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Tuesday, January 18, 2011

SCOTUS Reprise: Stripper's Estate Gets Second Oral Argument

Money isn't everything, right.  Yet here is SCOTUS, taking a close second look at the money.

A case involving a Texas Billionaire's massive estate and a washed-up model turned stripper is on the SCOTUS docket for oral argument today, for the second time.  You recall this case.

The estate of former Guess Jeans model whose, er, "married" name was Vickie Lynn Marshall, and who worked under the name Anna Nicole Smith, has carried on the lawsuit she filed shortly after J. Howard's death in 1995 at age 90.

Plenty of eyebrows were raised and family feathers ruffled in 1994 when Mr. Marshall took Smith as his third wife.  Then he died and the lawsuits began.

And these lawsuits have just not stopped, despite (and perhaps because of) the fact that all the litigants have died.  Anna Nicole Smith died in a drug overdose in 2007, shortly after the U.S. Supreme Court reversed an unfavorable decision for Smith issued by the U.S. Court of Appeals for the Ninth Circuit.

The case involves the scope of federal jurisdiction, eventually engulfing three separate court systems. At his death, Marshall had long established a trust estate plan leaving everything to his son, E. Pierce Marshall, who was also named trustee of the trusts.  Smith contested the trust plan, asserting that Marshall told her he would leave a portion of his estate to Smith.

What would have been a simple, although large, Texas county probate tussle went federal when Ms. Smith was hit with a default-judgment for, of all things, sexual harassment.  She filed for bankruptcy in California and her deceased husband's trustee-son claimed non-dischargability along with libel for statements Smith allegedly made against the decedent.  Smith counter claimed in the bankruptcy court for interference with her husband's estate plan.

Now hang with me on this....

The federal bankruptcy court not only dismissed the trustee's claim, it awarded Smith nearly half a billion dollars on her counter claim, finding that Marshall's son did interfere with his father's testamentary wishes.  This ruling was taken to the U.S. District Court where Smith's award was reduced to a paltry $88 million.

In the meantime, in an entirely separate proceeding, a Texas probate jury found that the decedent's estate plan was valid, ruling against Smith.  These decisions were then considered by the Ninth Circuit who invalidated the federal district court's award to Smith, holding that the Texas probate court had exclusive jurisdiction over such matters.

SCOTUS disagreed back in 2006, reversing the Ninth Circuit and holding that some issues tainted by state probate court could legitimately find their way into federal court via a properly raised bankruptcy-related issue; i.e. Smith's counterclaim.  The High Court then remanded the case back to the Ninth Circuit for a determination on the merits of that claim.

On those said merits, the Ninth Circuit again ruled against the stripper.  Again, the stripper, this time through her estate because she had died, appealed to SCOTUS who once again granted certiorari.  Responding to her claims is the estate of E. Pierce Marshall, who died shortly after Smith.

And now, viola, oral argument, chapter two is here today.  Stay tuned for the result.

This time, the issue concerns the very nature of federal jurisdiction and the constitutional powers (under Article II of the Constitution) of the federal courts; delving even deeper into that subject than the first go around. For a more detailed analysis of this case, SCOTUS expert Lyle Denniston has put together an excellent oral argument "recap" published on the SCOTUSblog.

Regardless of how the High Court rules, the lesson we take away from this suit is that money drives the bulk of all litigation.  Sometimes justice is just roadkill in the process.

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