Anna Nicole Smith's claim to fortune revived by court

Justices' 9-0 ruling sends ex-Playmate's case back to Calif. federal court

May 02, 2006|By DAVID G. SAVAGE | DAVID G. SAVAGE,LOS ANGELES TIMES

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

But the decision does not finally 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 their 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 Anna Nicole Smith.

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

Despite his loss yesterday, Pierce Marshall vowed to fight on.

"I will fight to clear my name in California federal court," he said. "That is a promise she and her lawyers can take to the bank."

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

"There is a long way to go between here and her ability to collect any money judgment against E. 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 that he intended to leave his estate entirely to E. Pierce Marshall.

Meanwhile, in a separate lawsuit brought in a bankruptcy court in Los Angeles, Anna Nicole Smith alleged that 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, the 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 Anna Nicole Smith's award entirely and said that 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 v. Marshall on the side of Anna Nicole Smith.

Yesterday, the Supreme Court called the 9th Circuit's decision a mistake. Justice Ruth Bader Ginsburg said Anna Nicole 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.

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

Los Angeles lawyer Kent L. Richland, who represented Anna Nicole Smith, said he was pleased by the court's ruling but acknowledged that a legal battle remains.

Also yesterday, the Supreme Court ruled that states cannot restrict efforts by defendants in death penalty cases to blame someone else during their trials without a judge examining the strength of both the defense and the prosecution's evidence.

By a 9-0 vote, justices said a South Carolina defendant's constitutional rights were violated by a rule that barred him from introducing testimony blaming another man, because the prosecution had introduced forensic evidence that appeared to support a guilty verdict.

Justice Samuel A. Alito, in his first opinion for the court, wrote that the South Carolina Supreme Court was wrong because it looked only at the strength of the prosecution's evidence and did not consider information that defendant Bobby Lee Holmes had gathered in his defense, including that he was framed by police.

David G. Savage writes for the Los Angeles Times. The Associated Press contributed to this article.

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