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When Houston attorney Tom A. Cunningham and his partners agreed in September 1999 to represent Playboy model Anna Nicole Smith in her battle for money that she claimed her late oilman husband wanted her to have, they knew they were getting involved in some complicated litigation in Texas and California. They ended up taking dozens of depositions and spent nearly six months in a Harris County, Texas, probate courtroom trying a suit in which Smith (her real name is Vickie Lynn Marshall) and one of her stepsons battled another stepson for J. Howard Marshall II’s assets. Smith became stepmother to J. Howard Marshall III and E. Pierce Marshall when she married their father the year before his death at age 90. But during much of the time the seven lawyers at Cunningham, Darlow, Zook & Chapoton were working on Smith’s litigation, they also were juggling a number of other big suits, including a huge class action in San Antonio that was once set for trial within days of the Marshall litigation. Plus, at the end of 1999 the firm was moving into new offices, which turned out to be far from ready for occupancy when they arrived with their furniture and files. But that’s exactly how the lawyers at Cunningham Darlow planned it when they formed their firm in April 1998 — they wanted to do big cases. Cunningham and partners Richard Zook and John Chapoton Jr. say their small firm can handle big suits by working closely with other firms and using technology. The firm is so wired that lawyers back at the office were able to e-mail questions to lawyers questioning witnesses in the Marshall trial. Cunningham Darlow wasn’t the only small firm involved in Estate of J. Howard Marshall II, deceased, et al. v. Robert S. Macintyre Jr., et al., No. 276,815-402. Most of the Texas lawyers involved in the trial were solo practitioners or practice at small firms. Despite the intensive discovery, the burdensome schedule of hearings and nearly six months of trial, Texas lawyers representing all three factions at trial say they found a way to manage their firms’ manpower and docket to accommodate the Marshall trial. “If the case had been handled by other firms, there probably would have been 15 to 20 lawyers working on it. We had the case staffed as well as it needed to be staffed, but not too much,” says B. Lee Ware, a partner in Houston’s Ware, Snow, Fogel & Jackson, one of the firms representing Pierce Marshall. “We had two to three associates who worked on the case from time to time. The [four] people who attended the trial did little or nothing else between the middle of August of last year until the trial ended on March 7,” Ware says. Other lawyers on Pierce Marshall’s team — Rusty Hardin, of the four-lawyer Rusty Hardin & Associates of Houston, and Jeffrey Chambers, a solo practitioner in Dallas — say they were able to do their jobs because lawyers from Ware Snow took the lead in discovery and kept the documents organized. “There were over a million pages of documents exchanged. There were on the order of 25 experts on all sides when I walked into this dream trial. All that had been organized,” Chambers says. “It was all weeded down to about eight large binders of about 300 documents, and it was just ready to roll.” But even with that, Chambers says he often had to work seven-day weeks to keep up with his caseload while the trial was raging in Houston. “I was able to juggle it,” he says. TABLOID FARE The legal battle between Howard Marshall II’s two sons would have attracted attention in Houston legal circles simply because the oilman’s wealth had been estimated at more than $1 billion. But the courtroom battle spawned tabloid fare because of the presence of the buxom Smith, a former stripper who was 63 years younger than Howard Marshall when she married him in 1994. The trial began in September 2000 and ended with a jury verdict on March 7, 2001. After Howard Marshall died in 1995, Pierce Marshall filed a will for probate in Houston. But Smith and Howard Marshall III, Pierce’s older brother who was disinherited following a dispute with his father in 1980, sued, claiming they are entitled to a share of the money. Testimony at trial put the value of Howard Marshall II’s estate at anywhere from $60 million to $1.6 billion. (Most of the oilman’s assets are in Marshall Petroleum, which owns about 13 percent of Koch Industries.) After the long trial, during which much of the attention was focused more on Smith’s attire than her lawyers’ legal arguments, the jury returned a verdict in Pierce Marshall’s favor and found his older brother should pay $35 million in damages. Smith’s role declined during the trial. She dropped her allegations in January after a judge in California presiding over her bankruptcy signed a final judgment awarding her $475 million of her husband’s estate. Counterclaims kept her in the Texas litigation, however. While that $475 million judgment is under the gun — a federal district judge in California vacated the judgment in June, saying he would conduct a de novo review of the evidence — the Texas litigation is reaching a turning point. A final judgment was circulating among the lawyers the week of Aug. 6 for signing. Wood hadn’t signed it by press time Aug. 9. The final judgment calls for Howard Marshall III to pay $4 million in actual damages and $6 million in punitives to his brother as trustee of the Bettye B. Marshall Living Trust. It grants a judgment notwithstanding the verdict on jury findings related to the other $25 million in damages. It also finds that Smith did not have an agreement with her husband that he would give her half of all his property and orders her to pay $541,000 to Pierce Marshall for attorneys’ fees. Lawyers for Smith and Howard Marshall III say they will appeal if post-judgment motions are unsuccessful. Cunningham Darlow will handle Smith’s appeals, while Howard Marshall III has hired John Hill Jr., a partner in Locke Liddell & Sapp in Houston. KEEP ON KEEPING ON Ware, a lawyer for Pierce Marshall, says the trial was time-intensive because it was so complicated. Some of the witnesses were on the stand for seven, eight or nine days and about three-quarters of the witnesses were experts, making trial preparation more difficult, he says. Ware and Cunningham also say many of the legal issues were complex. Ware says that required extensive briefing in areas where there isn’t much case law in Texas. Ware Snow had been working on the litigation since 1997 and worked on an earlier trial that ended in a mistrial in 1998 before former Probate Judge James Scanlan. Ware says the 19-lawyer firm has worked for an hourly rate, and he says it has been paid more than $5 million of the more than $15 million Pierce Marshall has spent on litigation related to his father’s estate. Ware worked on the suit with partners Don Jackson and Don Fogel. Hardin as well has been involved since 1997. He says he signed on in April 1997 to sit second chair to former Pierce Marshall lawyer Elizabeth Tipton in the first trial before Scanlan. He says his fee arrangement, like Ware Snow’s, is hourly, with a kicker providing for a potential bonus. “When both firms made their original fee arrangement almost three, four years ago before the mistrial, no one had any idea it would become what a nightmare it is,” says Hardin, who represented Marshall Petroleum and Howard Marshall II’s accountants at trial. Cunningham says his firm was hired in 1999 after Smith’s former lawyer, Diana Marshall, asked the firm to try the suit. Marshall, of the Marshall Law Firm, fought an earlier battle with Pierce Marshall and his lawyer Chambers in Dallas, where a jury returned an $8.5 million verdict against her and her former firm in 1998 in a libel suit. That suit settled for $800,000, the amount remaining under Marshall’s liability insurance policy. He says Cunningham Darlow has a contingent-fee arrangement with Smith for a share of proceeds of the Texas litigation and her bankruptcy litigation in California. (In California litigation, Smith alleges Pierce Marshall tortiously interfered with the gift Howard Marshall II intended to give her.) While the Marshall litigation hasn’t resulted in any money yet, Cunningham says the firm had two large paydays in 2000 — the settlement of a large contingent-fee suit and the settlement of the class action suit in San Antonio in which he was the lead defense attorney for Host Marriott. In that suit, which ultimately settled for $426 million, some limited partners of Host Marriott alleged they were charged excessive management fees. Cunningham doesn’t regret taking the Marshall suit on a contingency: “You don’t get a case that has a half-billion-dollar potential more than once or twice.” Hartnett & Hartnett, the seven-lawyer Dallas firm that worked the trial for Howard Marshall III, also has a contingent fee. Like Cunningham Darlow, the firm had other work going at the same time that brought in money. James Hartnett Jr. says he settled two other suits while he was trying the Marshall case and one of them was for a substantial fee worth more than the time he had in the Marshall litigation. “You win some, lose some. We’re not the first lawyers to have a really big case on a contingency and not win. It was not a financial hardship for us,” he says. Hartnett tried the suit with his brother, Will. Their brothers Jay and Fred, also partners in the firm, worked on pretrial matters. Dianne Lawter, a partner in Lawter & Lawter of Houston, another Texas firm that worked on the trial, did not return a telephone message by press time, but Hartnett says the Lawters were active in the case. Hartnett says his firm was hired in the summer of 1999, after the mistrial in 1998 and before the second round of discovery, to work with the Lawters. Chambers wasn’t brought into the case until May 2000. Although he is a plaintiffs’ lawyer who usually does contingent-fee work, Chambers says he was paid a “substantial” hourly rate during the Marshall trial totaling between $400,000 and $500,000. He says, “That really helped in terms of being able to keep a solo shop going during trial.”

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