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James Howard Marshall II (January 24, 1905 – August 4, 1995) was an American businessman, government official, lawyer, and legal scholar. He was involved with and invested in the American petroleum industry via his academic, government and commercial endeavors. He owned 16 percent of
Koch Industries Koch, Inc. () is an American Multinational corporation, multinational Conglomerate (company), conglomerate corporation based in Wichita, Kansas, and is the second-largest privately held company in the United States, after Cargill. Its subsidiarie ...
and was married to American model
Anna Nicole Smith Vickie Lynn Marshall (née Hogan; November 28, 1967 – February 8, 2007), known professionally as Anna Nicole Smith, was an American model, actress, and television personality. Smith started her career as a ''Playboy'' magazine centerfold in M ...
during the last 14 months of his life. His estate became the subject of protracted litigation, which was reviewed by the Supreme Court in '' Marshall v. Marshall'' and '' Stern v. Marshall''. The court kept the
will and testament A will and testament is a legal document that expresses a person's (testator) wishes as to how their property (estate (law), estate) is to be distributed after their death and as to which person (executor) is to manage the property until its fi ...
intact and substantially all of the assets in Marshall's estate wound up in trusts for the benefit of his daughter-in-law,
Elaine Tettemer Marshall Elaine Tettemer Marshall (born July 22, 1942) is an American billionaire heiress. Trusts for the benefit of Marshall and her two sons own the 16% beneficial interest in Koch Industries that were formerly owned by her husband, E. Pierce Marshall ...
, and her family.


Early life and education

Born in the Germantown section of
Philadelphia Philadelphia ( ), colloquially referred to as Philly, is the List of municipalities in Pennsylvania, most populous city in the U.S. state of Pennsylvania and the List of United States cities by population, sixth-most populous city in the Unit ...
, and raised a
Quaker Quakers are people who belong to the Religious Society of Friends, a historically Protestant Christian set of denominations. Members refer to each other as Friends after in the Bible, and originally, others referred to them as Quakers ...
, J. Howard Marshall II attended
George School George School is a private Quaker (Society of Friends) boarding and day high school located on a rural campus in Middletown Township, Bucks County, Pennsylvania ( Newtown postal address). It has been at that site since its founding in 1893, an ...
, a private high school in Newtown, Pennsylvania, and then studied liberal arts at
Haverford College Haverford College ( ) is a private university, private Liberal arts colleges in the United States, liberal arts college in Haverford, Pennsylvania, United States. It was founded as a men's college in 1833 by members of the Religious Society of Fr ...
, both Quaker institutions, graduating in 1926. While at George School and Haverford, he edited the school newspapers, captained the debate teams, was an All American soccer player, and played competitive tennis under the instruction of professional
Bill Tilden William Tatem Tilden II (February 10, 1893 – June 5, 1953), nicknamed "Big Bill", was an American tennis player. He was the world No. 1 amateur for six consecutive years, from 1920 to 1925, and was ranked as the world No. 1 professional by Ra ...
. He graduated ''
magna cum laude Latin honors are a system of Latin phrases used in some colleges and universities to indicate the level of distinction with which an academic degree has been earned. The system is primarily used in the United States. It is also used in some Sout ...
'' from
Yale Law School Yale Law School (YLS) is the law school of Yale University, a Private university, private research university in New Haven, Connecticut. It was established in 1824. The 2020–21 acceptance rate was 4%, the lowest of any law school in the United ...
in 1931. At Yale, he was case editor of the ''
Yale Law Journal ''The Yale Law Journal'' (YLJ) is a student-run law review affiliated with the Yale Law School. Published continuously since 1891, it is the most widely known of the eight law reviews published by students at Yale Law School. The journal is one ...
'' and studied with
law and economics Law and economics, or economic analysis of law, is the application of microeconomic theory to the analysis of law. The field emerged in the United States during the early 1960s, primarily from the work of scholars from the Chicago school of econ ...
pioneer Walton Hale Hamilton.


Careers

Upon graduation, from 1931 to 1933, he served as an Assistant Dean at
Yale Law School Yale Law School (YLS) is the law school of Yale University, a Private university, private research university in New Haven, Connecticut. It was established in 1824. The 2020–21 acceptance rate was 4%, the lowest of any law school in the United ...
and instructed courses in business, finance and procedure, while also publishing articles as a member of the influential
legal realism Legal realism is a naturalistic approach to law; it is the view that jurisprudence should emulate the methods of natural science; that is, it should rely on empirical evidence. Hypotheses must be tested against observations of the world. Leg ...
school of thought. He worked with future
Supreme Court In most legal jurisdictions, a supreme court, also known as a court of last resort, apex court, high (or final) court of appeal, and court of final appeal, is the highest court within the hierarchy of courts. Broadly speaking, the decisions of ...
Justice
William O. Douglas William Orville Douglas (October 16, 1898January 19, 1980) was an American jurist who served as an associate justice of the Supreme Court of the United States from 1939 to 1975. Douglas was known for his strong progressive and civil libertari ...
on an article titled ''A Factual Study of Bankruptcy Administration and Some Suggestions'', published in 1932. Along with Norman Meyers, he published two articles titled ''Legal Planning of Petroleum Production'' in 1931. These studies offered an alternative to the then-prevailing practices of controlled production in the
petroleum industry The petroleum industry, also known as the oil industry, includes the global processes of hydrocarbon exploration, exploration, extraction of petroleum, extraction, oil refinery, refining, Petroleum transport, transportation (often by oil tankers ...
, which were leading to dramatic
boom-bust cycle Business cycles are intervals of general expansion followed by recession in economic performance. The changes in economic activity that characterize business cycles have important implications for the welfare of the general population, governmen ...
s. They gained the interest of the government, as many of the supporters of the
New Deal The New Deal was a series of wide-reaching economic, social, and political reforms enacted by President Franklin D. Roosevelt in the United States between 1933 and 1938, in response to the Great Depression in the United States, Great Depressi ...
were supporters of
legal realism Legal realism is a naturalistic approach to law; it is the view that jurisprudence should emulate the methods of natural science; that is, it should rely on empirical evidence. Hypotheses must be tested against observations of the world. Leg ...
. In 1933, Marshall left Yale to become the Assistant
Solicitor A solicitor is a lawyer who traditionally deals with most of the legal matters in some jurisdictions. A person must have legally defined qualifications, which vary from one jurisdiction to another, to be described as a solicitor and enabled to p ...
at the
Department of the Interior The United States Department of the Interior (DOI) is an executive department of the U.S. federal government responsible for the management and conservation of most federal lands and natural resources. It also administers programs relatin ...
under
Harold L. Ickes Harold LeClair Ickes ( ; March 15, 1874 – February 3, 1952) was an American administrator, politician and lawyer. He served as United States Secretary of the Interior for nearly 13 years from 1933 to 1946, the longest tenure of anyone to hold th ...
. He authored the Code of Fair Competition for the Petroleum Industry (1933), and the
Connally Hot Oil Act of 1935 The Connally Hot Oil Act of 1935 was enacted in the wake of the Supreme Court's decision to strike down Section 9 (c) of the National Industrial Recovery Act (NIRA) in '' Panama Refining Co. v. Ryan''. The act gave the president authority "to pro ...
after the Supreme Court's decision to strike down the
National Industrial Recovery Act The National Industrial Recovery Act of 1933 (NIRA) was a US labor law and consumer law passed by the 73rd US Congress to authorize the president to regulate industry for fair wages and prices that would stimulate economic recovery. It als ...
. It revived legislation that regulated the flow of oil between states to protect the industry from "contraband oil" in order to stabilize falling prices. While Ickes originally considered having the government set a price floor for oil, Marshall got Ickes to sign off on a plan to require certificates of clearance for legally produced oil shipped in
interstate commerce The Commerce Clause describes an enumerated power listed in the United States Constitution ( Article I, Section 8, Clause 3). The clause states that the United States Congress shall have power "to regulate Commerce with foreign Nations, and amon ...
. In 1935, he left government service to become the special
counsel A counsel or a counsellor at law is a person who gives advice and deals with various issues, particularly in legal matters. It is a title often used interchangeably with the title of ''lawyer''. The word ''counsel'' can also mean advice given ...
to Kenneth R. Kingsbury, the president of
Standard Oil Standard Oil Company was a Trust (business), corporate trust in the petroleum industry that existed from 1882 to 1911. The origins of the trust lay in the operations of the Standard Oil of Ohio, Standard Oil Company (Ohio), which had been founde ...
of California (now
Chevron Corporation Chevron Corporation is an American multinational energy corporation predominantly specializing in oil and gas. The second-largest direct descendant of Standard Oil, and originally known as the Standard Oil Company of California (shortened t ...
) in San Francisco. In 1937, he became a partner at Pillsbury Madison Sutro (now
Pillsbury Winthrop Shaw Pittman Pillsbury Winthrop Shaw Pittman LLP, also known as Pillsbury, is a full-service law firm with a particular focus on the energy, financial services, real estate and technology industries. Based in the world's major financial, technology and energy ...
), which was the company's outside counsel. In 1941, he was called back to Washington, D.C. during
World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
as Solicitor of the Petroleum Administration for War, helping develop U.S.
energy policy Energy policies are the government's strategies and decisions regarding the Energy production, production, Energy distribution, distribution, and World energy supply and consumption, consumption of energy within a specific jurisdiction. Energy ...
during the war, including the Cole Pipeline Act of 1941, and later as a member of the Committee on Reparations and the
American Petroleum Institute The American Petroleum Institute (API) is the largest U.S. trade association for the oil and natural gas industry. It claims to represent nearly 600 corporations involved in extraction of petroleum, production, oil refinery, refinement, pipeline ...
. In 1944, after developing a relationship with Paul G. Blazer, he moved to
Ashland, Kentucky Ashland is a List of cities in Kentucky, home rule-class city in Boyd County, Kentucky, United States. The most populous city in Boyd County, Ashland is located upon the southern bank of the Ohio River at the state border with Ohio and near West ...
and became Vice Chairman and President of Ashland Oil and Refining Co. (now
Ashland Inc. Ashland, Inc., is an American chemical company headquartered in Wilmington, Delaware. The company was founded in the city of Ashland, Kentucky, in 1924, where it was headquartered before moving to Wilmington in 1994. The company has five wholly o ...
). In 1946, he drafted the
executive order In the United States, an executive order is a directive by the president of the United States that manages operations of the federal government. The legal or constitutional basis for executive orders has multiple sources. Article Two of the ...
creating the National Petroleum Council (US). In 1952, he became Executive Vice President at Signal Oil & Gas under Samuel B. Mosher. In 1961, he became President of Union Texas Petroleum and moved to Houston. In 1967, he became Executive Vice President of Allied Chemical (now
Honeywell Honeywell International Inc. is an American publicly traded, multinational conglomerate corporation headquartered in Charlotte, North Carolina. It primarily operates in four areas of business: aerospace, building automation, industrial automa ...
). He was also a director of Coastal Corporation. In 1984, he formed Marshall Petroleum, which was primarily a
holding company A holding company is a company whose primary business is holding a controlling interest in the Security (finance), securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own Share ...
for his interest in
Koch Industries Koch, Inc. () is an American Multinational corporation, multinational Conglomerate (company), conglomerate corporation based in Wichita, Kansas, and is the second-largest privately held company in the United States, after Cargill. Its subsidiarie ...
.


Koch Industries

In 1952, Marshall co-founded Great Northern Oil, which, in 1955, built an
oil refinery An oil refinery or petroleum refinery is an industrial processes, industrial process Factory, plant where petroleum (crude oil) is transformed and refining, refined into products such as gasoline (petrol), diesel fuel, Bitumen, asphalt base, ...
in
Rosemount, Minnesota Rosemount is a city in Dakota County, Minnesota, United States, on the southern edge of the Twin Cities Metropolitan Area. The population was 25,650 at the 2020 census. History Rosemount was established as a township in 1858 and incorporated ...
that could refine heavy, sour Canadian crude oil. In 1959, Fred Koch acquired a 35% interest in Great Northern Oil for $5 million. Union Oil acquired a majority interest in Great Northern and attempted to take over the company, but Marshall and Koch, who wanted to keep their assets in private hands, blocked the takeover. In 1969, after buying out Union Oil, Charles Koch, who shared a similar business philosophy with Marshall, swapped a stake in
Koch Industries Koch, Inc. () is an American Multinational corporation, multinational Conglomerate (company), conglomerate corporation based in Wichita, Kansas, and is the second-largest privately held company in the United States, after Cargill. Its subsidiarie ...
for the rest of Marshall's shares in Great Northern Oil.


Personal life


Marriages and relationships

Marshall married Eleanor Pierce in 1931 and divorced in 1961. They had two sons together: J. Howard Marshall III (born February 6, 1936) and E. Pierce Marshall (January 12, 1939 – June 20, 2006). His second marriage, to Bettye Bohannon, lasted from 1961 until her death from
Alzheimer's disease Alzheimer's disease (AD) is a neurodegenerative disease and the cause of 60–70% of cases of dementia. The most common early symptom is difficulty in remembering recent events. As the disease advances, symptoms can include problems wit ...
in 1991. In 1982, he met "Lady" Diane Walker at a
strip club A strip club (also known as a strip joint, striptease bar, peeler bar, gentlemen's club, among others) is a venue where strippers provide adult entertainment, predominantly in the form of striptease and other erotic dances including lap dances. St ...
and offered to marry her if his wife Betty, who had
Alzheimer's disease Alzheimer's disease (AD) is a neurodegenerative disease and the cause of 60–70% of cases of dementia. The most common early symptom is difficulty in remembering recent events. As the disease advances, symptoms can include problems wit ...
, were to die. Over several years, Marshall gave Walker $15 million worth of jewelry and other gifts. Walker died in 1991 at age 51 due to complications from facelift surgery. The gifts became subject to scrutiny by the
Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the Federal government of the United States, United States federal government, which is responsible for collecting Taxation in the United States, U.S. federal taxes and administerin ...
since
gift tax In economics, a gift tax is the tax on money or property that one living person or corporate entity gives to another. A gift tax is a type of transfer tax that is imposed when someone gives something of value to someone else. The transfer must ...
es were not paid; Marshall claimed that the gifts were instead "consulting fees". In 1994, at the age of 89, he married 26-year-old model
Anna Nicole Smith Vickie Lynn Marshall (née Hogan; November 28, 1967 – February 8, 2007), known professionally as Anna Nicole Smith, was an American model, actress, and television personality. Smith started her career as a ''Playboy'' magazine centerfold in M ...
. This was his third marriage and her second marriage. Their marriage lasted until his death 14 months later.


Eldest son left out of estate

In 1980, when Marshall's eldest son, J. Howard Marshall III, sided with Bill Koch, Frederick R. Koch and other collateral family members in dispute with Charles Koch and David H. Koch over making
Koch Industries Koch, Inc. () is an American Multinational corporation, multinational Conglomerate (company), conglomerate corporation based in Wichita, Kansas, and is the second-largest privately held company in the United States, after Cargill. Its subsidiarie ...
a
public company A public company is a company whose ownership is organized via shares of share capital, stock which are intended to be freely traded on a stock exchange or in over-the-counter (finance), over-the-counter markets. A public (publicly traded) co ...
and paying
dividend A dividend is a distribution of profits by a corporation to its shareholders, after which the stock exchange decreases the price of the stock by the dividend to remove volatility. The market has no control over the stock price on open on the ex ...
s, Marshall purchased back company stock from his son, given previously as a gift, for $8 million, considered to be a premium price, and removed the eldest son from his
will and testament A will and testament is a legal document that expresses a person's (testator) wishes as to how their property (estate (law), estate) is to be distributed after their death and as to which person (executor) is to manage the property until its fi ...
. Conversely, during the same dispute, his youngest son E. Pierce Marshall sided with his father, and that son received substantially all of Marshall's estate, valued at $1.6 billion at the time of his death.


Death and ensuing lawsuits

On August 4, 1995, Marshall died of
pneumonia Pneumonia is an Inflammation, inflammatory condition of the lung primarily affecting the small air sacs known as Pulmonary alveolus, alveoli. Symptoms typically include some combination of Cough#Classification, productive or dry cough, ches ...
at age 90 in Houston, Texas. Following Marshall's death,
Anna Nicole Smith Vickie Lynn Marshall (née Hogan; November 28, 1967 – February 8, 2007), known professionally as Anna Nicole Smith, was an American model, actress, and television personality. Smith started her career as a ''Playboy'' magazine centerfold in M ...
(who died on February 8, 2007) became involved in a court battle with her former stepson, E. Pierce Marshall (who died on June 20, 2006). J. Howard's will and trust did not include Anna Nicole or J. Howard's other son, J. Howard Marshall III. Anna Nicole and J. Howard III both sought to overturn the will and trust. In 2001, they both lost their cases during a six-month Texas state court jury trial. During the probate proceedings, Smith declared bankruptcy in California and was awarded $474 million as a sanction for E. Pierce Marshall’s alleged misconduct in discovery. In 2002, the bankruptcy judgment was vacated and Smith’s award was reduced to $88 million in a
United States district court The United States district courts are the trial courts of the United States federal judiciary, U.S. federal judiciary. There is one district court for each United States federal judicial district, federal judicial district. Each district cov ...
in California. In December 2004, a three-judge panel of the
United States Court of Appeals for the Ninth Circuit The United States Court of Appeals for the Ninth Circuit (in case citations, 9th Cir.) is the U.S. federal court of appeals that has appellate jurisdiction over the U.S. district courts for the following federal judicial districts: * Distric ...
vacated the District Court decision under the probate exception, ruling that the federal courts lacked subject matter jurisdiction over state probate matters. The Ninth Circuit decision also affirmed the primacy of Texas Probate decision which determined that no misconduct had taken place and that Smith was not one of J. Howard Marshall's heirs. However, on May 1, 2006, the
Supreme Court of the United States The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all Federal tribunals in the United States, U.S. federal court cases, and over Stat ...
in '' Marshall v. Marshall'' reversed the Ninth Circuit's decision regarding the probate exception, allowing Smith another opportunity to pursue her claims in federal court. The case was remanded to the Ninth Circuit for adjudication of the remaining appellate issues. On June 25, 2009, the same three-judge panel of the United States Court of Appeals for the Ninth Circuit heard oral arguments on the remaining appellate issues. On March 19, 2010, the United States Court of Appeals for the Ninth Circuit issued its second opinion on remand, finding in favor of E. Pierce Marshall, that the California Bankruptcy Court did not have jurisdiction and the California Federal District Court was precluded from reviewing matters already decided in the Texas Probate Court. On September 28, 2010, the U.S. Supreme Court again agreed to hear the case. On June 23, 2011, the United States Supreme court decided the case in a 5–4 decision in favor of the Marshall family (now styled '' Stern v. Marshall'' 10-179). The majority of the Court decided Congress cannot constitutionally authorize non-Article III bankruptcy judges final order jurisdiction on state law based counterclaims to proofs of claim which are not necessary to resolve the claim itself. Marshall's eldest son, J. Howard Marshall III, lost his case in Texas probate court and also lost a counterclaim against him for fraud with malice. The jury originally awarded E. Pierce Marshall $35 million in damages but the probate court reduced that amount to $10 million. J. Howard Marshall III then filed for bankruptcy in California and was
discharged Discharge may refer to: * The act of firing a gun * Termination of employment, the end of an employee's duration with an employer * Military discharge, the release of a member of the armed forces from service Flow * Discharge (hydrology), the a ...
by the same bankruptcy judge that had administered Smith's bankruptcy. This decision was affirmed by the United States Court of Appeals for the Ninth Circuit.


Dispute over pledge to alma mater

In 1976, Marshall pledged $4 million to his alma mater,
Haverford College Haverford College ( ) is a private university, private Liberal arts colleges in the United States, liberal arts college in Haverford, Pennsylvania, United States. It was founded as a men's college in 1833 by members of the Religious Society of Fr ...
. However, by the time of his death in 1995, Marshall had only contributed $2 million. Haverford sued his estate in a Houston probate court; in April 2003, a jury found that Haverford had not been injured because it had not relied on Marshall's pledges.


See also

*
History of the petroleum industry in the United States The history of the petroleum industry in the United States goes back to the early 19th century, although the indigenous peoples, like many ancient societies, have used petroleum seeps since prehistoric times; where found, these seeps signaled t ...


References


Bibliography

*


External links

* {{DEFAULTSORT:Marshall, J. Howard 1905 births 1995 deaths 20th-century American businesspeople 20th-century American lawyers 20th-century Quakers American businesspeople in the oil industry American chief executives American legal scholars American Quakers Anna Nicole Smith Association football players not categorized by nationality Businesspeople from Philadelphia Educators from Philadelphia George School alumni Haverford Fords men's soccer players History of the petroleum industry in the United States Lawyers from Philadelphia J.Howard Men's association football players not categorized by position Pennsylvania lawyers United States Department of the Interior officials Yale Law School alumni Yale Law School faculty