United States District Court, D. Columbia
November 8, 2005.
ROSEMARIE TOUSSAINT, Plaintiff,
HOWARD UNIVERSITY, Defendant.
The opinion of the court was delivered by: JOHN BATES, District Judge
The facts of this employment discrimination action filed by Dr.
Rosemarie Toussaint ("plaintiff") against Howard University
("defendant") are set forth fully in the Court's June 20, 2005
Memorandum Opinion. See Toussaint v. Howard Univ., Civil
Action No. 03-1395 at 2-3 (D.D.C. June 20, 2005) (memorandum
opinion) ("Toussaint Mem. Op."). The Court will only briefly
review those facts here.
Plaintiff is a doctor and professor formerly employed by Howard
University. Toussaint Mem. Op. at 2. Plaintiff alleges unlawful
discrimination on the basis of her gender and disability, as well
as unlawful retaliation, in violation of the following statutes:
District of Columbia Human Rights Act, D.C. CODE ANN. §§
2-1401.01 et seq. ("DCHRA"), Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq.
("Title VII"), and the Americans with Disabilities Act,
42 U.S.C. §§ 1201 et seq. ("ADA"). In this litigation, plaintiff
originally sought monetary remedies as well as the following
forms of declaratory and injunctive relief: tenure, remedial
medical training, reinstatement, sensitivity training for
defendant, and an injunction against further discrimination and
retaliation. See Pl.'s Mem. Opp'n to Mot. Reconsider at 8.
After plaintiff commenced her action, she filed for bankruptcy.
Toussaint Mem. Op. at 2-3. On June 20, 2005, the Court granted
in part a motion to substitute the trustee of plaintiff's
bankruptcy estate, Roger Schlossberg ("plaintiff's trustee"), as
the real party in interest for this litigation under
Fed.R.Civ.P. 17. See Toussaint Mem. Op. at 10. Pursuant to that order,
the Court substituted plaintiff's trustee for plaintiff with
respect to the monetary remedies sought, but permitted plaintiff
to remain in the litigation and pursue injunctive and declaratory
relief. Id. Both defendant and plaintiff's trustee have asked
the Court to reconsider that June 20, 2005 order and to
substitute plaintiff's trustee for plaintiff with respect to all
relief sought. For the reasons addressed below, and based on the
additional arguments now presented, the Court will grant those
There is no Federal Rule of Civil Procedure that expressly
addresses or mentions motions for reconsideration. Lance v.
United Mine Workers for Am. Pension Trust, 2005 WL 2766073 at *2
(D.D.C. 2005). Courts typically treat motions to reconsider as
motions to clarify, alter or amend judgment under Fed.R.Civ.P.
59(e). Id. (citing Piper v. DOJ, 312 F. Supp. 2d 17, 20
(D.D.C. 2004)). A court may grant a Rule 59(e) motion if: (1)
there has been "an intervening change in controlling law"; (2)
new evidence has become available; or (3) there is a need to "correct clear error or prevent manifest injustice." Ciralsky v.
Cent. Intelligence Agency, 355 F.3d 551, 671 (D.C. Cir. 2004);
see also Lance, 2005 WL 2766023 at *2 (citing Piper,
312 F. Supp. 2d at 21). A Rule 59(e) motion is "<not simply an
opportunity to reargue facts and theories upon which a court has
already ruled.'" Cooper v. Dep't of Justice, 2005 WL 670296 at
*2 (D.D.C. 2005) (unreported disposition) (citing New York v.
United States, 880 F. Supp. 37, 38 (D.D.C. 1995)). Nor is such a
motion to be used as "a vehicle for presenting theories or
arguments that could have been advanced earlier." Kattan v.
District of Columbia, 995 F.2d 274, 276 (D.C. Cir. 1993).
Although the alteration of a previously entered order is a rare
remedy, Cooper, 2005 WL 670296 at *2, a district court has
"considerable discretion" when it considers a Rule 59(e) motion,
Cooper, 2005 WL 670296 at *2; see also Lance, 2005
WL2766023 at *2.
Under 11 U.S.C. § 541(a), a bankrupt debtor's assets become the
property of the bankruptcy estate as soon as the bankruptcy
petition is filed, Parker v. Wendy's Int'l, Inc.,
365 F.3d 1268, 1272 (11th Cir. 2004); see Wieburg v. GTE Southwest
Inc., 272 F.3d 302, 306 (5th Cir. 2001); In re Miller v.
Shallowford Cmty. Hosp., 767 F.2d 1556, 1559 (11th Cir. 1985),
unless those assets are specifically exempted by the Bankruptcy
Code, see, e.g., In re Newpower, 233 F.3d 922, 934-35 (6th
Cir. 2000). Causes of action are considered assets and are not
exempted; thus, they become the property of the bankruptcy estate
under § 541(a) if they pre-date the bankruptcy petition. See S.
Rep. No. 989, 95th Cong., 2d Sess. 82, reprinted in 1978 U.S.
Code Cong. & Ad. News 5787, 5868; H.R. Rep. No. 595, 95th Cong.,
1st Sess. 367, reprinted in 1978 U.S. Code Cong. & Ad. News
5963, 6323; Barger v. City of Cartersville, Ga., 348 F.3d 1289, 1292 (11th Cir. 2003); Browning Mfg. v. Mims,
179 F.3d 197, 207-08 (5th Cir. 1999).
The focus of a Rule 17 "real party in interest" inquiry is
whether the party bringing the action is the same party that is
legally, as opposed to factually, aggrieved. See, e.g.,
Farrell Constr. Co. v. Jefferson Parish, La., 896 F.2d 136, 140
(5th Cir. 1990) (observing that "[t]he real party in interest is
the person holding the substantive right sought to be enforced,
and not necessarily the person who will ultimately benefit from
the recovery"). Once a cause of action becomes the property of
the bankruptcy estate, the bankruptcy trustee assumes the status
of the real party in interest under Fed.R.Civ.P. 17. See
11 U.S.C. § 323; Wieburg, 272 F.3d at 306. During the pendency of
the bankruptcy proceedings, therefore, a cause of action formerly
belonging to the plaintiff-debtor may only be pursued by the
bankruptcy trustee, see, e.g., Parker, 365 F.3d at 1272;
Barger, 348 F.3d at 1292; Jenkins v. Wright & Ferguson Funeral
Home, 215 F.R.D. 518, 521 (S.D. Miss. 2003) (citing Wieburg,
272 F.3d at 306), unless the bankruptcy trustee abandons the
cause of action or determines that it is not in the interest of
the bankruptcy estate to pursue it, see
11 U.S.C. §§ 554(a)-(d); Parker, 365 F.3d at 1272. See generally Jonathan
M. Hiltz, Killing Two Birds With One Stone the Proper
(Non) Application of Judicial Estoppel: Parker v. Wendy's Int'l,
Inc., 365 F.3d 1268 (11th Cir. 2004), 30 U. DAYTON L. REV. 401,
407 n. 60 (Spring 2004) (citing 11 U.S.C. § 554(a)).
Based on these well-settled principles of bankruptcy law, the
Court finds that plaintiff's trustee is the real party in
interest as to all relief sought. To begin with, plaintiff's
cause of action for employment discrimination arose before she
filed her bankruptcy petition. See Toussaint, Mem. Op. at 2.
As a non-exempt asset of plaintiff's, the cause of action was
thus converted into "property" of the bankruptcy estate under §
541(a) when she filed the bankruptcy petition. There is nothing to suggest that the cause of action has since reverted
to plaintiff the bankruptcy proceedings are ongoing, and the
trustee has never abandoned the cause of action or indicated that
the bankruptcy estate will not pursue it. To the contrary,
plaintiff's trustee has aggressively sought to be substituted for
plaintiff in this litigation. See Joinder of Bankruptcy Trustee
in Mem. of Howard University in Supp. of Reconsideration of Order
of June 20, 2005. For these reasons, plaintiff's trustee remains
the real party in interest and, as such, is the only party that
may pursue the cause of action and any remedies associated
The Court now concludes that the nature of the relief that
plaintiff seeks does not bear on this analysis. Under § 541(a),
the focus must be on the cause of action, not the remedy. If the
cause of action belonging to the bankruptcy estate yields a
remedy, that remedy must, by derivation, constitute property of
the bankruptcy estate. This case is analogous to a hypothetical
situation in which a plaintiff purchases an antique piano and
then files for bankruptcy. If the bankruptcy estate, as owner of
the antique piano, sells the piano to satisfy the plaintiff's
debts, it cannot be doubted that the plaintiff would have no
claim to the money obtained from that sale. Just as the Court
could not redirect the funds from the sale of the hypothetical
piano to plaintiff, the Court cannot redirect the injunctive and
equitable relief obtained as a result of the bankruptcy estate's
pursuit of its cause of action in this case. Nothing in the
bankruptcy code allows the Court to carve out portions of an
asset that properly belongs to the bankruptcy estate (here, a
pre-bankruptcy cause of action for employment discrimination) and
award those portions to plaintiff based on the way that plaintiff
has styled her complaint. To do so would facilitate circumvention
of the statutory scheme that Congress has established. Plaintiff
is not permitted to manipulate the system and deprive the
bankruptcy estate of the benefits that flow from the estate's
management of its asset.*fn1
The cases that plaintiff cites do not counsel to the contrary.
Instead, those cases establish the rather unremarkable principle
that executory service contracts existing before a bankruptcy
petition is filed are excluded from the bankruptcy estate (that
is, they cannot constitute property under § 541(a) and may not be
used by the bankruptcy estate to satisfy plaintiff's debts).
See, e.g., In re Noonan, 17 B.R. 793 (S.D.N.Y. 1982); In
re Bofill, 25 B.R. 550, 552 (S.D.N.Y. 1982). Plaintiff does not
have now, and did not have when she filed her bankruptcy
petition, a contract for personal or professional services.
Instead, plaintiff seeks injunctive and equitable relief as
remedies obtained through a cause of action that belongs to the
bankruptcy estate. Although plaintiff owned her cause of action
before she filed the bankruptcy petition, she surrendered that
cause of action and everything that the cause of action may
produce to the bankruptcy estate when she filed the bankruptcy
petition. As the product of an asset that belongs to the
bankruptcy estate, the injunctive and equitable relief must also
be the property of the bankruptcy estate.
Plaintiff's heavy reliance on Barger, 348 F.3d 1289, and
Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282 (11th Cir. 2002),
is misplaced, and has contributed to the Court's earlier error.
To begin with, plaintiff has failed to note that the viability of
both cases is, at best, uncertain. See Parker,
365 F.3d at 1272 (calling into question the application of judicial estoppel
in Burnes); In re Upshur, 317 B.R. 446, 453 (N.D. Cal. 2004)
(observing that Parker casts serious doubt on Burnes, and therefore also on Barger); Moore v. Colvin,
312 B.R. 902, 910-11 (N.D. Ala. 2004) (noting that the Eleventh
Circuit "failed to consider" important principles of bankruptcy
law in its Barger analysis and supporting Parker as the
proper legal framework). But even if Burnes and Barger remain
good law, they are not pertinent here. Those cases concerned
judicial estoppel, which is an equitable legal construct that
examines whether a court should impute to a plaintiff an improper
motive and an intent to deceive the bankruptcy estate if the
plaintiff has failed to disclose a pre-existing cause of action
as an asset on the bankruptcy petition. See Burnes,
291 F.3d at 1286-87. Neither case even remotely addressed whether the
plaintiff-debtor, as opposed to the bankruptcy trustee, was the
proper party to pursue the causes of action. Burnes and
Barger simply establish that if the injunctive and equitable
relief sought has no monetary value to the bankruptcy estate,
then the application of judicial estoppel with respect to such
pre-petition claims is not appropriate. See Barger,
348 F.3d at 1296; Burnes, 291 F.3d at 1289.
The principle of law articulated in Burnes and Barger is
not relevant to this case. Plaintiff latches onto those decisions
because she claims that they establish a rule that injunctive and
equitable relief, particularly reinstatement, are worthless to
the bankruptcy estate and therefore are per se excluded from the
bankruptcy estate. See Pl.'s Mem. Opp'n to Mot. Reconsider at
6-7. That is a mischaracterization.*fn2 Moreover, there are
critical differences between Burnes and Barger, on the one
hand, and this case, on the other. Most notably, the bankruptcy
trustees in Burnes and Barger did not seek to assert the
bankruptcy estate's rightful ownership over the causes of action, while plaintiff's trustee has several times
asserted the rights of the bankruptcy estate over the entire
employment discrimination action. Presumably, if the bankruptcy
trustees in Burnes and Barger had sought to assert the
bankruptcy estate's ownership over those causes of action, then
the plaintiff-debtors would not have been able to pursue those
causes of action. See Parker, 365 F.3d at 1273 (allowing
bankruptcy trustee to reopen a pre-existing case following a
no-asset discharge because the plaintiff-debtor had failed to
disclose a cause of action for discrimination as an asset).
The Court's decision is also consistent with notions of
judicial efficiency. Allowing both plaintiff and plaintiff's
trustee to prosecute a single cause of action, based solely on
the fact that several different types of relief are sought, would
be impractical. Plaintiff's interests will be adequately
represented by plaintiff's trustee, and the Court can conceive of
no difference in the way this cause of action will be pursued if
plaintiff's trustee seeks injunctive and equitable relief in
addition to monetary relief. If only a single party pursues this
cause of action, then discovery will be streamlined, any hearing
or trial will not be unduly lengthened, and costs will be lower.
The Court's decision does not contravene the policies that
underlie the antidiscrimination statutes. If plaintiff's trustee
does not fairly represent plaintiff's interests, then plaintiff
may resort to the procedural tools available in the bankruptcy
proceeding as a means of ensuring that her civil rights are
vindicated. See Fed.R.Bankr.P. 9019 (providing that
"[n]otice [of a settlement] shall be given to creditors, the
United States trustee, the debtor, and indenture trustees as
provided in Rule 2002 and to any other entity as the court may
direct"); In re RFE Indus., Inc. v. Gibbons, 283 F.3d 159,
163-64 (3d Cir. 2002) (finding that under Fed.R.Bankr.P. 9019,
debtor may object to a proposed settlement, particularly if the
"debtor is the party most clearly adversely affected by the [s]ettlement"). For "[t]he property rights of the
debtor are actually held in trust, where they may be administered
to creditors and/or re-vested with the debtor after the
bankruptcy proceeding." Hiltz, supra, at 407 n. 59 (citing
11 U.S.C. § 726).
This cause of action for employment discrimination arose before
plaintiff filed her bankruptcy petition. Under
11 U.S.C. § 541(a), the cause of action thus constitutes "property" of the
bankruptcy estate. As a result, plaintiff's trustee is the real
party in interest under Fed.R.Civ.P. 17, and, under the facts
of this case, only plaintiff's trustee may pursue the entire
cause of action, regardless of the nature of the relief sought.
Accordingly, the Court will grant the motions to reconsider filed
by defendant and plaintiff's trustee, and will substitute
plaintiff's trustee for plaintiff in full. A separate order
amending the Court's prior order of June 20, 2005 will be filed
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