REPLY TO [DOC 222] SHERMAN RESPONSE TO MOTION TO STRIKE - Page 1
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., § Civil Action No. 3-09CV0988-F
MANILA INDUSTRIES, INC., and §
MUNISH KRISHAN, §
Plaintiffs. §
§
v. §
§
JEFFREY BARON, and §
ONDOVA LIMITED COMPANY, §
Defendants. §
REPLY TO [DOC 222] SHERMAN RESPONSE TO MOTION TO STRIKE
TO THE HONORABLE ROYAL FURGESON, U.S. DISTRICT COURT JUDGE:
COMES NOW, Jeffrey Baron, Appellant, and respectfully replies to Mr.
Shermans response to [DOC 222], (Mr. Shermans Response to Mr. Barons
motion to strike the bankruptcy courts report and recommendation and to vacate
the order adopting same).
I. LACK OF SUBJECT MATTER JURISDICTION CANNOT BE WAIVED
1. Subject matter jurisdiction is never waived. Mansfield C. & L. M. R. Co.
v. Swan, 111 U. S. 379, 382 (1884). As Justice Harlan explained, the presumption
. . . is that the court below was without jurisdiction unless the contrary appears
affirmatively from the record. King Bridge Co. v. Otoe County, 120 U. S. 225,
226 (1887) ([T]he rule, springing from the nature and limits of the judicial power
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REPLY TO [DOC 222] SHERMAN RESPONSE TO MOTION TO STRIKE - Page 2
of the United States, is inflexible and without exception, which requires this court,
of its own motion, to deny its own jurisdiction, and, in the exercise of its appellate
power, that of all other courts of the United States, in all cases where such
jurisdiction does not affirmatively appear in the record on which, in the exercise of
that power, it is called to act.). The facts supporting jurisdiction must appear
affirmatively from the record. Id.
2. Other than a misplaced hope that the defect could be waived, Mr.
Sherman has no response to the bankruptcy courts lack of subject matter
jurisdiction over the subject matter of the report.
II. BANKRUPTCY RULE 9033 APPLIES TO ALL NON-CORE
PROCEEDINGS
3. Two courts cannot exercise concurrent jurisdiction over the same matter.
Accordingly, the only way for the district court to act as a supervisor of the
bankruptcy court (to use this Courts terminology), is either by withdrawing the
reference (in which case the bankruptcy court is divested of jurisdiction) or by
appellate review from the bankruptcy court, (in which case the requirements of
Rule 9033 must apply).
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REPLY TO [DOC 222] SHERMAN RESPONSE TO MOTION TO STRIKE - Page 3
III. YET ANOTHER SUA SPONTE BYPASS SUGGESTED BY MR.
SHERMAN
4. Mr. Sherman is now a serial offender in seeking to rely on purported sua
sponte actions of the district court as a means to circumvent the law and rules of
procedure.
5. The bankruptcy court's report was either a motion to withdraw its
reference or it wasn't. If it wasn't, it was dressed up in a false wrapper, and Mr.
Sherman's argument fails. If it was, the Federal and local rules were circumvented,
and the report must be stricken.
6. The Bankruptcy Rules require that a motion to withdraw reference be
made in the bankruptcy proceeding. The Bankruptcy Rules do not provide for the
bankruptcy court to act in he absence of such motion. 28 U.S.C. 157(d) (The
district court may withdraw, in whole or in part, any case or proceeding referred
under this section, on its own motion or on timely motion of any party, for cause
shown.)(emphasis). Even the case cited by Mr. Sherman, In re Moody, 64 B.R.
594 (Bankr. S.D. Tex. 1986) involves a motion. Notably, pursuant to the rules
promulgated by Congress, either the district court or any party may make the
motion. No provision allows the bankruptcy judge to do so. In any case, a motion
is required, and there is a specific rule for the handling of the motion.
7. In the Northern District of Texas, withdrawal of reference is governed by
local rule 5011-1. Local Rule 5011-1 Withdrawal of Reference requires that a)
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REPLY TO [DOC 222] SHERMAN RESPONSE TO MOTION TO STRIKE - Page 4
Procedure. A motion to withdraw the reference of a case or a proceeding in a case
shall be directed to the district court, but shall be filed with the Bankruptcy
Clerk. A status conference on the motion shall be held by the bankruptcy
judge with notice to all parties involved in a contested matter or adversary
proceeding of which the reference is proposed to be withdrawn. Moreover, the
bankruptcy and local rules lay out the appropriate method for a bankruptcy court to
communicate to a district court regarding the withdrawal of reference. Suffice to
say the bankruptcy courts report violates almost every requirement mandated by
law. See e.g., L.B.R. 5011-1.
8. Bankruptcy Rule 5011 expressly requires that a motion for withdrawal of
a case or proceeding shall be heard by a district judge. Accordingly, if the order
adopting the bankruptcy courts report was an order on withdrawal, a hearing was
mandated. Having been issued without a hearing, the order of withdrawal should
be vacated.
9. Similarly, Mr. Sherman offers no rule or authority to excuse the Court's
failure to allow 14 days to object to the report before adopting it, especially where
no notice of a shorter period was provided prior to the reports adoption.
10. Finally, no rule imposes a time limit for which to move to vacate or
strike filings or orders in an active lawsuit. The matter is not moot because the
adopted findings form a principal asserted grounds of the motion for receivership.
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REPLY TO [DOC 222] SHERMAN RESPONSE TO MOTION TO STRIKE - Page 5
Respectfully submitted,
/s/ Gary N. Schepps
Gary N. Schepps
State Bar No. 00791608
Drawer 670804
Dallas, Texas 75367
(214) 210-5940
(214) 347-4031 Facsimile
Legal@Schepps.net
APPELLATE COUNSEL FOR
JEFFREY BARON
CERTIFICATE OF SERVICE
This is to certify that this was served on all parties who receive notification
through the Courts electronic filing system.
/s/ Gary N. Schepps
Gary N. Schepps
Case 3:09-cv-00988-F Document 253 Filed 01/28/11 Page 5 of 5 PageID 5838

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