In Re Marshall

Opinion by Judge BEEZER; Concurrence by Judge KLEINFELD.

This case returns to us after the Supreme Court determined that we had construed too broadly the “probate exception” to our subject matter jurisdiction. Marshall v. Marshall, 547 U.S. 293 , 126 S.Ct. 1735 , 164 L.Ed.2d 480 (2006). Confident that we have subject matter jurisdiction over this case, id.; 28 U.S.C. § 1291 , we turn to the merits of the longstanding and acrimonious dispute.

This case involves a tort claim by Vickie Lynn Marshall against E. Pierce Marshall, the son of her late husband J. Howard Marshall II, for Pierce Marshall’s purported interference with a substantial inter vivos gift (estimated to exceed $300 million) that her late husband intended to give to her. The claim comes to us in an unusual procedural posture. It was asserted as a state law counterclaim to a nondischargeability complaint and proof of claim that Pierce Marshall filed in Vickie Lynn Marshall’s bankruptcy proceedings in the Central District of California. Both the bankruptcy and district courts found that Pierce Marshall was liable for tortious interference and awarded Vickie Lynn Marshall millions of dollars in compensatory and…

concurring:

I concur in the result reached by Judge Beezer’s opinion. Vickie’s counterclaim against Pierce is not a core proceeding, so the Texas probate court judgment preceded the district court judgment and controls.

I have no quarrel with the majority opinion, and offer no argument against it. I write merely to offer additional grounds that compel the same result.

Several alternative and independent grounds compel reversal: (1) because Pierce Marshall sought no damages from the bankruptcy estate, just a judgment that his Texas defamation judgment would not be discharged by the California bankruptcy, his claim could not affect the size of the estate available to Vickie Marshall’s creditors; (2) Vickie’s counterclaim for money could not affect whether Pierce’s defamation claim was dischargeable; (3) Vickie’s counterclaim was not related to the bankruptcy, because she had already been discharged and her creditors would get none of the money she sought from Pierce in her counterclaim; (4) Pierce’s defamation claim in Texas was a common law claim for personal injury, which cannot be core. Vickie’s counterclaim (itself a non-core tort claim) amounted to evasion of Pierce’s…

G. Eric Brunstad, Jr., Collin O'Connor Udell, Matthew J. Delude, Michael J. Newman, Joshua Richards, Peter F. Herzog, Kate O'Keeffe, Frank L. Tamulonis, III, Francesco P. Trapani, Dechert, LLP, Hartford, CT, for the appellant-cross-appellee.

Kent L. Richland and Alan Diamond, Greines, Martin, Stein & Richland LLP, Los Angeles, CA, for the appellee-cross-appellant.

Kathleen M. Sullivan, Quinn Emanuel Urquhart Oliver & Heges, LLP, Redwood Shores, CA; Craig Goldblatt, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C., for the amici.

Before: ROBERT R. BEEZER, ANDREW J. KLEINFELD and RICHARD A. PAEZ, Circuit Judges.

Opinion by Judge BEEZER; Concurrence by Judge KLEINFELD.

BEEZER, Circuit Judge:

This case returns to us after the Supreme Court determined that we had construed too broadly the "probate exception" to our subject matter jurisdiction. Marshall v. Marshall, 547 U.S. 293 , 126 S.Ct. 1735 , 164 L.Ed.2d 480 (2006). Confident that we have subject matter jurisdiction over this case, id. ; 28 U.S.C. § 1291 , we turn to the merits of the longstanding and acrimonious dispute.

This case involves a tort claim by Vickie Lynn Marshall against E. Pierce Marshall, the son…