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The Anna Nicole Legal Mess Continues

On June 25th oral arguments were heard in Seattle as Marshall v. Marshall – a/k/a Anna Nicole Smith case – returned to the 9th Circuit Court of Appeals. Legal teams representing the late Anna Nicole Smith and the family of J. Howard Marshall II again presented their cases before the three-judge panel.

To catch you up to speed – Anna Nicole Smith married billionaire J. Howard Marshall II and sued after learning that she had been excluded from his written will and estate plan. Smith claimed Marshall verbally promised to leave her half his money, but no one else heard that promise nor was it mentioned in his written will and estate plan.

After initiating her suit in a Texas probate court, Smith decided to file for bankruptcy in California. This “forum shopping” was an attempt to avoid the Texas probate court case that she had initiated because it began to look pretty obvious what the outcome would be—one not in her favor.

She won a huge judgment in the Bankruptcy Court — $447 million dollars, but around the same time, lost her case in the Texas probate court.

The case then made its way to the U.S. District Federal Court in California which conducted its own review and decreased the award given to Smith in the Bankruptcy Court. This was then appealed to the 9th Circuit Court of Appeals.

The 9th Circuit reversed the rulings of the Bankruptcy Court and District Court and upheld the Texas Probate Court’s judgment that Smith wasn’t entitled to a portion of the estate. They decided that this was a probate matter that was decided in Texas and that judgment was and is the judgment of record.

Smith then appealed that ruling to the highest court in the land – the U.S. Supreme Court. Ultimately, the U.S. Supreme Court ruled that the 9th Circuit’s decision was overly broad on an issue and remanded the case back to the 9th Circuit Court of Appeals for further review where it remains today.

Legal expert Horace Cooper has been following this case and was able to attend the oral argument in Seattle. Cooper believes that perhaps the most important principle involved in this case is a common legal concept known as “res judicata” — a Latin phrase that literally means a matter already judged.

Cooper reported, “The three-judge panel focused intensely on the issue of timing — whether it was the bankruptcy court or the Texas probate court’s final ruling which happened first legally. The overwhelming evidence is that the Texas probate court issued its final ruling first.”

You can listen to the oral arguments HERE

The Marshall family attorney, Eric Brunstad, laid out his case and provided legal arguments based on three key points: “core” vs. “non-core” bankruptcy jurisdiction, issue and claim preclusion and causes of action based on Texas law. Brunstad, who has been with the Marshall family every step of the way, gave the three-judge panel the legal facts and case history required for them to make their decision.

Representing Anna Nicole Smith was Kent Richland. Richland was constantly peppered with questions. In fact, unlike Brunstad – who made all of his arguments and reserved time for rebuttal – Richland’s time expired amidst a barrage of questions by the panel.

As the saying goes, the definition of insanity is doing the same thing over and over again and expecting a different result. This is legal insanity. Let’s hope the 9th Circuit puts an end to this case once and for all, including this idea of “forum shopping” which can potentially affect all Americans with estates big and small.