- Case Type:
- Case Status:
- 17-12744 (11th Circuit, Aug 10,2018) Published
- Eleventh Circuit reversed sanctions imposed by district court on attorneys for prosecuting claims that their client failed to disclose as assets in his bankruptcy case. Applying its 2017 ruling in Slater v. U.S. Steel, the 11th Circuit concluded that the district court could not infer plaintiff was judicially estopped from raising his claim, but instead must consider all facts and circumstances of the case including Plaintiff's sophistication and the bankruptcy court's permission to amend disclosures. As such, Plaintiff's attorneys could not be sanctioned for prosecuting frivolous claims.
- Procedural context:
- In the district court FLSA proceeding against Defendant, the district court granted Defendants' summary judgment motion on the grounds that Plaintiff was judicially estopped from asserting the FLSA claim because it was inconsistent with the failure to disclose the claim in his bankruptcy case. Defendants then moved for sanctions against Plaintiff and his lawyers which the district court granted, based on the magistrate judge's recommendations, on the basis that Plaintiff's lawyers had acted unreasonably and in bad faith by litigating the claim without performing an adequate investigation prior to filing the suit. Defendant appealed the district court's decision to impose sanctions but not the underlying grant of summary judgment. During the appeal, the Eleventh Circuit decided Slater v. U.S. Steel Corp, 871 F.3d 1174 (11th Cir. 2017) (en banc), which overruled prior precedent that permitted a district court to infer intent to misuse the courts by simply showing the plaintiff had failed to disclose a civil claim in their bankruptcy proceedings.
- Plaintiff (Silva) worked for Defendant (Pro Transport), and had claimed that he had been required to work without being paid overtime, in violation of the Fair Labor Standards Act ("FLSA"). Plaintiff later filed for chapter 13 bankruptcy, but failed to list his FLSA claim against Pro Transport as an asset. During his pending bankruptcy case, Plaintiff met with another attorney who filed the FLSA claim against Defendant, but Plaintiff did not update his bankruptcy disclosures and the attorney failed to ask if he had any pending legal matters.
- W Pryor, J Pryor Anderson
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