When Can a Litigant Talk Out of Both Sides of His Mouth and When Can’t She?

Photo by Jeremy Johnson, Meddling with Nature

A child might say, “Daddy, you cannot prove that I ate the cookie, but, if you conclude that I did eat eat the cookie, I thought that Mommy said I could.”

This child will possibly get a time-out from the parents. Maybe not. Either way, the parents might be forced to suppress smirks at the child’s precocity, audacity, and cleverness. But how do we feel about it when grown-ups use such double-talking tactics in our courts?

Judicial estoppel prevents a party that has taken one position in litigating a particular set of facts from later reversing its position when it is to its advantage to do so. It is intended to protect the courts from being manipulated by chameleonic litigants who seek to prevail, twice, on opposite theories.

This seems pretty obvious, right?

According to a recent United States Eighth Circuit Court of Appeals decision, however, Minnesota has not yet “formally recognized” the doctrine of judicial estoppel.

Also, as with so many aspects of the law, what starts out looking “pretty obvious” can get complicated with just a little more consideration.

Generally, the doctrine requires that three conditions be met. First, the party presenting the allegedly inconsistent theories must have prevailed in its original position (‘a litigant is not forever bound to a losing position’). Second, there must be a clear inconsistency between the original and subsequent position of the party. Finally, there must not be any distinct or different issues of fact in the proceedings.

That sounds fine but then courts have gotten tangled up as to what “prevailing” can mean in the “original position.” (In fact, there is a court of appeals’ “circuit split” on this issue, the U.S. Court of Appeals for the Eighth Circuit recently found.)

How about if a plaintiff sues two insurers under two insurance policies, making factual allegations that trigger coverage under Insurer A’s policy but that exclude coverage under Insurer B’s policy? Then, plaintiff settles with Insurer A in exchange for money. Then plaintiff changes factual allegations in order to trigger coverage under Insurer B’s policy…Can plaintiff be said to have “prevailed” in the original position against Insurer A so that plaintiff cannot pivot and argue alternative facts against Insurer B? Having just said that Minnesota has not “formally recognized” the doctrine, the Eight Circuit went on to hold:

…Minnesota law requires a party to succeed ‘at trial’ before the doctrine would apply… We have, however, said the ‘chief purpose’ of the doctrine ‘is to protect the integrity of the judicial process.’ Under circumstances where a party pursues alternate theories against two parties, settles the weaker claim against one party without a court adjudication, and then pursues the stronger theory against the other party in court, we see little, if any, threat to the integrity of the judicial process.

Photo by brainloc on sxc.hu (Bob Smith)

So under certain circumstances, I guess maybe you cannot have had your cookie and yet you can have eaten it too?

(I note that the Eighth Circuit opinion uses the term “theory” and “alternative theory” which softens the dissonance of inconsistency. But the differing allegations are facts, not theories. The driver was operating “under the authority of ATS” or he “was acting on his own behalf at the time of the accident.”)