WASHINGTON, D.C. — The Supreme Court ruled Thursday that a bankruptcy court incorrectly granted Anna Nicole Smith over $400 million from the estate of her oil magnate husband J. Howard Marshall.
In the 5-4 decision, the nation’s highest court held that the US Constitution barred a California bankruptcy court from deciding a matter outside the scope of bankruptcy law.
The former Playboy Playmate married the billionaire Marshall in 1994 when she was 26 and he was 89. Marshall died in 1995 and left his entire estate to his son Pierce. Smith sued in response, but a Texas probate court granted the entire estate to Pierce Marshall despite claims by Smith that he had conspired to withhold funds promised to her by his father.
Smith then made a similar claim against Pierce Marshall when she filed for bankruptcy in a California court. This time Smith won, and the bankruptcy court awarded her over $400 million. This decision sparked years of litigation over whether the determination by the Texas probate court or the California bankruptcy court prevailed.
Smith died in 2007 from what was determined to be an accidental overdose, but her estate continued the legal fight to keep her portion of the estate. Pierce Marshall also died in the course of litigation.
The opinion by Chief Justice John Roberts noted that although the facts of the case were complicated, the legal principle was not. Roberts held that the Constitution prohibited bankruptcy courts from awarding damages on common law tort claims. “We conclude that, although the [California] Bankruptcy Court had the statutory authority to enter judgment on [Smith’s] counterclaim, it lacked the constitutional authority to do so,” Roberts wrote. Accordingly, the court affirmed that the Texas probate court’s decision prevailed and that Pierce Marshall was entitled to the entire estate.
Roberts began his opinion with a paragraph-long quotation from Charles Dickens’ “Bleak House” to highlight the fact that none of the original parties to the lawsuit lived to see its result. Roberts’ opinion was joined by Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito. Scalia also wrote a concurring opinion. Justice Stephen Breyer wrote the dissent, which was joined by Ruth Bader Ginsburg, Sonia Sotomayor, and Elena Kagan.