Leaked cables from Bahamian government officials detailing scandal. A Lon- don opera chronicling her tumultuous life and ca- reer. Supreme Court ar- guments in the estate case continuing years after her demise. The Anna Nicole Smith saga forges on.
Despite the tabloid stories that continue to surface describing the troubled life of the former Playboy model, it’s the legal matters involved in a fight Smith initiated almost 15 years ago that should make the American public sit up and take notice. The glaring legal problem in Stern v. Marshall is the blatantly manipulative manner by which Smith’s lawyer and lover, Howard K. Stern, and her team of lawyers moved an estate case from a Texas probate court to a California bankruptcy court in search of a more favorable venue. Stemming from that overarching problem, a more technical matter is the question that nine Supreme Court justices will soon decide after oral arguments on Jan. 18 - the issue of what is “core” and “non-core” (or relevant and irrelevant) to a bankruptcy filing.
To boil down this issue, it is best to start from the beginning. In 1995, Vickie Lynn Marshall (aka Anna Nicole Smith) initiated proceedings in a Texas probate court seeking a share of the estate of her late husband, J. Howard Marshall II. Smith claimed tortious interference with expectancy of inheritance against Marshall’s son, E. Pierce Marshall. The nature of this claim is extremely important because, by definition, it is a personal injury tort.
In 1996, Smith filed for bankruptcy in California and claimed that the very same issues she had asked the Texas probate court to review had suddenly become core to her bankruptcy proceedings. According to the statutory grant of jurisdiction to the U.S. Code, however, personal injury torts must automatically be considered non-core to bankruptcy filings. Thus, under the code, a bankruptcy judge may hear arguments regarding a non-core issue but may not make a final ruling on that issue. A bankruptcy court can merely offer a recommendation on non-core issues. In order for it to be final, a federal court must review the matter de novo (anew) and either uphold, alter or set aside the recommendation. As this process is exactly what occurred in Smith’s case, a federal appellate court clearly recognized that the estate issue was non-core to the bankruptcy proceedings. Now that ruling awaits argument this month in the Supreme Court.
It all comes down to a matter of simple timing. Although the bankruptcy court was the first to rule and ruled in favor of Smith, that decision was not final. The Texas probate court, in turn, ruled in favor of E. Pierce Marshall and did so before the federal court’s de novo review. Therefore, the Texas court is the clear court of record regarding the estate matter. The bankruptcy court finding and subsequent belated federal court review are moot.
It’s easy for Smith’s scandalous life (and death) and complicated legal terminology to detract from the real issue at play here. This case is very simple. Common sense dictates a Supreme Court ruling in favor of the Marshall family, but the rule of law dictates it, too. Should that not be so, the American public and our time-honored judicial system will be the worse for it. For example, those who believe in federalism would not want to see a state court’s legal holding overturned by a federal court a thousand miles away that has no expertise in Texas probate law. In another instance, a civil rights litigant filing a claim of racial discrimination in the workplace would not want a judge in a specialty tax court to decide his case. When it comes to the law, there are many gray areas. Stern v. Marshall offers the Supreme Court an opportunity to make this issue quite black and white. Here’s hoping the justices take it.
Victoria Toensing is a former Justice Department prosecutor, and Joe diGenova is a former U.S. attorney. They are founding partners of the Washington law firm diGenova & Toensing.