Skip navigation

Understanding Anna’s Case


As titillating as the facts are in the case of the tabloid star Anna Nicole Smith, the legal issue at its core is what makes Marshall v. Marshall critically important. That's why the U.S. Supreme Court is hearing the case Feb. 28. That's also why fiduciaries -- and the lawyers who sue and defend them -- will want to close pay attention: The high court's decision could materially impact their practices.

Marshall is on appeal from the U.S. Court of Appeals for the Ninth Circuit, which dismissed the case for lack of jurisdiction because of the so-called probate exception to federal court diversity jurisdiction. That decision cost Anna Nicole: Her sizeable, $89 million award was vacated. More importantly for the rest of us, though, if the Ninth Circuit's decision is allowed to stand as is, out-of-state probate litigants would be relegated to state courts -- where the risk of prejudice against them represents the very evil that federal court diversity jurisdiction was designed to prevent. Indeed, state probate courts in many less populated areas still have lay judges with reputations of being biased or corrupt, thereby denying litigants access to a presumably more level playing field.

Most commentators believe that Article III of the Constitution does not mandate the probate exception. This is because the plain language of Section 2 of Article III contains no reference to a probate exception. Commentators analogize this omission to a prior U.S. Supreme Court decision holding that the only other implied exception to diversity jurisdiction -- the domestic relations exception -- is not constitutionally mandated because it is not specifically mentioned in Article III.

Rooted in English Law

Rather, legal scholars generally regard the probate exception as springing from the language of the Judiciary Act of 1789; specifically, the language granting diversity jurisdiction. That act gave the lower federal courts jurisdiction over "all suits of a civil nature at common law or in equity, [that exceed $500] and . . . between a citizen of the State where the suit is brought and a citizen of another State." (Emphasis added). But courts have historically viewed this language through the prism of the 18th century English legal system. It was thought that at that time in England, wills were probated and estates administered by ecclesiastical, or religious courts, not courts of law or chancery. Therefore, many U.S. judges believed that the 1789 statute did not include probate matters in its granting of federal diversity jurisdiction.

This judicial view has persisted to varying degrees even though legal historians have since pointed out that the English ecclesiastical courts of 1789 did not exercise exclusive control over the administration of estates or trusts. In prior centuries, the Church of England had exercised such control, but the clergy developed the annoying habit of appropriating most of the property it got its hands on. By 1789, the ecclesiastical courts were relegated to appointing family members to administer estates and to dealing with certain administrative matters. It was the courts of law that dealt with grants of interest in real property; and trust issues were the exclusive realm of chancery. Thus, even if we were to accept the historical underpinnings of 1789 English law as a model, U.S. courts seem to have interpreted the scope of the probate exception as much larger and more encompassing than necessary.

It's also unclear why courts in the United States would look solely to English law in 1789 rather than colonial law, even if the law applied by the various colonies at the time was somewhat of a hodgepodge. Early in the colonial period, wills and estates were often administered non-judicially by councils reporting to the colonial governors. By the end of the colonial period, most of the colonies had established specialty courts to deal with these issues. Admittedly, these courts regarded themselves as ecclesiastical in nature. So it might be that referencing American law of 1789 still would result in some sort of probate exception by federal courts.

No discussion of the probate exception would be complete without mention of some of the other obstacles that often bar a litigant's path to the federal courthouse. These exist even if a federal court finds that it has jurisdiction over a diversity case involving a probate or probate-related matter. First, if the matter involves a trust, look out for the court's application of the doctrine of custodia legis. As described by one court, this doctrine is "nothing more than a practical 'first come, first serve' method of resolving jurisdictional disputes between two courts with concurrent jurisdiction." Thus, if a state court action is filed first, this doctrine might block a timely filed notice of removal (to federal court) if the state court has the power to adjudicate all of the claims effectively.

Second, a federal district court may exercise "prudential abstention" in those cases that come close to triggering the probate exception if it finds there's a strong state interest in the issue or if the state court has special competence in the matter. The various abstention doctrines have developed through case law over the years and acquired names like the "Pullman Abstention" (a case that involves an unsettled question of state law which, depending on outcome, may or may not raise a federal question), "Burford" (a case that would be disruptive of state efforts to establish coherent public policy), "Colorado River" (avoidance of piecemeal litigation), etc.

Worthy of note, however, is the U.S. Supreme Court's statement in the Colorado River case: "Abstention from the exercise of federal jurisdiction is the exception, not the rule"; and federal courts have a "virtually unflagging obligation . . . to exercise the jurisdiction given them." Look for some discussion of the various abstention doctrines in the Supreme Court's opinion in Marshall.

Interesting Case

All in all, Marshall is shaping up to be pretty interesting. The Bush administration and the Heirs organization ( have weighed in with amicus briefs supporting Anna Nicole's position. The stage is set for spirited oral argument.

My prediction is that the high court will narrow and circumscribe the probate exception while providing guidance on application of the various abstention doctrines. But in the end, the probate exception will likely remain.

Although a number of observers have criticized federal courts for keeping their calendars cleared by dumping unwanted probate-related cases back on the state courts, it's unlikely that the exception will disappear completely. As Judge Richard A. Posner, U.S. Court of Appeals for the Seventh Circuit pointed out in Dragan v. Miller: "[H}owever shoddy the historical underpinnings of the probate exception, it is too well established a feature of our federal system to be lightly discarded."

In preparing this e-newsletter, the author found the following two articles informative:
* Peter Nicolas, "Fighting the Probate Mafia: A Dissection of the Probate Exception to Federal Court Jurisdiction," Southern California Law Review, September 2001.
* Gregory C. Luke and Daniel J. Hoffheimer, "Federal Probate Jurisdiction, Examining the Exception to the Rule," Federal Bar News and Journal, November/December 1992.

To subscribe, click here.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.