On June 21, 2013, the US Court of Appeals for the Seventh Circuit issued an opinion in Grochocinski v. Mayer Brown Row & Maw, LLP which held that the district court's exercise of judicial estoppel was proper in a case where a bankruptcy trustee's position in a malpractice suit was inconsistent with a different party's position in an earlier suit.

In 2003, a dispute arose between Spehar Capital, a company that pairs venture capitalists with companies in need of investors, and CMGT, one of its clients, over payment Spehar argued it was due. Spehar sued CMGT in California state court, and when CMGT failed to appear, the court granted Spehar a default judgment of over $17 million. Due to CMGT's lack of funds, however, Spehar was unlikely to collect the judgment.

Spehar, however, devised a strategy to recover it. The Seventh Circuit outlined Spehar's strategy as follows:

As noted by the Seventh Circuit, this strategy permitted Spehar to recover on its default judgment by convincing another court that the default judgment should never have been entered.

Per its strategy, Spehar forced CMGT into bankruptcy by filing an involuntary bankruptcy petition on August 25, 2004, and David Grochocinski was appointed as trustee. Spehar approached Grochocinski with the next step in its plan, bringing a malpractice action against Mayer Brown. Grochocinski was unwilling to pay for this litigation, so Spehar advanced litigation costs to the estate. Spehar also recommended a malpractice attorney for Grochocinski to retain to bring the malpractice claim against Mayer Brown. When that attorney declined to do so, Spehar recommended another attorney, who brought the claim in Illinois state court. Mayer Brown removed to federal court under the bankruptcy removal statute, 28 U.S.C. § 1452.

Mayer Brown then moved for summary judgment, which the district court granted on the grounds of judicial estoppel, holding that the trustee could not take a position in the malpractice suit inconsistent with Spehar's position in the California suit. The trustee appealed.

The Seventh Circuit affirmed the district court's grant of summary judgment, noting that the action presented a question of first impression: whether judicial estoppel can be applied to a litigant based on the litigation position of someone else. The Seventh Circuit held that the answer was yes, for two principal reasons:

The Seventh Circuit added that Spehar was intimately involved with Grochocinski and the malpractice litigation, and was, in fact, the direct cause of the malpractice suit. Therefore, Grochocinski could be judicially estopped from asserting claims inconsistent with Spehar's earlier position in the California litigation: namely, that Mayer Brown was guilty of malpractice in part by failing to adequately defend CMGT such that Spehar obtained the default judgment, when Spehar's ultimate goal was to recover on the same default judgment.

Grochocinski v. Mayer Brown Row & Maw, LLP demonstrates that judicial estoppel may be applied based on the positions of parties in other actions, even if the client is not directly involved in those actions.