547 U.S. 293 (2006)
Vickie Lynn Marshall, also known as Anna Nicole Smith, met J. Howard Marshall II in October 1991 and married him on June 27, 1994.1 J. Howard died on August 4, 1995.2 Although he had given Vickie substantial gifts and money during their relationship, his will made no provision for her.3 Vickie maintained that J. Howard had intended to secure her future through a catchall trust.4 Respondent E. Pierce Marshall, one of J. Howard’s sons, stood as the sole ultimate beneficiary under his father’s estate plan, which consisted of a living trust and a pourover will directing all remaining assets into the trust.
In January 1996, while J. Howard’s estate remained subject to probate proceedings in Harris County, Texas, Vickie filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Central District of California.5 In June 1996 Pierce filed a proof of claim in that bankruptcy case asserting that Vickie had defamed him through statements made to the press shortly after J. Howard’s death.6 Vickie answered and asserted a counterclaim alleging that Pierce had tortiously interfered with her expected gift by imprisoning J. Howard against his wishes, surrounding him with hired guards, making misrepresentations to him, and transferring property contrary to his expressed intentions.7
The Bankruptcy Court granted summary judgment to Vickie on Pierce’s defamation claim.8 After a trial on the merits it entered judgment for Vickie on her tortious interference counterclaim and awarded her more than $449 million in compensatory damages, less any amount recovered in the Texas probate action, plus $25 million in punitive damages.9 Pierce then moved to dismiss for lack of subject-matter jurisdiction, arguing that the claim belonged exclusively in the Texas probate proceedings.10
In the Texas Probate Court, Pierce sought a declaration that the living trust and will were valid.11 Vickie initially challenged the instruments and asserted her own tortious interference claim there but voluntarily dismissed both claims after the Bankruptcy Court’s judgment.12 Following a jury trial the Probate Court declared the trust and will valid.13
On review of the Bankruptcy Court’s judgment the District Court rejected the probate-exception argument.14 The court adopted the Bankruptcy Court’s findings with supplements.15 It awarded Vickie approximately $44.3 million in compensatory damages together with an equal amount in punitive damages.16 The Ninth Circuit reversed.17 It held that the probate exception barred federal jurisdiction because the claim raised questions ordinarily decided by a probate court and because the Texas Probate Court had asserted exclusive jurisdiction over all of Vickie’s claims.18 The Supreme Court granted certiorari in 2005.19
Whether the probate exception to federal jurisdiction extends beyond the probate or annulment of a will and the administration of a decedent’s estate to bar adjudication of a tortious interference claim?20
The probate exception reserves to state probate courts the probate or annulment of a will and the administration of a decedent’s estate.21 It also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court.22 But it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction.23
No. Vickie’s tortious interference counterclaim, asserted in the bankruptcy proceeding after Pierce filed a proof of claim, seeks an in personam judgment against Pierce for preventing the transfer of an intended gift through imprisonment, guards, misrepresentations, and property transfers.24 The claim does not involve the administration of an estate, the probate of a will, or any other purely probate matter.25 It does not seek to reach a res in the custody of a state court, as established by the Bankruptcy Court and District Court proceedings in the Central District of California.26
The probate exception does not bar federal jurisdiction over Vickie’s tortious interference claim.27
Related opinions on this issue
Justice Stevens concurs in the judgment.28 He would go further by rejecting the probate exception entirely.29 Stevens argues that Markham's historical assertion about English chancery jurisdiction is an exercise in mythography.30
He notes that federal courts have exercised jurisdiction over controversies involving the validity of wills when they qualify as cases or controversies.31 Examples include Gaines v. Fuentes and Payne v. Hook.32 Stevens would provide the probate exception with a decent burial rather than preserving its vitality based on Markham dicta.33
Whether a state probate court’s ruling that it possesses exclusive jurisdiction over probate-related claims binds federal courts and strips them of subject-matter jurisdiction?34
A State cannot create a transitory cause of action and at the same time destroy the right to sue on that transitory cause of action in any court having jurisdiction.35 Jurisdiction is determined by the law of the court’s creation and cannot be defeated by the extraterritorial operation of a state statute.36
No. The Texas Probate Court’s ruling that it had exclusive jurisdiction over all of Vickie’s claims does not bind the federal courts.37 Under Erie, Texas law governs the substantive elements but not the federal courts' jurisdiction.38 The claim is a transitory tort that federal courts can adjudicate as shown by the counterclaim filed in the California bankruptcy case.39
The state probate court's exclusive jurisdiction ruling does not strip federal courts of jurisdiction.40
Whether federal courts may exercise jurisdiction over a claim alleging tortious interference with an expected gift, asserted as a counterclaim in bankruptcy proceedings, when the claim does not seek to probate a will or administer an estate?41
Yes. Vickie’s claim was asserted as a counterclaim in the Chapter 11 bankruptcy case in the Central District of California after Pierce filed a proof of claim alleging defamation.44 The claim alleges a widely recognized tort.45 It does not seek to probate a will or administer an estate or reach property in state court custody.46
Federal courts may exercise jurisdiction over the tortious interference counterclaim.47