Equitable estoppel, also known as “estoppel in pais,” is a common law doctrine that “prevent[s] one party from taking unfair advantage of another when, through false language or conduct, the person to be estopped has induced another person to act in a certain way, with the result that the other person has been injured in some way.” While this doctrine has been invoked for hundreds of years among private litigants, courts still struggle mightily over if and when equitable estoppel should be applied against government action.
Historically, equitable estoppel was not allowed against the government under any circumstance. The reasons for this are not without merit. These reasons include: protecting the public fisc (and fears of the resulting crushing liability from the numerous lawsuits emanating from the immense level of communication between the government and its citizenry), preventing the infringement of the federal government’s sovereign immunity, avoiding schemes to defraud the government, and recognizing separation of powers principles. In recent times, however, courts have realized that a failure to estop the government in every instance can lead to grave injustices.
This Note explores the legal history of equitable estoppel as it is applied to the government, including Supreme Court case law and subsequent interpretations by lower courts. It then examines the various issues created by the current unsettled state of the equitable estoppel doctrine in the governmental context, and how various commentators have proposed remedying these issues. Next, it recognizes that there is no panacea; each of these remedies are inadequate. Finally, this Note puts forth a new idea, which is gaining traction in some circles, that when deciding equitable estoppel cases the government should apply each of these approaches in conjunction with each other, but with one additional element: when the government’s actions in effect allow it to substantially undermine the core legislative purpose of the Act in question, the government should be estopped.
Stephen Holstrom, CONTRACT LAW—ESTOPPING BIG BROTHER: THE CONSTITUTION, TOO, HAS SQUARE CORNERS, 33 W. New Eng. L. Rev. 163 (2011), http://digitalcommons.law.wne.edu/lawreview/vol33/iss1/5