Smith Loses Her Claim to Millions

A federal appeals court ruled Thursday that former Playboy centerfold Anna Nicole Smith is not entitled to $88.5 million from the estate of her oil tycoon husband and that it belongs to her stepson instead.

The ruling is the latest in a tale of sex and money that has wound through Texas and California courtrooms for nearly 10 years and been sensationalized in supermarket tabloids.

The U.S. 9th Circuit Court of Appeals found that the California federal judge who awarded the judgment to Smith in 2002 did not have jurisdiction over the case.

Rather, the justices found that jurisdiction belonged to a Texas probate court, which earlier had ruled against Smith and established that E. Pierce Marshall was the sole and rightful heir to the estate of his father, J. Howard Marshall.

“We hold that all federal courts, including bankruptcy courts, are bound by the probate exception to the federal court jurisdiction and that we are required to refrain from deciding state law probate matters, no matter how the issue is framed by the parties,” a three-judge panel ruled in its reversal of the lower court’s decision.

Smith, whose real name is Vickie Lynn Marshall, could not be reached for comment. Her attorney, Howard K. Stern, said the decision was “an absolute injustice” and promised to take the case to the U.S. Supreme Court if necessary. First, he said, they will seek a rehearing from the full 9th Circuit.

“The 9th Circuit Court has, on a legal technicality, reversed the judgments of two federal courts that found massive fraud and other wrongdoing by E. Pierce Marshall by which he deprived Vicki Lynn Marshall of the property that her husband intended her to have,” Stern said.

E. Pierce Marshall said he was prepared to fight Smith, whom he nicknamed “Miss Cleavage,” as long as it takes.

“Many people have asked over the many years if the fight to uphold my father’s last wishes has been worth it,” the younger Marshall said Thursday in a written statement. “I know Anna and her lawyers were counting on our family giving up and paying them an absurd sum to go away. That was never going to happen.

“We were and are prepared to go to the U.S. Supreme Court if necessary to protect my father’s well-documented estate plan and to refute the lies heaped upon our family.”

Smith and the elder Marshall met in 1991, when she was dancing at a Houston strip club, and he was trying to overcome the depression he had fallen into after both his wife and mistress died within a few months of each other. The two were married in 1994, when Marshall was 89 and Smith 26. Marshall died 14 months later.

The legal battle began shortly after his death, unfolding in probate, bankruptcy and federal district courts. The debate has been over two central questions: whether the elder Marshall promised to leave Smith half his fortune and whether the younger Marshall tried to swindle her out of it.

Three years ago, a bankruptcy judge in Los Angeles sided with Smith, and awarded her $475 million. Six months later, a Texas probate court declared the younger Marshall the sole heir. The case eventually fell to U.S. District Judge David O. Carter in Santa Ana. He agreed to review the bankruptcy case, throwing out Smith’s $475-million judgment.

After a monthlong trial, Carter concluded in March 2002 that Smith truly loved Marshall, despite the 63-year age gap and the fact that his fortune was the central facet of their romance. The judge also accused Smith’s stepson of lying, falsifying documents and tricking his father in an attempt to rob Smith of any share of the elder Marshall’s estimated $780-million fortune.

Carter found Smith was entitled to half of the investment income Marshall earned during their marriage, plus $44 million in punitive damages because of her stepson’s “willful, malicious” plot to deceive her. The total was about 8% of Marshall’s fortune. The rest went to his son.

In reversing Carter’s decision, the 9th Circuit concluded that Texas law clearly governs the trust and the last will and testament of J. Howard Marshall. Once the appeals panel ruled on the jurisdiction question, it did not have to address other questions raised on appeal.