# Oral Argument Re-Listen: Keathley v. Buddy Ayers | Nondisclosure Doesn't Lead to Lawsuit Dismissal

Page: https://stenobird.com/podcast/the-high-court-report-7304353/oral-argument-re-listen-keathley-v-buddy-ayers-nondisclosure-doesn-t-lead-to-lawsuit-dismissal
Text version: https://stenobird.com/podcast/the-high-court-report-7304353/oral-argument-re-listen-keathley-v-buddy-ayers-nondisclosure-doesn-t-lead-to-lawsuit-dismissal.md
Podcast: [The High Court Report](https://stenobird.com/podcast/the-high-court-report-7304353)
Published: 2026-06-13T09:00:00+00:00
Episode link: https://thehighcourtreport.com//oral-argument-re-listen-keathley-v-buddy-ayers-nondisclosure-doesnt-lead-to-lawsuit-dismissal
Audio file: https://episodes.captivate.fm/episode/2323a9ee-bb12-4e03-858a-9dedb88d78a8.mp3
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Duration seconds: 4237

## Resource

Keathley v. Buddy Ayers Construction, Inc. | Case No. 25-6 | Docket Link: Here | Argued: 3/24/2026 | Decided: 6/11/2026 Oral Advocates: Petitioner (Keathley): Gregory G. Garre of Latham and Watkins United States (as Amicus Curiae Supporting Vacatur): Frederick Liu, Assistant to the Solicitor General, Department of Justice Respondent (Buddy Ayers Construction): William M. Jay of Goodwin Proctor Overview: A bankruptcy debtor's failure to disclose a personal-injury lawsuit triggered the Fifth Circuit's rigid two-factor estoppel test, splitting federal circuits over whether courts must examine all circumstances or presume bad faith from knowledge and motive alone. Question Presented: Whether courts must examine the totality of circumstances — not just two factors — to determine if a bankruptcy debtor's omission of a lawsuit qualifies as inadvertent. Posture: District court and Fifth Circuit dismissed Keathley's personal-injury lawsuit under rigid two-factor judicial estoppel rule. Main Arguments: Petitioner Keathley: (1) Courts must examine all circumstances before concluding a bankruptcy omission reflects intentional concealment; (2) The Fifth Circuit's test conflates theoretical motive with actual bad faith, eliminating any real inadvertence exception; (3) Blocking honest debtors' lawsuits rewards tortfeasors and destroys assets creditors could recover. Respondent Buddy Ayers Construction: (1) Objective inconsistency — not subjective bad intent — supplies the basis for judicial estoppel; (2) The inadvertence exception covers only objectively verifiable errors, not every non-malicious explanation a debtor offers; (3) A multi-factor holistic test eliminates deterrence, invites abuse, and guts the bankruptcy disclosure system. Holding: Courts must examine the totality of ci…

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