Bankruptcy Nondisclosure Bars Discrimination Case: Mitchell v. DeJoy, No. 24-3039 (10th Cir. Jan. 27, 2025) (J. Phillips)

Andrea Mitchell sued Louis DeJoy, the Postmaster General of the United States Postal Service (USPS), in the United States District Court for the District of Kansas, alleging disability discrimination and retaliation in violation of the Rehabilitation Act. The district court granted USPS’s motion to dismiss under the doctrine of judicial estoppel because Mitchell failed to properly disclose her discrimination and retaliation claims in her bankruptcy petition, and Mitchell appealed to the Tenth Circuit Court of Appeals.

Factual Overview
Mitchell began working for USPS as a forklift operator in December 2016. In September 2021, she requested an accommodation for a disability. According to Mitchell’s allegations, USPS refused her request, failed to engage in an interactive process, treated her differently than other similarly situated employees, and retaliated against her by placing her on unpaid leave and terminating her employment. Mitchell also alleged that USPS failed to train supervisors about their duties under the Rehabilitation Act.

In June 2022, Mitchell filed a claim with the Equal Employment Opportunity Commission alleging disability discrimination, harassment, and retaliation. In November 2022, she filed for Chapter 13 bankruptcy, stating under penalty of perjury that she had no claims against third parties. She amended her bankruptcy pleadings in December 2022 to disclose a “pending wage class action lawsuit” of “unknown” value against an unspecified party. The bankruptcy court confirmed Mitchell’s Chapter 13 plan in June 2023. Later that month, Mitchell filed her lawsuit against USPS.

Legal Analysis

Judicial Estoppel: The court analyzed whether Mitchell’s failure to properly disclose her discrimination and retaliation claims in her bankruptcy petition warranted dismissal under judicial estoppel. The court considered three factors: (1) whether the party’s subsequent position was clearly inconsistent with its former position, (2) whether the suspect party succeeded in persuading a court to accept that party’s former position, and (3) whether the party seeking to assert an inconsistent position would gain an unfair advantage if not estopped.

The court held that Mitchell’s characterization of her claims as a “wage class action lawsuit” in her bankruptcy proceedings was clearly inconsistent with her individual disability discrimination and retaliation claims under the Rehabilitation Act. The court distinguished Mitchell’s case from Bejarano v. Bravo! Facility Servs., Inc., where disclosure of a “Pending Employment Discrimination Claim” was deemed sufficient to encompass FMLA claims. Instead, the court found Mitchell’s case more analogous to Hermann v. Hartford Casualty Insurance Co., where disclosure of a potential personal injury award was insufficient to encompass a bad-faith insurance claim.

The Tenth Circuit affirmed the district court’s dismissal of Mitchell’s claims, holding that the district court did not abuse its discretion in applying judicial estoppel to bar her disability discrimination and retaliation claims against USPS.