By Lanny J. Davis & David B. Rivkin Jr.
Say this about Anna Nicole Smith: In a variety of ways, she brought together Americans of all stripes. In an era of political division, she welcomed all in her various endeavors.
That is her legal legacy, too. On Tuesday, the U.S. Supreme Court will, for the second time, hear oral argument in a case arising from Ms. Smith’s bankruptcy and her attempt to use that bankruptcy to get around the will of her deceased husband, billionaire oilman J. Howard Marshall II. The case has brought together a wide coalition of liberals, conservatives and people of all stripes concerned about one thing: the constitutional guarantee that lawsuits will be decided by a fully independent and impartial judge.
That is what brought the two of us to be hired to represent the National Black Chamber of Commerce and the American Board of Trial Lawyers Advocates in filing an amicus brief with the Supreme Court in this case — Mr. Davis, a liberal and former counsel to a Democratic president; Mr. Rivkin, a conservative and former counsel to a Republican president.
The facts of this case are fit for a tabloid. In the tumultuous final years of her life, Ms. Smith claimed that she was owed hundreds of millions of dollars because of a verbal promise Mr. Marshall had made prior to his death at the age of 91, less than a year after their marriage. This despite that Mr. Marshall, while lavishing her with millions in gifts, cut his newlywed wife out of his will.
At first, Ms. Smith pursued her claim in the usual manner, by challenging Mr. Marshall’s will. In April 1995, she brought her claim in a Texas probate court, arguing that the elder Mr. Marshall had promised a substantial portion of his estate but that Mr. Marshall’s son, E. Pierce Marshall, had illegally blocked that promise from being carried to leave more money for himself and others named in the final will.
Pierce, in turn, sued Ms. Smith for defamation. But before a jury could hear that case, she filed for bankruptcy, under very suspicious circumstances, in a California court. (Meanwhile, a Dallas jury found that her attorney had in fact defamed Pierce.) When Mr. Marshall filed a claim in the bankruptcy court to prevent his defamation suit from being wiped out, which is what usually happens in bankruptcy, Ms. Smith turned around and slapped him with the same claims that she had made in the Texas case.
The result was to give Ms. Smith two bites at the apple: once in the Texas court, where her claims would have to face a fact-intensive jury trial, and again in the bankruptcy court, where they would face far less scrutiny. Some observers said the bankruptcy case was manufactured for just this purpose.
Just as the Texas jury trial was getting under way, the bankruptcy judge ruled in Ms. Smith’s favor, awarding her over $450 million. The judge heard evidence over the course of just a couple days and showed an unusual hostility to Pierce’s case
The Texas jury trial, by contrast, was just like in the movies. The jury heard evidence for five months from more than 40 witnesses, with extensive questioning and cross-examination from both sides. It reached a unanimous verdict: Mr. Marshall had never promised to put Ms. Smith in his will or give her hundreds of millions — or anything. In effect, Ms. Smith had lied.
Here’s where the legal issues get complicated. The basic question is, which verdict stands, the one reached by the Texas jury after a five-month trial or the quick decision of a bankruptcy judge? Usually, the first judgment is the one that controls, but there’s a quirk: Because a bankruptcy judge isn’t a “judge” under the Constitution, he can’t enter a final judgment in cases that aren’t “core” to the bankruptcy process. Instead, a federal judge — one appointed by the procedures specified in the Constitution and totally insulated from political pressure — has to review the evidence and make his own decision. As a matter of law, that’s the final decision.
The bankruptcy court’s judgment was first in time, but if Ms. Smith’s claim that Mr. Marshall illegally interfered to keep her out of the will is “non-core,” then the Texas decision was first in law. Hundreds of millions of dollars hang in the balance.
So do fundamental guarantees of independent judges, constitutional fidelity and justice. These are what’s brought together a strange-bedfellows coalition of liberals, conservatives and independents, all standing up for the Supreme Court to take Article III of the Constitution, which lays out the requirements for judges and the courts, as seriously as the Framers intended.
The position taken by Ms. Smith’s estate offends progressives, who do not want a plaintiff in a state civil rights case to be vulnerable to being trumped by a decision by a bankruptcy court. A bankruptcy judge is not required to abide by the Seventh Amendment’s right to a trial by jury, nor the various due-process rights protected by the rules that govern Article III-federal judges cases. Bankruptcy judges were created by Congress under Article I of the Constitution to relieve Article III judges of the need to preside over complex and arcane bankruptcy cases that have little to do with the usual subject matters before the courts. Under the Constitution, Congress couldn’t do any more than that, such as reassigning typical lawsuits to non-Article III judges. And indeed, Congress didn’t intend to give bankruptcy judges final decisionmaking authority over “non-core” bankruptcy issues, things that go beyond the simple adjudication of debtors’ and creditors’ rights.
At the same time, the position taken by Ms. Smith’s attorneys also offends conservative principles. First, it would allow a judge created by Congress to intrude on the independent, final decisionmaking powers of federal judges, expressly invested with such powers by Article III of the Constitution. Second, it would ignore federalist principles deferring to the states, such as state court systems, except for where the Constitution expressly provides for overriding state legal authority.
One hopes that the Supreme Court’s liberals and conservatives will find the same common ground as we did in submitting a brief to the court on behalf of the National Black Chamber of Commerce and the American Board of Trial Advocates.
It is noteworthy that four federal judges in the courts below all agreed that a bankruptcy judge cannot have “final” decisionmaking authority over “non-core” bankruptcy issues, even for the kind of claim brought by Ms. Smith, and that Article III courts must retain final authority to decide such “non-core” issues.
It might not be easy nowadays for liberals and conservatives to come together and agree on anything. But the good news is that, at least in this case, the attorneys representing the Smith estate managed to accomplish one “purple” moment when liberals and conservatives can come together and agree on the importance both of protecting due process and the right to jury trials, as well as strictly construing the right of Article III judges to make final decisions on “non-core” bankruptcy issues.