Why Not to Misrepresent Facts to the Courts: Possible Loss of Claims Related to the Misstatement

The courts do not like when people make false statements to them, and in response, the law has developed various means of responding to misstatements. One response is a rule, applied in every state and in the federal courts, that once a person makes a statement in a successful submission to the courts, that person may not contradict that statement in a later proceeding. The idea is to prevent litigants from playing fast and loose with the courts. In the course of my career, I have successfully presented an argument raising this issue and successfully defended against such an argument. A recent federal case illustrates the application of this rule.

 

The plaintiff in the case had filed for bankruptcy. As part of the bankruptcy petition, she was required to list all of her assets. She left off the list a claim for employment discrimination, which counts as an asset because of its potential value. The employer learned of the bankruptcy and moved to dismiss the discrimination lawsuit.

 

As applied in the federal courts, the rule may be applied if the following facts exist:

 

1. The position taken in the two cases is clearly inconsistent. (Nobody doubted that it was; the plaintiff denied the existence of the claim in the bankruptcy but pursued it in the discrimination suit.)

 

2. The first court accepted the position asserted in that case. (The discharge of her debts implied that it had.)

 

3. Allowing the position asserted in the second case would unfairly damage the other side. (Because creditors might push to collect on the discrimination claim, its omission might result in reducing the possibility of settlement.)

 

4. The misstatement was not inadvertent or by mistake. (This was the main issue in the case. The courts try to decide whether there is a serious attempt to deceive.)

 

The court inferred from the fact that the plaintiff waited until after the employer moved to dismiss her suit to amend her bankruptcy filings that she might be trying to deceive the bankruptcy court. In addition, unlike in an earlier case under similar circumstances, the plaintiff made no attempt to explain why she left the claim off her bankruptcy filings. Based on these facts, the court decided that the discrimination suit should be dismissed.

 

The moral of this story is, never blow hot and cold with the same breath. If you assert a position with the court – or with any government agency – in one case, you shouldn’t change your position in another case. If you think that might be an issue, discuss matters with your lawyer before you make the assertion.

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5 Responses to Why Not to Misrepresent Facts to the Courts: Possible Loss of Claims Related to the Misstatement

  1. thnidu says:

    Not to mention being under oath…?

  2. True, but the chances of prosecution are less than most people think.

    • thnidu says:

      OK.
      Point of order here, or something. I checked “Notify me of follow-up comments via email”, and that’s how I saw your reply. WordPress’s email message quoted the start of your post, then your reply… which, of course, was not a reply to the post, but to my comment. In a more complex thread (and they don’t get any simpler than this one) that could be VERY confusing. That’s broken, it is.

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