MARSHALL V. MARSHALL 547 U.S. 293 (2006) CASE BRIEF

MARSHALL V. MARSHALL

547 U.S. 293 (2006)

NATURE OF THE CASE: Marshall (Vickie) appealed a reversal of a district court decision regarding matters related to the probate of an estate that were decided in bankruptcy.

FACTS: Vickie Lynn Marshall (aka Anna Nicole Smith) is the surviving widow of J. Howard Marshall II. Vickie and J. Howard met in October 1991. After a courtship lasting more than two years, they were married on June 27, 1994. J. Howard died on August 4, 1995. J. Howard did not include anything for Vickie in his will. According to Vickie, J. Howard intended to provide for her financial security through a gift in the form of a 'catchall' trust. E. Pierce Marshall (Pierce), one of J. Howard's sons, was the ultimate beneficiary of J. Howard's estate plan, which consisted of a living trust and a 'pour over' will. Under the terms of the will, all of J. Howard's assets not already included in the trust were to be transferred to the trust upon his death. The estate was subject to proceedings in Probate Court in Harris County, Texas, Vickie filed for bankruptcy in California. Pierce filed a proof of claim alleging that Vickie had defamed him and sought a declaration that the debt he asserted in that claim was not dischargeable in bankruptcy. Vickie counterclaimed in that Pierce had tortiously interfered with a gift she expected by imprisoning J. Howard against his wishes; surrounding him with hired guards for the purpose of preventing personal contact between him and Vickie; making misrepresentations to J. Howard; and transferring property against J. Howard's expressed wishes. The Bankruptcy Court granted summary judgment in favor of Vickie on Pierce's claim and, after a trial on the merits, entered judgment for Vickie on her tortious interference counterclaim. The court awarded Vickie compensatory damages of more than $449 million-less whatever she recovered in the ongoing probate action in Texas-as well as $25 million in punitive damages. Pierce filed a post-trial motion to dismiss for lack of subject-matter jurisdiction, asserting that Vickie's tortious interference claim could be tried only in the Texas probate proceedings. The Bankruptcy Court held that 'the `probate exception' argument was waived' because it was not timely raised. In the Texas Probate Court, Pierce sought a declaration that the living trust and his father's will were valid. Vickie filed a tortious interference claim against Pierce, but voluntarily dismissed both claims once the Bankruptcy Court entered its judgment. Following a jury trial, the Probate Court declared the living trust and J. Howard's will valid. Pierce sought district-court review of the Bankruptcy Court's judgment. The District Court held that the exception did not reach Vickie's claim because the Bankruptcy Court 'did not assert jurisdiction generally over the probate proceedings . . . or take control over [the] estate's assets.' The District Court also held that Vickie's claim did not qualify as a 'core proceedin[g] and treated the Bankruptcy Court's judgment as 'proposed, rather than final,' and undertook a 'comprehensive, complete, and independent review of' the Bankruptcy Court's determinations. The District Court determined that Pierce had tortiously interfered with Vickie's expectancy. The District Court awarded Vickie some $44.3 million in compensatory damages. In addition, finding 'overwhelming' evidence of Pierce's 'willfulness, maliciousness, and fraud,' the District Court awarded an equal amount in punitive damages. The Court of Appeals for the Ninth Circuit reversed. It held that the probate exception bars federal jurisdiction in this case. A claim falls within the probate exception if it raises 'questions which would ordinarily be decided by a probate court in determining the validity of the decedent's estate planning instrument,' whether those questions involve 'fraud, undue influence, or tortious interference with the testator's intent.' The Supreme Court granted certiorari.

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