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After today’s widely reported win by Anna Nicole Smith before the US Supreme Court (stories here and here), Pierce Marshall vowed that the only thing “Anna and her lawyers can take to the bank” from this win is a “continue[d] fight to clear [his] name in California federal court.” His lawyer, Eric Brunstad, echoing arguments he advanced to the Supreme Court, remarked that Anna will lose Round 2 before the 9th Circuit because she “can’t get a second bite at the apple” (a quote that reminded me, given the circumstances, of this great movie). Anna’s lawyer, Kent Richland, retorted: “We are confident that the 9th Circuit will have no problem in ruling in our favor on the issues that remain.” Round 2 of appellate review sure is shaping into another good ole’-fashioned Texas-style “hully-gully slopfest.”
Now to the decision, Marshall v. Marshall, 2006 WL 1131904, where Justice Ruth Bader Ginsberg, writing for a unanimous Court, swept aside “misty understandings of English legal history” and held, in no uncertain terms, that “the Ninth Circuit had no warrant from Congress, or from decisions of this Court, for its sweeping extension of the probate exception.” (p.2) Notably, Justice Ginsberg did not wipe away the “probate exception,” as Anna’s lawyers had urged and as Justice Stevens advocated in his concurring opinion (extolled here). Instead, she ruled narrowly, holding “that the instant case does not fall within the ambit of the narrow exception recognized by our decisions.” (p.8) (However, in marked contrast to Pierce’s portrayal of Anna here, the Court’s framing of events leading to the marriage as a “courtship” (p.2) suggests that Anna’s front-row teardrops during oral argument were not perceived by the Court as quite the crocodile tears some would have us believe.) [NB: But see here]
So what, then, is the “ambit of the narrow exception recognized by our decisions”? To Justice Ginsberg, the answer is found in the Court’s decision in Markham v. Allen, 326 U.S. 490 (1946), which she described as “the Court’s most recent and pathmarking pronouncement on the probate exception.” (p.11) This decision stated, in a quite “misty” and “mythograph[ic]” way (pp. 1-2), that “the equity jurisdiction conferred by the Judiciary Act of 1789…, which is that of the English Court of Chancery in 1789, did not extend to probate matters.” (p.11)
Justice Ginsberg noted that Markham is “enigmatic,” to be sure, but it remains good law. She wrote:

[I]t has been established by a long series of decisions of this Court that federal courts of equity have jurisdiction to entertain suits ‘in favor of creditors, legatees and heirs’ and other claimants against a decedent’s estate ‘to establish their claims’ so long as the federal court does not interfere with the probate proceedings or assume general jurisdiction of the probate or control of the property in the custody of the state court.” 326 U.S., at 494. (Emphasis in original). (pp. 13-14)

As regards how the term “interfere” should be construed, Justice Ginsberg wrote:

[W]e comprehend the “interference” language in Markham as essentially a reiteration of the general principle that, when one court is exercising in rem jurisdiction over a res, a second court will not assume in rem jurisdiction over the same res. (Citations omitted). Thus, the probate exception reserves to state probate courts the probate or annulment of a will and the administration of a decedent’s estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court. But it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction. (p.14)

In analyzing Anna’s case in light of the foregoing principles, Justice Ginsberg concluded that Anna wins because her claim does not — quoting Markham — “involve the administration of an estate, the probate of a will, or any other purely probate matter.” (p.15) Rather, Justice Ginsberg wrote:

Provoked by Pierce’s claim in the bankruptcy proceedings, Vickie’s claim … alleges a widely recognized tort. Vickie seeks an in personam judgment against Pierce, not the probate or annulment of a will. Nor does she seek to reach a res in the custody of a state court. Furthermore, no “sound policy considerations” militate in favor of extending the probate exception to cover the case at hand. Trial courts, both federal and state, often address conduct of the kind Vickie alleges. State probate courts possess no “special proficiency *** in handling [such] issues.” (Citations omitted). (p.15)

So Anna wins, and the judgment of the 9th Circuit is reversed, with instructions “for futher proceedings consistent with this opinion.”
Part II, coming soon, will focus on the two issues that the 9th Circuit hoped to avoid having to wrestle with by dismissing the case on jurisdictional grounds, but now will have to address head on. (So don’t be surprised to see this case back in Justice Ginsberg’s lap a year or two from now.)
The first issue is whether Anna’s counterclaim against Pierce (who clearly never should have submitted to the jurisdiction of the bankruptcy court by filing a proof of claim in Anna’s bankruptcy case) was a “core” or “non-core” proceeding. Given that the bankruptcy court found Pierce liable for almost $500 million, whereas the district court tagged Pierce for just under $100 million, Pierce’s fortune (or misfortune) may well hinge on the answer to this seemingly innocuous question, as the following very telling exchange at oral argument illustrates:Continue Reading Pierce Marshall Readies for Another Assault on Anna Nicole Smith After the US Supreme Court Throws Her a Lifeline – Part I

With MSM focused on Anna Nicole Smith’s case before the Supreme Court, there’s lots of enlightening reading to be found. Here’s some that have caught my eye [NB: vol. 2 here]:

  • Althouse reports on the oral argument and predicts Anna will win on the merits.
  • Broadsheet quotes Univ. of Chicago Law School’s Doug Baird as saying: “I’d suspect some justices haven’t the slightest idea who Anna Nicole is.” [NB: I suppose they’d have a far better idea if the issues had been more “prurient” in nature.]
  • How Appealing! provides links to photos and to news reports from Newsweek, NPR (here and here), the AP (here and here), the Houston Chronicle, and USA Today.
  • SCOTUSblog, whose founders at Goldstein & Howe represent Anna’s adversary, recaps the oral argument.
  • The Volokh Conspiracy links here to Dahlia Lithwick’s “Supreme Court dispatches” on Slate.com (including a link to her story on NPR). Volokh’s Jim Lindgren also separately provides this solid analysis of the case from a “T&E” (trusts and estates) perspective (though some may prefer the “T&A” perspective here).
  • Wonkette! offers some color commentary on the oral argument and the circus atmosphere outside (with links).
  • The WSJ Law Blog offers good background reading, updates, and links here, here, and here.

You can also find more background reading on the case at my posts here, here, here, and here.
Finally, Anna’s reply brief, filed last week, can be found here (courtesy of SCOTUSblog). It provides the following two short — but significant — retorts:Continue Reading Anna Nicole Smith Case Roundup

With Bingham McCutcheon’s Eric Brunstad and SCOTUSblog’s Tom Goldstein the lead attorneys on a 50 page brief filed on behalf of E. Pierce Marshall, the son of Anna Nicole Smith’s former hubby, J. Howard Marshall, you can bet that Anna Nicole’s legal team will be burning the midnight oil through oral argument on February 28.
More on Pierce’s arguments later, but suffice it to say for now that Anna Nicole’s not exactly being portrayed as a modern-day Jane Eyre. The brief begins with the following bit of contextual background:

J. Howard met Vickie in 1991 at a club where she danced. They were married in 1994, when he was eighty-nine and she was twenty-six. The marriage lasted fourteen months, ending with J. Howard’s death on August 4, 1995.

One unanticipated wrinkle here that the Respondent didn’t have a chance to consider or address, but which clearly affects the dynamic of the entire case, is the Court’s opinion (issued the next business day after the Respondent’s brief was filed) in Central Virginia Comm. College v. Katz (discussed here). One has to wonder whether the Court will look at Anna Nicole’s tortious interference claim as one being “asserted in proceedings necessary to effectuate the in rem jurisdiction of the bankruptcy court.” Since a tortious interference claim probably does not fit that bill, and since (as the Respondent notes) “Congress has not seen fit to displace” (or abrogate) the long-standing judicially established “probate exception” to federal bankruptcy jurisdiction (which bars the exercise of bankruptcy jurisdiction over a decedent’s property), then perhaps the Court will agree with the Respondent that “there is no basis for abandoning the probate exception that Congress has not seen fit to displace” (or abrogate).
Maybe Anna Nicole’s not going to have such a good year after all!
Thanks to Tom Goldstein and his staff at SCOTUSblog for providing us with early access to the briefs filed by and in support of the petitioner and the respondent.
Previous posts on this case of Marshall v. Marshall can be found here, here, and here.
Pierce’s lengthy “Summary of Argument” follows:Continue Reading The Empire Strikes Back: Pierce Marshall and His Amici File Fiery Responses to Anna Nicole Smith’s Claim to a Big Chunk of Her Erstwhile Hubby’s Trust

The latest revelation regarding Judge Alito’s past is that he wrote a memo in 1986, while a lawyer for the Reagan administration, in which he advised the president to expressly declare the president’s understanding of a bill at the time it was signed because “[t]he president’s understanding of the bill should be just as important as that of Congress.”
In a similar vein, Judge Alito may soon be asked as a member of the Supreme Court in Howard Delivery Service, Inc., v. Zurich Am. Ins. Co., No. 05-128, to provide his understanding of statutory provisions that themselves were designed to overrule two long-standing Supreme Court cases (here and here). Those cases, decided under the Bankruptcy Act of 1898 (as amended), held that wage priorities in bankruptcy would not be extended to cover various fringe benefits that technically were not “wages.” The obvious difference between the Court’s and the president’s interpretive views, of course, is that (President Andrew Jackson and the Archidiocese of Portland aside) the Court’s interpretation of the meaning of such legislation is dispositive, whereas the president’s interpretation is not.
In Howard Delivery Service, the debtor/petitioner recently submitted its opening brief, which presents the following straight-forward question for the Court to answer:

In a bankruptcy case, is an unsecured claim for unpaid premiums owing for a debtor’s statutory workers’ compensation liability insurance policy entitled to priority under Section 507(a)(4) of the Bankruptcy Code as a “contribution to an employee benefit plan arising from services rendered,” as held by the Fourth and Ninth Circuits, or is such a claim not entitled to Section 507(a)(4) priority, as held by the Sixth, Eighth and Tenth Circuits? [NB: BAPCPA had the effect of renumbering Section 507(a)(4) so that now it is numbered Section 507(a)(5).]

The Fourth Circuit, unable to deliver a majority or pluraity opinion, looked here more like the “gang that couldn’t shoot straight” in answering this question. The petitioner summarized the Fourth Circuit’s “fractured per curiam” ruling as follows:

Judge King wrote an opinion concurring in the judgment in which he found that the language of § 507(a)(4) is plain and unambiguous and that the unpaid premiums constituted “contributions to an employee benefits plan arising from services rendered.” 403 F.3d at 232. By contrast, Judge Shedd, in his concurring opinion, found the language of § 507(a)(4) to be ambiguous. 403 F.3d at 239. Nevertheless, Judge Shedd ultimately agreed with Judge King that Zurich’s claim was entitled to priority, but relied instead upon a provision of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C.S. § 1001-1461, that referred to the term “employee benefit plan.” Id. Judge Niemeyer issued a dissenting opinion in which he found that:

[t]he plain language of § 507(a)(4), which gives priority to claims for unpaid contributions to an employee benefit plan arising from services rendered, does not cover claims for unpaid insurance premiums charged to cover the statutory liability of the employer to its employees. The unpaid insurance premium is not an unpaid contribution; it is not an unpaid contribution to an employee benefit plan; and it does not arise out of an employee’s services rendered in that it is not a wage surrogate.

403 F.3d at 244 (emphasis in original). Judge Niemeyer further found that the opinions of Judge King and Judge Shedd violated the underlying rule that priorities under the Bankruptcy Code are to be narrowly construed. 403 F.3d at 244 (Niemeyer, J., dissenting).

Though the Petitioner will likely win given the fractured ruling of the Fourth Circuit compared to the strong, consistent rulings of the Sixth, Eighth, and Tenth Circuits, it will be interesting to see how the Court will handle statutory interpretation questions such as:

  • It is an oft-stated principle of statutory construction that a court must consider the specific language itself, the context of that language, and the broader context of the statute as a whole. To what extent will the decision be shaped by an “overriding objective of providing to creditors equal distribution of a debtor’s limited resources”? (Pet. Brief at *10.)
  • Will the Court agree that the plain meaning of the 1978 Bankruptcy Code amendment that extended wage priorities to “contributions to an employee benefit plan” should be limited to the situations addressed in the prior Supreme Court holdings that the legislation is said to have been designed to overturn?
  • To what extent should the Court rely upon legislative history to determine whether the priorities of Section 507(a)(4) should be extended beyond fringe benefits and comparable “wage substitutes”?
  • To what extent should courts look to contemporaneous editions of Merriam Webster’s or Random House dictionaries in defining simple words like “contribution,” “benefit,” and “plan”, and to what extent must there be consistency between their plain meaning and their “usage within the broader context of the Bankruptcy Code”? (Pet. Brief at *15.)
  • Is it appropriate for the Court to “incorporate characterizations of a term in another statute absent some congressional indication that this was intended”? (Pet. Brief at *15-*16.)

The debtor/petitioner’s “Summary of Argument” follows:Continue Reading US Supreme Court Asked to Interpret Scope of 1978 Bankruptcy Code Amendment that Was Designed to Overrule Two Prior Supreme Court’s Holdings on Wage Priorities in Bankruptcy

Add an all-star lineup of bankruptcy gurus to the chorus of voices (including our own government) lining up in support of Anna Nicole Smith’s position before the US Supreme Court in her continuing efforts to wrestle money from the flush estate of her late husband, the oil tycoon J. Howard Marshall II (at least she got half his ashes!).
The list of bankruptcy luminaries signing on to the brief (thus insuring their invitation to Anna’s victory celebration) are: Richard Aaron, Jagdeep S. Bhandari, Susan Block-Lieb, Ralph Brubaker, Erwin Chemerinsky, Robert D’Agostino, S. Elizabeth Gibson, Robert M. Lawless, Charles Mooney, C. Scott Pryor, Nancy Rapoport, Robert K. Rasmussen, Keith Sharfman, Ettie Ward and Robert M. Zinman.
They say they submit this amicus brief (<a href="pdf), pro bono, because of their deep concern that the Court get it right (though the real reason could be a concern that she have enough money so that she doesn’t feel a need to produce shows like these). They write:

The Amici Curiae are law professors who have devoted their careers to the study and teaching of bankruptcy law and bankruptcy jurisdiction. They are deeply interested in this case because of the important effect its outcome could have on the scope of bankruptcy jurisdiction. The Amici file this pro bono brief to offer what assistance they can to the Court as it considers and decides whether the broad and unqualified jurisdiction specially conferred by Congress on the courts of bankruptcy is cut down by the judicially-created probate exception so as to exclude from their jurisdiction any matter that might affect a decedent’s legatees or heirs.

In supporting Petitioner and seeking reversal of the decision of the Circuit Court, the Amici urge the Court to hold that the probate exception does not limit the bankruptcy jurisdiction broadly conferred by 28 U.S.C. § 1334, and that the bankruptcy-related abstention provisions in 28 U.S.C. § 1334(c), which include the role of state courts and state law among its relevant abstention considerations, govern the circumstances in which bankruptcy jurisdiction shall not be exercised. This brief focuses on the issue by emphasizing the special nature of the bankruptcy jurisdiction and abstention statutes, whereas the Circuit Court viewed this bankruptcy case from the vantage point of a decedent’s heirs and legatees and state probate courts.

Their “Summary of Argument,” in true professorial style, is long, but compelling. It states:Continue Reading Bankruptcy Professors Hop on Anna Nicole Smith Bandwagon in Amicus Brief Filed with the US Supreme Court

We finally obtained copies of a host of filings with the Supreme Court in the case of Anna Nicole Smith (besides the US Amicus brief noted here) (pdf), including the opening brief filed by Anna’s lawyers (pdf).
The respondent’s brief is due to be filed on January 20, 2006. Oral argument is scheduled for February 28, 2006.
Four questions are presented:

1. What is the scope of the probate exception to federal jurisdiction?
2. Did Congress intend the probate exception to apply where a federal court is not asked to probate a will, administer an estate, or otherwise assume control of property in the custody of a state probate court?
3. Did Congress intend the probate exception to apply to cases arising under the Constitution, laws, or treaties of the United States (28 U.S.C. § 1331), including the Bankruptcy Code (28 U.S.C. § 1334), or is it limited to cases in which jurisdiction is based on diversity of citizenship?
4. Did Congress intend the probate exception to apply to cases arising out of trusts, or is it limited to cases involving wills?

An amicus brief in support (further discussed here) was also submitted by an all-star lineup of bankruptcy academicians (Richard Aaron, Jagdeep S. Bhandari, Susan Block-Lieb, Ralph Brubaker, Erwin Chemerinsky, Robert D’Agostino, S. Elizabeth Gibson, Robert M. Lawless, Charles Mooney, C. Scott Pryor, Nancy Rapoport, Robert K. Rasmussen, Keith Sharfman, Ettie Ward and Robert M. Zinman) (pdf).
Additionally, counsel for both petitioner and respondent submitted an approximately 250 page joint appendix containing excerpts from various relevant judgments, answers, opinions, briefs, jury instructions, and transcripts.
Anna’s lawyers summarize her position before the Court on these questions as follows:Continue Reading Anna Nicole Smith Position Revealed in an Opening Brief to the US Supreme Court

Here’s a link to the amicus brief filed on 11/21/05 by the US in support of Anna Nicole Smith in her case before the US Supreme Court, Marshall v. Marshall, No. 04-1454 (referenced here) (<a href="pdf). Looks like this is the first brief filed since the Court granted Anna’s petition for certiorari last September.
The “Question Presented” is:

Whether a claim that falls within the scope of the jurisdiction conferred upon the federal courts and that seeks neither to probate a will nor to administer or assume control over the property in a decedent’s estate is nevertheless excepted from federal jurisdiction if it involves the adjudication of rights related to property that is the subject of an ongoing state probate proceeding.

The “Interest of the United States” is described as follows:Continue Reading US Supports Position of Anna Nicole Smith in Amicus Brief Filed with the US Supreme Court

Anyone’s who’s experienced the spectacle of an oral argument at the US Supreme Court will surely appreciate the scare, laughter, and tricks served up at oral argument on Halloween Day in Central Va. Community College v. Katz. In the end, however, I expect that Judge Goldgar‘s prediction at the National Conference of Bankruptcy Judges in early November that the Supreme Court “dodged another bullet” on the sovereign immunity question will likely prove correct, and that the litigants will find at the end of the day that their bags contain few treats.
A good summary of the case going into oral argument is found here, courtesy of our friends at SCOTUSblog, which also alerted us to the availability of the 49 page transcript.
At oral argument, William E. Thro argued on behalf of the petitioner-claimants from Virginia, and Kim Martin Lewis argued for Katz, the respondent-bankruptcy trustee. All Justices, except Justice Thomas, actively engaged counsel in discussion and debate, with Justice Scalia overtly supporting Mr. Thro’s arguments, and Chief Justice Roberts showing good-natured exasperation at the respondent’s own bag of tricks (p.44, and see below).
Still, the argument was interrupted by no fewer than six good-hearted chuckles of record from the Justices and the gallery, including (p.37) from a loud, sudden “pop” and “flash” that clearly startled the Justices on this ghoulish day and led to the following amusing rapid-fire sequence of comments, starting with–

Justice O’Connor, who proclaimed, in Paul Revere-like fashion, “A light bulb exploded. A light bulb exploded.”
Followed by Chief Justice Roberts signaling the “all clear”: “I think it’s safe.”
Followed by the dry Justice Breyer: “A light bulb went out.”
Then again by a relieved Chief Justice Roberts: “It’s a trick they play on new Chief Justices all the time.”
Then by Justice Scalia, who wished everyone “Happy Halloween”.
Meanwhile, the unflappable Justice Ginsburg stayed on track with her line of questioning, not missing a beat: “Let me ask this–“.
While Justice Kennedy tried to allay Katz’s shaken counsel, who was already having difficulties of her own on the merits: “Take your time. We’re interested–“.
Only to be thrown off yet again by Chief Justice Roberts, who reminded counsel of the noticeably shaky ground on which she was treading: “Yeah, we’re even more in the dark now than before.”

Thro’s arguments for the Petitioners were workmanlike, and–most importantly–he didn’t stray from his two main arguments (Seminole Tribe controls; and sovereign immunity bars monetary judgment claims) despite attempts by four of the nine Justices to trip him up within the first few minutes of his argument, including:Continue Reading More Tricks Than Treats in a Light-Popping Halloween Performance at the US Supreme Court in Central Va. v. Katz