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Anna Nicole estate loses

Ruling in a case sent back to it by the Supreme Court nearly four years ago, the Ninth Circuit Court decided Friday that the estate of the late topless dancer and model, Anna Nicole Smith, is not entitled to any of her claim for tens of millions of dollars from the fortune of a Texas oil tycoon to whom she was married for 14 months.  A Texas probate court handling the estate of her late husband, J. Howard Marshall II, had nullified any claim she had, and thus all of the estate belongs to his heirs in the Marshall family, the Circuit Court decided in a lengthy opinion.  This marked the second time that the Circuit Court had rejected the former Mrs. Marshall’s bid for a large gift that she contended her husband had promised her during their marriage.

The Supreme Court, in a unanimous decision in May 2006, overturned the Ninth Circuit’s earlier ruling that the federal courts had no jurisdiction to hear Mrs. Marshall’s claim (Anna Nicole Smith was her stage name; her real name was Vickie Lynn Marshall).  The Justices found that the federal bankruptcy court had the authority to hear her claim, and ordered the Circuit Court to decide the merits of that claim.  (A post on this blog discussing the Supreme Court’s 2006 ruling can be read here.)

Mrs. Marshall’s main legal adversary in the prolonged fight was one of her late husband’s sons, E. Pierce Marshall.  About a month after the Supreme Court ruled in the case, Pierce Marshall died, at age 67.  Mrs. Marshall died in 2007, at age 39, apparently of an overdose of prescription drugs.  Their estates continued the legal contest, leading to Friday’s Circuit Court decision.

Their 15-year legal battle had proceeded both in a Texas probate court and in federal bankruptcy court in California.  The Texas court ruled that Mr. Marshall had left his estate to his youngest son, and had not intended to give Mrs. Marshall a gift from the assets that were being passed to his son.  The federal trial judge in the bankruptcy case, however, ruled that Mrs. Marshall was entitled to $88.6 million from the estate (reduced from a bankruptcy judge’s award of $474 million), on the theory that Pierce Marshall had interfered with her legal rights to the gift she claimed.

But, on Friday, the Ninth Circuit concluded that the rulings in the Texas probate court were binding on the federal bankruptcy court, because the state court’s decision was the earliest final judgment on matters in dispute between Mrs. Marshall and Pierce Marshall.  The bankruptcy court only had authority, the Circuit judges concluded, to decide a core bankruptcy proceeding, and Mrs. Marshall’s claim against Pierce did not qualify.  “We reverse the judgment of the district court and remand with instructions that judgment be entered in favor of the Estate of Pierce Marshall,” the Circuit Court concluded.

It thus resolved the most significant of the legal questions that the Supreme Court had told it to decide on returning the case for reconsideration.  Presumably, Mrs. Marshall’s estate has the option of attempting to get the case back before the Supreme Court on the legal outcome.