From Longaberger Co. v. Kolt, 2009 U.S. App. LEXIS 25047 (6th Cir. Nov. 16, 2009):

In its motion for injunctive relief, Longaberger stated that "if Kolt disburses or otherwise commingles or uses the settlement funds which he holds in constructive trust for the benefit of the Plan, the Plan will forever lose the ability to recover its property." Moreover, Longaberger represented that it was "not seeking to enforce its contractual right to reimbursement from Billiter. Instead, Longaberger, on behalf of the Plan, [sought] title to or a security interest in a particular, identifiable account: namely, the settlement funds in Kolt's IOLTA account." Longaberger argued that it would be irreparably harmed if an injunction were not granted because "[i]f the money leaves the [IOLTA], Longaberger [would] be left without recourse and [would] be unable to enforce the terms of the Plan." Apparently persuaded by Longaberger's arguments, the district court granted a preliminary injunction on February 16, 2005, which required Kolt to maintain any remaining settlement funds in his IOLTA during the pendency of this litigation.

On May 15, 2006, the Supreme Court issued its decision in Sereboff which held that funds no longer had to be traceable or maintained in order for relief to qualify as equitable under ERISA. Because of Sereboff, Longaberger filed a second amended complaint on November 6, 2006, which "clarified its position seeking 'equitable lien by agreement' in light of the 2006 Supreme Court decision and ruling." Longaberger also argued in its summary judgment briefing that "repayment" of funds that have already been disbursed from Kolt's IOLTA was an available remedy under ERISA.

Kolt argues on appeal that Longaberger's claims for monetary relief should be barred by the doctrine of judicial estoppel because arguments Longaberger made in its initial pleadings, and on which the district court relied in issuing a preliminary injunction, were in conflict with those arguments Longaberger later presented in its motion for summary judgment. "Judicial estoppel is an equitable doctrine that preserves the integrity of the courts by preventing a party from abusing the judicial process through cynical gamesmanship, achieving success on one position, then arguing the opposite to suit an exigency of the moment." Teledyne Indus., Inc. v. NLRB, 911 F.2d 1214, 1217-18 (6th Cir. 1990); \see also New Hampshire v. Maine, 532 U.S. 742, 750 (2001). "The doctrine of judicial estoppel bars a party from (1) asserting a position that is contrary to one that the party has asserted under oath in a prior proceeding, where (2) the prior court adopted the contrary position 'either as a preliminary matter or as part of a final disposition.'" Browning v. Levy, 283 F.3d 761, 775 (6th Cir. 2002) (quoting Teledyne, 911 F.2d at 1218). The doctrine of judicial estoppel, however, "is applied with caution to avoid impinging on the truth-seeking function of the court because the doctrine precludes a contradictory position without examining the truth of either statement." Teledyne, 911 F.2d at 1218 (footnote omitted). Moreover, a court should consider whether a party has gained an unfair advantage from the court's adoption of its earlier inconsistent statement. New Hampshire, 532 U.S. at 751. The issue of judicial estoppel combined with a change in law appears to be an issue of first impression in our circuit. In such cases, "this Court routinely looks to our sister circuits for guidance[.]" United States v. Houston, 529 F.3d 743, 762 n.3 (6th Cir. 2008) (Clay, J., dissenting). Several of our sister circuits have held that judicial estoppel is inappropriate when a party is merely changing its position in response to a change in the law. See Jarrard v. CDI Telecomms., Inc., 408 F.3d 905, 915 (7th Cir. 2005) ("Judicial estoppel should not be used to work an injustice, particularly when the defendants' change in position resulted from circumstances outside their control -- namely, a change in controlling state law.") (internal citation omitted); Folio v. City of Clarksburg, 134 F.3d 1211, 1218 (4th Cir. 1998) (judicial estoppel not invoked where second position was based upon a change in the law); United States v. Vastola, 989 F.2d 1318, 1324 (3d Cir. 1993) (same); Maui Land & Pineapple Co. v. Occidental Chem. Corp., 24 F. Supp. 2d 1083, 1086 (D. Haw. 1998) (explaining that the application of judicial estoppel "is inappropriate when a party is merely changing its position in response to a change in the law.") (citing Arizona v. Shamrock Foods Co. , 729 F.2d 1208, 1215 (9th Cir. 1984)) (finding no judicial estoppel when a party altered its theory of recovery in response to a change in law); Seneca Nation of Indians v. New York, 26 F. Supp. 2d 555, 565-66 (W.D.N.Y. 1998), aff'd, 178 F.3d 95 (2d Cir. 1999). Moreover, other courts have found that judicial estoppel bars changes in factual positions and does not extend to inconsistent opinions or legal positions. Okland Oil Co. v. Conoco Inc., 144 F.3d 1308, 1325 (10th Cir. 1998), appeal after remand, 149 F.3d 1191 (10th Cir. 1998) (unpublished table decision); Ottema v. State ex rel. Wyoming Worker's Comp. Div., 968 P.2d 41, 45-46 (Wyo. 1998).

In the present case, there is no evidence of the gamesmanship that the doctrine of judicial estoppel was intended to prevent. Longaberger's arguments, though facially inconsistent, were not an attempt to abuse the judicial process through cynical gamesmanship. Rather, Longaberger altered its theory of recovery in response to the change in the law brought by Sereboff. In light of this change in law, Longaberger's motives are not suspicious because, for the reasons stated above, Longaberger could not have argued its prior position without running afoul of controlling Supreme Court case law. Cf. New Hampshire, 532 U.S. at 755 (recognizing that judicial estoppel might not be applicable if inconsistent positions result from change in public policy, statutory provisions, or facts) (citations omitted). We therefore adopt the position of our sister circuits and hold that judicial estoppel is not applicable where a party argues an inconsistent position based on a change in controlling law. Accordingly, Kolt's judicial estoppel argument fails.