J. Howard Marshall
James Howard Marshall II | |
|---|---|
| Born | 24 January 1905 Philadelphia, Pennsylvania, U.S. |
| Died | 4 August 1995 (aged 90) Houston, Texas, U.S. |
| Occupation(s) | Entrepreneur, government official, attorney, legal scholar |
| Years active | 1931–1995 |
| Known for | Ownership in Koch Industries; legal disputes over estate; oil industry executive roles |
James Howard Marshall II (January 24, 1905 – August 4, 1995) was a prominent American entrepreneur, government official, attorney, and legal scholar with extensive involvement in the U.S. oil sector through academic, public service, and business positions. He held a 16 percent ownership in Koch Industries and was married to model Anna Nicole Smith during the final 14 months of his life. His estate became embroiled in prolonged legal disputes, notably reaching the Supreme Court in the cases Marshall v. Marshall and Stern v. Marshall. Ultimately, the will was validated, with the majority of assets placed into trusts benefiting his daughter-in-law, Elaine Tettemer Marshall, and her family.
Early life and education
Marshall was born in the Germantown neighborhood of Philadelphia and raised within the Quaker faith. He attended George School in Newtown, Pennsylvania, followed by graduation from Haverford College in 1926—both institutions affiliated with Quaker traditions. During his studies, he served as editor of school newspapers, led debate teams as captain, achieved All American status in soccer, and trained competitively in tennis under professional Bill Tilden. He earned his law degree magna cum laude from Yale Law School in 1931, where he was case editor for the Yale Law Journal and studied under Walton Hale Hamilton, a pioneer in law and economics.
Careers
Between 1931 and 1933, Marshall held the position of Assistant Dean at Yale Law School, instructing courses on business law, finance, and procedural matters while publishing influential works within the legal realism movement. In collaboration with future Supreme Court Justice William O. Douglas, he co-wrote A Factual Study of Bankruptcy Administration and Some Suggestions (1932). Alongside Norman Meyers, he produced two articles titled Legal Planning of Petroleum Production (1931), which suggested alternatives to controlled production methods that contributed to boom-and-bust cycles in the petroleum industry. These proposals garnered attention from government officials supportive of New Deal policies aligned with legal realism principles.
In 1933, Marshall joined the Department of the Interior as Assistant Solicitor under Harold L. Ickes. He drafted the Code of Fair Competition for the Petroleum Industry (1933) and played a key role in crafting the Connally Hot Oil Act of 1935, legislation designed to regulate interstate oil shipments and stabilize prices following the Supreme Court’s invalidation of the National Industrial Recovery Act. Rather than establishing price floors, he secured approval for implementing certificates of clearance for legally produced oil transported across state lines.
After departing government service in 1935, he became special counsel to Kenneth R. Kingsbury, then president of Standard Oil of California (now Chevron Corporation). By 1937, he had become a partner at Pillsbury Madison Sutro (presently Pillsbury Winthrop Shaw Pittman), serving as outside counsel to Standard Oil. During World War II, he returned to Washington as Solicitor for the Petroleum Administration for War, influencing U.S. energy policy including contributions to the Cole Pipeline Act of 1941 and participating in reparations negotiations as well as initiatives by the American Petroleum Institute.
In 1944, having established connections with Paul G. Blazer, Marshall relocated to Ashland, Kentucky to serve as Vice Chairman and President of Ashland Oil and Refining Co. (now Ashland Inc.). In 1946, he was responsible for drafting the executive order that created the National Petroleum Council (US). He advanced to Executive Vice President at Signal Oil & Gas in 1952 under Samuel B. Mosher’s leadership and assumed the presidency of Union Texas Petroleum in Houston by 1961. By 1967, he held the role of Executive Vice President at Allied Chemical (currently Honeywell) and served on the board of directors for Coastal Corporation. In 1984, he established Marshall Petroleum as a holding entity for his shareholding in Koch Industries.
Koch Industries
Marshall played a key role in founding Great Northern Oil in 1952, which by 1955 had established an oil refinery in Rosemount, Minnesota designed to process heavy, sour crude from Canada. In 1959, Fred Koch purchased a 35% interest in Great Northern Oil for $5 million. When Union Oil acquired majority ownership and attempted a takeover, Marshall and Koch intervened to prevent the company from going public. By 1969, after acquiring Union Oil’s shares, Charles Koch traded a stake in Koch Industries to obtain the remainder of Marshall's holdings in Great Northern Oil.
Marriages and relationships
Marshall's first wife, Eleanor Pierce (1931–1961), bore him two sons: J. Howard Marshall III (born 1936) and E. Pierce Marshall (1939–2006). His second marriage was to Bettye Bohannon, which lasted from 1961 until her passing in 1991.
In 1982, Marshall met Diane Walker and vowed to marry her if Bettye passed away. Over several years, he gifted Walker jewelry and presents valued at $15 million; these gifts later came under scrutiny by the Internal Revenue Service concerning unpaid gift taxes, although Marshall described them as "consulting fees." Walker died in 1991 due to complications following a facelift.
At the age of 89, Marshall wed 26-year-old model Anna Nicole Smith in 1994. Their marriage continued until his death fourteen months later.
Eldest son excluded from inheritance
During a family dispute in 1980 involving Bill Koch, Frederick R. Koch, Charles Koch, and David H. Koch about taking Koch Industries public and dividend distributions, Marshall repurchased stock from his eldest son, J. Howard Marshall III, at a premium of $8 million and removed him from his will. Meanwhile, his younger son, E. Pierce Marshall, who supported him during the conflict, received nearly the entire $1.6 billion estate upon Marshall’s death.
Death and subsequent litigation
Marshall passed away on August 4, 1995, at age 90 due to pneumonia in Houston, Texas. Following his death, Anna Nicole Smith (deceased 2007) engaged in prolonged legal disputes with her stepson, E. Pierce Marshall (deceased 2006). The will and trust excluded both Anna Nicole and his other son, J. Howard Marshall III, who both unsuccessfully challenged the estate during a six-month jury trial in Texas in 2001.
During probate proceedings, Smith declared bankruptcy in California and was initially awarded $474 million based on alleged wrongdoing by E. Pierce Marshall; this amount was later reduced to $88 million before being overturned by federal courts due to jurisdictional concerns. In 2006, the Supreme Court of the United States ruled in Marshall v. Marshall that Smith could pursue her claims in federal court. Later appeals favored E. Pierce Marshall by confirming California courts lacked authority over issues resolved by Texas probate courts.
The U.S. Supreme Court revisited the matter again in 2011 with Stern v. Marshall, deciding by a 5–4 vote that Congress cannot confer final jurisdiction on non-Article III bankruptcy judges over specific state law counterclaims, effectively supporting the position of the Marshall family.
J. Howard Marshall III also lost his probate contest and related fraud claims; damages initially assessed at $35 million were lowered to $10 million. He subsequently filed for bankruptcy protection in California and received discharge from the same judge who presided over Smith’s bankruptcy case; this discharge was upheld by the Ninth Circuit Court of Appeals.
Controversy regarding donation to alma mater
In 1976, Marshall committed to donating $4 million to Haverford College, his alma mater; however, by the time of his passing in 1995, only $2 million had been given. Subsequently, Haverford initiated legal action against his estate in Houston probate court. In April 2003, a jury determined that the college suffered no damages since it had not depended on receiving the entire pledged amount.