Justices Side With Ex-Model, Keeping Alive Her Estate Claim

Anna Nicole Smith, the former Playboy Playmate and widow of a Texas oil billionaire, won a unanimous ruling from the Supreme Court on Monday that cleared the way for her to claim as much as $500 million from her late husband’s estate.

But the decision does not resolve the 11-year-old legal dispute, which has bounced back and forth between the state courts of Texas and the federal courts in California.

The court battle has been fought over who lied and schemed to get a share of the estate of J. Howard Marshall: his son or his widow. Marshall was 89 years old and worth an estimated $1.6 billion in 1994 when he married the 26-year-old model. He died a year later, and the fight was on.

A Texas court backed the oilman’s son, E. Pierce Marshall, but a federal bankruptcy judge backed Smith.

In a victory for the widow, the Supreme Court tossed out a decision saying federal judges had no authority to decide a lawsuit she had filed against her stepson. She claimed that he had schemed and forged documents to deprive her of a huge gift her octogenarian husband had promised her before his death.

Despite his loss Monday, Marshall vowed to fight on. “I will fight to clear my name in California federal court. That is a promise [she] and her lawyers can take to the bank,” he said.

So far, both sides have taken plenty of money to their lawyers, but not to the bank. And several experts in bankruptcy law agreed the battle will drag on.

“There is a long way to go between here and her ability to collect any money judgment against Pierce Marshall,” said Craig Goldblatt, a Washington lawyer who filed a court brief on behalf of experts in bankruptcy.

That is because the Supreme Court did not decide whether the Texas court or the federal bankruptcy court handed down the first decision. Usually, when judges are dueling over who gets to decide an issue, the first ruling is honored in the end.

After the death of J. Howard Marshall, his will was probated in a Texas court, which agreed he intended to leave his estate entirely to Pierce Marshall.

Meanwhile, in a separate suit brought in bankruptcy court in Los Angeles, Smith alleged the billionaire’s son had -- before her husband’s death -- schemed to deny her what she had been promised. She had filed for bankruptcy for unrelated reasons.

She emerged with a judgment that the widow -- Vickie Lynn Marshall in court and Anna Nicole Smith on stage -- was due $474 million from her late husband’s estate.

Since then, higher courts have been trying to decide which ruling should be honored: the Texas probate order or the federal bankruptcy decision.

Two years ago, the U.S. 9th Circuit Court of Appeals in San Francisco threw out Smith’s award and said federal judges had no right to intervene in any matter involving a state’s probate of an estate.

That ruling threatened to crimp the power of federal courts on several fronts. For example, the Internal Revenue Service often goes to federal court to seek taxes that are owed by an estate. For that reason, the Justice Department entered the case of Marshall vs. Marshall on the side of the billionaire’s widow.

On Monday, the Supreme Court called the 9th Circuit’s decision a mistake. Justice Ruth Bader Ginsburg said Smith had sued over a kind of fraud that deprived her of a gift. She was not contesting the terms of her late husband’s will.

“We hold that the 9th Circuit had no warrant from Congress, or from the decisions of this court, for its sweeping extension” of the rule that prevents federal judges from deciding on wills, Ginsburg said. “Trial courts, both federal and state, often address conduct of the kind Vickie alleges.”

But having revived her claim, the high court sent the case back to the 9th Circuit. It must decide whether Smith’s suit was properly in a bankruptcy court in the first place. Moreover, it must consider a timing question that could be crucial.

Ginsburg noted that a federal judge in California had issued a final ruling for Smith on March 7, 2002. Less than a month earlier, a Texas probate court had handed down a final ruling in favor of Pierce Marshall, she said.

Los Angeles lawyer Kent L. Richland, who represents Smith, said he was pleased by the high court’s ruling but acknowledged that a legal battle remained.

Richland said he would argue that the bankruptcy judge in Los Angeles was the first to rule on Smith’s claim that she had been cheated, and for that reason, its decision is first.

“Anna Nicole Smith’s claims existed years before her husband died and years before thoughts of probate even began,” Richland said.

“We are confident that the 9th Circuit will have no problem in ruling in our favor on the issues that remain.”