Lawyers for the late Vickie Lynn Marshall (better known publicly by her stage name as a topless performer, Anna Nicole Smith) have made a new move in the Supreme Court to head off the loss of her $89 million claim from the estate of her late husband, Texas oil tycoon J. Howard Marshall II.  A petition for rehearing (found here) seeks to delay a final federal court ruling while she pursues an appeal of a Texas court’s decision against her claim.
The petition, filed July 14, is a follow-up to the Court’s ruling on June 23 (Stern v. Marshall, docket 10-179), declaring that a U.S. bankruptcy court did not have the authority to decide her claim, since it was based on state law only. That decision, at the time, appeared to wipe out her claim and to set the stage for her late husband’s entire estate to go to the estate of one of his sons, the late Pierce Marshall.
But, attorneys for the estate of Mrs. Marshall argued that this should not be the last word on the long-running controversy. Although her estate has lost in a ruling by a Texas probate court, the new petition contended, she has appealed that defeat, and thus it may yet be overturned.  It thus should not take precedence, the attorneys argued, over a U.S. District Court ruling that had awarded her some $89 million from the family estate.
Technically, the petition does not seek to undo, or even to bring about a reconsideration of, the Justices’ June 23 decision. Instead, it seeks to persuade the Court that, when it acts to formally send the case back to the Ninth Circuit Court, it should order the Circuit Court “to stay this appeal pending the resolution of Vickie’s Texas appeal.”
In that appeal, the estate of Mrs. Marshall is arguing that the ruling against her and n favor of Pierce Marshall was “improper as a matter of law,” because the claim against her by Pierce Marshall “was filed without leave of court, was filed after she [Mrs. Marshall] had already dismissed all her affirmative claims, was not supported by the pleadings or jury findings, and did not state a justiciable controversy.”
If her estate wins on appeal, on any one of those grounds, the rehearing petition asserted, her defeat in the state court would be overturned, and would not displace what she had won earlier in U.S. District Court.  The District Court judgment, and its award to her of $89 million, was not the ruling that the Supreme Court had found constitutionally flawed, the petition asserted. Rather, it was a federal bankruptcy court decision. The District Court, the petition recalled, had decided the matter anew, for itself, independently of the bankruptcy judgment.  Indeed, the Supreme Court’s opinion June 23 recognized that difference, the petition noted.
The case has had a complex history, moving between state and federal courts, and between federal courts at all levels, and the rehearing petition is itself somewhat complex in scope, though the remedy it seeks — a temporary delay in federal court resolution — is simple.
After Mrs. Marshall and Pierce Marshall had died, lawyers for each of their estates continued to press their competing claims. She contended that Pierce Marshall had interfered with her right to a gift from her late husband, and he had contended that she had defamed him with her allegations. The two claims were made in both state and in federal bankruptcy court, as well as in higher federal courts.
What the Supreme Court decided this past Term was that the bankruptcy court could not constitutionally exercise jurisdiction over Mrs. Marshall’s interference claim, because that was based on state law, and Congress could not assign to a non-Article III bankruptcy judge the power to decide that as a final and binding matter.
In the rehearing petition, Mrs. Marshall’s estate argued that, if the state probate ruling against her is reversed on appeal, that will remove it as the basis for the Ninth Circuit Court’s decision (overturned by the Supreme Court) that the state probate judgment displaced her victory, and the $89 million judgment, in District Court.
Citing a standard treatise on federal court jurisdiction, the rehearing petition asserted: “A judgment that rests solely on the preclusive effect of another judgment still on appeal should not stand if the first judgment is reversed, and that result should always be avoided.”
There is no other mechanism than a stay of the Ninth Circuit case, the petition said, to provide a remedy for Mrs. Marshall’s estate if she wins her Texas appeal.  If the District Court judgment she had won is dismissed, it added, the widow of Pierce Marshall who is handling his estate “could distribute all assets and close the estate.”  Mrs. Marshall’s claim would then be gone, it said.
Under the Supreme Court’s Rule 44, governing rehearing petitions, such a petition ordinarily would not be granted “except by a majority of the Court, at the instance of a Justice who concurred in the judgment or decision.” In addition, such a petition ordinarily will not be granted unless the Court asks for a response to it. However, it is unclear whether those provisions would apply when such a petition is not asking the Court to reconsider the substance of its ruling, but instead only seeks to shape the scope of the remand order.
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