What Is Judicial Estoppel?

Under the doctrine of judicial estoppel, an employee is barred from recovering under the ADA or FEHA for disability discrimination if the employee previously represented in another forum (typically, in an application for disability benefits) that he or she was totally disabled or unable to work. The judicial estoppel doctrine is an equitable affirmative defense designed to prevent an employee from gaining an unfair advantage by taking inconsistent positions in different proceedings. The policies underlying the judicial estoppel doctrine are “general considerations of the orderly administration of justice and regard for the dignity of judicial proceedings.” Rissetto v. Plumbers and Steamfitters Local 343, 94 F.3d 597, 601 (9th Cir. 1996).

Recent Developments

Several recent California appellate decisions have addressed the applicability of judicial estoppel in ADA and FEHA cases. In Prilliman v. United Airlines, Inc., 53 Cal. App. 4th 935 (1997), United Airlines grounded an airline pilot when it learned that he had contracted AIDS. The pilot applied for and received Social Security and private disability benefits prior to filing suit under FEHA for disability discrimination. The trial court granted United’s motion for summary judgment, but the Second District Court of Appeal reversed. Initially, the Court noted that FEHA imposes an affirmative duty on an employer to offer a reasonable accommodation to a qualified individual with a disability, including reassignment to a vacant position, unless the employer can show undue hardship. On the issue of judicial estoppel, the Court recognized that an employee may be barred from attempting to gain unfair advantage by taking one position in one forum and then taking a clearly inconsistent position in a different forum. Under the specific facts of the case, however, the Court found that the plaintiff’s receipt of disability and Social Security benefits, both of which were based on the plaintiff’s inability to work as a pilot, did not necessarily mean that the plaintiff was unable to work in an alternative position in the company. The Court therefore held that receipt of such benefits did not automatically preclude the plaintiff from pursuing his FEHA disability claim.

More recently, a different division of the Second District Court of Appeal held that a plaintiff was barred from pursuing an ADA claim where the plaintiff asserted an inconsistent position in an earlier workers’ compensation proceeding. In Jackson v. County of Los Angeles, 60 Cal. App. 4th 171 (1997), the plaintiff police officer filed a claim for workers’ compensation benefits. As part of his workers’ compensation claim, the plaintiff was evaluated by a physician who found that the plaintiff suffered from work-related hypertension, which required him to work in a stress-free environment. The plaintiff’s workers’ compensation claim was subsequently settled with the agreed stipulation that plaintiff was permanently disabled and could only work in a stress-free environment. The employer subsequently terminated the plaintiff’s employment because his position as a police officer necessarily involved stress, and an ADA lawsuit ensued.

The trial court in Jackson granted summary judgment in favor or the employer because it concluded that the workers’ compensation award barred the plaintiff’s ADA claim under the doctrine of judicial estoppel. In affirming the judgment, the Court of Appeal stated that judicial estoppel should apply when: (1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position; (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud or mistake.

Applying these criteria, the Court of Appeal in Jackson concluded that judicial estoppel barred plaintiff’s recovery because: (1) plaintiff had taken two positions - one in the workers’ compensation proceeding in which he stated that he required a stress-free job and another in the ADA action where he asserted he could perform the essential functions of a police officer position; (2) the positions were taken in judicial or quasi-judicial proceedings; (3) the plaintiff was successful in asserting the first position, given that the workers’ compensation judge adopted the stipulation requiring the plaintiff to have a stress-free work environment; (4) the plaintiff acknowledged that the essential functions of his police officer position did involve stress; and (5) the position taken in the workers’ compensation proceeding had not been taken as a result of ignorance, fraud or mistake.

In Bell v. Wells Fargo Bank, 62 Cal. App. 4th 1382 (1998), the First District Court of Appeal refused to apply the Jackson test in a FEHA action. In Bell, a former bank employee with HIV brought a disability discrimination claim under FEHA after the bank removed his existing accommodation allowing him to commute from his home one day a week. The trial court granted summary judgment, finding that the employee’s action was barred because he previously represented in his application for disability benefits that he was disabled and unable to perform “his regular and customary work.” The Court of Appeal reversed. Initially, the Court noted that judicial estoppel is an issue of fact to be decided according to the particular facts and circumstances of each case. The Court then stated that the doctrine should only be applied when a person has made statements or taken positions that are “totally inconsistent” or “so irreconcilable” that one statement necessarily excludes the other. Id. at 1387. The Court found that the plaintiff’s statements in his disability benefits application were not totally inconsistent with his litigation position that he could have performed his job had his prior accommodation been left in place. As a result, the Court ruled that the judicial estoppel issue could not be decided as a matter of law by way of summary judgment. The Court distinguished the result in Jackson by stating that Jackson was based upon the ADA, whereas Bell involved FEHA.

Finally, in Drain v. Betz Laboratories, Inc., 74 Cal. Rptr. 2d 598 (1998), rehearing granted June 11, 1998, the Court of Appeal applied judicial estoppel to preclude an employee from alleging that he was terminated on racial grounds in violation of FEHA. In Drain, the employee represented in a workers’ compensation proceeding that he was “totally disabled” from performing any of his job functions or any other occupation. He subsequently alleged in a civil action that the employer should have accommodated his disability by providing him with a light-duty job because it had done the same for Caucasian employees. After reviewing the five factors set forth in Jackson, supra, the Court found that the plaintiff’s representation in the workers’ compensation proceeding precluded him from representing in the civil action that he was able to continue working. Although no factual findings were included in the workers’ compensation referee’s approval of the parties’ compromise and release, the Court stated that such a fact was not fatal. Citing Jackson, the Court stated that “circumstances may warrant application of the doctrine even if the earlier position was not adopted by the tribunal.” Id. at 605. The Drain Court distinguished Prilliman by stating that the plaintiff did not seek disability benefits based on an inability to perform a specific job function. Similarly, the Court distinguished Bell by stating that the plaintiff’s disability application was not susceptible of varying interpretations.

B. Ninth Circuit Decisions

In Kennedy v. Applause, Inc., 90 F.3d 1477 (9th Cir. 1996), the employee asserted that she was discharged because of Chronic Fatigue Syndrome in violation of the ADA. The district court granted summary judgment for the employer on the ground that there was no genuine issue of material fact regarding whether the plaintiff was a qualified individual with a disability. The Ninth Circuit Court of Appeals affirmed because the employee made sworn statements on her state disability benefit and Social Security claim forms that she was completely disabled for all work-related purposes. Significantly, the Court precluded the plaintiff’s ADA claim even though the Social Security Administration denied her claim for benefits because it concluded that she had the ability to return to her job. The Court also disregarded the plaintiff’s deposition testimony that she was not totally disabled, given than it contradicted her prior sworn statements.

Although not an ADA case, the Ninth Circuit applied the judicial estoppel doctrine in an employment context in Rissetto v. Plumbers and Steamfitters Local 343, 94 F.3d 597 (9th Cir. 1996). In Rissetto, the employee filed a workers’ compensation claim asserting an inability to work. The employee subsequently sued her employer for age discrimination under FEHA and other state claims that were premised on her ability to work. The Ninth Circuit affirmed summary judgment in favor of the employer, stating “[w]e hold that, having obtained a favorable settlement based on her assertion that she could not work, plaintiff was estopped from claiming that she was performing her job adequately. Plaintiff was thus unable to establish a prima facie case of discrimination.” Id. at 606. Although the plaintiff’s claims were based on state law, the Court ruled that federal law governs the application of judicial estoppel in federal court.

In Baker v. Asarco, Inc., 1997 U.S. App. Lexis 19948 (9th Cir. 1997), the Ninth Circuit (in an unpublished decision) affirmed summary judgment in favor of the employer on an ADA claim where the plaintiff applied for disability benefits and stated he was permanently unable to work. The Court noted that the plaintiff “did not state he could work with a reasonable accommodation; rather, he claimed he could not work at all.” Id. at 3. Given the plaintiff’s assertion of total and permanent disability, the Court stated that “he cannot argue that he was entitled to a reasonable accommodation at the same time he claimed to be unable to work at all.” Id. at 4, citing D’Aprile v. Fleet Servs. Corp., 92 F.3d 1, 4 (1st Cir. 1996).

Most recently, the Ninth Circuit addressed the subject of judicial estoppel in Johnson v. State of Oregon, 141 F.3d 1361 (9th Cir. 1998). In Johnson, the Court held that neither application for nor receipt of disability benefits automatically bars an employee from establishing that he or she is a qualified individual with a disability under the ADA. Because of the different definitions of disability under the ADA and various policies of disability benefits-providers, the Court stated that an employee may be “disabled” and entitled to disability benefits so long as he or she is not working, and still be a qualified individual with a disability under the ADA because he or she can work with reasonable accommodations.

Since the plaintiff in Johnson alleged she was permanently disabled but could work with reasonable accommodation, the Court ruled that her representations to the Social Security Administration, IRS and private disability insurers that she was “unable to work” did not bar her ADA claim because there had been no prior representation regarding whether she could work with a reasonable accommodation. The Court did note, however, that “in clear-cut cases, representations on disability benefits applications may warrant judicial estoppel of ADA claims.” Id. at 1369. Thus, the Court stated that judicial estoppel may apply if the plaintiff’s prior representations “demonstrate that a claimant is playing fast and loose with the courts, seeking advantage by advancing mutually exclusive contentions before the court and benefit providers.” Id. In addition, the Court stated that a plaintiff’s prior representations for disability benefits “may be so strong and definitive that they will defeat the plaintiff’s prima facie case on traditional summary judgment grounds.” Id.

C. Supreme’s Court Review Of The Judicial Estoppel Issue

The United States Supreme Court recently granted certiorari in Cleveland v. Policy Management Systems Corp., 120 F.3d 513 (5th Cir. 1997), cert. granted 119 S. Ct. 39 (1998). In Cleveland, the Supreme Court is expected to resolve a split in the federal circuits and decide whether a terminated employee’s assertions to the Social Security Administration of total disability and inability to work preclude an employee from recovering under the ADA or create a rebuttable presumption that the individual is not a qualified individual with a disability.

In Cleveland, the plaintiff took a leave of absence after suffering a stroke. Upon taking leave, the plaintiff filed an application for Social Security benefits in which she stated that she was “unable to work.” A few months later, however, she returned to work but did not perform well and required several accommodations. The employer refused to provide the accommodations and subsequently terminated her for poor performance. Following her termination, the plaintiff renewed her application for Social Security benefits and provided a sworn statement that she was “unable to work due to my disability” and “could no longer do the job because of my disability.” The Social Security Administration determined that the plaintiff had been disabled continuously since suffering her stroke and granted her benefits retroactively. Simultaneously with seeking Social Security benefits, the plaintiff filed suit claiming that her employer violated the ADA.

The district court in Cleveland granted the employer’s motion for partial summary judgment, ruling that the plaintiff’s statements in her application for Social Security benefits precluded her from claiming to be a qualified individual with a disability. The Fifth Circuit Court of Appeals agreed. According to the Fifth Circuit, the plaintiff’s assertion of total disability created a “rebuttable presumption” that the employee could not perform the essential functions of her job. Theoretically, the Court noted that a plaintiff can be qualified to work with a reasonable accommodation, but unable to work under disability inquiries that do not contemplate the enabling effects of accommodation. Nonetheless, the Court held that the application for or receipt of disability benefits creates a rebuttable presumption that the plaintiff is judicially estopped from asserting that he or she is a qualified individual with a disability. Under the specific facts of the case, the Court ruled that the plaintiff “continuously and unequivocally represented to the SSA that she is totally disabled and completely unable to work. As her statements are unambiguous and previously uncontroverted, she cannot now be heard to complain that she could perform the essential functions of her job.” Id. at 518.

The Supreme Court is expected to issue a ruling in Cleveland by the end of June.

Conclusion

As is evident from the foregoing, both state and federal courts are not uniform in their application of judicial estoppel in disability discrimination cases. Indeed, the law regarding judicial estoppel in ADA and FEHA cases is still in a state of flux. Several California appellate decisions and Ninth Circuit cases have barred ADA and FEHA claims under the judicial estoppel doctrine, while others have not. Read together, the decisions show that the application of judicial estoppel will trigger a fact-intensive inquiry into the representations that the employee makes in his or her application for disability benefits. While the doctrine will not necessarily bar discrimination claims by plaintiffs who have received disability benefits, the doctrine will continue to be a significant hurdle for many claimants. The Supreme Court’s upcoming decision in Cleveland likely will clarify the law in the federal courts; to what extent the Supreme Court’s decision will influence California state law claims remains to be seen.