Plaintiff was judicially estopped from seeking compensatory damages pursuant to title vii when she failed to disclose her discrimination claim in a contemporaneous bankruptcy proceeding.

The plaintiff alleged that her former employer unlawfully terminated her employment because of her pregnancy, in violation of Title VII and the Pennsylvania Human Relations Act. Prior to filing her lawsuit in federal court, the plaintiff had filed a charge of discrimination on October 19, 2007, against her former employer with the Equal Employment Opportunity Commission ("EEOC"), and she filed a second charge of discrimination on December 17, 2007. On February 11, 2009, and February 26, 2009, she received right-to-sue letters from the EEOC regarding her charges of discrimination. On February 22, 2009, the plaintiff filed a bankruptcy petition with the assistance of an attorney. However, the plaintiff failed to disclose her pending administrative charges as assets in her bankruptcy petition. The plaintiff also failed to disclose her lawsuit as an asset when her attorney amended the petition on April 8, 2009. On April 9, 2009, the plaintiff filed her lawsuit against her former employer and never disclosed the existence of the lawsuit to the bankruptcy court or the bankruptcy trustee. She also answered interrogatories by stating that "[p]laintiff has not been involved in any other legal proceedings." As a result, the defendant sought summary judgment on its affirmative defense of judicial estoppel, arguing that the plaintiff's failure to disclose her discrimination claims in a contemporaneous bankruptcy proceeding should preclude her from pursuing her discrimination claims. Although the court found that the plaintiff acted in bad faith in not disclosing her discrimination claims to the bankruptcy court, it did not dismiss her claims in their entirety. Rather, the court determined that "the purpose of judicial estoppel—deterrence against manipulation of the judicial process—is served by barring [plaintiff] from pursuing her claims for compensatory damages." The court, however, noted that the plaintiff will be permitted to seek declaratory and equitable relief that would have added no value to the bankruptcy estate.

Case Law Alert - 4th Qtr 2010