Published January 17, 2011
Even by the high-brow standards of the Supreme Court, Tuesday's case over the estate claimed by deceased Texas sex symbol Anna Nicole Smith delves so far into the depths of probate and bankruptcy law that even the most attuned legal minds will be challenged to fully understand all of the complexities now before the justices.
While the high court is known for issuing rulings on great constitutional issues, its routine business often ventures into the mundane interpretation of somewhat obscure laws passed by Congress. In this instance, it's a dispute over a provision in the 1984 Bankruptcy Act.
As any regular reader of supermarket checkout line magazines already knows, the case started with the 1995 death of tycoon J. Howard Marshall and the struggle between Smith, a strip club dancer whom the elderly Marshall married shortly before his death, and Marshall's son Pierce over claims to the hundreds of millions dollars left in the estate.
Over the years the case has worked its way through various federal bankruptcy courts and Texas probate proceedings and a much-publicized stop at the Supreme Court in 2006. Then, camera crews surrounded the court to get a look at Smith who died nine months after the justices ruled unanimously in her favor. A similar scene outside the court Tuesday, without Smith's presence, seems highly unlikely.
The 2006 ruling sent the case back to the Ninth Circuit U.S. Court of Appeals for further review.
Last year that court again ruled against Smith, known as Vickie Lynn Marshall in the legal records, and the executor of her estate, Howard K. Stern.
One of the many oddities of the case is that Pierce Marshall is also dead. So the dispute before the justices is between two estates fighting over J. Howard Marshall's will. In order to keep the names and parties straight one of the briefs in the case added the following footnote, "For the sake of readability, we adopt the Ninth Circuit's approach and refer to the petitioner as Vickie Lynn Marshall ("Vickie") and the respondent as Pierce Marshall ("Pierce")."
It is unusual, but not unprecedented, for cases to return to the Supreme Court for a second argument.
In short, Stern's lawyers contend a federal bankruptcy judge is legally empowered to address all of the core claims and counterclaims brought by the parties. "Lower courts across the country have uniformly held for decades that bankruptcy courts can enter final orders on debtors' compulsory counterclaims to proofs of claim. Until now," lawyer Kent Richland wrote in his brief to the court.
Lawyers for Elaine Marshall, Pierce Marshall's widow, say Congress didn't empower the bankruptcy court with such broad authority and that rulings made by the Texas probate court should carry the day. "Congress intentionally limited (bankruptcy judges') ability to resolve state law causes of action that the debtor may hold against others," Eric Brunstad told the court.
Acting U.S. Solicitor General Neal Katyal has filed a brief in the case supporting Stern not out of some interest to get the Obama administration into the tabloids, but rather because his office is charged with defending federal laws. "The United States has a substantial interest in the outcome of the case because United States trustees -- who are Department of Justice officials appointed by the Attorney General -- supervise the administration of bankruptcy cases."
Katyal also questioned the foundation of the legal analysis used by the Ninth Circuit in its ruling that he claims "calls into question the scope of Congress's constitutional authority to authorize bankruptcy-judge adjudication of counterclaims filed by the estate."
A ruling is expected by the end of June.