JANE MAGNUS-STINSON, District Judge.
Presently before the Court in this alleged employment discrimination action is Defendant Indiana Oxygen Company, Inc.'s ("Indiana Oxygen") Motion to Dismiss Plaintiff's Complaint and/or Cap Plaintiff's Damages Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. [Filing No. 9.] For the following reasons, the Court
The purpose of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) is to test the sufficiency of the complaint, not to decide the merits of the case. Rule 12(b)(1) requires dismissal of claims over which the federal court lacks subject-matter jurisdiction. Jurisdiction is the "power to decide" and must be conferred upon the federal courts. In re Chicago, R.I. & P.R. Co., 794 F.2d 1182, 1188 (7th Cir.1986). Whether or not a plaintiff has standing to bring a lawsuit is a jurisdictional requirement which may be challenged through a motion made pursuant to Rule 12(b)(1). Hoffman v. Gard, 2010 WL 4226177, *1 (S.D.Ind.2010).
The Court must accept as true the factual allegations of the complaint, viewing them in the light most favorable to the plaintiff, and making all reasonable inferences in the plaintiff's favor. Sanner v. Board of Trade, 62 F.3d 918, 925 (7th Cir.1995). However, when faced with a challenge to its subject-matter jurisdiction, the Court may look beyond the complaint and review any other evidence to resolve the jurisdictional issue. Halker v. United States, 2010 WL 2838468, *2 (S.D.Ind. 2010). The burden is on the plaintiff to prove, by a preponderance of the evidence, that subject-matter jurisdiction exists for his or her claims. Lee v. City of Chicago, 330 F.3d 456, 468 (7th Cir.2003).
The following facts are stated consistent with the foregoing standard, that is, in the light most favorable to Plaintiff Gregory Thomas. On July 13, 2012, Mr. Thomas filed a voluntary petition for relief under Chapter 13 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Indiana ("Petition").
In May 2013, Mr. Thomas was terminated from his employment at Indiana Oxygen. [Filing No. 10-11.] He filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC") the following month, alleging that Indiana Oxygen wrongfully terminated him based on his disability and in retaliation. [Filing No. 10-11.] The EEOC issued Mr. Thomas a "Right to Sue" letter, [Filing No. 10-12], and Mr. Thomas filed a Complaint in Marion County Superior Court on February 19, 2014, [Filing No. 1-1]. Indiana Oxygen removed the lawsuit to this Court pursuant to 28 U.S.C. §§ 1331, 1441, and 1446. [Filing No. 1.]
In his Complaint, Mr. Thomas asserts claims for discrimination in violation of the American with Disabilities Act, 42 U.S.C. § 12101, et seq., ("ADA"), retaliation in violation of the ADA, and retaliatory discharge in violation of public policy. [Filing No. 1-1 at 4-5.] Mr. Thomas alleges that he was terminated from his employment within weeks after he suffered a significant work-related injury. [Filing No. 1-1 at 3.] He claims that, despite his qualifications and work performance, Indiana Oxygen "failed and refused to engage in the interactive process with [him], failed to make or even consider reasonable accommodations for him, and ultimately terminated his employment because of his disability or perceived disability." [Filing No. 1-1 at 4.] Additionally, Mr. Thomas asserted that his termination was in retaliation for exercising his rights to seek accommodation and worker's compensation. [Filing No. 1-1 at 4-5.]
Meanwhile, after his termination but before he filed the Complaint, Mr. Thomas filed two motions in the Bankruptcy Court. First, Mr. Thomas filed a Motion to Modify Chapter 13 Plan on May 29, 2013, requesting that the court modify his plan due to a decrease in income, [Filing No. 10-7 at 1], and the court granted his motion on July 17, 2013, [Filing No. 10-8]. Then, on August 18, 2013, he moved the Bankruptcy Court to modify his Chapter 13 plan to reflect receipt of a worker's compensation settlement, [Filing No. 10-9 at 1]. The Bankruptcy Court granted his motion on October 7, 2013. [Filing No. 10-10.] Neither motion contained information regarding Mr. Thomas' potential litigation or any claims he might have against Indiana Oxygen, and the Bankruptcy Court modified his Chapter 13 plan based on those representations in the motions.
Indiana Oxygen filed the pending motion on April 2, 2014. [Filing No. 10.] Shortly thereafter, Mr. Thomas filed a Debtors' Application to Employ Special Counsel, advising the Bankruptcy Court of his employment discrimination case in this Court and asking it to appoint special counsel for
The Court must determine whether Mr. Thomas has standing to bring his employment discrimination suit in this Court. Without standing, there would be no basis for subject-matter jurisdiction, his claims cannot proceed, and must be dismissed. Fed.R.Civ.P. 12(b)(1).
Indiana Oxygen argues that Mr. Thomas does not have standing to pursue his claims because the claims are property of the bankruptcy estate and he has not disclosed them in the bankruptcy proceeding. [Filing No. 10 at 4-5.] Further, Indiana Oxygen argues that if Mr. Thomas were to attempt to amend his bankruptcy petition, he would still be estopped from pursuing his claims for his own benefit. [Filing No. 10 at 8.] Mr. Thomas responds that he "has always had standing to pursue this case" and has now disclosed his claims in the bankruptcy proceeding. [Filing No. 13 at 2-3.]
As an initial matter, it is clear that Mr. Thomas' discrimination claims are part of the bankruptcy estate. The Bankruptcy Code requires the debtor to schedule as assets "all legal or equitable interests of the debtor in property as of the commencement of the [Chapter 13 bankruptcy] case." 11 U.S.C. § 541(a)(1). Any legal claims procured while the bankruptcy is pending also become property of the bankruptcy estate. 11 U.S.C. § 1306(a)(1) ("Property of the [Chapter 13 bankruptcy] estate includes ... all property of the kind specified in such section that the debtor acquires after the commencement of the case but before the case is closed, dismissed, or converted ...."); Rainey v. United Parcel Service, Inc., 466 Fed.Appx. 542, 544 (7th Cir.2012) ("A Chapter 13 estate encompasses all property, including legal claims, acquired after the petition is filed and before the case is closed"). Because Mr. Thomas' discrimination claims against Indiana Oxygen arose after his bankruptcy proceedings commenced and before it concluded,
As part of the bankruptcy estate, Mr. Thomas has a duty to disclose his employment discrimination claims to the Bankruptcy Court. "Debtors have a continuing duty to schedule newly acquired assets while the bankruptcy case is open." Rainey, 466 Fed.Appx. at 544. During the first month and a half of this litigation, Mr. Thomas neglected his duty. [See Filing No. 10-3.] On April 18, 2014, however, after Indiana Oxygen filed the pending Motion to Dismiss, Mr. Thomas disclosed his employment discrimination suit to the Bankruptcy Court and requested to employ special counsel, [Filing No. 13-1 at 1], and the Bankruptcy Court granted Mr. Thomas' motion, [Filing No. 13-2]. As such, he fulfilled his duty to inform the Bankruptcy Court and his creditors of his employment discrimination claims.
Because a Chapter 13 debtor retains possession of the bankruptcy estate's
Because Mr. Thomas is permitted to pursue his employment discrimination claims on behalf of the bankruptcy estate as a debtor-in possession, Mr. Thomas has met his burden to prove that this Court has subject-matter jurisdiction over his claims. See id. (finding that the Chapter 13 debtor had standing to litigate his discrimination claims in federal district court after informing the trustee of previously undisclosed claims when the trustee did not choose to abandon that property and when the bankruptcy proceedings were ongoing); Tucker, 2011 WL 4479112, at *2 (concluding that once the Chapter 13 debtor amended her schedules to include the cause of action and the bankruptcy court appointed special counsel to litigate her claim on behalf of the bankruptcy estate, the debtor was "no longer pursuing this action for her benefit, and thus, she has standing to bring this claim").
Indiana Oxygen argues that even if Mr. Thomas has standing to pursue his employment discrimination claims on behalf of the bankruptcy estate, judicial estoppel prescribes that Mr. Thomas' damages be
Judicial estoppel is an equitable doctrine, Cannon-Stokes v. Potter, 453 F.3d 446, 448 (7th Cir.2006), and may be invoked by a court at its discretion, New Hampshire v. Maine, 532 U.S. 742, 750, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001). The doctrine can be used either to estop the plaintiff from pursuing a claim entirely, Matthews v. Potter, 316 Fed.Appx. 518, 522-23 (7th Cir.2009), or to cap the damages available to the plaintiff, Wiggins v. Citizens Gas & Coke Utility, 2008 WL 4530679, *4 (S.D.Ind.2008).
Indiana Oxygen relies heavily on Wiggins v. Citizens Gas & Coke Utility, 2008 WL 4530679 (S.D.Ind.2008), to support its argument that Mr. Thomas' nondisclosure was not based on inadvertence and that his damages should be capped as a result. In Wiggins, the plaintiff filed a charge with the EEOC on July 1, 2002, alleging that his employer discriminated against him. 2008 WL 4530679, at *1. Two months later, the plaintiff filed a petition for Chapter 7 bankruptcy without disclosing his EEOC charge. Id. After the trustee reported no receipt or distribution of assets, the bankruptcy court granted him a discharge of his debts and closed the case. Id. Over two and a half years later, the plaintiff filed a lawsuit against his employer based on the alleged discrimination. Id. In response to his employer's interrogatory, the plaintiff denied filing for personal bankruptcy after June 2002, which was untrue. Id. With only seven days until the trial date, the employer notified the court that it had discovered that the plaintiff had failed to disclose his Chapter 7 bankruptcy
Although the Seventh Circuit has not spoken directly on the issue before the Court, other district courts within this Circuit have analyzed cases involving facts much closer to the facts present in this case — which are significantly distinguishable from the facts in Wiggins.
Similar to the plaintiffs in both Wiggins and Fulmore, Mr. Thomas did not disclose this lawsuit to the Bankruptcy Court until after Indiana Oxygen filed its Motion. See Wiggins, 2008 WL 4530679, at *1; Fulmore, 2013 WL 3864205, at *1-2; [Filing No. 10; Filing No. 13-1]. In the instant case, however, Mr. Thomas' employment discrimination claims, like the plaintiff's claims in Fulmore, arose while his Chapter 13 bankruptcy case was still pending. [Filing No. 1-1]; Fulmore, 2013 WL 3864205, at *1. In Wiggins, the bankruptcy court closed the plaintiff's Chapter 7 bankruptcy case and fully discharged his debts after relying on his nondisclosure, 2008 WL 4530679, at *1, but here Mr. Thomas has not received a discharge of his debts or other substantial gains as a result of his omission, [see Filing No. 10-3]. Additionally, unlike the plaintiff in Wiggins but comparable to the plaintiff in Fulmore, there is no evidence that Mr. Thomas intentionally withheld information about this lawsuit from the Bankruptcy Court. Wiggins, 2008 WL 4530679, at *1; Fulmore, 2013 WL 3864205, at *2-3. The plaintiff in Wiggins actively and deliberately denied filing a personal bankruptcy after June 2002 in response to the defendant's interrogatory, 2008 WL 4530679, at *1, whereas there is no evidence that Mr. Thomas intentionally manipulated the Bankruptcy Court or this Court by explicitly lying on his Petition or any other court document.
In the context of whether judicial estoppel applies, the courts are divided on the question whether a plaintiff's subjective intent or corrective action for the benefit of the bankruptcy estate matters. Some courts look primarily to the subjective intent of the party to consider whether the plaintiff's nondisclosure was inadvertent or purposeful. See Korti v. A.W. Holdings, LLC, 2014 WL 793360, *4 (N.D.Ind.2014) ("Defendant has cited to nothing in the record to indicate that [the plaintiff] intentionally omitted the litigation from his first filing, or at the beginning of the second petition, or that he possessed a bad motive"); Burns v. Village of Crestwood, 2013 WL 352784, *4 (N.D.Ill.2013) ("Court generally consider a party's subjective intent in deciding whether to apply judicial estoppel... Without evidence of why [the plaintiff] omitted his potential claims from his initial bankruptcy petition, the Court cannot decide whether applying the equitable doctrine of judicial estoppel would `work an injustice'") (quoting Matter of Cassidy, 892 F.2d 637, 642 (7th Cir.1990)); Jaeger v. Clear Wing Prods., Inc., 465 F.Supp.2d 879, 882 (S.D.Ill.2006) ("Notably, judicial estoppel does not apply when a debtor's `prior position was taken because of a good-faith mistake rather than as part of a scheme to mislead the court'") (quoting Stallings v. Hussmann Corp., 447 F.3d 1041, 1048 (8th Cir.2006)); Swearingen-El, 456 F.Supp.2d at 991 ("Judicial estoppel is not warranted here. Defendants cannot show plaintiff intended to deceive the bankruptcy court").
A plaintiff's swift corrective action, namely disclosure of a lawsuit to the bankruptcy court for the benefit of the bankruptcy estate, can suggest that the nondisclosure was inadvertent. In Cannon-Stokes, the Seventh Circuit applied judicial estoppel to prevent the plaintiff from personally benefitting from a lawsuit that she failed to disclose to the bankruptcy court, reasoning that "if [the plaintiff] were really making an honest attempt to pay her debts, then as soon as she realized that it had been omitted, she would have filed amended schedules and moved to reopen the bankruptcy, so that the creditors could benefit from any recovery." 453 F.3d at 448 (emphasis in original). The court continued,
Other courts have determined that a plaintiff's nondisclosure is "inadvertent only when he is either unaware of the claims or has no motive to conceal the claims." Wiggins, 2008 WL 4530679, at *2. Using this reasoning, a plaintiff's corrective action and subjective intent beyond this narrow understanding of "inadvertence" do not matter. See Becker, 2007 WL 1224039, at *1 ("[The plaintiff] intimates that her failure to disclose this lawsuit in her sworn financial statement was unintentional, but her subjective intent does not matter") (citing Cannon-Stokes, 453 F.3d at 449); Bland, 2008 WL 109388, at *3 ("Whether or not [the plaintiff] knowingly concealed this cause of action, the Court finds no grounds to excuse his failure to disclose"). Indiana Oxygen urges the Court to adopt this reasoning as well, but several district court cases since Wiggins have applied a broader definition of "inadvertence" that considers subjective intent, and the Court will do the same here. See, e.g., Korti, 2014 WL 793360, at *6; Burns, 2013 WL 352784, at *4; Fulmore, 2013 WL 3864205, at *3; Posley v. Clarian Health, 2012 WL 4101914, *5-6 (S.D.Ind.2012); Tucker, 2011 WL 4479112, at *3.
Given the early stage of this litigation, the lack of evidence suggesting that Mr. Thomas' nondisclosure of this lawsuit to the Bankruptcy Court was purposeful,
Moreover, the determination whether to cap damages and whether Mr. Thomas can benefit by receiving any damages over the amount owed to his creditors is likely one better suited for the Bankruptcy Court. In Fulmore, the court denied the defendant's motion to cap the plaintiff's damages and explained: "The Bankruptcy Court and Trustee are now on notice of this lawsuit. If and when any monies are received, the Court trusts that the Bankruptcy Court will proceed accordingly." 2013 WL 3864205, at *3. Similarly, in Osterhout v. Wal-Mart Stores East, LP, which presented facts similar to this case,
2012 WL 1434842, *2 (N.D.Ind.2012); see also Korti, 2014 WL 793360, at *6 ("Whether [the plaintiff's] damages should be limited to the amount owed to his creditors in his bankruptcy case is an issue within the jurisdiction of the bankruptcy court"). At this time, based on the reasons listed above, Mr. Thomas is allowed to proceed with his employment discrimination claims acting on behalf of the bankruptcy estate, and the decision whether he is allowed to receive damages in excess of the amount owed to his creditors is left to the Bankruptcy Court.
For the foregoing reasons, Indiana Oxygen's Motion to Dismiss Plaintiff's Complaint and/or Cap Plaintiff's Damages Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, [Filing No. 9], is