Amicus Curiae Brief — Marshall v. Marshall

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF OF AMICUS CURIAE

WASHINGTON LEGAL FOUNDATION

IN SUPPORT OF RESPONDENT

(202) 588-0302 Los Angeles, CA 90017

(213) 694-1200

Counsel for Amicus Curiae

Date: January 20, 2006

QUESTION ADDRESSED BY AMICUS CURIAE

The question addressed by amicus curiae is:

Whether a bankruptcy court lacks jurisdiction in a civil

proceeding where the subject matter of the action falls within

the exclusive in rem jurisdiction of a probate or other state

-court.

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TABLE OF CONTENTS

INTEREST OF AMICUS CURIAE .......0..:ssccssescsssssssorsscesseees l

SEAT Ree CPE BORIS CAI iecccscecccccccccsccsssorsovevensercnscciezses 2

SUMMARY OF ARGUMENT......0........cccecsesercesseeesseesenees 4

PETUINTE cstbiicthlccitsetindinncestninedidinisibenidincasntbecvibistetiniesiosse 7

I,

Il.

Il.

ALL COURTS THAT EXERCISE JN REM

JURISDICTION DO SO EXCLUSIVELY ............. 7

THE DOCTRINE OF PRIOR EXCLUSIVE

JURISDICTION APPLIES TO ALL JN REM

AND QUASI IN REM PROCEEDINGB.................. 8

A. The Doctrine of Prior Exclusive Jurisdiction

Promotes Harmonious Cooperation Among

Federal and State Courts..........................sceceesees 8

B. Neither 28 U.S.C. § 1334 Nor the

Bankruptcy Code Abrogate the Doctrine of

Prior Exclusive Jurisdiction As It Applies to

In Rem State Court Proceedings Involving

IED GRIIIII vaigiccintasttishissniccnarniderectpentonepoene 10

THE SCOPE AND EFFECT OF A PROBATE

COURT’S EXCLUSIVE JN REM

JURISDICTION MUST BE EXPANSIVE

ENOUGH TO GRANT EFFECTIVE RELIEF

“AGAINST THE WORLD ............ccscsescssssvesseeee 15

A. A Court’s Exclusive /n Rem Jurisdiction Is

Not Limited Solely to Disposition of the

IIE Adnscvsiisntnnaictabsdngieiscananntdbennbendbachindsihis 15

IV

B. In Gelston v. Hoyt, this Court Answered

the Question Presented On Appeal In

Fee GRID as cticccconscvienpatsencapevntniitiniapatibichincimiiiaaaté 19

IV. THE CONCERNS RAISED BY THE UNITED

STATES AS AMICUS CURIAE IN SUPPORT

OF THE PETITIONER ARE MISPLACED

AND DO NOT WARRANT DEVIATION

FROM THE UNIFIED PRINCIPLES THAT

GOVERN JN REM PROCEEDINGB...............0006. 23

RAR II OW sornccosrscivonenecessosecsctsconsiivcsneneniabvonipebsiinaningiiiel 27

Vv

TABLE OF AUTHORITIES

Cases

American Home Products Corp. v. Collins,

cert. denied, 125 S. Ct. 1823 (2005) ................c..000000 a

Ankerbrandt v. Richards,

TS Sa ae ae er 14

California v. Deep Sea Research, Inc.,

TET NEE IS NR aR 13,17

Case of Broderick's Will,

88 U.S. (21 Wall.) 503 (1874)... ceceeeeeeeeees passim

Cohen v. De La Cruz.

TESTE Rs REE Oe NEE 12

Covell v. Heyman,

ETT ET TELL ESET A 7, 8, 12

Gardner v. New Jersey,

EIST a A a 15, 16

Gelston v. Hoyt,

16 U.S. (3 Wheat.) 246 (1818) ................ccccccceeeeeees passim

Haddock v. Haddock,

ETS TE I Se aaa 13

Hagan v. Lucas,

Be TE BEI ccncccescssncceccenecsnsonesegensensssconnns 8

Hartford Underwriters Ins. Co. v. Union

Planters Bank, N.A.,

ET 11

In re French,

139 B.R. 476 (Bankr. D.S.D. 1992) .0.........ccccccceceeeees 13

Lincoln Property Co. v. Roche,

TO ace l

vi

Markham vy. Allen,

a : GIs ctencesinciiniadssennsiddathadtiniaadsdeiitaiiidd 24, 25

Marshall v. Marshall,

BR SEE me seeees 4

Mooney v. Harlin,

Ln, EE PIE Se eeaee™ 7

Moser v. Pollin,

ee ee Be etintiahieccccinnapitbinicencccssitindnnininuns 23

Patterson v. Shumate,

ee Fe titi dienntenthadinimsiinccithtasihdiiemcinninchtinibiinede 10

Penn General Casualty Co. v. Commonwealth of

Pennsylvania ex rel. Schnader,

Se TTI citinclrignsccsientnitmsnnaninsitinemeanemniabiinionaen 5, 8,9

Pennsylvania Pub. Welfare Dep't v. Davenport,

eh I ceihrcnccnciliicetiinnttiatnittnancintdniinssiiniinast 12

Princess Lida of Thurn and Taxis v. Thompson,

EE a 9,15

Slay Warehousing Co., Inc. v. Modern Boats,

Inc. (In re Modern Boats),

775 F.2d 619 (5™ Cir. 1985) ...c.cccccccscsscesessesseeseeneeees 13,14

Taylor v. Carryl,

61 U.S. (20 How.) 583 (1858)................ccccccessereeenesesenees 9

Tennessee Student Assistance Corp. v. Hood,

Oe Ss Se identtcnsecsntniiemncentimmennsiins passim

United States v. Bank of New York & Trust Co.,

EE Re ee passim

United States v. One 1985 Cadillac Seville,

ee ae 0 ly ee aitecertictnrnntnnsececentccieeees 5,9

Waterman v. Canal-Louisiana Bank & Trust Co.,

ee ee Fee ictachinincenediditiaticncisiiteinsintsnansizcanal 6,17, 18

Vil

White v. White (In re White),

oe gg EE ae eee 13

Williams v. State of North Carolina,

BOF ERs ee Ce restintancensnditenicstnsstesiccieenccsecmambatinte 13

Williams v. State of North Carolina,

eI xstntareienentninnedlicctnnsinciahanansdatineaeacaien 13

Statutes

ee ees Se ccncaricncsemnenctguiiinteanttiniieniamiiaanaiiattdinns 12

ae se Oe eiitatciciiticicartihincaneinstinindhcnntilpibapinsuiitectintipeanialac 12

ie ME icin ierredicinidnestensiiiliabinepcenitieiaiineessieatiniiaibwaniis 13

ee icvernovitasseninatehiaistiiietiiicindsibindapapniai 10, 11

ie Se ictraerciciernarctidinpsmanpnstnitipiemenieitin 11

Tex. Prob. Code Ann. §§ SA(b), 5(F) ...cccccccccccsecsesseteceeeeneeven 7

Legislative History

H.R. Rep. No. 95-595, 95" Cong., 1* Sess. 310

(1977), as reprinted in 1978 U.S.C.C.A.N.

Fy GIT caccnsncrnenctneccsncsveeeensinsnincenaneieentinencsneseaesnnen 12

Other Authorities |

Brian Greene, The Elegant Universe (1999) .............ccc00000-00+ 4

Rules

RD PD cccctincescesnineteaseapeeninniiaiecdinsitintiiuae l

PE RED > UND censcrsenincecnapinpenrcuniipiintitimmseninieligipsiaeien 14

BRIEF OF AMICUS CURIAE

WASHINGTON LEGAL FOUNDATION

IN SUPPORT OF RESPONDENT

Amicus curiae Washington Legal Foundation (“WLF”)

respectfully submits that the judgment of the court of appeals

should be affirmed. !

INTEREST OF AMICUS CURIAE

WLF is a nonprofit public interest law and policy center

based in Washington, D.C., with thousands of suppevicrs na-

tionwide. WLF regularly appears before federal and state

courts to promote economic liberty, free enterprise, and a

limited and accountable government. WLF has filed briefs in

this Court and elsewhere addressing the limitations upon the

scope of jurisdiction to be exercised by federal and state

courts. See, e.g., Lincoln Property Co. v. Roche, 126 §S. Ct.

606 (2005); American Home Products Corp. v. Collins, cert.

denied, 125 S. Ct. 1823 (2005).

WLF fully supports the position of E. Pierce Marshall

(“Respondent”) that this Court should affirm the Ninth Cir-

cuit’s j»4gment and hold that, under the probate exception,

the fede. .l district court lacked jurisdiction to hear this case.

WLIF writes separately to address the broader implications of

the challenge by Vickie Lynn Marshall (“Petitioner”) to the

probate exception; specifically, the negative impact upon the

orderly and effective administration of justice in the exercise

by both federal and state courts of in rem jurisdiction. The

touchstone of in rem jurisdiction, and its effective exercise, is

the exclusive jurisdiction granted to one court over the res,

|! Pursuant to this Court’s Rule 37.6, WLF states that this brief was not

authored in whole or in part by counsel for any party, and that no person

or entity other than WLF or its counsel, contributed monetarily to the

preparation or submission of this brief. Letters consenting to the filing

of this brief have been submitted to the Clerk.

2

without interference by other courts. The unduly restrictive

reading of the probate exception advanced by Petitioner con-

tradicts nearly two centuries of judicial precedent that were

designed to avoid “unseemly and disastrous conflicts” be-

tween federal and state courts of the kind that have unfortu-

nately occurred in this case.

STATEMENT OF THE CASE

Petitioner married J. Howard Marshall II (“Decedent’’) in

1994. Decedent died in 1995. ER2 95. Prior to his death,

Decedent conveyed and transferred most of his property to a

living trust established under a written trust instrument. ER

1018, 2623. He also left a series of wills, the last of which

(the “Will”) left all of his property to the Trust to be distrib-

uted after his death in accordance with the terms of the Trust.

ER 510, 514-16. (The Will and Trust are cotestvaty § re-

ferred to as the “Estate Plan’’).

Prior to Decedent’s death, Petitioner commenced pro-

ceedings in the probate court for the state of Texas, seeking a

declaration concerning the Trust’s validity and alleging that

Respondent tortiously interfered with her property rights with

respect to Decedent’s assets. ER 4615-17, 5620. After De-

cedent died, Petitioner filed a further application seeking a

declaration that Decedent died intestate. ER 816-18. Re-

spondent opposed the application and sought to admit the

Will in the Texas probate court. ER 836-45. Petitioner

thereafter contested the Will, challenged the validity of the

Estate Plan, and pursued her claim against Respondent - all

in the Texas probate court proceeding that she commenced.

ER 1319-31, 2863-65, 5523-31. A five month jury trial took

place in 2000 and 2001, ER 4706, and on March 7, 2001, the

jury returned its verdict upholdir.,, the validity of the Trust

2 The term “ER” refers to certain “excerpts of record” filed in the

Ninth Circuit pursuant to that Court's local rules.

3

and Will and rejecting the various claims seeking recoveries

at odds with Decedent’s Estate Plan. ER 3719, 3735. An

initial probate judgment was entered by the Texas probate

court on August 15, 2001, ER 4001, and the second amended

final probate judgment was entered on December 7, 2001,

which admitted the Will to probate, and found both the Will

and the Trust to be genuine and valid and not the product of

improper conduct. ER 4717.

In January 1996, while the Texas probate proceeding was

pending, Petitioner filed a voluntary bankruptcy petition in

California. ER 2642. Five months after filing for bank-

ruptcy, she commenced a civil proceeding against Respon-

dent in bankruptcy court. ER 948-49. The new lawsuit in-

volved the same subject matter as the controversies to be de-

termined by the Texas probate court, requiring consideration

of issues such as the Decedent’s intent concerning disposi-

tion of his assets and the validity of the Estate Plan. Com-

pare ER 948-49 with ER 2863-65. The bankruptcy court ul-

timately issued a decision finding that Petitioner had an ex-

pectancy of a substantial portion of Decedent’s wealth, and

after concluding that Respondent interfered with that expec-

tancy, awarded approximately $450 million to the Petitioner.

App. 198-99.

Respondent appealed to the federal district court. App.

148-99. There, the court concluded that the civil proceeding

_was non-core, and therefore reviewed de novo the bankruptcy

court’s decision. App. 171-87. The district court ultimately

awarded Petitioner about $88.5 million, concluding that De-

cedent’s signature on the Trust was falsified, that the Estate

Plan did not reflect Decedent’s true intentions, and that Re-

spondent had interfered with Decedent’s intent to give Peti-

tioner an alleged gift by engaging in illegitimate “estate

3 “App.” refers to the Appendix to Petition for Writ of Certiorari.

4

planning transactions for [Decedent].” ER 65, 73; App. 78-

136, 194-46.

Upon further appeal, the Ninth Circuit vacated the district

court’s judgment, finding that the “probate exception” ap- .

plies in bankruptcy cases. App. 1-38. The Ninth Circuit

based its ruling in part on the exclusive in rem jurisdiction of

probate courts that has a binding effect “upon the whole

world,” including United States district courts, of determina-

tions made by the probate court. Because Petitioner’s claim

that Decedent intended to give her a gift “went to the very

essence of the testamentary instruments executed by J. How-

ard Marshali II in his lifetime,” App. 35, the Ninth Circuit

found her claims to be “‘in substance nothing more than a

thinly veiled will contest” and a “disguised attack” on the

Trust and the disposition of the property under the Trust.

App. 31, 36-37.

Petitioner filed a petition for a writ of certiorari to the

Ninth Circuit, which this Court granted. Marshall v. Mar- »

shall, 126 S. Ct. 35 (2005).

SUMMARY OF ARGUMENT

In The Elegant Universe, author Brian Greene describes

the quest by physicists for more than half a century to formu-

late a unified theory of physics, known as “string theory,”

that reconciles the apparent conflict between the theories of

general relativity and quantum mechanics. Brian Greene,

The Elegant Universe 15 (1999).

In the universe of law where courts exercise in rem juris-

diction, there already exists such a unified theory. The fun-

damental principles of that “theory” have been developed by

the Court over two centuries, and include the following:

First, the exercise by a court of in rem jurisdiction is al-

ways exclusive. This reflects the need to promote harmoni-

ous cooperation among courts and “[t]o avoid unseemly and

disastrous conflicts in the administration of our dual judicial

5

system.” Penn General Casualty Co. v. Commonwealth of

Pennsylvania ex rel. Schnader, 294 U.S 189, 195 (1935).

Second, in order to resolve potential conflicts among

courts seeking to exercise in rem jurisdiction, this Court has

developed the doctrine of “prior exclusive jurisdiction.” That

doctrine imposes a prudential limitation on the jurisdiction of

courts in proceedings where another court has previously ex-

ercised in rem jurisdiction over the res. United States v.

Bank of New York & Trust Co., 296 U.S. 463, 478 (1936);

United States v. One 1985 Cadillac Seville, 866 F.2d 1142,

1145 (9"" Cir. 1989)(citing Penn General Casualty, 294 U.S.

at 195).

Third, because of the nature of in rem proceedings as

“one against the world,” the limitation on the jurisdiction of

other courts, whether exercised in rem or in personam, ap-

plies to all disputes that “come incidentally in controversy”

with the “same subject matter” as that adjudicated in the in

rem proceeding. Gelston v. Hoyt, 16 U.S. (3 Wheat.) 246,

315 (1818). Such relief is necessary to avoid “col!s#teral” and

“indirect” attacks on the exclusive exercise of in rem juris-

diction. /d. at 313.

This Court recognized more than a century ago that the

“continued prevalence” of the probate exception can be at-

tributed to the nature of probate actions as in rem proceed-

ings. Case of Broderick’s Will, 88 U.S. (21 Wall.) 503, 509

(1874). A probate action is, however, but one of many kinds

of proceedings that are based upon the principles of in rem

jurisdiction. Accordingly, the Petitioner’s efforts to limit the

application of the probate exception, if successful, would

have negative implications for all federal and state courts that

depend upon their in rem jurisdiction to grant relief that is

effective “against the world.”

The Court anticipated this very peril when it warned in

Gelston v. Hoyt, nearly two centuries ago, about the “mis-

chievous consequences” that would result if decisions by

courts with exclusive in rem jurisdiction were subject to “in-

6

direct” or “collateral” attack. Jd. at 313. In Gelston, the

Court held that a state court lacked jurisdiction to hear de-

fenses to a tort action where such defenses were premised on

adjudication of questions related to forfeiture and seizure that

were subject to the exclusive in rem jurisdiction of the fed-

eral admiralty court. /d. at 313-14. The same reasoning ap-

plies to this case — namely, the federal districi court lacks ju-

risdiction to hear a civil proceeding involving subject matter

that falls within the exclusive in rem jurisdiction of the Texas

probate court.

The United States, as amicus curiae supporting the Peti-

tioner, has raised concerns that the Ninth Circuit’s decision,

if affirmed, will deprive federal courts of jurisdiction to de-

termine such matters as the tax liability of a decedent’s es-

tate. That concer is wholly misplaced. The exclusive in

rem jurisdiction vested in probate courts does not equate to

the wholesale elimination of the concurrent in personam ju-

risdiction of federal courts “to establish a debt or a right to

share in property, and thus to obtain an adjudication which

might be had without disturbing the control of the state

court.” United States v. Bank of New York & Trust Co., 296

U.S. at 478; see also Waterman v. Canal-Louisiana Bank &

Trust Co., 215 U.S. 33, 44 (1909). It does, however, prevent

federal courts from interfering with state probate actions,

whether directly by contesting probate of a will or indirectly

in the manner pursued by Petitioner.

As for the concern of the United States Trustee Program

(the “Program’’) that recognition of a “broad probate excep-

tion” could interfere with the ability of bankruptcy courts to

administer debtors’ estates expeditiously, the Program has it

backwards. As a practical matter, restrictions on the effec-

tive exercise of in rem jurisdiction by courts, if generally ap-

plied in bankruptcy and other in rem proceedings, would

have a more widespread and deleterious impact on the bank-

ruptcy system than would application of the probate excep-

tion in the fewer number of cases where the jurisdiction of

probate courts and bankruptcy courts intersect.

-

ARGUMENT

I. ALL COURTS THAT EXERCISE IN REM

JURISDICTION DO SO EXCLUSIVELY

As this Court has recognized for nearly two centuries,

probate proceedings are actions in rem. E.g., Gelston vy.

Hoyt, 16 U.S. at 315; Case of Broderick’s Will, 88 U.S. at

509.4 Indeed, the “continued prevalence” of the probate ex-

ception has been attributed by this Court to the manner in

which the probate of a deceased person’s estate “partakes, in

some degree, of the nature of a proceeding in rem.” Broder-

ick’s Will, 88 U.S. at 509. Accordingly, the general princi-

ples of law governing in rem jurisdiction apply to probate

matters.

Both federal and state courts exercising in rem jurisdic-

tion are granted exclusive jurisdiction over the res to be ad-

ministered. 5 This rule has been regularly applied in jurisdic-

tional disputes between federal and state courts involving -

property that has been seized or attached, where this Court

has consistently held that property cannot be subject to two

jurisdictions. Covell v. Heyman, 111 U.S. 176, 181-82

(1884). In Covell v. Heyman, the Court explained the effect

of one court’s jurisdiction over the property upon the juris-

diction of the other:

{[W]hen one takes into its jurisdiction a spe-

cific thing, that res is as much withdrawn

from the judicial power of the other as if it had

4 Probate proceedings under Texas law are no exception to this rule.

E.g., Mooney v. Harlin, 622 S.W.2d 83, 85 (Tex. 1981).

5 See TEX. PROB. CODE ANN. §$§ SA(b), S(F\“Any cause of action

appertaining to estates or incident to an estate shall be brought in a statu-

tory probate court” rather than in the district court, including “All matters

relating to the collection, settlement, partition and distribution of estates

of deceased persons”).

8

been carried physically into a different territo-

rial sovereignty. To attempt to seize it by a

foreign process is futile and void.

Id. at 182.

The exclusive in rem jurisdiction of courts “is a principle

of comity with perhaps no higher sanction...” /d. This

Court has long recognized that “[a] most injurious conflict of

jurisdiction would be likely often to arise between the federal

and state courts if the final process of the one could be levied

on property which had been taken by the process of the

other.” Hagan v. Lucas, 35 U.S. (10 Pet.) 400, 403 (1836).

More recently, in Penn General Casualty, 294 U.S 189, this

Court reaffirmed that where two suits before a federal and

state court are in rem or quasi in rem, “the jurisdiction of one

court must of necessity yield to that of the other” in order

“{t]o avoid unseemly and disastrous conflicts in the admini-

stration of our dual judicial system.” /d. at 195.

Il. THE DOCTRINE OF PRIOR EXCLUSIVE

JURISDICTION APPLIES TO ALL IN REM

AND QUASI IN REM PROCEEDINGS

A. The Doctrine of Prior Exclusive Jurisdiction

Promotes Harmonious Cooperation Among

Federal and State Courts

The need to avoid conflicts and promote harmonious co-

operation between federal and state courts led to the devel-

opment by this Court of the doctrine of “prior exclusive ju-

risdiction.” Under this principle, applicable to both federal

and state courts, “the court first assuming jurisdiction over

the property may maintain and exercise that jurisdiction fo

the exclusion of the other... .” United States v. Bank of New

York & Trust Co., 296 U.S. at 477 (emphasis added). The

doctrine reflects “the discharge of the long-recognized duty

of this court to give effect to such ‘methods of procedure as

shall serve to conciliate the distinct and independent tribunals

of the States and of the Union, so that they may co-operate as

9

harmonious members of a judicial system coextensive with

the United States.’” /d. at 477-78 (quoting Taylor v. Carryl,

61 U.S. (20 How.) 583, 595 (1858)).®

The doctrine of prior exclusive jurisdiction has never

been restricted to cases where property has been seized under

judicial process, but rather “applies as well where suits are

brought to marshal assets, administer trusts, or liquidate es-

tates, and in suits of similar nature, where, to give effect to its

jurisdiction, the court must control the property.” Jd. at 477.

In Princess Lida of Thurn and Taxis v. Thompson, 305 U.S.

456 (1939), for example, the doctrine was applied in a dis-

pute specifically involving a trust. The trustees had filed an

account of the trust in the Court of Common Pleas for Penn-

sylvania. Certain of the beneficiaries brought suit in equity

in federal district court against the trustees, alleging misman-

agement of the trust and seeking removal of the trustees and

an accounting and repayment of the estate’s losses. The trus-

tees sought to enjoin the beneficiaries from continuing the

federal lawsuit. Concluding that the Common Pleas Court

“could not effectively exercise the jurisdiction vested in it,

without a substantial measure of control of the trust funds,”

this Court held that the jurisdiction of the Common Pleas

Court was guasi in rem and thus exclusive, and that the fed-

eral district court was without jurisdiction of the suit brought

before it. /d. at 467 (emphasis added).

6 The doctrine has been explained as one that is not a constitutional

limitation upon the jurisdiction of federal courts, but rather “a prudential

limitation applied by the Supreme Court in the interest of judicial har-

mony.” United States v. One 1985 Cadillac Seville, 866 F.2d 1142, 1145

(9th Cir. 1989). Although a prudential limitation, the Ninth Circuit has

held that, under this Court’s well established precedent, a federal court

lacks discretion te accept jurisdiction and “must yield to a prior state pro-

ceeding.” /d. (citing Penn General Casualty Co., 294 U.S. at 195).

10

B. Neither 28 U.S.C. § 1334 Nor the Bankruptcy

Code Abrogate the Doctrine of Prior Exclusive

Jurisdiction As It Applies to Jn Rem State

Court Proceedings Involving Non-Debtor

Assets

Petitioner suggests in her brief that Congress, when it en-

acted 28 U.S.C. § 1334 in 1978, as amended in 1984, in-

tended to overrule the doctrine of prior exclusive jurisdiction

and confer federal district courts with jurisdiction over prop-

erty subject to pre-existing in rem proceedings. That reading

of section 1334 finds no support in the statute’s plain lan-

guage, or elsewhere.

Petitioner incorrectly relies upon section 1334(b), which

provides:

Notwithstanding any Act of Congress that

confers exclusive jurisdiction on a court or

courts other than the district courts, the district

courts shall have original but not exclusive ju-

risdiction of all civil proceedings arising un-

der title 11, or arising in or related to cases

under title 11.

28 U.S.C. § 1334(b). Notably, subsection (b) refers to “any

Act of Congress that confers exclusive jurisdiction” but

makes no mention of “state law” that confers exclusive juris-

diction. /d. (emphasis added). Given the use of the phrase

“state law” elsewhere in section 1334 (specifically, subsec-

tion (c)), the absence of any reference to “state law” in sec-

tion 1334(b), when coupled with the explicit reference to

“any Act of Congress,” is telling. If anything, it indicates a

deliberate intention not to provide district courts with origi-

nal jurisdiction over proceedings otherwise subject to the ex-

clusive in rem jurisdiction of state courts. E.g., Patterson v.

Shumate, 504 U.S. 753, 758 (1992)(when Congress meant to

refer to state law under the Bankruptcy Code, it used the term

“state law‘).

ll

Nor does subsection (e) of section 1334 support Peti-

tioner’s argument. Section 1334(e) grants the district court

exclusive jurisdiction over “all of the property, wherever lo-

cated, of the debtor as of the commencement of such case,

and of property of the estate.” 28 U.S.C. § 1334(e). How-

ever, the case at issue does not involve the district court’s

exercise of jurisdiction over the res of the Petitioner. Here,

the Petitioner confuses the in rem and in personam jurisdic-

tion granted to federal courts in bankruptcy cases. The civil

action in which Petitioner has brought her claims against Re-

spondent is not an in rem proceeding as it relates to her bank-

ruptcy proceeding, but rather a chose in action in which the

district court purported to exercise in personam jurisdiction

over Respondent. Merely because her personal claims (to the

extent they exist) may be property of the estate does not con-

vert the civil proceeding against Respondent into one that is

in rem.’ The only res in dispute is Decedent’s probate estate,

and Petitioner’s claim that she was entitled to receive that

property upon Decedent’s death. Those are matters subject

to the exclusive in rem jurisdiction of the Texas probate

court.

Given that the res in dispute is not the property of the

debtor or the estate, section 543 of the Bankruptcy Code

would not apply. That provision appears to constitute the

only statutory exception under the Bankruptcy Code to the

doctrine of prior exclusive jurisdiction. Section 543 requires

7 Indeed, if a debtor's ownership of a chose in action was itself suffi-

cient to create exclusive in rem jurisdiction over civil proceedings

brought to pursue those claims, then bankruptcy courts would have exclu-

sive jurisdiction over every one of those civil proceedings. One need

look no further than the plain language of section 1334(b), which pro-

vides that such jurisdiction is “original but not exclusive,” to reject that

premise. 28 U.S.C. § 1334(b)emphasis added); see Hartford Underwrit-

ers Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 7 (2000)(requiring

that statute be interpreted based upon its plain language).

12

a “custodian” of property of the debtor or the estate not to

take action with respect to such property and to turn it over to

the bankruptcy trustee. 11 U.S.C. § 543. The term “custo-

dian” is defined under section 101(11) of the Bankruptcy

Code to include state court receivers, trustee or assignees un-

der a general assignment for the benefit of creditors. 11

U.S.C. § 101(11). The legislative history to secu 101(11)

explains that custodian is defined to mean a “prepetition liq- —

uidator of the debtor’s property,” or other court officers that

perform functions “substantially similar to those of a receiver

or trustee.” H.R. Rep. No. 95-595, 95" Cong., 1 Sess. 310

(1977)(emphasis added), as reprinted in 1978 U.S.C.C.A.N.

5963, 6267. The proceeding before the Texas probate court

obviously does not fall within the scope of section 543, as it

involved administration of the Decedent's property (not the

debtor’s) and has no “custodian” within the meaning of sec-

tion 101(11).

Other than section 543, which affects only the priority of

exclusive jurisdiction and in any event is not applicable to

this case, there is no indication in the language of section

1334, the Bankruptcy Code, or elsewhere that Congress

sought to depart from the doctrine of prior exclusive jurisdic-

tion. In other cases, this Court has presumed that Congress

continued “‘past bankruptcy practice absent a clear indication

that Congress intended . . . a departure... .’”” Cohen v. De

La Cruz, 523 U.S. 213, 221 (1998)(quoting Pennsylvania

Pub. Welfare Dep't v. Davenport, 495 U.S. 552, 563 (1990)).

As noted above, the doctrine of prior exclusive jurisdiction

has been applied for more than a century and has been recog-

nized by this Court as “a principle of comity with perhaps no

higher sanction.” Covell v. Heyman, 111 U.S. at 182. Thus,

one would expect something more explicit from Congress

(comparable to Section 543) if it intended to deviate from

those principles in any respect.

Indeed, the underpinning of that doctrine, i.e., that prior

possession of the res determines whether a court’s jurisdic-

tion lies, was reinforced in a recent case involving the exer-

13

cise of in rem jurisdiction. In California v. Deep Sea Re-

search, Inc., 523 U.S. 491 (1998), the Court held that the

Eleventh Amendment did not preclude the federal court from

exercising its exclusive in rem admiralty jurisdiction to adju-

dicate the State of California’s claim to a shipwreck. /d. at

507-08; 28 U.S.C. § 1333 (granting federal courts jurisdic-

tion exclusive of states over admiralty cases). But the Court

expressly based its ruling on the fact that the State of Cali-

fornia did not have possession of the res, and distinguished

other prior opinions of this Court on that very basis. /d. at

504 (“[iJn this case, unlike in Treasure Salvors, DSR asserts

rights to a res that is not in the possession of the State’). The

fact that the Court’s decision turned on the state’s non-

possession of the res suggests that the doctrine of prior ex-

clusive jurisdiction retains its vitality even where Congress

has otherwise granted, by statute, exclusive in rem jurisdic-

tion to a federal court. 3

Petitioner cites to three cases where she contends courts

have, since enactment of section 1334, rejected the doctrine

of prior exclusive jurisdiction and permitted federal courts to

exercise jurisdiction notwithstanding prior “in rem” proceed-

ings. White v. White (In re White), 851 F.2d 170, 172-74 (6"

Cir. 1988)(prior divorce proceeding); Slay Warehousing Co.,

Inc. v. Modern Boats, Inc. (In re Modern Boats), 775 F.2d

619, 620 (5" Cir. 1985)(prior admiralty proceeding); /n re

French, 139 B.R. 476, 482 (Bankr. D.S.D. 1992)(prior di-

vorce proceeding). Each of those cases are inapposite. Two

of them involved prior divorce proceedings, which have been

found by this Court not to constitute in rem proceedings to

which the world is a party. E.g., Williams v. State of North

Carolina, 317 U.S. 287, 297 (1942)(citing Haddock v. Had-

dock, 201 U.S. 562 (1906)) (“[t}he historical view that a pro-

ceeding for a divorce was a proceeding in rem [citation omit-

ted] was rejected by the Haddock case’’); Williams v. State of

North Carolina, 325 U.S. 226, 232 (1945)(“insofar as a di-

vorce decree partakes of some of the characteristics of a de-

cree in rem, it is misleading to say that all the world is party

14

to a proceeding in rem”).8 The third case, Modern Boats,

775 F.2d at 610, involved a prior federal admiralty proceed-

ing which, under the plain language of section 1334(b) grant-

ing original jurisdiction “notwithstanding any Act of Con-

gress,” does not preclude the exercise of original federal ju-

risdiction by the district court.

Finally, Petitioner points to Rule 1016 of the Federal

Rules of Bankruptcy Procedure, under which the death of a

debtor “shall not abate a liquidation case under chapter 7 of

the Code.” FepD. R. BANKR. P. 1016. Of course, that rule is

entirely in accord with the doctrine of prior exclusive juris-

diction. Where a debtor files for bankruptcy protection and

then subsequently dies, the federal district court has prior

(and thus exclusive) jurisdiction over the res, i.e., the prop-

erty of the debtor’s estate.

Accordingly, the doctrine of prior exclusive jurisdiction

remains applicable state probate proceedings, and has not

been abrogated either by section 1334 or the enactment of the

Bankruptcy Code. Resolution of the appeal thus turns on the

scope and effect of the Texas probate court’s exclusive in

rem jurisdiction, addressed infra.

8 Indeed, the fact that divorce proceedings are not in rem distinguishes

this case from Ankerbrandt v. Richards, 504 U.S. 689 (1992), upon which

Petitioner heavily relies.

15

Hil. THE SCOPE AND EFFECT OF A PROBATE

COURT’S EXCLUSIVE IN REM

JURISDICTION MUST BE EXPANSIVE

ENOUGH TO GRANT EFFECTIVE RELIEF

“AGAINST THE WORLD”

A. A Court’s Exclusive Jn Rem Jurisdiction Is Not

Limited Solely to Disposition of the Property

An in rem proceeding is “one against the world,” ena-

bling a court with jurisdiction over the res to “determine all

claims that anyone, whether named in the action or not, has

to the property or thing in question.” Tennessee Student As-

sistance Corp. v. Hood, 541 U.S. 440, 448 (2004). In one of

the earlier cases applying the “probate exception,” this Court

has described the nature of a proceeding in rem as one “in

which all persons in the world who have any interest are

deemed parties, and are concluded as upon res judicata by

the decision of the court having junsdiction.” Broderick’s

Will, 88 U.S. at 509.

By its very nature, the relief available under an in rem

proceeding is not narrowly limited to disposition of the res.

In order to grant relief “against the world,” the court must be

able to “effectively exercise the jurisdiction vested in it.”

Princess Lida of Thurn and Taxis v. Thompson, 305 U.S. at

466-67. In Princess Lida, for example, the Court held that,

where a state court was vested with exclusive guasi in rem

jurisdiction over a trust, the federal district court lacked ju-

risdiction over an action charging the trustees with misman-

agement of the trust estate and seeking, as a remedy, to re-

move the trustees, require them to file an account of the trust

and post a bond. /d. at 467-68.

Likewise, in Gardner v. New Jersey, 329 U.S. 565

(1947), the Court held that if the reorganization court lacked

the power to deal with tax liens of a state, “the assertion by

the State of a lien would pull out chunks of an estate from the

reorganization court and transfer a part of the struggle over

the corpus into tax bureaus and other state tribunals.” /d. at

16

577. That result would “fly in the teeth” of the exclusive ju-

risdiction granted to the reorganization court. /d. This Court

explained that exclusive jurisdiction over the debtor and its

property:

is not limited to the prevention of interference

- with the use of the property by the trustee; it

“extends also to the adjudication of questions

respecting the title.” [Citations omitted]. It is

the exclusive jurisdiction of the reorganization

court which gives it power to preserve the

railway as a unit and as a going concern and to

prevent it from being divided up and dismem-

bered piece-meal.

Id.9

The scope and effect of a court’s exclusive in rem juris-

diction can apply to an in personam action before another

court. For example, this Court held in Hood that a discharge

of a debt by a bankruptcy court, although an in rem proceed-

ing, “‘operates as an injunction’ against creditors who com-

mence or continue an action against the debtor in personam

to recover or to collect a discharged debt... .” Hood, 541 ©

U.S. at 447, 448 n.4. That injunction over in personam ac-

tions is necessary for a bankruptcy court exercising in rem

jurisdiction to administer the res effectively, without interfer-

ence by other courts.

Even when faced with constitutional challenges to a

court’s exclusive in rem jurisdiction, this Court has consis-

tently confirmed the expansive authority of such courts to

grant “relief against the world.” Most recently in Hood, this

9 To be clear, unlike in Gardner, the dispute between Petitioner and Re-

spondent in this case is not over the title of any property of the debtor's

estate, but rather goes to the entitlement of the parties to the res of Dece-

dent's estate.

17

Court concluded that the bankruptcy court’s in rem jurisdic-

tion was binding on the State of Tennessee, even where there

was no waiver of the state’s sovereign immunity under the

Eleventh Amendment. /d. at 448 (“(uJnder our longstanding

precedent, States, whether or not they choose to participate in

the proceeding, are bound by a bankruptcy court’s discharge

order no less than other creditors”); see also California v.

Deep Sea Research, Inc.; 523 U.S. at 507-08 (Eleventh

Amendment held not to bar federal in rem jurisdiction over

claims of California to a shipwreck, at least where the res

was not in the State’s possession).

Similarly, in Broderick's Will, this Court explained that

in rem jurisdiction is binding even upon parties that (in what

would otherwise violate due process) never received notice

of the proceeding:

The world must move on, and those who

claim an interest in persons or things must be

charged with knowledge of their status and

condition, and of the vicissitudes to which

they aré subject. This is the foundation of all ~<

judicial proceedings in rem.

Broderick’s Will, 88 U.S. at 519.

Given that the exclusive jurisdiction of in rem proceed-

ings applies to states with Eleventh Amendment sovereign

immunity and parties without any notice of the proceeding,

there seems no basis to except from that expansive reach an

individual such as the Petitioner who is neither a sovereign

nor unaware of (and who in fact commenced and was a party

to) the pending probate proceeding.

Petitioner relies upon Waterman vy. Canal-Louisiana

Bank & Trust Co., 215 U.S. 33 (1909), but that decision ac-

tually supports the Respondent. In Waterman, the complain-

ant, a niece of the decedent, sought an accounting in federal

court of a probate estate, and also sought to cause the execu-

tor to recognize her legacy under the will and pay the residue

18

of the estate over to her. /d. at 42. With respect to her re-

quest for an accounting of the probate estate, the Court held

that the federal district court lacked jurisdiction to hear that

request, concluding that such relief would interfere with the

probate court’s jurisdiction to “determin[e] the amount of the

residue arising from the settlement of the estate in the court

of probate.” Jd. at 46. The Court did find that the federal

court had jurisdiction to establish complainant’s interest in

her legacy and her right to recover from any residue of the

estate not previously distributed. It did so, however, only

after explicitly noting that the complainant “does not seek to

set aside the probate of the will, which the bill alleges was

duly established and admitted to probate in ‘the proper court

of the state.” Id. at 46 (emphasis added). Given the absence

of any direct or indirect challenge to the will, or whether its

terms reflected the decedent’s testamentary interest, and “be-

cause of the facts presented in the bill,” the Court held that

the federal district court’s exercise of jurisdiction in that lim-

ited circumstance would not interfere with the “ordinary set-

tlement of the estate” or the possession of the estate in the

hands of the executor. /d. Even so, the Court made clear that

the federal district court lacked jurisdiction to determine the

amount of the residue arising from the settlement of the es-

tate in the court of probate, leaving that determination to the

exclusive jurisdiction of the state probate court. /d.

Thus, the limited claim which the Court allowed the

complainant in Waterman to adjudicate in federal court- did

not interfere with the probate court’s ability to grant effective

in rem relief “against the world.” In contrast, Petitioner’s

claims against Respondent, which are premised on the asser-

tion that Decedent intended to grant a portion of his estate to

Petitioner, indisputably interfere with the Texas probate

court’s exercise of its jurisdiction.

19

B. In Gelston v. Hoyt, this Court Answered the

Question Presented On Appeal In This Case

Petitioner urges an unduly narrow view of in rem juris-

diction that ignores well settled precedent of this Court. The

very question concerning the extent to which a court’s exclu-

sive in rem jurisdiction deprives another court of jurisdiction

over the subject matter of the in rem proceeding was specifi-

cally addressed in an opinion written by Justice Story nearly

200 years ago, Gelston v. Hoyt, 16 U.S. 246

~ In Gelston, the petitioners, acting under color of United

States law, seized a ship from the respondent. Because the

seizure for the forfeiture was under United States law, the

federal district court had exclusive in rem jurisdiction to de-

termine whether the seizure was “rightful or tortious.” /d. at

312. The district court ruled in favor of the respondent, find-

ing the seizure to have been unjustified and ordered the ship

returned. The respondent then brought suit for trespass and

conversion against the petitioners in the state court of New

York. In defense against the action, the petitioners sought to

offer, as justification for the trespass or in mitigation of dam-

ages, evidence to prove their right of seizure. The state court

refused to consider that evidence and entered judgment in

favor of the respondent; the supreme court of the state of

New York effirmed.

In affirming the judgment of the state court, and finding

that the state court could not “entertain and decide the ques-

tion of forfeiture in this case,” id. at 312, this Court based its

decision upon the exclusive in rem jurisdiction vested in the

federal court:

This is a seizure for a forfeiture under the laws

of the United States, and, consequently, the

right to decide upon the same, by the very

terms of the statutes, exclusively belongs to

the proper court of the United States; and it

depends upon its final decree, proceeding in

rem, whether the seizure is to be adjudged

20

right or tortious. If a sentence of condemna-

tion be pronounced, it is conclusive, that a for-

feiture is incurred; if a sentence of acquittal, it

is equally conclusive against the forfeiture;

and in either case, the question cannot be liti-

gated in another forum.

Id. at 312 (emphasis added). This Court explained that the

reasonableness of the doctrine “results from the very nature

of proceedings in rem” and the need to avoid “mischievous

consequences”:

The decree of the court acts upon the thing in

controversy, and settles the title of the prop-

erty itself, the right of seizure, and the ques-

tion of forfeiture. If its decree were not bind-

ing upon the world upon the points which it

professes to decide, the consequences would

be most mischievous to the public. In case of

condemnation no good title to the property

could be conveyed, and no justification of the

seizure could be asserted under its protection.

In case of acquittal, a new seizure might be

made by any other persons /oties quoties for

the same offence, and the claimant be loaded

with ruinous costs and expenses.

Id. at 313 (emphasis added). Although the Court noted that

the above reasoning applies even where a court of competent

jurisdiction lacks exclusive jurisdiction, it found such reason-

ing to apply “with greater force to a court of exclusive juris-

diction; since an attempt to re-examine its decree, or deny its

conclusiveness, is a manifest violation of its exclusive au-

thority.” /d.

Justice Story’s opinion answers the question presented to

this Court by Petitioner. In Gelston, the Court found to be

impermissible the attempt by petitioners to raise, as a defense

of the state court action, the right of seizure and question of

forfeiture. That defense was recognized as nothing more

i—_

21

than an “indirect” and “collateral” attack on the district

court’s exclusive in rem jurisdiction:

It is doing that indirectly, which the law itself

prohibits to be done directly. It is, in effect,

impeaching collaterally, a sentence which the

law has pronounced to be valid until vacated

or reversed on appeal by a superior tribunal.

Id. (emphasis added). Accordingly, this Court found that by

virtue of the federal district court’s decree of acquittal, “the

seizure is established conclusively to be tortious, and the

party is entitled to his full damages for the injury.” /d. at

314.

In Gelston, this Court premised its decision on the exclu-

sivity and nature of a court’s in rem jurisdiction, and not

merely upon principles of res judicata. This is evident from

the Court’s holding that the exclusive jurisdiction of an in

rem proceeding applied to the petitioners whether or not they

were deemed to have been parties to that proceeding:

In legal propriety, therefore, he cannot be

deemed a stranger to the decree in rem; he is

at all events a privy, and as such must be

bound by a sentence which ascertains the sei-

zure to be tortious. But if he were a mere

stranger, he would still be bound by such sen-

tence, because the decree of a court of compe-

tent jurisdiction in rem is, as to the points di-

rectly in judgment, conclusive upon the whole

world.

Id. at 320 (emphasis added).

Leaving no room for doubt that the teachings of Justice

Story apply to this case, the Court expressly recognized in

Gelston that the principles and reasoning set forth therein

would apply with equal force to probate proceedings:

22

[N]o principle of general law seems better set-

tled, than that the decision of a court of a pe-

culiar and exclusive jurisdiction must be com-

pletely binding upon the judgment of every

other court, in which the same subject matter

comes incidentally in controversy. It is famil-

iarty known in its application to the sentences

of ecclesiastical courts, in the probate of wills

and granting of administrations of personal

estate; to the sentences of prize courts in all

matters of prize jurisdiction; and to the sen-

tences of courts of admiralty and other courts

acting in rem, either to enforce forfeitures or

to decide civil rights.

Id. at 315 (emphasis added).

In the instant case, as in Gelston, the claims asserted in

Petitioner’s lawsuit against Respondent “come incidentally in

controversy” with the “same subject matter” as that adjudi-

cated by the Texas probate court, and thus constitute the kind

of “indirect” and “collateral” attack on the probate court’s

jurisdiction that this Court refused to allow in Gelston. Al-

though the Ninth Circuit did not cite Gelston v. Hoyt in its

opinion, its reasoning closely parallels that of Justice Story

nearly two centuries ago. The Ninth Circuit expressly cited

to the general principles governing in rem jurisdiction and

the binding effect “upon the whole world,” including United

States district courts, of determinations by a court with such

jurisdiction. App. 34-35. According to the Ninth Circuit,

Petitioner’s claim that Decedent intended to give her a gift

“went to the very essence of the testamentary instruments

executed by J. Howard Marshall Il in his lifetime.” App. 35.

Likewise, her claims that Respondent engaged in transactions

which “wrongfully depleted the trust and estate of J. Howard

Marshall” were claims that, if successfully brought in probate

court, would have resulted in a money judgment against Re-

spondent and in favor of “the estate of J. Howard Marshall

II.” App. 35. Finding that her claims were “‘in substance

23

nothing more than a thinly veiled will contest,” App. 31

(quoting Moser v. Pollin, 294 F.3d 335, 340 (2d Cir. 2002)),

the Ninth Circuit concluded:

We agree with the contention of E. Pierce

Marshall that the probate exception to federal

court jurisdiction applies in this case because

Vickie Lynn Marshall’s claims were simply a

disguised attack on J. Howard Marshal II’s

1982 trust, as amended, and on the postmor-

tem disposition of his property as provided in

the trust.

App. 36-37 (emphasis added).

Petitioner’s civil proceeding against Respondent proves

Justice Story to have been clairvoyant when he warned about

the “mischievous consequences” that would result if courts

exercising in rem jurisdiction were made subject to “indi-

rect,” “collateral,” “disguised” or “thinly veiled” attacks.

Probate courts are granted exclusive jurisdiction in order to

grant the relief “against the world” necessary to enable their

effective exercise of jurisdiction ovér the res. A rule that

permits indirect or collateral challenges to that jurisdiction

will undermine the principles that are essential to in rem ju-

risdiction and lead to the very “injurious and unseemly con-

flict” among federal and state courts that those principles

were specially designed to avoid.

IV. THE CONCERNS RAISED BY THE UNITED

STATES AS AMICUS CURIAE 1N SUPPORT

OF THE PETITIONER ARE MISPLACED

AND DO NOT WARRANT DEVIATION

FROM THE UNIFIED PRINCIPLES THAT

GOVERN IN REM PROCEEDINGS.

In its brief filed as amicus curiae in support of the peti-

tioner, the United States argues for reversal of the Ninth Cir-

cuit’s decision. The United States raises two concerns with

respect to the Ninth Circuit’s interpretation of the probate

*

24

exception: first, that it will deprive federal courts of jurisdic-

tion to decide disputes over federal tax liability; and second,

that it could interfere with the ability of the bankruptcy sys-

tem to administer debtors’ estates expeditiously, fairly and

efficiently.

The first concern raised by the United States is mis-

placed, as illustrated by the Court’s decision in United States

v. Bank of New York :& Trust Co., 296 U.S. 463. In that case,

the United States brought suit in federal district court seeking

an accounting and delivery of funds in the possession of New

York’s superintendent of insurance. /d. at 470. Based upon

the object of the suits, which was “to take the property from

the depositaries and from the control of the state court, and to

vest the property in the United States to the exclusion of all

those whose claims are being adjudicated in the state pro-

ceedings,” the Court properly held that the federal district

court lacked jurisdiction. /d. at 478. In so holding, however,

the Court recognized that the actions were not brought

“merely to establish a debt or a night to share in the prop-

erty.” Jd. at 478.

This Court’s decision in United States v. Bank of New

York & Trust Co. was specifically cited in Markham y. Allen,

326 U.S. 490 (1946), where the Court held in the context of

the probate exception that “federal courts of equity have ju-

risdiction to entertain suits ‘in favor of creditors, legatees and

heirs’ and other claimants against a decedent’s-esiate ‘to es-

tablish their claims’ so long as the federal court does not in-

terfere with the probate proceedings or assume general juris-

diction of the probate or control of the property in the cus-

tody of the state court.” /d. at 494. Thus, the Ninth Circuit’s

decision below, if affirmed, will not necessarily defeat the in

personam jurisdiction of a federal court to adjudicate the fed-

eral tax liability of a decedent’s estate, where the United

States does not also request the federal district court to cause

the turnover or other disposition of such estate property, nor

otherwise seek to interfere with the probate court’s exclusive

25

jurisdiction in a manner contrary to principles established in

Gelston, Markham, Hood and other decisions of this Court.!°

Nor should the United States or the Program be con-

cerned that this Court’s recognition of a “probate exception”

consistent with the Ninth Circuit’s opinion below would im-

pair the ability of bankruptcy courts to administer bankruptcy

estates expeditiously, fairly, and efficiently. In seeking to

allow federal court jurisdiction to intrude upon the exclusive

in rem jurisdiction of probate courts, the United States fails

to give due consideration to the more prevalent harm to the

bankruptcy system that could result if the exclusive in rem ~

jurisdiction of bankruptcy courts were vulnerable to the same

kind of indirect attacks that Petitioner has launched against

the exclusive in rem jurisdiction of the Texas probate court.

In Hood, this Court recognized the fundamental impor-

tance of a bankruptcy court’s broad in rem jurisdiction in

providing a debtor with the fresh start that is a central pur-

pose of bankruptcy law:

A bankruptcy court is able to provide the

debtor a fresh start in this manner, despite the

lack of participation of all of his creditors, be-

cause the court’s jurisdiction is premised on

the debtor and his estate, and not the creditors.

Hood, 541 U.S. at 447. The same principle applies in pro-

bate proceedings, where broad in rem jurisdiction is also nec-

10 The concurrent jurisdiction of federal district courts and probate courts

to adjudicate the validity and amount of claims against a decedent's estate

is analogous to the concurrent jurisdiction of federal and state courts to

adjudicate the validity and amount of claims against a debtor’s estate in

bankruptcy. But just as a state court clearly lacks jurisdiction to grant a

bankruptcy discharge or confirm a plan of reorganization, or adjudicate

whether a bankruptcy court properly discharged a debt or confirmed a

plan, a federal court lacks jurisdiction to adjudicate the intent of a dece-

dent under a will or trust.

26

essary to provide complete settlement of a probate estate

“against the world”:

The public interest requires that the estates of

deceased persons, being deprived of a master,

and subject to all manner of claims, should at

once devolve to a new and competent owner-

ship; and, consequently, that there should be

some convenient jurisdiction and mode of

proceeding by which this devolution may be

effected with least chance of injustice or

fraud; and that the result attained should be

firm and perpetual. ... These objects are gen-

erally accomplished by the constitution and

powers which are given to probate courts, and

the modes provided for reviewing their pro-

ceedings. And one of the principal reasons

assigned by the equity courts for not entertain-

ing bills on questions of probate is, that the

probate courts themselves have all the powers

and machinery necessary to give full and ade-

quate relief.

Broderick’s Will, 88 U.S. at 509-10.

As explained supra, the principles of in rem jurisdiction

that this Court has developed over the past two hundred years

has not only enabled bankruptcy, probate and other courts to

exercise their in rem jurisdiction more effectively, but also

has been characterized by this Court as essential to preserve

harmony and cooperation among federal and state courts.

Given those policy imperatives, the specific conterns raised

by the United States as amicus curiae, even if they were

germane, should nevertheless yield to the invaluable benefits

achieved through a unified theory of in rem jurisdiction that

is designed to avoid “injurious conflicts” among courts. One

need look no further than the history of this case, and the

conflict that arose between the federal bankruptcy court and

27

state probate court, to remind us of the larger importance of

those principles.

CONCLUSION

The judgment of the court of appeals should be affirmed.

January 20, 2006

Respectfully submitted,

SIDNEY P. LEVINSON

Counsel of Record

HENNIGAN, BENNETT & DORMAN

LLP

601 S. Figueroa Avenue

Suite 3300

Los Angeles, CA 90017

(213) 694-1200

DANIEL J. POPEO

PAUL D. KAMENAR

WASHINGTON LEGAL

FOUNDATION

2009 Massachusetts Ave., N.W.

Washington, D.C. 20036

(202) 588-0302

Counsel for Amicus Curiae