A Legal Blockbuster Headed Your Way
by Horace CooperJust 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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43 Comments
I never had any feelings one way or the other about Anna Nicole Smith while she was alive, well except I thought she was a ditz but other then that nothing. Now though I feel as though she was a cash cow for the blood suckers that surrounded her, i.e. Howard K Stern. He and her doctor should be shot for how they kept her so drugged up and out of control with the meds. I wouldn't put it past them if they weren't directly involved with her sons death as well. Talk about ambulance chasing, this guy chased the inevitable ambulance for YEARS. Simply disgusting.
Marshall had plenty of time to prepare a new will. The courts shouldn't reward gold-diggers.
we need the resident legal experts, Mr Price and Lawhawk to wade into this mess- it is our take that she has a pretty strong case depsite the protestations of the Marshall family… as sad as it seems the law isn't always fair, and it would be a travesty if the bottom dwelling Stern got a payday.
Ultimately we all have bigger fish to fry…
I really wish the American courts would adopt the "loser pays" system that the rest of the world uses. That would surely make people think twice before filing frivilous lawsuits.
You might want to include some of the machinations by the Marshall family in the farce in Texas. My understanding is that those fine upstanding individuals were more than slightly involved with subverting the truth in that case.
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This case is shaping up as our version of "Jarndyce v. Jarndyce", the fictional probate case at the center of Dickens "Bleak House." I am a lawyer who doen't do much probate work. However I must take my hat off to the sheer creativity of the Smith legal team. In my state, the decedent's property can only be divided in two ways. First, if he has a will then according to that will. Second, if he is intestate, then according to the state Statute of Descent and Distribution. Maybe someone can tell me why this did not immediately happen in Texas. I appreciate Mr. Coopers fine summary and eagerly look forward to the next round in this facinating story.
I just hope, Anna Nicole Smith's child is taken care of in all this mess.
Facinating stuff and certainly the kind of thing they don't teach you in the Trusts and Estates class in law school. I appreciate Mr. Cooper's very concise review of the facts. I have to express my admiration for the sheer creativity of the Smith legal team and their never-say-die attitude. Of course half a billion bucks is quite an incentive. This case may evolve into our own version of Jarndyce v. Jarndyce, the fictional probate case at the center of Dickens
novel "Bleak House." As I recall the novel ends with the revelation that the legal costs have exhausted the estate and there is nothing left to fight over.
Facinating stuff. I wonder if there will be anything left in the estate when this thing is finally concluded.
1. She was married to the man and Texas is a community property State. She was entitled to some $.
2. Opposite sex couples are allowed to marry for ANY reason they choose. The motives do not have to be pure and honorable. She married him for his $ – OMG what a shock, and he married her for her uh assets as well.
3. Marshall was hardly a poor innocent old man who fell into the clutches of a gold digger. He had at least one long term mistress before Anna Nicole and probably would have married her, had she not died first.
4. You just can't deny someone their rights because you don't like them or think they are bad people.
5. Had the family not been greedy, they could have probably paid Anna Nicole off with 20 or so million, they were cheap and greedy and stupid.
Those are my 5 reasons why I disagree with this article.
Yeah, like was said up-thread “loser pays.” That would nip it in the bud, cases wouldn’t become careers for overly ambitious attorneys and the jeopardy would extend to all parties. The Lawsuit is the every mans lottery, and the cost like taxes are passed on to the consumer.
You beat me to it Holly. “Loser pays,” seems like the best solution which means it can’t be used, government think, don’t you know?
After years of gathering empirical and anecdotal evidence, I have concluded that the principle mission of American jurisprudence is: Make money for lawyers.
Very much like Jarndyce V Jarndyce in Dickens' "Bleak House".
Very much like Jarndyce V Jarndyce in Dickens' "Bleak House".
But there is a downside to loser pays too. Think about what happens if you sue someone with deep pockets and they can hire the best attorneys to out lawyer you. Loser pays would be fine if it wasn't so much the case that the deepest pocket wins — which it may not necessarily be but it does seem that the American legal system is stacked in favor of. Look at OJ (granted criminal prosecution but his atty's ran circles around poor Marcia). What you really want is kind of a frivolous suit – lawyer pays law. But then what do you view as the standard to determine what is frivolous? Empathy would seem to play a large role. Perhaps we need a stricter code of conduct for attorneys with them being eligible for fines for over zealous representation of their clients.
Good point? If you made it subjective and not across the board corruption, nepotism would seep in and your back where you started.
Lawyers = sucking the case dry
I know everyone likes to complain about obnoxious legal cases. But, I do find it preferable to having both sides meet in the street at high noon and the winner is whoever lives.
Anyone want to bet against Smith's team working on a contingency fee schedule? There was a marriage of true love
That could have been a sit com. Texas billionaire marries stripper – he dies – let the games begin! Are all the principals saying "It isn't the money it's the principal?" (It's always the money)
I suspect that is the reason why there was such a line up of fathers for her baby – pretty disgusting isn't it? Didn't Marshall's son even die in this saga?
Like getting divorced – as soon as you bring in the lawyers…
As a former legal secretary of 25 years experience, my opinion of frivolous lawsuits is something that can't be printed here or I'll be banned. But, trust me, they're evil. In this state of California, lawsuits have disintegrated from being defense into being weapons – with too many of those weapons being wielded for political purposes.
And it's not just California. Alaska is doing the same thing – as exhibited by the hellish costs which Governor Palin is forced to pay to defend herself against frivolous lawsuits (the cost is currently $600,000 and counting). Damn, that's unfair. And it must be stopped. I am all for 'loser pays'. Or – at the least – let the one filing a frivolous lawsuit first post a bond.
As a result of frivolous lawsuits, the law has disintegrated from being a defense into a weapon. Ask Governor Palin who has now run up nearly $600,000 in costs (and still rising) to defend herself against political opponents and just plain nasty individuals with their own jealous agenda – all of whom have the 'right' to attack anyone they feel like in the courts, while leaving the victim with no protection save debt and misery. It's unfair and it must be stopped.
"Great idea! Let's make it impossible for the poor to sue the rich in their tilted legal system"…
Idiot.
"Loser pays" in some form or another is in place in several states, including California. Truly frivolous suits are most often dismissed at pretrial motions, and the punishment is what is called "sanctions" leaving the judge to decide if the frivolous suit was the fault of the plaintiff, the plaintiff's attorney, or both. Sanctions can be very costly for phony plaintiffs and ambulance-chasing attorneys. "Silly suits," with some basis in law are handled by pretrial setllement conferences. The plaintiff makes a final demand, and if the defendant refuses, it then goes to trial. The catch is that even if the plaintiff wins, he wins only the amount of damages that the jury awards, and if that award is less than the final (often outrageous) demand, the plaintiff gets the actual damages but has to pay the other side's attorney's fees and costs (which can easily be more than the award of damages). Nokarmahere is on the right track, but there are rules for determining what amounts to a frivolous lawsuit at the early stages, so at least in California, we are more concerned with "silly suits." This is not true for most of the states where you are hearing of those unconscionably large jury awards. John Edwards would find it a lot tougher practicing law in California.
I should add that under the Calfornia rules, the jury does not know what the final demand and final offer were, so they have no clue as to how much they would have to award in order to declare the plaintiff "the winner," They might award $50,000 in a case we might think is really only worth $20,000, but if the plaintiff refused to settle, and demanded $55,000, the plaintiff "loses," and therefore has to pay the defendant's attorney's fees and costs, and in a lengthy pretrial case, that could easily be $75,000 or more.
This legal mess could fill an entire volume and a semester of law school (I can actually envision a version of this with names redacted as a bar exam question). So I'll just make two comments: This is an example of selfish people and greedy lawyers looking for big bucks with justice as a minor footnote. And no matter who wins, I hope and pray that Stern loses. This is what a panicky harried law student preparing for the bar exam would call a "racehorse contracts/family law/agency/real property/federal supremacy/conflict of laws/equity/bankruptcy/constitutional law crossover question."
The defendants offer in settlement must also be reasonable. So a plaintiff (or his insurance company) no longer has the option of offering $5,000 in a case where the medical damages alone are already $6,000. So if the defense makes an unreasonably low offer such as this, and the jury awards $50,000 when the plaintiff's demand was $55,000, the judge has the discretion to decide that the offer was a sham, and may yet award attorney's fees and costs to the plaintiff because the defense "forced the plaintiff to trial." It's a complicated process, but the whole concept is to get the parties to reach a reasonable settlement without granting an unfair advantage either to a litigious plaintiff or to a wealthy defendant.
It's everybody's legal system, and that was a perfectly good suggestion. Your rudeness was completely unnecessary. The poor don't have to lay out a dime if the case is a contingency case or taken by a legal aid society. Loser pays doesn't mean that the rich own the courts. It just means think twice before you sue someone for huge bucks for small or imagined injuries. If you want to disagree, do it with some manners.
By anybody's standards, this is a legal mess with no simple answers. I don't know the reasons behind why the normal rules of intestate succession weren't applied, but in my few brief encounters with the Texas court system, I can guess it has something to do with Texas having many, many arcane rules that only faintly resemble those of the rest of the states. At this point, I don't even remember if the husband had a will, but that would be handled differently in Texas from what most of us expect in other states as well. They will be writing bar exam questions like this case for years to come.
I'm sure all the lawyers are making a good living off this case. Bloodsuckers.
so it's quite simple then- right, counselor?
Planet_Zero I’m surprised you’re off your knees after Barry’s infomercial. You really do love your Barry don’t you. What’s in it for you?
This is a case of "can't BOTH sides lose?" if ever I saw one. She was a gold-digger and he was a horny old creep. Her side are filthy leeches and his side are greedy, stupid snobs. Too bad the entire wad can't go into a trust for her child.
The lawyers, of course, will fatten on this regardless. My family was embroiled in a horrible lawsuit many years ago, and my opinion of the legal profession has never recovered. A woman ran over my mother, killed her, then filed a lawsuit against her estate for pain and suffering. Yes, it seemed that my mother's corpse crashing through her windshield was quite traumatic. My father was forced to countersue, and it dragged through the courts for 8 years. The final result? After legal fees, the total settlement we received as $360. Yes, my brother and I each got the princely sum of $180 for my mother's life. I would sooner they had crapped in my hand than accept that check. But someone, somewhere, got handsomely paid for their time.
"What's in it for you?"
Um, how about an America that isn't a complete and utter embarassment? How about an environment which isn't polluted and a more peaceful society? Yeah, all that and a bag of chips son…
Oh hey Zero! As I expected you hate America, why? Embarrassing how, and to whom? Why do you still live in America? Do you live in Sec: 8 housing? Do you presently use the health department for your health care? Why do you love a Washington politician so? What is the pay off, what’s in it for you?
would call a "racehorse contracts/family law/agency/real property/federal supremacy/conflict of laws/equity/bankruptcy/constitutional law crossover question."
ahh sounds alot like some of my land development projects.
Ain't it the truth?
Except that land development projects make sense. lol
They do in the end. The long, twisted and winding road actually gets you somewhere.
"This is a case of "can't BOTH sides lose?" if ever I saw one. She was a gold-digger and he was a horny old creep. Her side are filthy leeches and his side are greedy, stupid snobs. Too bad the entire wad can't go into a trust for her child."
That sums it up far more succinctly than I could! However the rush of potential fathers for the child – can't forget the next generation!
Marshall specifically excluded Anna from his will (after having provided for her handsomely with jewelry and property during his lifetime). It's just a shame that she and her "people" have been able to manipulate the judicial system so egregiously. I certainly hope that the 9th finally gives the Marshall family some justice. From listening to the oral arguments, it sounds like the judges are leaning that way. (http://www.ca9.uscourts.gov/media/view_subpage.ph...
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