Dechert Team Secures Supreme Court Win in Stern v. Marshall
June 23, 2011
Dechert News Release
Dechert attorneys won a victory on June 23, 2011, before the Supreme Court in favor of the Marshall family in Stern v. Marshall (the Anna Nicole Smith litigation). In the long-running litigation over the claims of Anna Nicole Smith to her former husband's estate, G. Eric Brunstad, Jr., counsel of record, represented the Marshall family in opposing Ms. Smith's estate before the Supreme Court. In a decision that has been called a "momentous . . . constitutional ruling" on the authority of the bankruptcy courts, the Supreme Court held that bankruptcy judges do not have the constitutional authority under Article III to finally decide a debtor's counterclaim that is a state law action independent of the federal bankruptcy law.
In addition to Mr. Brunstad, Dechert’s team on this matter included Collin O'Connor Udell, Matthew J. Delude, Sandy Bilus, Joshua Richards, Joybell Chitbangonsyn, Justin Danilewitz, Sarah Mendola, John O'Brien, Kate O'Keeffe, Brielle Rey, David Caroline, Rani Habash, Jessica Howell, Wayne Pollock, Gordon Sung, Christopher Varano and Galia Porat.
The case concerns the disposition of the estate of J. Howard Marshall following his marriage to Vickie Lynn Marshall (A.K.A. “Anna Nicole Smith”) and his subsequent death. As a result of the decision, Ms. Smith's estate will not be able to collect roughly $89 million from Mr. Marshall's estate. Here is a brief timeline of the matter. Note that Mr. Brunstad began representing Pierce Marshall, son of the late J. Howard Marshall in 2000 when the case reached the district court:
- Bankruptcy Court – In bankruptcy court, Ms. Smith obtained a judgment against Pierce Marshall on her counterclaim for roughly $475 million.
- Texas Probate Court – A five-and-a-half month jury trial in the Texas probate court found that Mr. Marshall did not owe Ms. Smith anything.
- District Court – The district court vacated the bankruptcy court’s decision and imposed its own judgment against Mr. Marshall for roughly $89 million.
- Ninth Circuit (first appearance) – The Ninth Circuit reversed the district court’s decision on the basis of the probate exception to federal jurisdiction, and determined that Mr. Marshall did not owe Ms. Smith anything in light of the Texas probate jury trial.
- Supreme Court (first appearance) – The United States Supreme Court reversed the Ninth Circuit, holding that the probate exception did not apply, and remanded the case to the Ninth Circuit for further proceedings.
- Ninth Circuit (on remand) – The Ninth Circuit, on remand, again reversed the district court’s decision, finding that Vickie’s counterclaim was not a core proceeding and that the bankruptcy court accordingly lacked jurisdiction to issue a final order.
- Supreme Court (second appearance) – In the June 23 decision, the United States Supreme Court affirmed the Ninth Circuit.