Marshall v. Marshall
547 U.S. 293 (2006)
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Rule of Law:
The judicially created probate exception to federal jurisdiction is a narrow rule that does not bar federal courts from adjudicating tort claims related to a decedent's estate. The exception only applies to cases that require the federal court to probate or annul a will, administer a decedent's estate, or dispose of property that is in the custody of a state probate court.
Facts:
- Vickie Lynn Marshall (Vickie) married the much older and wealthier J. Howard Marshall II (J. Howard) after a two-year courtship.
- During their marriage, J. Howard lavished gifts on Vickie and, according to her, promised to provide for her financial security through a trust.
- When J. Howard died, his will left his entire fortune to his son, E. Pierce Marshall (Pierce), and made no provision for Vickie.
- Vickie alleged that J. Howard had intended to give her a substantial gift via a trust, but Pierce prevented this gift from being finalized.
- Vickie claimed Pierce engaged in tortious conduct, including forging documents, making misrepresentations, and effectively imprisoning J. Howard to prevent him from finalizing the intended gift to her.
Procedural Posture:
- Vickie Marshall filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Central District of California.
- E. Pierce Marshall filed a proof of claim in the bankruptcy proceeding, alleging Vickie defamed him.
- Vickie filed a counterclaim against Pierce for tortious interference with her expected multi-million dollar gift from J. Howard Marshall.
- The Bankruptcy Court, treating the counterclaim as a core proceeding, entered a judgment for Vickie for over $449 million in compensatory damages and $25 million in punitive damages.
- On appeal, the U.S. District Court held that the probate exception did not apply, but found the claim was a non-core proceeding requiring de novo review.
- After conducting its own review, the District Court awarded Vickie approximately $88 million in compensatory and punitive damages.
- Pierce, as appellant, appealed to the U.S. Court of Appeals for the Ninth Circuit, and Vickie, as appellee, cross-appealed.
- The Ninth Circuit reversed the District Court's judgment, holding that the probate exception barred federal courts from exercising jurisdiction over Vickie's claim.
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Issue:
Does the probate exception to federal jurisdiction bar a federal court from adjudicating a state-law tort claim for tortious interference with an expected gift when the claim does not involve the probate of a will, the administration of an estate, or control over property in the custody of a state court?
Opinions:
Majority - Justice Ginsburg
No. The probate exception does not bar federal jurisdiction over Vickie's tortious interference claim. The exception is narrow and reserves to state probate courts only the probate or annulment of a will and the administration of a decedent's estate; it also precludes federal courts from attempting to dispose of property that is in the custody of a state probate court. Vickie's claim is an in personam action against Pierce for damages, not an action to probate a will or to reach a res in the custody of the state court. Furthermore, a state cannot divest federal courts of jurisdiction over a transitory tort action by granting exclusive jurisdiction to its own probate courts.
Concurring - Justice Stevens
No. While the majority correctly concludes the claim can be heard in federal court, its reasoning does not go far enough because there is no true 'probate exception' to federal jurisdiction. The historical premise for the exception is a myth, and any limits on federal jurisdiction over probate-related matters stem from generally applicable jurisdictional rules, such as the rule against exercising in rem jurisdiction over property already controlled by another court. Rather than narrowing the so-called exception, the Court should do away with it entirely.
Analysis:
This decision significantly clarifies and narrows the scope of the probate exception, resolving a circuit split on the issue. By confining the exception to the core probate functions of probating a will, administering an estate, and controlling estate property, the Court curtails the ability of litigants to use the exception to shield themselves from tort liability in federal court. The ruling ensures that federal courts can hear in personam claims, such as tortious interference, that are merely related to a will or estate, thereby preventing states from creating exclusive jurisdictional safe harbors for tortfeasors in their probate systems.
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