Just in time for Hollywood’s Blockbuster Summer season, the west coast is scheduled for a limited engagement legal premiere of sorts. This week on June 25th, the 9th Circuit Court of Appeals will host the latest episode in the saga of the long-running litigation between the estates of Anna Nicole Smith and oil baron J. Howard Marshall.
This remarkable drama demonstrates the lasting power of a lawsuit that has outlasted the life and death of Anna Nicole Smith and her former husband, billionaire oil man J. Howard Marshall II. As the litigation against the estate of her former husband goes on without them both, the absurdity of the case grows clearer.
After more than a decade of legal machinations and courtroom schemes chasing the estate of deceased multi-millionaire J. Howard Marshall, Smith’s lawyers have little to show for their efforts. For the lawyers pushing this case, it truly has been a roller coaster ride. Here’s a quick refresher: The case started in a probate court in Texas within weeks of J. Howard Marshall II’s death in 1995. Anna Nicole Smith initially joined with Marshall’s eldest son J. Howard Marshall III claiming that even though they’d been left out of Marshall’s written will and estate plan, they each had been promised orally a portion of his estate. After a trial lasting nearly six months, the jury ultimately ruled against Anna Nicole Smith and Marshall’s first son.
But Smith’s legal team proved itself tenacious and willing to subvert the system. Just before the Texas verdict was issued, they leapfrogged to a federal bankruptcy court in California. There they were able to get their biggest win – nearly half a billion dollars – by convincing the bankruptcy judge to ignore the course of events and legal arguments covering probate matters in Texas. It’s been mostly downhill since then: the first appeal to the federal district court in California reduced the award by nearly three quarters.
Next the case went to the 9th Circuit. Here Anna Nicole would lose on every count. The court ruled as a matter of law that the entire dispute could be heard only by Texas. On appeal to the Supreme Court, the legal team would gain a narrow victory that kept the case on life support. In the 2006 opinion, the Supreme Court ruled that the 9th Circuit had been overly broad in assuming that this dispute could only be heard in Texas and they sent it back for further review in California, where it remains. Even after all this, most lawyers agree that the prospects for an actual win are meager at best.
But now the 9th Circuit has re-engaged and has agreed to hear oral arguments on the case in Courtroom One on the Eighth Floor of Seattle’s William Kenso Nakamura United States Courthouse. There are five questions that the hearing will be focused on:
(1) Whether Anna Nicole Smith initial claim on the estate of J. Howard Marshall II was a “core” bankruptcy proceeding.
(2) If Smith’s claim was not a “core” bankruptcy proceeding, whether the Texas probate court’s judgment which came first precludes the Federal Courts judgments in whole or in part.
(3) Whether the statute of frauds, which requires estate and wills to be put in writing, affects Smith’s ability to establish her claim.
(4) Whether the discovery sanctions ordered by the district court and the bankruptcy court were reasonable.
(5) If Dannielynn, Smith’s surviving child is a real party in interest and has no guardian ad litem, whether the court should appoint a guardian ad litem and, if so, who the guardian ad litem should be and what provisions should be made for the guardian ad litem’s compensation.
These are mostly the questions that the Supreme Court never addressed when it ruled on the case initially. But each question presents fairly devastating risks to Smith’s legal team. But a win by Smith’s legal team could prove devastating to property rights and estate planning.
In the movies even sequels are given a rest when the franchise no longer has resonance with the audience. Unfortunately this isn’t the case with lawsuits. They often continue regardless of their merit or intrinsic value.
In any event, whatever ultimately comes of this lawsuit, it should remind us all that the legal shenanigans over this half-billion-dollar estate aren’t simply a private matter for the parties involved. We are all impacted. Win or lose, the reckless and selfish actions of a few bad eggs cost the rest of us. Frivolous lawsuits clog our courts and prevent legal disputes with merit from being heard in a timely manner. In fact, according to a recent study by the Chamber of Commerce litigation costs add up to nearly $809 per year for every person in America today.
More frighteningly, this case sets an attractive precedent for future abuse and destabilizes the estate plans of ordinary Americans who want to pass wealth to their children. Tragically, the Anna Nicole Smith legal saga is yet another example of how the American judicial system encourages creativity and legal mayhem at the expense of justice
Horace Cooper is a writer and legal commentator (www.horacecooper.com)
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