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In re Taxotere (Docetaxel) Products Liability Litigation

United States District Court, E.D. Louisiana

October 15, 2018

Accord Healthcare, Inc., 17-cv-00348 THIS DOCUMENT RELATES TO Christine and Jim Kinderdine

         SECTION: “H” (5)



         Before the Court is a Motion for Summary Judgment Based upon Judicial Estoppel (Doc. 3476) filed by Defendant Accord Healthcare, Inc. (“Accord”). For the following reasons, the Motion is GRANTED IN PART. It is further ordered that Plaintiffs' Motion for Leave to File Sur-Reply Brief in Opposition to Accord Healthcare, Inc.'s Motion for Summary Judgment Based Upon Judicial Estoppel (Doc. 4199) is GRANTED and Plaintiffs' proposed sur-reply shall be accepted into the record.


         On November 3, 2016, Plaintiff Christine Kinderdine filed a bankruptcy petition in the United States Bankruptcy Court for the Southern District of Ohio (the “Bankruptcy Court”). The petition required that she disclose any “[c]laims against third parties, whether or not you have a filed a lawsuit or made a demand for payment.” Ms. Kinderdine responded, “No.”

         Roughly two months after filing her bankruptcy petition, on January 13, 2017, the Kinderdines filed the instant action against Accord, alleging failure to warn, misrepresentation, negligence, negligent misrepresentation, fraudulent concealment, fraud and deceit, and loss of spousal consortium. Although Ms. Kinderdine's bankruptcy proceeding remained open for months after she filed her Taxotere action, she never amended her bankruptcy petition to disclose the Taxotere action. Ultimately, the Bankruptcy Court closed her bankruptcy on April 13, 2017, issuing a “no asset” discharge.

         More than one year after the conclusion of her bankruptcy proceeding, on April 19, 2018, counsel for Accord deposed Ms. Kinderdine. At the deposition, counsel asked Ms. Kinderdine about her bankruptcy. Shortly after the deposition, Ms. Kinderdine moved to reopen her bankruptcy so that she could disclose her Taxotere lawsuit. The Bankruptcy Court denied the motion, stating that “the Claim appears to remain property of the estate to be pursued and administered by the Chapter 7 Trustee as he determines appropriate. . . . Absent the Debtor pursuing this claim on behalf of the estate derivatively, any motion to reopen to pursue this asset would need to be filed by the Chapter 7 Trustee, not the Debtor.”[1] Consistent with this order, the Chapter 7 Trustee filed a Motion to Reopen. The Bankruptcy Court granted the Motion on July 25, 2018, writing that “[t]he Court finds that good cause has been shown to grant the Motion so that a Chapter 7 Trustee can administer assets for the benefit of creditors.”[2]

         Accord filed this Motion arguing that Ms. Kinderdine is judicially estopped from pursuing her Taxotere action against Accord because she did not disclose the action during her bankruptcy proceeding. Accord further argues that, because Ms. Kinderdine's claims fail, Plaintiff Jim Kinderdine cannot pursue a derivative loss of consortium claim against Accord.


         Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”[3] A genuine issue of fact exists only “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”[4]

         In determining whether the movant is entitled to summary judgment, the Court views facts in the light most favorable to the non-movant and draws all reasonable inferences in his favor.[5] “If the moving party meets the initial burden of showing that there is no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence or designate specific facts showing the existence of a genuine issue for trial.”[6] Summary judgment is appropriate if the non-movant “fails to make a showing sufficient to establish the existence of an element essential to that party's case.”[7] “In response to a properly supported motion for summary judgment, the non-movant must identify specific evidence in the record and articulate the manner in which that evidence supports that party's claim, and such evidence must be sufficient to sustain a finding in favor of the non-movant on all issues as to which the non-movant would bear the burden of proof at trial.”[8] “We do not . . . in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts.”[9] Additionally, “[t]he mere argued existence of a factual dispute will not defeat an otherwise properly supported motion.”[10]


         I. Choice of Law

         Plaintiffs assert that this Court should apply Ohio choice-of-law rules, and they argue that these rules require the application of Ohio substantive law. Defendant agrees that Ohio law governs Plaintiffs' substantive claims. Defendant, however, asserts that the Fifth Circuit's interpretation of federal common law judicial estoppel applies to this case. Defendant notes that in In re Vioxx Products Liability Litigation, Judge Eldon Fallon of this Court applied Fifth Circuit law rather than Ninth Circuit law to judicially estop the claims of the plaintiffs, even though they were residents of California and originally filed their lawsuits in California state court.[11]

         A number of circuit courts agree that “in cases where federal law is at issue, transferee courts are obligated to follow their own interpretation of the relevant law.”[12] The Fifth Circuit has not ruled on the issue, but Judge Fallon has held that an MDL Court is “obliged to apply . . . the federal law of its own circuit.”[13] The Western District of Texas has held the same.[14]

         The Southern District of New York has reasoned that this approach furthers the purpose of the MDL statute, specifically 28 U.S.C.A. § 1407(a), which aims to establish centralized management.[15] The court wrote that “[t]his purpose would be thwarted if this Court were to follow the opinions offered by the many circuits from which the cases were transferred.”[16] The court explained as follows:

[W]ithout limiting the sources of binding precedent, each motion in multi-district litigation could easily turn into a review of the interpretations of all or most of the circuits, a result at odds with the fundamental purpose of section 1407. This would have a debilitating effect on the court's ability to resolve motions in a timely and efficient manner.[17]

         Accordingly, the judge held that when interpreting and applying the federal Constitution, any federal statute, or the Federal Rules of Civil Procedure, she was bound only by the opinions of the Supreme Court and the Second Circuit.[18] This Court agrees with the reasoning of the Southern District of New York and will apply Fifth Circuit law.

         II. Judicial Estoppel

         Defendant argues that Plaintiff Christine Kinderdine is judicially estopped from pursuing this action against Accord because she did not disclose the action during the pendency of her bankruptcy. Defendant further argues that, because Ms. Kinderdine's primary claim fails, Plaintiff Jim Kinderdine's derivative loss of consortium claim must fail.

         Plaintiffs emphasize that Ms. Kinderdine has disclosed her Taxotere action to the Bankruptcy Court and that the Chapter 7 Trustee has decided to pursue the Taxotere claims. Plaintiffs explain that Ms. Kinderdine did not disclose her action initially because she was unable to ascertain production identification information to identify the specific manufacturer of the chemotherapy drug that she used. Plaintiffs explain that Ms. Kinderdine identified Accord as the manufacturer on August 24, 2017, but at this point, her bankruptcy had concluded. On May 17, 2018, however, she moved to reopen the bankruptcy, and Plaintiffs emphasize that she did so prior to Accord filing this Motion. Lastly, Plaintiffs assert that if judicial estoppel bars Ms. Kinderdine from pursuing her Taxotere claims, the Trustee should be permitted to pursue both her claims and Mr. Kinderdine's derivative claim.

         “‘The doctrine of judicial estoppel is equitable in nature and can be invoked by a court to prevent a party from asserting a position in a legal proceeding that is inconsistent with a position taken in a previous proceeding.'”[19] “In this way, the doctrine ‘protect[s] the integrity of the judicial process.'”[20] Courts agree that judicial estoppel is particularly appropriate where a party “fails to disclose an asset to a bankruptcy court, but then pursues a claim in a separate tribunal based on that undisclosed asset.”[21]

         Judicial estoppel has three elements: (1) the party against whom estoppel is sought has asserted a position plainly inconsistent with a prior position, (2) a court accepted the prior position, and (3) the party did not act inadvertently.[22] The first element is satisfied where a party failed to amend a bankruptcy petition to disclose a claim he or she pursued after filing the petition.[23] This is consistent with Fifth Circuit precedent making clear that the duty to disclose claims in bankruptcy proceedings is an ongoing obligation.[24] Failing to disclose a claim impliedly represents to the bankruptcy court that the debtor's financial status remained unchanged, and this representation is plainly inconsistent with a subsequent assertion of the undisclosed claim.[25]

         Relatedly, the second element is met where the bankruptcy court implicitly accepted the debtor's representation by operating as though his or her financial status was unchanged.[26] Lastly, to establish a defense of inadvertence, a party has to prove (1) that he or she did not know about the inconsistency or (2) that he or she lacked a motive for concealment.[27]

         The Fifth Circuit decision in In re Superior Crewboats is a seminal one on judicial estoppel in the bankruptcy context, and Accord cites it for a number of propositions.[28] In Superior Crewboats, one of the debtors had a personal injury claim stemming from an injury that he sustained while disembarking a ship.[29] When he and his wife filed bankruptcy, they failed to disclose the potential claim.[30] Then, the debtors sued the ship owner without amending their bankruptcy schedules.[31] The debtors told the bankruptcy trustee about the claim but represented that it was prescribed by the statute of limitations.[32] Accordingly, the trustee formally abandoned the claim, and ultimately, the bankruptcy court issued a “no asset” discharge.[33]

         The ship owner filed summary judgment on the basis of judicial estoppel, and the district court denied the motion.[34] The court wrote that it could not conclude that the debtors took inconsistent positions because this was a question of fact to be determined at trial.[35]

         The Fifth Circuit reversed and held that judicial estoppel barred the personal injury suit as a matter of law.[36] In its analysis, the court held that the debtor's positions in the two proceedings were “clearly inconsistent.”[37] The court noted that the Bankruptcy Code requires the disclosure of all assets, including claims, and “[t]he duty to disclose is continuous.”[38] The debtors' “omission of the personal injury claim from their mandatory bankruptcy filings is tantamount to a representation that no such claim existed.”[39] Yet the debtors then contended before the state court that the personal injury claim was viable and worth $2.5 million.[40] The Fifth Circuit wrote that “[s]uch blatant inconsistency readily satisfies the first prong of the judicial estoppel inquiry.”[41]

         The court then held that the second element was met, noting that the bankruptcy trustee formally abandoned the claim and the bankruptcy court issued a “no asset” discharge.[42] Thus, the bankruptcy court adopted the debtors' position.[43]

         Regarding the third element, the Fifth Circuit wrote that the debtors “certainly had knowledge of the undisclosed claim, initiating the suit only months after filing for bankruptcy and requesting service of process during the pendency of the bankruptcy” and “[s]till, the couple remained silent until months later.”[44] When the debtors finally informed the bankruptcy trustee, they said the claim was prescribed.[45] Thus, the Fifth Circuit concluded that the debtors were aware of the facts underlying their claim, and the district court's conclusion that a fact issue existed regarding the debtors' wrongful intent was incorrect.[46]

         The Fifth Circuit further concluded that the debtors had a motivation to conceal as they “would certainly reap a windfall had they been able to recover on the undisclosed claim without having disclosed it to the creditors.”[47] “Such a result would permit debtors to ‘[c]onceal their claims; get rid of [their] creditors on the cheap, and start over with a bundle of rights.'”[48] Thus, the court ruled that the debtors could not be permitted, at such a late date, to reopen the bankruptcy and amend their petition because judicial estoppel was intended to prevent such abuses.[49] The court noted that allowing a debtor to “back-up, reopen the bankruptcy case, and amend his bankruptcy filings, only after his omission has been challenged by an adversary, suggests that a debtor should consider disclosing personal assets only if he is caught concealing them.”[50]

         With regard to Ms. Kinderdine, the elements of judicial estoppel are met. Ms. Kinderdine took clearly inconsistent positions in these proceedings; she failed to disclose her Taxotere claims to the Bankruptcy Court-even after she filed her Taxotere lawsuit. The ...

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