently in having this as an asset of the estate.
Well, the creditors were being --
Can you explain what's 1 going on? Is it just because this is Chapter 13 and it's not -- it's just handled in a -- in a -- in a rather informal way?
So, Your Honor, I mean, that's part of -- part of it. I mean, here, the creditors were paid 100 percent on -- on the plan and ultimately were paid off. If any creditor had any concern about the payments on the plan or how this asset would have affected the estate, they could have taken action in the nearly one year between the time when Mr. Keathley advised the court of the cause of action and before his -- his -- his bankruptcy was completed. And all of that would be part of the mix here, the fact that no creditors even complained. There's a debate as -- in -- in the law as to whether or not there was any interest available here. I mean, again, as the amici, former bankruptcy judges, explained, we don't think interest was available here. So the creditors were getting and did get everything they were entitled to --
I don't know how much this law -- personal injury lawsuit would garner, but the choice for the creditors was an unknown sum of recovery, some of which would have been paid to medical injuries and to supplement lost income versus the security of having full payment, correct?
That's -- that's correct, Your Honor.
And having the bankruptcy last forever without full payment?
That's correct. And, you know, creditors are uniquely situated to protect their own interests. If they thought anything wrong had happened or there was a -- they had a stake in the cause of action, they would have acted here. No creditor objected.
Mr. Garre, your -- your brief speaks often of bad faith, of whether the debtor had bad faith in making these inconsistent representations. Are you 1 equating that -- you haven't spoken of it very much today. Are you equating it with the kind of intent that you have been talking about?
Yes. I mean, the courts refer to bad faith here in cases from here and there. I mean, we're not suggesting that this is an inquiry into whether there was an -- an intent to -- to defraud the court or anything like that. I think what the -- the doctrine looks to is the intentional inconsistency. And where a litigant makes an intentional inconsistency to gain an unfair advantage through the courts, this Court recognized in New Hampshire that that undermines the integrity of the court and that that -- that is sort of, you know, consistent with an intent to mislead the court often. But we're not suggesting that a finding of, you know, actual bad faith is -- is necessary or part of the -- part of the analysis.
But are you suggesting that this finding of intentional misrepresentation is necessary? This goes to Justice Gorsuch's question again --
-- and also to the Chief Justice's when he opened when he said, you know, in the end, judicial estoppel is about the integrity of the courts. And aren't there circumstances in which, even though you couldn't find that kind of intentionality on the part of the debtor or the part of somebody else making the representations, still, the integrity of the courts is on the line?
So I don't think the Court has to rule that out. I mean, I think the -- the courts, you know, just as frequently talk about how judicial estoppel doesn't apply in the case of inadvertence or mistake. And we think, in that situation, where a party, because of a mistake, hasn't intentionally adopted a particular position, that there is not the same kind of threat to the judiciary. But this Court doesn't need to say here that judicial estoppel is never appropriate in any situation in which a party makes a mistake. I mean, we think it's an important factor. The Court recognized it in 1 New Hampshire, other courts have universally recognized it, and it's particularly important and applicable in this unique context.
Very briefly, Mr. Garre. I -- I -- I take your point that you don't need to have an intention to mislead the court. You say, though, an intention to pursue inconsistent positions is required. I just don't see that in New Hampshire either. I see you have to take inconsistent positions, but I'm not sure I see that you have to intentionally do so. Am I missing something there?
So I think, in New Hampshire, on page 750, it talked about prohibiting parties from deliberately changing positions according to the exigencies. I mean, the Court cited lower court cases like Scarano, which talked about --
It -- it does cite lower court cases, but when it -- when it actually lists the factors, it just says 1 inconsistent positions and deriving an unfair advantage from them on page 750.
But then I think the -- I'm sorry, Your Honor.
But then I think, when the Court later, in applying the factors, says that -- that courts have resisted application in the instance of mistake or --
Yes, inadvertence and mistake. That we know to be true. That New Hampshire definitely does say.
And I guess that leads me to this. Judicial estoppel is kind of an off-branch of equitable estoppel and is a relatively new invention dating to -- well, new -- date -- dates to the mid-19th century. For law, I guess that's new sometimes. And we have exactly one opinion on the subject, New Hampshire. That's it. We haven't developed the law very much yet. And I wonder whether you would be content with the following ruling and, if not, why not. 1 We've said inadvertence and mistake is not a basis for judicial estoppel. The Fifth Circuit glossed that rule with one of its own, a bright-line rule that it's never inadvertence and mistake when there's a knowing omission and there's a motive. Would it be enough to simply say we don't need a further gloss on inadvertence and mistake, this is an equitable doctrine, go back and do it again, looking to what we've said?
So that would be an improvement, Your Honor, but I think that what the court need -- what the -- the Fifth Circuit needs guidance on is that you really have to take this holistic analysis in terms of whether or not there was a mistake, and I, you know --
Yes. No, I'm giving you that.
I'm just simply saying their bright-line rule on what does and does not qualify as inadvertence and mistake is -- is not what we said in New Hampshire, go back and try again. Maybe -- maybe applying state law, maybe taking cognizance of the 1 bankruptcy context, all of these kinds of additional concerns, but -- but a very short and succinct opinion saying look at New Hampshire.
So I think that that would be fine. Obviously, the devil's in the details, Your Honor, but I think what -- what's critical there is that --
I don't think there would be many details in what I've outlined.
-- the -- that the upshot would be is that in this instance, if the courts conclude that a debtor's failure to update a form was simply an honest mistake that it generally -- it would be inappropriate to apply judicial estoppel, and that's -- that's the baseline.
If it's inadvertent or mistaken?
Okay. Honest mistake. Okay. Thank you.
Is there any 1 difference between a knowing inconsistency and an intentional inconsistency? I'm not sure about your answer to that.
I don't think so, Your Honor. But the -- the point that's critical here is that a court has to determine that when the debtor failed to update his form, he was knowingly or intentionally adopting the position that no cause of action exists, and -- and instead of --
So no daylight? I'm just making sure.
Well, I mean, I -- look, in the law, there -- there probably is a difference between knowing, willingness --
Well, in this. I know in the law.
In this context, is there any daylight between a knowing inconsistency and an intentional inconsistency as you see it?
As a practical matter, I don't think there is. I will say that the courts have talked about intentional 1 inconsistency. I mean, that's the language this Court piggybacked on for the lower court cases.
Well, I think that creates confusion, as Justice Gorsuch was talking about.
Yeah. So, I -- I mean, I -- I think the intent -- the intent language is well taken. I mean, if this Court believes that -- that the knowing language is -- is more suited to the doctrine, I mean, I think that would lead to the same conclusion here, and that's -- that's what we're up here fighting for.
Justice Barrett? Justice Jackson?
So I'm noting that New Hampshire wasn't a bankruptcy case, and I'm thinking that maybe judicial estoppel is sort of a poor fit for this context because, even if there is an intentional omission, however we define that, that the bankruptcy court has 1 many, many tools, I think -- this is sort of what Justice Sotomayor was alluding to -- to solve that problem when it comes to its attention, and to prevent the estate from getting this additional asset seems to harm the creditors in ways that I don't think are consistent with the way we understand bankruptcy. So, I mean, in addition to Justice Gorsuch's solution, I suppose one thing could be to think about whether judicial estoppel is really the right remedy here.
So I -- I -- again, I'm not going to quarrel with anything that results in a conclusion that judicial estoppel doesn't apply. What -- what I think is important here is what the bankruptcy -- the bankruptcy court has control of these proceedings, and its actions or inactions should be an important factor in determining whether or not judicial estoppel is appropriate.
Do you know if there's ever a world in which -- is -- is it after the bankruptcy closes that this information comes to the bankruptcy court's 1 attention? Is there nothing that could be done at that point, or --
So there's always an opportunity to take advantage?
Right. And I'm not going to -- I'm not going to make my friend's argument. What I would say, though, is I think that -- that courts have assumed judicial estoppel is applied here because, on the theory that the second court is being duped, so to speak, in -- in the sense that there's inconsistent positions, and so it's -- it's a threat to the second court, but -- but I think Your Honor's point is exactly right that the bankruptcy context is unique and that there's an important role for the bankruptcy courts --
And the second court's proceed --
-- and a lot of this can be resolved.
The second court's proceedings are sort of completely independent, 1 right?
I mean, they're arising out of facts that have nothing to do with the bankruptcy.
And that -- that underscores the windfall that the defendant is getting. The defendant in the second proceeding has no connection to the bankruptcy, and yet the defendant walks away scot-free.
And that's not equitable in any sense.
Mr. Liu. ORAL ARGUMENT OF FREDERICK LIU FOR THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING VACATUR
Thank you, Mr. Chief Justice, and may it please the Court: Whoops, I spilled the water. That's a 1 first. Judicial estoppel should apply only if the balance of equities supports it. In New Hampshire versus Maine, this Court described factors relevant to that balance. Those factors include whether a party derived an unfair advantage from the prior position, whether that position was the product of inadvertence, and whether judicial estoppel is consistent with broader public interests. Here, the Fifth Circuit made two errors. One is the error Petitioner has focused on this morning. The Fifth Circuit reduced inadvertence to just two considerations, thereby failing to consider the totality of the relevant evidence, including evidence that Petitioner reasonably believed that he had no duty to disclose his tort claim while a damages award was still a long ways off. But the other error is, in our view, even more fundamental. The Fifth Circuit effectively reduced the entire balance of equities to a single factor, inadvertence, thereby ignoring the interests of innocent 1 creditors and the bankruptcy court's ability to undo any unfair advantage. Therefore, the decision below should be vacated and the case remanded. I welcome the Court's questions.
Mr. Liu, I'd like you to take a step back to New Hampshire. New Hampshire was quite a different case from this. New Hampshire involved litigation between Maine and New Hampshire over the boundaries. In two earlier cases, New Hampshire had accepted that the middle of the river was the boundary, and in the subsequent litigation, it changed and argued that the boundary was to the Maine shore. And what the Court said in Justice Ginsburg's opinion was that you could not, to your advantage, change positions like that and, hence, judicial estoppel. How does that fact pattern allow us to decide this case based on New Hampshire?
Well, I -- I -- you're right that the specific context of New Hampshire is far different from a bankruptcy case, where, as some justices have already mentioned, the -- 1 the two proceedings, the bankruptcy case --
Well, I'm not as interested in the bankruptcy case. I'm interested in the fact that the litigation was between the same parties, between New Hampshire and Maine. Here, that you do not have that mutuality.
That's right. And I -- I -- I -- I -- I think what this points up is that, for judicial estoppel to apply, the balance of equities has to support it. And in New Hampshire versus Maine, I think it was important to the balance of equities that you had two co-equal sovereigns that had been involved in the same litigation many years prior. That's part of the balance of equities. Our submission here is a court shouldn't blind itself to the balance of equities in this context either. I think what New Hampshire versus Maine teaches is there are two kind of essential elements of judicial estoppel. Those are the first two factors. You've got to have inconsistent statements, and you've got to have the first statement relied upon by the court. 1 But, beyond that -- and this is on pages 750 to 756 of the Court's opinion -- it's a balance-of-equities analysis. You look to see if one party derived an unfair advantage. You look to see if the prior position was the product of inadvertence. You look at the broader public interest, including the fact that these were two coequal sovereigns that were involved in the same case earlier, and you ask, after considering the entire balance of equities, whether judicial estoppel is appropriate. I think what's really wrong about the Fifth Circuit's decision in this case is, if you look at Pet. App. 9a, it reduced that entire balance to just one factor, which is inadvertence. And then, beyond that, compounding that error, it turned inadvertence into just two considerations, knowledge of the facts and potential motive, which -- which is not a -- a -- a totality analysis of even the one factor the Fifth Circuit thought it should consider.
Mr. Liu, I guess I'm not sure I understand how what you're saying 1 right now fits with this footnote that you wrote. This is page 24 in your brief, Footnote 2, where you say we shouldn't talk about whether inadvertence always precludes judicial estoppel. And I hear you saying now we should talk about that. We should say inadvertence is just one factor. It doesn't always preclude judicial estoppel. Am -- am I wrong about that there's a shift here?
I -- I -- I wouldn't say it's a shift in this sense, and -- and I -- I think there are two -- two analytical things at issue. One question is, what goes on the balance? And we think that is an important question. The Court should address what goes on the balance is not just inadvertence but also unfair advantage, other interests, et cetera. That's all what goes on the balance. I think there is a separate analytical question about how those various factors relate to each other. And what we mean by Footnote 2 is this Court doesn't need to decide whether one factor, if it exists, is necessarily going to trump the other factors. We think it's 1 enough for this Court to basically reiterate what it said in New Hampshire versus Maine, which is the balance of equities isn't just one factor, it's all these factors. The Court said it was non-exhaustive in the end.
But do you agree with this, that in -- even if you had all the intent in the world, it doesn't necessarily get you judicial estoppel, and, conversely, even if there was complete inadvertence, it doesn't necessarily preclude judicial estoppel?
That is the government's position. I think that's that second bucket of analysis. The Court doesn't need to go that far. I think the Court can just say, look, if you're a lower court, you should be looking at all the factors. It may well be that one factor turns out to be dispositive. After you've -- you've seen a bunch of cases, maybe you can reach that conclusion. But, at this -- at this part of the analysis, you should at least have in full view all the relevant factors.
And is the idea behind this that everything needs to be filtered 1 through the principal purpose of judicial estoppel, which is protecting the integrity of the courts, and that this question of intentionality may coincide with that principal purpose but in certain cases may not?
Correct. We -- we -- we think, certainly, when a party has deliberately taken a prior position, as opposed to having taken it by inadvertence, it certainly heightens the impression that I think judicial estoppel is trying to avoid, and that impression is the impression that courts are just arbitrarily giving a party whatever it says it wants. But, conversely, there may be cases where the first party gets a tremendous advantage even though it took that position inadvertently, and it doesn't make sense, it just wouldn't be fair, to allow that party to obtain a further advantage in the second proceeding.
Mr. Liu, I -- I take your point that inadvertence and mistake may not automatically defeat judicial estoppel. But I'm also not sure we need to get into what 1 all the factors are or even talk about a holistic analysis given, as Justice Thomas pointed out, New Hampshire was -- really could have been an equitable estoppel case. Forget about judicial estoppel. And the bankruptcy context is different. And we have an Erie problem and all these -- why not just simply say the factor of -- of inadvertence and mistake, whatever it means, doesn't mean what the Fifth Circuit said it meant, good-bye?
That is a sufficient ground for vacating and remanding. We --
And you have no problem with that?
We have no problem with that. We just wanted the Court to be aware, when it's considering the scope of inadvertence, that it may not be the be all/end all of the analysis, that you can't -- you might not necessarily hang everything in the case on whether it's inadvertent or not.
We don't even need to take a view on that, it seems to me. Maybe some future case, there would be a reason to make it a bright-line rule. Maybe not, as you 1 say. We don't have to take a position in this case on that, do we?
That's -- that's right. And, really, our submission is you -- you don't need to move the lines you drew in New Hampshire versus Maine an inch. New Hampshire versus Maine said inadvertence -- it may be appropriate to resist -- resist the application of judicial estoppel if the party's prior position was the product of inadvertence. We -- we're happy with -- with -- with that statement of what the law is.
We dispute the way inadvertence was defined here.
Well, I mean, New Hampshire against Maine, it's featured prominently because it's the only thing. I -- I wonder if saying anything about it -- I mean, it's two sovereign states against each other and the boundaries, you know, I'm not sure that we should try to bring it into play any more than is necessary.
I don't -- I don't really quibble with that at all. I -- I -- I read New 1 Hampshire versus Maine as setting forth pretty high-level principles. I mean, the principles I understand that decision to set forth are the balance of equities matters and the list of equities is kind of non-exhaustive and inadvertence may be one of those factors. I think, at that level, there's nothing wrong with taking those principles and articulating them here. I agree, once you get into how those principles cash out, you may not be in a -- in a situation where New Hampshire versus Maine really speaks to that.
Thank you, counsel. Justice Thomas? Justice Alito?
I -- I know I'll have a chance to speak to Justice Gorsuch later, but -- (Laughter.)
-- but you answered him --
I don't know what you think simply saying they were wrong about inadvertence would get us, because you came up here and said there were two fundamental errors and that -- and I thought, in describing the errors, both times, you -- you said the court failed to take into account totality of the circumstances. So it wasn't just merely their failure to address inadvertence properly. They failed to do the holistic evaluation of what was the prejudice to the parties from that inadvertence. Even if it was deliberate, it could still -- you -- you've said all these other things. So I -- I'm not sure --
I -- well, we -- we would certainly be more satisfied with an opinion that went further and said inadvertence is not the only factor. We think that just follows pretty directly from New Hampshire versus Maine. To give one stark example, I mean, New Hampshire versus Maine --
No, I -- I -- I -- but why did you say yes --
-- to an opinion that basically brings us back here? Because I can see the Fifth Circuit saying exactly what it said below. If you know you didn't say it, it's intentional; it's not inadvertence. So they've already answered that question.
I don't think they -- so this is getting to the error, I think, that this Court should really -- needs to correct because it is core to the dispute between the parties, which is this is what -- this is the real definition -- this is the correct definition in our view of -- of -- of inadvertence versus non-inadvertence. We think, in all cases, the relevant question is, did the party deliberately take the prior position? In other words, did the party deliberately choose Position X --
So does it come 1 down to the Fifth Circuit now coming back to us and saying he told his attorney, but the attorney didn't tell the court, and you're responsible for your attorney's errors?
Which is what we usually say.
We do think the attorney is responsible. The attorney's conduct does bind the client. And --
And so that's what the Fifth Circuit basically said here, that the attorney knew. The attorney didn't say it. So you -- we're -- we're back to the circle.
Well, here -- here's -- here's -- here are two errors, I think, that the Fifth Circuit made just as to inadvertence. One is it deemed irrelevant -- and this is on Pet. App. 13a -- any evidence regarding the attorney's knowledge of whether the duty to disclose applied in this case. That is a bucket of relevant evidence that -- relevant and -- and mainly objective evidence, in our view, that the Fifth Circuit didn't consider. And the second error is, even with 1 respect to its analysis of the potential motive that Justice Alito brought up, the Fifth Circuit's analysis was incomplete. I mean, the record suggests many reasons why there was no modification of the plan when this -- when this tort claim was ultimately disclosed. The fact is, no matter when you disclosed it, it would have been years before this claim would have become an award of damages.
So, in one word, I'd do a simple opinion that says you have to look at the totality of the circumstances and you can't reduce it to the three factors that you mention alone.
That would be my opinion.
That -- that -- that's right. And -- and -- and the Fifth Circuit ignored evidence relevant to the knowledge of the duty and ignored evidence pertaining to the potential motive prong --
All right. Thank you, counsel.
-- that the Fifth Circuit 1 did consider.
Justice Kagan? Justice Gorsuch? Justice Kavanaugh? Justice Barrett? Justice Jackson? Thank you, counsel. Mr. Jay. ORAL ARGUMENT OF WILLIAM M. JAY ON BEHALF OF THE RESPONDENT
Mr. Chief Justice, and may it please the Court: The question the Court agreed to decide in this case is not about whether there was a clear inconsistency between the representations but about whether proof of bad faith is required before judicial estoppel can apply. And the answer should be no. Where the same litigant seeks to win a second victory on grounds that are clearly inconsistent with the grounds on which he won the first victory, that undermines the integrity of the judicial process, and it is not necessary to also prove that -- as Mr. Liu just said, that the -- that litigant intended 1 to switch positions all along. I'd like to make basically three basic points, one about precedent, one about practicalities, and one about bankruptcy. The first is that there are multiple cases, not just New Hampshire, also the 19th century cases that New Hampshire addressed. I don't think Petitioner's rule can explain any of them. One key thing that New Hampshire says is that mistake or inadvertence looks at Time 1, not Time 2. And I -- I think there's been a lot of inconsistency with the other side's presentation this morning about whether they look at Time 1 or Time 2. Second, in practice, as the district court noted, basically, every litigant facing judicial estoppel who claims his original position was a mistake, under the other side's rule, would just -- just a declaration claiming a lack of legal understanding or that the attorney gave bad advice would be enough for a trial. And, third, although we are not urging a special rule for bankruptcy cases, as the other side is, we think that our rule better 1 fits the bankruptcy context anyway. Petitioner's rule would undermine the full disclosure of assets on which the bankruptcy bargain depends. A doctrine, as Judge Easterbrook puts it, that encourages debtors to be truthful in their bankruptcy filings will assist creditors in the long run. That is why our rule does not deprive creditors of recoveries that they would otherwise be able to get. District courts might well exercise their discretion at the margin in favor of less culpable litigants, but there's no reason to make bad faith a prerequisite. I welcome the Court's questions.
Is there any difference between your rule and the Fifth Circuit's rule?
Not in practice and certainly -- certainly not in this case. The -- the one -- if -- if -- if I were writing the rule for all circumstances, I would say that the question of benefit, which the Fifth Circuit describes as part of the inadvertence- or-mistake inquiry, I think New Hampshire would 1 put that earlier in the analysis. And the core -- New Hampshire's core three factors are clear inconsistency, accepted by the tribunal, and getting some benefit that would be inequitable for you to keep. And I think that we -- we would put the -- sort of the financial aspect of the benefit that the litigant gains from the bankruptcy in that bucket instead. I don't think that's a -- that's an analytical point. I don't think it makes any difference in this case. So we certainly agree with the Fifth Circuit that the question is not whether the -- the litigant himself got bad legal advice or was subjectively aware of the legal duty as opposed to the facts.
New Hampshire also considered the detriment to the party before the court in the subsequent litigation. What is the detriment to your client?
So, in New Hampshire, the Court said or, in other words, that it said either benefit to the party that took the position or a detriment to the adversary. And 1 I think New Hampshire is unusual, and your question to my friend earlier about mutuality gets to this. It is actually unusual for judicial estoppel to be -- to come up in a second piece of litigation before the same -- involving the same parties precisely because the second -- if it's the same party, they're well positioned to call the person out for switching positions. In the Philadelphia, Wilmington Railroad case that New Hampshire discussed, you know, it's been -- it's been settled since the 1850s that this is primarily a doctrine about defending the courts' integrity, and for that reason, mutuality is not required.
What's -- how would you respond to Petitioner's argument that this is a windfall for your client?
I think it -- it's just the same point, that the -- the way in which a court's integrity is preserved through the use of this doctrine is that the litigant against whom the inconsistent representation is being made points it out to the court and so, in -- in that sense, because mutuality isn't 1 required, it is that litigant's standing in for the court and pointing out that the court is about to be misled by the common litigant who took the -- the clearly inconsistent position in the prior action. So I understand the windfall point, but I think that's just -- you might say the same thing about res judicata, collateral estoppel, that the -- the system cares more about locking down the first determination and preventing it from being relitigated rather than saying, well, the correct answer would be to side against the second litigant rather than the first.
Well, but it's not really just relitigation. It's a new person jumping on to the scene. It does seem -- in terms of the courts' integrity, it does seem a little much that the one person who's getting off is the one who -- whose truck hit the other guy, right? I mean, it's a lot easier to explain why that's a bad result than simply the idea that, oh, there was something else that went on that the court didn't know about and now you're 1 going to change the -- the natural sense of the propriety of the result by saying the one person who we know inflicted harm, according to the allegations, of course, gets off scot-free.
So I think that's a consequence, Your Honor, of the fact that, if this comes up, it comes up at a time when it's too late to reopen the first proceeding. This goes to a question that Justice Sotomayor asked, that one of the elements of judicial estoppel is that the first proceeding has already resulted in some benefit to the -- to the common litigant. And so every court of appeals that has applied New Hampshire to the bankruptcy context has agreed with the basic proposition in this case, although I think it's one that Mr. Garre seems to be disagreeing with, that a representation to the bankruptcy court that there is no cause of action is inconsistent with asserting in a subsequent action that there is a cause of action, just like asserting ownership of a piece of property or a -- a different legal interest, asserting that you don't own that property in one action is 1 inconsistent with assert -- with trying to invoke the ownership right in a second action.
Yes, it's inconsistent, but what is the advantage that is gained from that in this situation?
So the advantage in a -- in a bankruptcy in which the debtor has an incentive to minimize assets is the ability to convince the bankruptcy court that -- so this is a Chapter 13 case, taking this as an example, that a Chapter 13 would be just as much in the creditors' interest as a Chapter 7, which is always the --
I understand. But the bankruptcy court could convert the proceeding if that information is brought to their attention. The creditors apparently in this case, for whatever reason, said we don't care. I don't understand what the advantage is that is being apparently at the heart of your concern that judicial integrity is threatened or something in this situation.
The advantage that a litigant gets is getting -- is convincing the 1 bankruptcy court to confirm the Chapter 13 plan --
Not a litigant, this litigant. In other words, in these circumstances --
-- because, as others have pointed out, we're talking about a totality of the circumstances, you know, equitable assessment of whether judicial estoppel should be applied.
Right. And the facts -- I mean, if you want me to talk about the facts of this case, so, in this case, at the time that the debtor had the cause of action, the debtor also fell behind on payments and had to -- had to submit additional amendments to the -- or modifications to the Chapter 13 plan. And the trustee initially objected to the first of those amendments and said this amended plan doesn't leave unsecured creditors as well off as a Chapter 7.
And once the information was brought to their attention, no one sought interest, no one thought the plan 1 should change in any way?
So, respectfully, Your Honor, like, that's a -- that's a distinct point, and I'm happy to address that because the -- this was brought to the bankruptcy court's attention such as it was. And if you -- if you look at page 203, you'll see that the -- the debtors didn't actually disclose any valuation for this claim. They didn't change the sum total of their assets at all. They just listed -- they mentioned the claim and said unknown. This, of course, was well into the payment plan. It's after the -- the new confirmation had been granted. And at that point, I think it's not surprising that creditors who were receiving this stream of payments and weren't really told anything about this cause of action didn't affirmatively seek reopening of the -- the bankruptcy.
I guess my question is, is it fair to just assume or presume that by not having this information, an advantage has been obtained such that it makes sense and is equitable to preclude the debtor from 1 accessing or having this asset, which could, in some situations, actually go into the estate and be a part of the entire bankruptcy? It just seems very harsh.
-- I'm happy to answer the -- the question. Just let me note by my preface that the -- whether there has been an advantage gained, I think, as -- as -- this goes to much of my colloquy with Justice Thomas earlier -- I think that that's a different question than the one on which the Court granted cert. I mean, at the -- the --
Well, we certainly didn't grant cert on the bad faith. You said that at your original statement, and I took issue with it. The question the Court granted cert on, you said, was whether proof of bad faith is required.
If you look at the actual question presented, it's whether the Fifth Circuit's formulation, which is requiring potential motive for disclosure, was correct.
Right. But, if you -- right. If you look at the last sentence of the question presented, right, it says that the reason that the -- that the Fifth Circuit is wrong is that it doesn't require proof of bad faith. And that is the -- that is the fundamental submission that we're making to the Court, that inadvertence or mistake, as an exception to the judicial estoppel doctrine, does not connote proof of bad faith. I mean, it may --
Well, Mr. Jay, if we're talking about protecting the integrity of the courts, I just want to clarify a factual point. Am I correct that the bankruptcy court declined to sanction?
No party asked for sanctions, Your Honor, so -- so that --
The bankruptcy court knew because this was brought, you know, your -- the -- let's see. It's my understanding the bankruptcy court knew about this because he ultimately did go back to the bankruptcy court and make the court aware. Am I right about that?
There's an amended schedule that, as I was saying to Justice Jackson, doesn't disclose the amounts but states that there is a claim -- for the first time that there is a claim under -- in the answer to Question 33 on the schedule.
That's after the confirmation.
And maybe this goes to Justice Sotomayor's point and Justice Jackson's point to your friend on the other side. Why isn't the bankruptcy -- in this context, why wouldn't we expect the bankruptcy court to be the one to police this?
I think that no one asked the bankruptcy court to take any action. And it -- I -- it may well be that -- you know, as I was saying to Justice Jackson, that the creditors concluded that this late in the payment plan, it wasn't worth the candle to do so. And the bankruptcy court -- and this is to the point that Justice Jackson asked my friend about. The bankruptcy court may have 1 tools that it can use in bankruptcy in the sense of denying a discharge or denying access to Chapter 13 and forcing the case to be converted -- converted to Chapter 7 or even referring to criminal prosecution. But all of those things go to the bankruptcy itself rather than to the consistency of the representations between the bankruptcy and the -- and a subsequent proceeding.
Mr. Jay, if we might zoom out just for a second, judicial estoppel is an off-branch of equitable estoppel. Equitable estoppel requires mutuality. Our judicial estoppel, one case, had mutuality, where a benefit gained by one party did cause a detriment to the other, could have been an equitable estoppel case. This is where we don't have mutuality. And if -- if judicial estoppel is about protecting the integrity of the courts, I get the concern on the one side that there's perhaps a misrepresentation to the bankruptcy court subject to all the caveats we've discussed. 1 But the courts also have a duty and they're open to claims of personal injury. And to give your client a windfall would also seem to have some impact, again, zooming out, on the -- on the integrity of the judicial process and its accessibility. No?
I don't think so, Your Honor, any more than -- than issue preclusion does, which, as the Court's --
No, I understand we have non-mutual issue preclusion.
And -- and you -- you alluded to those. But those -- those doctrines are, again, new and riddled with exceptions when it comes to non-mutual collateral estoppel and -- and the like. And -- and -- and it does seem to me like what one -- often we don't do it when it's just not fair.
And -- and, here, how about, again, if we're concerned about the integrity of the judicial process, why isn't one consideration that your client would just 1 get a plain old windfall?
So the non-mutuality goes at least back to the Philadelphia, Wilmington Railroad case in the 1850s, which --
-- discussed in New Hampshire, right? So I resist the premise that -- that it is as new as, for example, non-mutual issue preclusion. And --
Right. And the -- the significance that we take from the fact that, as you said, issue -- sorry, judicial estoppel grows out of equitable estoppel is that equitable estoppel likewise doesn't have this type of state-of-mind requirement. It focuses on the -- on the effect --
Not just -- put aside the state-of-mind requirement. Put that aside.
That's not relevant to my question.
But I think that the reason 1 that there is no state-of-mind requirement for equitable estoppel or judicial estoppel is -- is that both doctrines focus on the effect. Equitable estoppel focuses on the effect to one litigant. Judicial estoppel focuses on the effects on the judicial system.
Yes, and -- and my question is one of the effects on the judicial system here is we're closing the courthouse doors to a good claim and allowing one party who has engaged in tortious conduct to walk away scot-free.
We only -- the premise of your question, Your Honor, that it is a good claim is --
Let's assume -- I -- I know you resist that, but let's just assume that for one --
I'm not resisting it for the usual "I don't" -- you know, lawyers don't concede anything reasons.
They never do. (Laughter.)
I'm resisting it because it's the very premise of judicial estoppel that 1 we don't look past -- once the first case is over, we don't look past the accuracy of the representation in the first case. That's the point, right? The -- the whole point of the -- of the representation in the first case, whether it's New Hampshire or -- or this bankruptcy case or any of the other judicial estoppel cases, is the representation that, in this case, I don't have an asset of this nature.
Right. So I think that -- that Mr. Garre, in his presentation, brought this, you know, back to sort of the mantra of a failure to update a form, and I do want to resist that -- that characterization because, I mean, again, first, the Court didn't grant cert on the clear inconsistency point. You know, there's no -- no disagreement in the courts of appeals that where there's a representation that a cause of action doesn't exist, that's inconsistent with asserting it. And in this case, there's no fact -- no assertion of a factual lack of knowledge. In fact, the facts show that the -- 1 that all the facts were known. There's also no dispute about the obligation to disclose, and this -- this goes -- this gets to a question, I think, that Justice Alito asked my friend earlier, that where there is a duty to disclose, that failing to make a disclosure is a representation to the courts that there is nothing to disclose. So, because those aren't the questions before the Court, all I think that the other side is left with is saying that they resist the idea that either the attorney knew of the legal obligation, which in that bankruptcy court is well established, it's been established for at least a decade, or that the attorney failed to give advice on that to the debtor. And on -- tying together all the questions about what you might say in an opinion, we would urge you to say in an opinion that the bankruptcy -- that attorneys' representations matter, that a litigant can't escape judicial estoppel by saying, although my attorney made this representation to the court in the first action, that's a mistake because I 1 didn't understand the consequences of the choice that my attorney was making. That's fundamentally inconsistent with the notion of mistake as this Court has used it for well over a century. I think this is well fleshed out in the Jerman versus Carlisle McNellie decision that we cite in our papers. But that cites precedent going well back to Justice Story construing a statute involving mistake or error. Legal mistakes aren't that kind of mistake, and that -- that type of error is not what the judicial estoppel doctrine or the inadvertence-or-mistake exception to it are getting at. And I think Justice Jackson had the hypothetical in the top half of the argument about the -- the asset being concealed from the divorce. And I think that the point that I wanted to make from that is that how is that example going to come to light and how are -- how are these causes of action that are not disclosed in bankruptcy and that -- that, if disclosed, the bankruptcy court could make its determination about whether they should have 1 been disclosed sooner and what the consequences should be, how are they going to come to light if there is no incentive to litigate the fact that they didn't come to light sooner? So, as the lower courts have recognized that -- that apply our rule, not just the Fifth Circuit but -- but also others --
But why does the incentive have to come from the threat of not allowing you to pursue the claim? I mean, this is the point that -- that many have pointed to or made with respect to all the tools the bankruptcy court has to sanction an intentional omission of that nature.
But the -- the tools to sanction all presuppose that someone's going to find out about the concealed claim, and the tools are not useful if the assets don't come to light. And I think that --
Yeah, but you need to find out about the concealed claim in order for the claim to be extinguished. I mean, that's -- that's a necessary condition for anything to happen. 1 The question is, why, once we find out about it, the remedy is to say you cannot pursue that claim as opposed to some other solution?
I mean, I think the -- the reason is the clear inconsistency and that, you know, this isn't -- this doesn't just come up in the context of, you know, the -- the good claim that -- that we're talking about. I mean, this comes up in all types of bankruptcy actions in which a party makes a solemn representation to the bankruptcy court about the amount of property that they have, and they subsequently turn around and make representations to another court that are flatly inconsistent with that such that --
I understand, but the equivalent would be that once that happens, somehow the bankruptcy court could divest the person of that property, which is not the answer, right? The answer is they adjust the bankruptcy proceeding to sanction them appropriately.
But that -- that's just -- that's just it, Justice Jackson. I think that 1 once the plan is confirmed and the debtor gets the discharge, I don't think that the -- that my friend on the other side is correct to say that the bankruptcy court always has the option to say, oh, I'm going to take some further action. In a Chapter 13 plan, if the creditors have been paid off, then the creditors have been paid off. And I -- and a Chapter 13 plan is time-limited. The bankruptcy court, I think, doesn't have the -- the free hand that your question is positing.
And should that factor in then to whether or not judicial estoppel is appropriate? Why couldn't -- in the totality of the circumstances, maybe in that situation, you would have judicial estoppel?
So, I -- I mean, I think our -- I resist giving a bankruptcy-specific answer, but I'll -- but I'm happy to give -- give an answer for that question. In every bankruptcy -- in every judicial estoppel case, rather, the question is what is the benefit that the -- that the common litigant, you know, 1 between the two actions has gotten from the first action? And if it's raised early enough that the -- that the litigant can surrender the benefit, then there isn't going to be judicial estoppel. I think that's just baked right into the doctrine. You don't need a bankruptcy -- bankruptcy-specific rule to say that because I think that's part of judicial estoppel, just like the clarity, like the -- clearness -- how clear the inconsistency between the representations is, also baked into the judicial estoppel doctrine. And when -- when there's doubt about whether a, you know, pro se litigant or something like that has made such a representation, then the -- the existing judicial estoppel doctrine can deal with that.
Unless the Court has any further questions?
Justice Thomas? Justice Alito? Thank you, counsel.
Rebuttal, Mr. Garre? REBUTTAL ARGUMENT OF GREGORY G. GARRE ON BEHALF OF THE PETITIONER
Thank you, Mr. Chief Justice. We would welcome any ruling setting aside the Fifth Circuit rule in this case. (Laughter.)
But we do think it's important for the Court to say that a holistic analysis should be undertaken into intent because I do think that it's likely this case will end up right back before this Court, as Justice Sotomayor indicated. And then we would urge the Court to let the lower courts sort out the particular facts and circumstances in this case under the holistic analysis. As to the question presented, the question presented and the whole petition is directed right at the Fifth Circuit's rule here. There's absolutely nothing that prevents this Court from considering that question, 1 resolving the circuit split, and the Court should do so. Petitioner disclosed his claim with more than a year left on the bankruptcy plan in this case. The bankruptcy court could have objected if it thought anything was awry. And any creditor could have come forward and objected if it thought it was entitled to anything more, but no one did. And, last, I would just say on the windfall point, no doctrine of equity would allow the tortfeasor in this case to walk away scot-free if the debtor here simply made an honest mistake in failing to update the form. The Fifth Circuit's decision should be reversed and the case remanded. Thank you.
Thank you, counsel. The case is submitted. (Whereupon, at 11:11 a.m., the case was submitted.)