Ashmore v. CGI Group, No. 18-2392 (2d Cir. 2019)Annotate this Case
Plaintiff filed a whistleblower action under Section 806 of the Sarbanes-Oxley Act against CGI, alleging that he was unlawfully fired in retaliation for his complaints about and objections to an allegedly fraudulent scheme developed by CGI's executives. The district court held that the Sarbanes-Oxley claim survived summary judgment, but later dismissed plaintiff for lack of standing due to his parallel bankruptcy proceeding. After the bankruptcy case closed, plaintiff moved to be substituted in as the proper party-in-interest. The district court granted plaintiff's motion and then dismissed the case on grounds of judicial estoppel.
The Second Circuit held that the district court exceeded its discretion by invoking the judicial estoppel doctrine. The court held that where, as here, a pro se debtor has listed his pending litigation on the Statement of Financial Affairs (SOFA), rather than the Schedule B as it was constituted at the time of plaintiff's filing, and then disclosed it to the trustee and the bankruptcy court prior to discharge of his debt, and the trustee and the bankruptcy court were on sufficient notice to take steps to protect the creditors' interests, the debtor is not estopped from pursuing that litigation by virtue of the doctrine of judicial estoppel. The court explained that, for estoppel to apply, there must be greater indicia than presented here of an intent to deceive the court for the debtor's benefit. Accordingly, the court vacated the judgment and remanded for further proceedings.
The court affirmed the district court's grant of partial summary judgment to CGI on the state-law breach of contract claim, holding that the dismissal order was rendered moot by virtue of later developments.