No. 10-11202
In the
United States Court of Appeals
for the Fifth Circuit
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NETSPHERE, INC. Et Al,
Plaintiffs
v.
JEFFREY BARON,
Defendant-Appellant
v.
ONDOVA LIMITED COMPANY,
Defendant-Appellee
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Appeal of Order Appointing Receiver in Settled Lawsuit
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Cons. w/ No. 11-10113
NETSPHERE INC., Et Al, Plaintiffs
v.
JEFFREY BARON, Et Al, Defendants
v.
QUANTEC L.L.C.; NOVO POINT L.L.C.,
Appellants
v.
PETER S. VOGEL,
Appellee
▬▬▬▬▬▬▬▬▬▬▬▬▬
From the United States District Court
Northern District of Texas, Dallas Division
Civil Action No. 3-09CV0988-F
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EMERGENCY MOTION FOR IMMEDIATE TEMPORARILY STAY
OF DISTRICT COURT ORDER TO IMMEDIATELY LIQUIDATE
$60 MILLION IN ASSETS FOR $0.02 CENTS ON THE DOLLAR IN
PRE-ARRANGED SECRET SALES TO ALLOW FILING AND
RULING ON A MOTION FOR A PERMANENT STAY PENDING
APPEAL
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Cons. w/ No. 11-10289
NETSPHERE, INC., ET AL, Plaintiffs
v.
JEFFREY BARON, Defendant- Appellant
v.
DANIEL J SHERMAN, Appellee
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Cons. w/ No. 11-10290
NETSPHERE, INC. ET AL, Plaintiffs
v.
JEFFREY BARON, ET AL, Defendants
v.
QUANTEC L.L.C.; NOVO POINT L.L.C., Non-Party Appellants
v.
PETER S. VOGEL, Appellee
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Cons. w/ No. 11-10390
NETSPHERE, INC. ET AL, Plaintiffs
v.
JEFFREY BARON, Defendant – Appellant
v.
QUANTEC L.L.C.; NOVO POINT L.L.C., Appellants
v.
ONDOVA LIMITED COMPANY, Defendant – Appellee
v.
PETER S. VOGEL, Appellee
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Cons. w/ No. 11-10501
NETSPHERE, INC. ET AL, Plaintiffs
v.
JEFFREY BARON, Defendant – Appellant
QUANTEC L.L.C.; NOVO POINT L.L.C., Appellants
CARRINGTON, COLEMAN, SLOMAN & BLUMENTHAL, L.L.P.,
Appellant
v.
PETER S. VOGEL; DANIEL J. SHERMAN, Appellees
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Interlocutory Appeals of
Orders in Receivership on Appeal
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From the United States District Court
Northern District of Texas, Dallas Division
Civil Action No. 3-09CV0988-F
Hon. Judge William R. Furgeson Presiding
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CERTIFICATE OF INTERESTED PERSONS
The undersigned counsel of record certifies that the following listed persons
and entities have an interest in the outcome of this case. These representations are
made in order that the judges of this Court may evaluate possible disqualification
or recusal.
1. PARTIES
a. Defendant/Appellant: JEFFREY BARON
b. Defendant/Appellee: DANIEL J. SHERMAN, Trustee
for ONDOVA LIMITED COMPANY
c. Intervenor: Rasansky, Jeffrey H. and Charla G. Aldous
d. Intervenor: VeriSign, Inc.
e. Plaintiffs: (1) Netsphere Inc
(2) Manila Industries Inc
(3) Munish Krishan
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f. Appellants: (1) Novo Point, LLC
(2) Quantec, LLC
g. Appellee: Peter S. Vogel
h. Purchaser: Discovery Communications, Inc.
2. ATTORNEYS
a. For Appellant: Gary N. Schepps
Suite 1200
5400 LBJ Freeway
Dallas, Texas 75240
Telephone: (214) 210-5940
Facsimile: (214) 347-4031
b. For Appellee Vogel: Gardere Wynne Sewell LLP
(1) Barry Golden
(2) Peter L. Loh
1601 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone (214) 999-3000
Facsimile (214) 999-4667
bgolden@gardere.com
c. For Appellee Sherman:
Munsch Hardt Kopf & Harr, P.C.
(1) Raymond J. Urbanik, Esq.
(2) Lee J. Pannier, Esq.
3800 Lincoln Plaza / 500 N. Akard Street
Dallas, Texas 75201-6659
Telephone: (214) 855-7500
Facsimile: (214) 855-7584
c. For Intervenor VeriSign: Dorsey & Whitney (Delaware)
(1) Eric Lopez Schnabel, Esq.
(2) Robert W. Mallard, Esq.
d. For Intervenor Rasansky and Aldous: Aldous Law Firm
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(1) Charla G Aldous
d. For Plaintiffs:
(1) John W MacPete, Locke Lord Bissell & Liddell
(2) Douglas D Skierski, Franklin Skierski Lovall Hayward
(3) Franklin Skierski, Franklin Skierski Lovall Hayward
(4) Lovall Hayward , Franklin Skierski Lovall Hayward
(5) Melissa S Hayward, Franklin Skierski Lovall Hayward
(6) George M Tompkins, Tompkins PC
3. OTHER
a. Companies and entities purportedly seized by the receivership:
(1) VillageTrust
(2) Equity Trust Company
(3) IRA 19471
(4) Daystar Trust
(5) Belton Trust
(6) Novo Point, Inc.
(7) Iguana Consulting, Inc.
(8) Quantec, Inc.,
(9) Shiloh LLC
(10) Novquant, LLC
(11) Manassas, LLC
(12) Domain Jamboree, LLC
(13) Genesis, LLC
(14) Nova Point, LLC
(15) Quantec, LLC
(16) Iguana Consulting, LLC
(17) Diamond Key, LLC
(18) Quasar Services, LLC
(19) Javelina, LLC
(20) HCB, LLC, a Delaware limited liability company
(21) HCB, LLC, a U.S. Virgin Islands limited liability company
(22) Realty Investment Management, LLC, a Delaware limited liability
company
(23) Realty Investment Management, LLC, a U.S. Virgin
(24) Islands limited liability company
(25) Blue Horizon Limited Liability Company
(26) Simple Solutions, LLC
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(27) Asiatrust Limited
(28) Southpac Trust Limited
(29) Stowe Protectors, Ltd.
(30) Royal Gable 3129 Trust
b. Receiver / Mediator / Special Master: Peter Vogel
c. Non-party attorneys seeking fees from the receivership res:
1. Garrey, Robert (Robert J. Garrey, P.C.)
2. Pronske and Patel
3. Carrington, Coleman, Sloman & Blumenthal, LLP
4. Aldous Law Firm (Charla G. Aldous)
5. Rasansky Law Firm (Rasansky, Jeffrey H.)
6. Schurig Jetel Beckett Tackett
7. Powers and Taylor (Taylor, Mark)
8. Gary G. Lyon
9. Dean Ferguson
10. Bickel & Brewer
11. Robert J. Garrey
12. Hohmann, Taube & Summers, LLP
13. Michael B. Nelson, Inc.
14. Mateer & Shaffer, LLP (Randy Schaffer)
15. Broome Law Firm, PLLC
16. Fee, Smith, Sharp & Vitullo, LLP (Vitullo, Anthony “Louie”)
17. Jones, Otjen & Davis (Jones, Steven)
18. Hitchcock Evert, LLP
19. David L. Pacione
20. Shaver Law Firm
21. James M. Eckels
22. Joshua E. Cox
23. Friedman, Larry (Friedman & Feiger)
24. Pacione, David L.
25. Motley, Christy (Nace & Motley)
26. Shaver, Steven R. (Shaver & Ash)
27. Jeffrey Hall
28. Martin Thomas
29. Sidney B. Chesnin
30. Tom Jackson
CERTIFIED BY: /s/ Gary N. Schepps
Gary N. Schepps
COUNSEL FOR APPELLANT
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TABLE OF CONTENTS
CERTIFICATE OF INTERESTED PERSONS ........................................................................... 2
TABLE OF CONTENTS................................................................................................................. 6
Jurisdiction of the Court of Appeals .............................................................................................. 8
Motion Overview............................................................................................................................ 10
Factual Background of the Liquidation and Massive Scope ..................................................... 10
Overview................................................................................................................... 10
The Motion to Liquidate was Functionally Ex Parte and Granted without
Hearing...................................................................................................................... 12
Argument & Authorities ............................................................................................................... 13
AS A MATTER OF ESTABLISHED LAW, THE DISTRICT COURT
LACKS SUBJECT MATTER JURISDICTION OVER THE ASSETS OF
NOVO POINT LLC AND QUANTEC LLC ........................................................... 13
1. There Must First be a Controversy Pled Before the Court Concerning
the Subject Matter .................................................................................................. 13
2. Cochrane v. WF Potts Son & Co., 47 F.2d 1026 (5th Cir. 1931) ...................... 14
SEEKING TO USE NOVO POINT, LLC AND QUANTEC, LLC
ASSETS TO PAY OFF NON-JUDGMENT DEBTS ALLEGED AGAINST
OTHER PARTIES IS NOT AUTHORIZED BY LAW............................................ 15
Bollore SA v. Import Warehouse, Inc................................................................... 15
THE REQUIREMENTS OF 28 U.S.C. 2001 APPLY TO PERSONALTY
PURSUANT TO 28 U.S.C. 2004. ............................................................................ 17
IT IS PATENTLY UNREASONABLE NOT TO ENGAGE IN ANY
MARKETING EFFORTS WITH RESPECT TO THE DOMAIN NAMES
SOUGHT TO BE LIQUIDATED............................................................................. 17
MR. NELSON’S SOURCE FOR ‘APPRAISALS’ AND
METHODOLOGY FOR DETERMINING DOMAIN VALUE IS NOT
RELIABLE NOR REASONABLE .......................................................................... 18
THE ORDERS GRANTING THE RECEIVER’S FEES ARE
ERRONEOUS .......................................................................................................... 22
Lack of Subject Matter Jurisdiction ..................................................................... 22
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Receivership Fees Unauthorized............................................................................ 23
Unclean Hands ........................................................................................................ 24
Fee Award was Not For Actual Services to Benefit of LLCs .............................. 25
No Hearing was Held on the Contested Fee Applications................................... 26
Fees Erroneously Awarded for Work on A Different Receivership Estate....... 26
The Fifth Amendment Question ............................................................................ 29
Standard in Granting Stay Pending Appeal ................................................................................ 31
CONCLUSION .............................................................................................................................. 32
PRAYER ......................................................................................................................................... 32
CERTIFICATE OF SERVICE ..................................................................................................... 33
CERTIFICATE OF NOTICE....................................................................................................... 33
CERTIFICATE OF EMERGENCY ............................................................................................ 34
TABLE OF AUTHORITIES......................................................................................................... 35
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TO THE HONORABLE JUSTICES OF THE FIFTH CIRCUIT COURT OF
APPEALS:
COMES NOW Novo Point LLC, and Quantec LLC, Appellants, and move
for an emergency order to immediately and temporarily stay the order of the
District Court to sell immediately in private, no-auction sales what appears to be
$60 Million
in assets for $0.02 cents on the Dollar. The District Court had advised
this Honorable Court that if allowed to rule on the motions to sell the domain name
assets it would stay the sales to allow appeal. SR. v9 p97. Contrary to the
District Court’s advisory to this Honorable Court, it has not stayed the sales, and
has ordered they be conducted immediately.
Jurisdiction of the Court of Appeals
When property is placed into a receivership, it is taken into possession by
the court through its representative, the receiver. See Booth v. Clark, 58 U.S. 322,
331 (1855). When a receivership order is appealed, the effect of the appeal is that
the appellate court has “jurisdiction over the res the same as the trial court had”.
Palmer v. Texas, 212 U.S. 118, 126 (1909). Accordingly, this Honorable Court
currently holds possession and jurisdiction over the assets of Novo Point LLC and
Quantec, LLC. R. 3934, 4306. Pursuant to 28 U.S.C. §1651, this Honorable Court
may issue “all writs necessary or appropriate in aid of their respective
jurisdictions”. If the District Court’s order authorizing sale of receivership
assets— the domain names owned by Novo Point LLC and Quantec LLC— is not
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stayed, this Honorable Court will be divested of jurisdiction over that part of the
receivership estate. Staying the order of sale is necessary to protect this court’s
possession and jurisdiction of the receivership estate which is the subject of appeal
before this Honorable Court.
Federal Rule of Appellate Procedure 8(a)(1) provides that a motion for stay of
an order “must ordinarily
be presented to the district judge in the first Instance.”
The District Court below has ordered counsel not to seek relief on behalf of Novo
Point LLC or Quantec LLC in the District Court, and has ordered all matters
relating to the receivership must be filed in the Court of Appeals. Therefore,
obtaining relief in the District Court is not practicable, and action by the Court of
Appeals is necessary. Federal Rule of Appellate Procedure 8(a)(2)(A)(i) authorizes
this Honorable Court to grant a stay where moving first in the district court would
be impracticable. An emergency request for stay has been filed with the District
Court on behalf of Baron, and the District Court has not ruled on Baron’s motion.
If the District Court’s order is carried out and the assets are liquidated immediately,
it will be too late for the District Court to rule later. Also, a temporary stay will
allow the District Court to rule on a permanent stay.
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Motion Overview
This Honorable Court stayed the District Court below from disposing of
assets of Novo Point LLC, pending this Court’s ruling as to the validity of the
order adding Novo Point LLC’s assets into receivership. The District Court
entered an Advisory to this Honorable Court stating that if the stay was lifted,
the District Court would grant the motions to liquidate the assets and “would stay
orders concerning the sale of domain names and orders concerning fees to be
paid to the Baron attorneys pending appeal”. SR. v9 p97. However, instead
of doing that the District Court has ordered the immediate liquidation of the
domain name assets.
There are no
exigent circumstances requiring that the sales occur
immediately and, granting an emergency stay is necessary to protect the
jurisdiction of this Honorable Court over the receivership res currently in the
possession of this Honorable Court.
Factual Background of the Liquidation and Massive Scope
Overview
As discussed below, Vogel’s motion to sell the Assets of Novo Point LLC
and Quantec LLC maintains the secrecy of the particular assets, and the private,
non-auction sales arranged by Vogel (apparently through Nelson). However,
because of the size of the transactions involved there has been a substantial amount
of industry ‘buzz’ regarding the sales as well as buzz regarding offered ‘joint
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ventures’ whereby Nelson would sell assets at $0.02 cents on the dollar in private
sales, and then the buyers would then ‘flip’ the assets at a $50 Million profit—to be
split with Nelson (and apparently Vogel). It is unknown (as Vogel has kept the
matter secret) which domains actually make up the ‘big 50’ Vogel seeks to
liquidate, or if the buyers have agreed to later split the profits with Nelson and/or
Vogel (as the buyers’ identities have also been kept secret by Vogel).
However, from the industry buzz it appears that Vogel is seeking to sell
those domain names whose values exceed One Million Dollars per domain
.
Thus, the sales sought by Vogel could constitute a liquidation of as much as 95% of
the total value of LLC assets— a liquidation of $60 Million (or more) in assets.
Notably, the per domain market value in excess of one million Dollars per
domain, has been admitted by Sherman: Sherman has explained that “These
names have both high revenue potential and can be sold individually - sometimes
for in excess of $1 million a piece
.” R. 2687 (lines 10-11).
In other words, it appears that Vogel is attempting to liquidate the ‘big 50’
domain names that can be sold individually in excess of $1 million a piece, for
only around $1 million in total. That would leave 99.9% of the domain names
intact numerically. However, the vast bulk of domain names are valued at only
between $50.00 and $600.00 (as compared to the $1 Million to $4 Million per
domain valuation of the ‘big value’ domains). Accordingly, Vogel is apparently
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seeking to secretly liquidate up to 80-95% of the value of the LLCs’ assets— in
private sales (at $0.02 cents on the Dollar) to his hand-picked buyers.
The Motion to Liquidate was Functionally Ex Parte and Granted without
Hearing
In a very unusual process, the fundamental operative information about
Vogel’s motion to liquidate were kept secret. For example, the LLCs have been
kept in the dark as to the individual domain names proposed to be sold— (1)
preventing the parties from soliciting an alternative purchaser for more money and
(2) preventing the parties from researching and gathering evidence to establish the
market value of the domains in question. The LLCs have been also kept in the
dark about the sales price of any domain name (even if the domain name were kept
secret, the sales price of each ‘secret’ domain could be stated), and the LLCs have
been kept in the dark as to appraised value of those domain names with the
‘appraiser’ relied upon by the receiver. Accordingly, we move to have that
information released, and a reasonable opportunity allowed to respond to the
specific domains in question.
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Argument & Authorities
AS A MATTER OF ESTABLISHED LAW, THE DISTRICT COURT LACKS
SUBJECT MATTER JURISDICTION OVER THE ASSETS OF NOVO
POINT LLC AND QUANTEC LLC
1. There Must First be a Controversy Pled Before the Court Concerning the
Subject Matter
As a preliminary matter, the Constitution requires that for a federal court to
have subject matter jurisdiction over any matter, there must first be a controversy
concerning that matter pled before the Court. See Liner v. Jafco, Inc., 375 U.S.
301, 306 fn3 (1964). Accordingly, this Honorable Court has held that “[T]he
exercise of judicial power depends upon the existence of a case or controversy.”
Locke v. Board Of Public Instruction of Palm Beach Cty., 499 F.2d 359, 364 (5th
Cir. 1974). Federal courts are, notably, courts of limited jurisdiction, and that
jurisdiction cannot to be expanded by judicial decree. Kokkonen v. Guardian Life
Ins. Co. of America, 511 U.S. 375, 377 (1994). Further, it is presumed
that a
matter lies outside a court’s subject matter jurisdiction and the burden of
establishing the contrary rests upon the party asserting jurisdiction. Id.; McNutt v.
General Motors Acceptance Corp., 298 U.S. 178, 182-183 (1936).
As discussed below, this Honorable Court has held that a claim or
controversy is not created by a request to impose a receivership. Rather, the
district court must have subject matter jurisdiction over a controversy concerning
the property before a receivership may be imposed over that property. This
Honorable Court has specifically held that for a court to have subject matter
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jurisdiction pursuant to which a receivership (otherwise authorized) can be
ordered, there must first be a controversy concerning that property pled before the
court. Cochrane v. WF Potts Son & Co., 47 F.2d 1026, 1027-1028 (5th Cir. 1931).
2. Cochrane v. WF Potts Son & Co., 47 F.2d 1026 (5th Cir. 1931)
This Honorable Court squarely addressed the issue at bar in Cochrane. In
Cochrane, the plaintiff moved “[T]hat the court appoint a receiver to take charge of
the securities of, and act as successor trustee in, all
the issues [of stock].” Id. at
1027. The Cochrane motion was granted and, as requested in the motion, the
district court placed the all
the stock issues (series A-F) into receivership. Id. at
1028. However, outside of series E, no claim against the stock had been made in
the pleadings. Id. at 1027. This Honorable court therefore found that the district
court lacked “jurisdiction over these [other] properties” and the order appointing a
receiver to take charge of them was void.
Id. at 1028.
1
Accordingly, the application of this Honorable Court’s holding in Cochrane
to the case at bar is clear. No claim or controversy was pled against Novo Point,
LLC, Quantec, LLC, or their property. Since the pleadings did not put at issue the
1
In Cochrane, this Honorable Court announced four key principles of law, as follows:
(1) Nothing was alleged in the plaintiff’s pleadings to set up any claim against securities
series A-D, or series F, and therefore: [T]he plaintiffs’ pleadings [did not] put their
subject-matter at issue;
(2) The district court therefore had no subject matter jurisdiction over the property, and
because: [I]t had no jurisdiction over these properties, its order appointing a receiver to
take charge of them was void;
(3) [S]eizing the securities did not, unless the subject-matter was by proper pleadings
already before the court, aid its jurisdiction; and
(4) Where judicial tribunals have no jurisdiction of the subject matters on which they
assume to act, their proceedings are absolutely void in the strictest sense of the term.
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subject matter of Novo Point LLC, Quantec LLC, or their property, the District
Court lacked subject matter jurisdiction with respect to the LLCs and their
property. See Cochrane at 1028-1029.
SEEKING TO USE NOVO POINT, LLC AND QUANTEC, LLC ASSETS TO
PAY OFF NON-JUDGMENT DEBTS ALLEGED AGAINST OTHER
PARTIES IS NOT AUTHORIZED BY LAW
Bollore SA v. Import Warehouse, Inc.
The issue was presented to the Fifth Circuit in Bollore SA v. Import
Warehouse, Inc., 448 F.3d 317 (5th Cir. 2006). In Bollore, the district court entered
an order appointing a receiver over an alleged ‘alter ego’ entity, and ordering
turnover of property. Id. at 321. The Fifth Circuit vacated the receivership and
held that turnover orders do “not
allow for a determination of the substantive rights
of involved parties” and may not
be used “as a vehicle to adjudicate the substantive
rights of non-judgment third parties”. Id. at 323. The Fifth Circuit held that this
rule ultimately springs from due process concerns. Id. (such a remedy “completely
bypasses our system of affording due process.”).
As explained by the Fifth Circuit in Bollore, alter ego proceedings are
substantive proceedings arising out of state law. Id. at 324. Pursuant to Texas law,
a party must pursue their alter ego proceedings in a separate trial on the merits. Id.
No such proceedings were pled against Novo Point or Quantec, and no such trial
was ever held. As in Bollore, because no independent trial was held against Novo
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Point or Quantec to establish an alter ego claim, their assets cannot be taken to
satisfy someone else’s debts.
By contrast, it is long settled law that receivership “determines no
substantive right; nor is it a step in the determination of such a right.” Pusey &
Jones Co. v. Hanssen, 261 U.S. 491, 497 (1923).
Notably, if Novo Point and Quantec had been served with citation and
appeared as parties in a lawsuit seeking to impute liability upon them under an
alter ego or reverse piercing theory (neither of which has occurred), they would
have prevailed at trial as a matter of law. The first step to a claim for piercing
the corporate veil (although notably, no such claim was pled or heard) is to
determine which jurisdiction’s law controls the issue. E.g., Sommers Drug
Stores Co. Emp. P. Sharing Trust v. Corrigan, 883 F.2d 345, 353 (5th Cir. 1989).
Novo Point, LLC and Quantec, LLC are incorporated under the laws of the Cook
Islands. The law of the Cook Islands therefore applies. See e.g., Alberto v.
Diversified Group, Inc., 55 F.3d 201, 203 (5th Cir. 1995); Klaxon Co. v. Stentor
Elec. Mfg. Co., 313 U.S. 487, 496 (1941). Pursuant to Cook Islands law, there is
no basis to impose reverse alter-ego liability. Cook Islands Ltd.Liab.Cos.Act 2009
§45.
2
2
The same result would be reached in applying Texas corporate law. As explained by the Fifth
Circuit in Bollore, “Texas courts will not apply the alter ego doctrine to directly or reversely
pierce the corporate veil unless one of the ‘alter egos’ owns stock in the other.” Id. at 325. Since
Jeff Baron owns no stock in either Novo Point, LLC, nor Quantec, LLC, alter-ego liability
would not apply.
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THE REQUIREMENTS OF 28 U.S.C. 2001 APPLY TO PERSONALTY
PURSUANT TO 28 U.S.C. 2004.
If there were a legal basis to liquidate any domain name, as a general rule
“Any personalty sold under any order or decree of any court of the United States
shall be sold in accordance with section 2001 of this title”. 28 U.S.C. 2004. No
justification has been offered to explain a different approach in this case. If there
are parties interested to purchase a domain, there is no logical reason why they
would not bid on the domain in a public auction.
IT IS PATENTLY UNREASONABLE NOT TO ENGAGE IN ANY
MARKETING EFFORTS WITH RESPECT TO THE DOMAIN NAMES
SOUGHT TO BE LIQUIDATED.
Mr. Nelson states in his affidavit that he did not engage in any
marketing
efforts with respect to the domain names the receiver desires to liquidate. Mr.
Nelson admits that he created a protocol for selling domain names at a reasonable
value. That protocol includes advertisements on industry websites, press releases,
engaging brokers, using an auction, and maintaining a sales website. None
of
these procedures were followed with respect to the domain names now at issue.
That is patently unreasonable.
Mr. Nelson’s affidavit establishes that the sales prices for many of the
domains sought to be sold are “substantially lower than their appraised values.”
Liquidation in such circumstance is patently unreasonable.
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MR. NELSON’S SOURCE FOR ‘APPRAISALS’ AND METHODOLOGY
FOR DETERMINING DOMAIN VALUE IS NOT RELIABLE NOR
REASONABLE
Background
There are different aspects of domain name value, as follows:
1. “Parking” value.
This aspect of value relates to the random traffic
a name may obtain. “googl.com” for example may enjoy heavy traffic
intended for google.com. Or, “hotmeals.com” may receiver traffic for those
looking for hot meals. Or, if a website has appropriate content, a name
may facilitate search traffic . With the last option value is dependent
upon content, so that appraisal of value requires analysis of possible content
and not just the name itself. Notably, many of the factors used to evaluate
the parking value of a domain can be affected. Web content, back links, and
other factors can be modified to substantially increase the ‘parking’ value
and passive income of a website. A website that generates only $1 a month
might generate a thousand times that amount if content is added that
generates search results, or if links to the site are seeded over the internet,
etc. Accordingly, a ‘developed’ parking domain can have a thousand times
value to an undeveloped site.
2. “Marketing” value.
This value is the value to a company or
advertiser for use in a marketing campaign. For example, the domain
“Slice.com” might be worth a million dollars as a knife industry website, or
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half a million dollars as a Mrs. Baird’s Bread promotion site. Or, for
example, a PriceLine competitor could market “Slice the Price” using
“Slice.com” with a valuation for the domain at several million dollars.
Determination of the marketing value of any domain requires an expert
opinion from a marketing professional in the relevant, applicable fields for
which the domain would provide marketing value. Notably, because the
value is determined by the marketing value to the company who purchases
the domain based on marketing value, while Pure Smoothies may offer
$10,000.00 as its maximum offer for the domain “Pure.com”, Pure
Investements might offer a hundred times that about for the same domain.
For that reason valuation requires knowledge of the relevant markets, and
has nothing to do with the internet searches or current domain traffic.
Similarly, marketing value cannot be determined by comparing physically
'similar' domains. For example “Coke.com”'s value has nothing to do with
the value of “Poke.com” or “Joke.com”. The bottom line in determining the
marketing value of any domain is that it requires significant expertise and
research into the “brick and mortar” world in order to determine a domain’s
value.
3. “Ego” value.
For example, “Jones.com” may be worth a hundred
thousands dollars someone named Jones that could afford the price.
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Accordingly, properly advertised auctions are necessary to realize a
domain’s ego value.
Nelson’s Appraisals Unreliable
Estibot, like the other ‘appraisal’ sources relied upon by the receiver
do not involve valuation of the domain’s “Marketing” value. Rather Estibot and
the other on-line ‘appraisal’ sources used by the receiver use a computed valuation
based on the semantics of the domain name. The ‘appraisal’ sites are designed for
amateurs who do not understand the domain name industry. That Mr. Nelson
clearly has no idea what he is talking about and clearly lacks experience is
established by his claim that Estibot’s appraisals typically are within 20% of the
eventual sale price. Any credible and independent industry expert will confirm
this, and so does Estibot.com.
Estibot expressly discloses that they are not offering an actual dollar
appraisal for domain names, and expressly directs that their “appraisals” should not
be used in making sales decisions. At the bottom of each appraisal Estibot.com
discloses “The dollar valuation is not to be taken literally …. Do not make a
purchase or sale decisions based on this appraisal.”
Just like a US District Court should not base decisions on the contents of
fortune cookies, Estibot’s ‘appraisals’ should not be used in making a sales
decision. Here is a simple example to illustrate. Estibot.com ‘appraised’
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“Japan.com” at $9,900.00 when Vogel’s motion to liquidate was filed. (Today the
estibot appraisal of Japan.com is $69,000.00). That is not very much money. By
contrast, Estibot.com appraised “Germany.com” at around $1,600,000.00.
Clearly, “Germany.com” is not worth by a factor of more than 160 (16,000%) the
value of “Japan.com”. Or, for example, Estibot.com values “Korea.com” based
on the actual sale of the name, at over $5,000,000.00. Accordingly, if Mr.
Nelson and the receiver were relied upon to sell “Japan.com” it would be
under-valued by around 50,000%. Ie., if Estibot is the source of valuation
(which Mr. Nelson relies upon to determine value within 20% of sales price) then
the domains will be sold at a 99.5% discount, essentially giving the domains away.
The other web based ‘appraisal’ services relied upon by Mr. Nelson and the
receiver are similar. Factors used to determine domain value are “backlinks,
Google PageRank, Compete rank, Quantcast rank, and Alexa rank” as well as “the
meaning of the keywords present in the domain name”. For the web based
appraisal services such as DomainApprisal.com, “Commerce Potential” means
“monthly keyword search volumes, CPC advertising cost, historical search volume
trends, and seasonal search volume trends.” None of these statistics about internet
traffic have anything to do with the marketing value of any particular domain name
with relationship to any particular industry or product.
Respondent acknowledges that the current
“Parking” wholesale market
value of a non-generic domain name site (such as ‘bigsadangles.com”) can be
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reasonably determined by an ‘appraisal’ by a site like sedo.com. That evaluation
methodology is not appropriate nor reasonable for marketing name websites. The
result is that domain names worth millions of dollars, such as “Japan.com” are
‘appraised’ at under $10,000.00, or 99.5% below
their real market value.
THE ORDERS GRANTING THE RECEIVER’S FEES ARE ERRONEOUS
Lack of Subject Matter Jurisdiction
The Supreme Court has held that where a district court lacks subject matter
jurisdiction over assets placed into receivership, the court is without power to make
any charge upon, or disposition of, the property seized. E.g., Lion Bonding &
Surety Co. v. Karatz, 262 U.S. 640, 642 (1923). As explained by the Supreme
Court, “If there were no jurisdiction, there was no power to do anything but to
strike the case from the docket.” Citizens' Bank v. Cannon, 164 U.S. 319, 324
(1896). Pursuant to the holding of this Honorable Court in Cochrane v. WF Potts
Son & Co., 47 F.2d 1026 (5th Cir. 1931), because the pleadings in the district court
lawsuit did not put the subject matter of the property ordered into receivership at
issue, the district court lacked subject matter jurisdiction over the property. It is,
moreover, presumed that a court lacks subject matter jurisdiction. E.g., Lehigh
Mining & Mfg. Co. v. Kelly, 160 U.S. 327, 337 (1895); Kokkonen v. Guardian Life
Ins. Co. of America, 511 U.S. 375, 377 (1994). Further, lack of subject matter
jurisdiction cannot be waived nor overcome by an agreement of the parties. E.g.,
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Mitchell v. Maurer, 293 U.S. 237, 244 (1934). Accordingly, fees may not be
awarded from the receivership estates’ property. E.g., Lion Bonding at 642.
Receivership Fees Unauthorized
Moreover, even where there is subject matter jurisdiction (there is none
here– no claim was pled against Novo Point LLC, Quantec LLC, or their assets,
nor against the assets of Jeff Baron) the Supreme Court has held that “If he [the
receiver] has taken property into his custody under an irregular, unauthorized
appointment, he must
look for his compensation to the parties at whose instance he
was appointed”. Atlantic Trust Co. v. Chapman, 208 U.S. 360, 373
(1908)(emphasis). The instant receiverships are both irregular (being commenced
in off-the-record, ex parte proceedings without any supporting affidavits or even a
claim to some ‘emergency’ that could not be protected against by a restraining
order) and unauthorized (“there is no occasion for a court of equity to appoint a
receiver of property of which it is asked to make no further disposition” and “a
federal court of equity will not appoint a receiver where the appointment is not
ancillary to some form of final relief which is appropriate for equity to give”,
Gordon v. Washington, 295 U.S. 30, 37-38 (1935)). Accordingly, the receiver must
look for compensation from the parties at whose instance he was appointed.
Atlantic Trust at 373. Notably, it was at Vogel’s own insistence that he was
appointed receiver over Novo Point LLC and Quantec LLC.
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Unclean Hands
Moreover, even if the receiverships were authorized by law (they are not),
and were not tainted by the irregular proceedings to obtain them, the factual and
legal basis upon which the receiverships were founded have been shown to be
false. Accordingly, the only right to expenses would be an equitable right that is
limited to expenses incurred to the extent they have inured to the benefit of the
receivership estate that is sought to be charged. E.g. Speakman v. Bryan, 61 F.2d
430, 431, 432 (5th Cir. 1932). None of the fees sought by Vogel for himself and
his partners has benefited any receivership estate. Moreover, Vogel is barred by
the equitable maxim that “he who comes into equity must come with clean hands”.
The doctrine of unclean hands requires that the Court refuse “any relief whatsoever
[and] not to compromise with it .. by allowing a part of what was claimed” E.g.,
Manufacturers' Finance Co. v. McKey, 294 U.S. 442, 451 (1935). Vogel clearly
comes with unclean hands. Vogel, while holding quasi-judicial office of special
master in the case, in order have himself appointed as receiver, deceitfully led the
District Court—in secret, ex parte, off the record proceedings— to wrongfully
believe that Jeff Baron had caused a mediation, for which Vogel was the mediator,
to fail. In truth, Vogel had not even scheduled the mediation yet. The deceit was
fundamental and material. The District Judge, wrongfully or rightfully, was
concerned that Jeff Baron had allegedly not paid a long list of attorneys. The
District Judge ordered mediation to resolve the perceived problem that the District
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Judge found personally disturbing. Since he had ordered mediation to resolve the
issue, the District Judge would not have taken the much more drastic step of
receivership, without waiting to see what result was produced by the mediation.
Accordingly, in order to have himself appointed receiver, Vogel needed to torpedo
the mediation. So, as mediator, he failed to schedule the mediation, and falsely
represented to the District Judge that the mediation had failed.
Fee Award was Not For Actual Services to Benefit of LLCs
This Honorable Court has held that compensation paid from a receivership
estate must be for actual services provided to that estate. E.g., Commodity Credit
Corporation v. Bell, 107 F.2d 1001, 1001 (5th Cir. 1939); Securities and Exchange
Com'n v. Elliott, 953 F.2d 1560 (11th Cir. 1992) (“The court in equity may award
the receiver fees from property securing a claim if the receiver's acts have
benefited that property.”). No allegation has been made and no evidence has been
offered to sustain a showing that the fee request is for reasonable or necessary fees
to the benefit of any estate, nor are the fees segregated between estates. The
limitation upon attorneys to charge only a reasonable legal fee and to charge only
for legal services that are actually provided is a legal and ethical duty imposed by
law in Texas. Lee v. Daniels & Daniels, 264 SW 3d 273, 280-281 (Tex.App.-San
Antonio 2008, pet. denied)(noting “[A]ttorneys are members of an ancient
profession with unique privileges and corresponding responsibilities” and rejecting
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the right of attorney to seek fees where “None of that time was spent engaged in
‘legal services’ performed or rendered on behalf of Cummings, his client.”).
No Hearing was Held on the Contested Fee Applications
The District Court also erred in refusing to hold an evidentiary hearing on
Vogel and Gardere’s disputed fees. This Honorable Court has held that “the judge
must hold an evidentiary hearing if there are any disputed factual issues.” Matter of
US Golf Corp., 639 F.2d 1197, 1202 (5th Cir. 1981). The District Court also erred
in failing to explain the basis of his award. This Honorable Court has held that
“Finally, the judge must explain the basis of his award. In particular, he must
briefly describe his findings of fact and explain how an analysis of the appropriate
factors has led to his decision. Significantly, the judge must indicate how each of
the twelve Johnson factors affected his decision.” Id. The District Court’s order
fails to meet this standard.
Fees Erroneously Awarded for Work on A Different Receivership Estate
This Honorable Court has held that receivership fees must be charged
against each fund held by the receiver as if separate receivers had been appointed
for each. Bank of Commerce & Trust Co. v. Hood, 65 F.2d 281, 283-4 (5th Cir.
1933). The District Court may award the receiver fees from property only if the
receiver's acts have benefitted that
property. E.g., Securities and Exchange Com'n
v. Elliott, 953 F.2d 1560 (11th Cir. 1992) (relying upon Bank of Commerce & Trust
Co. v Hood at 283). The Million Dollar fee award (making a total of Two Million
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Dollars awarded to Vogel and Gardere) was not segregated nor shown to have been
for any acts to the benefit of Novo Point LLC nor Quantec LLC.
For further cause Appellants also argue the following:
Further, pursuant to Texas law, an attorney is paid (when they actually do
work on behalf of a client providing legal services) not solely based on their work,
but also based on their loyalty to the client. Burrow v. Arce, 997 S.W.2d 229, 237
(Tex. 1999). Vogel’s law firm has not been loyal to any of the receivership estates
in Vogel’s hands. Rather, Vogel has worked in clear conflict of interest between
various estates and against the estates. For example, Vogel and his law firm have
clearly been acting as prosecutors against Baron and his estate, actively soliciting
claims against the estate and arguing actively against the interests of the estate. At
the same time Vogel has held the conflicted position of being charged with
defending LLC assets against ‘claims’ made against Baron, while at the same time
Vogel has prosecuted the claims and forcibly sought to liquidate company assets to
pay ‘Baron’ claims. Similarly, in acting as receiver both of Baron and of
AsiaTrust, Vogel is clearly conflicted over the adverse claims of AsiaTrust against
Baron, and to claims by former attorneys employed by AsiaTrust who seek to make
Baron personally liable for the fees due from AsiaTrust. This Honorable Court has
held that “[W]here an actual conflict of interest exists, no more need be shown in
this type of case to support a denial of compensation.” Matter of Consolidated
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Bancshares, Inc., 785 F.2d 1249, 1256 (5th Cir. 1986). The Supreme Court has
explained the rule as follows:
“[R]easonable compensation for services rendered” necessarily implies
loyal and disinterested service in the interest of those for whom the
claimant purported to act. American United Mutual Life Ins. Co. v. City
of Avon Park, 311 U.S. 138. Where a claimant, … was serving more
than one master or was subject to conflicting interests, he should be
denied compensation. It is no answer to say that fraud or unfairness
were not shown to have resulted. Cf. Jackson v. Smith, 254 U.S. 586,
589.
Woods v. City Nat. Bank & Trust Co. of Chicago, 312 U.S. 262, 268 (1941).
Notably, Vogel is also conflicted as a fiduciary and partner of Gardere. On hand as
a fiduciary for Gardere Vogel is charged with maximizing the fees received by
Gardere and paid a bonus based on the more he bills on Gardere’s behalf. At the
same time, Vogel is charged as a fiduciary for the receivership estates and has the
conflicting duty to conserve estate property and minimize unnecessary fees and
charges.
Finally, Vogel and his firm should not be paid from receivership assets for
work done in defending Vogel or in engaging in a controversy with parties to the
lawsuit. E.g. In re Marcuse & Co., 11 F.2d 513, 516 (7th Cir.1926) (the receiver
has ordinarily no justification for engaging in a controversy with one who claims
adversely to him and because “the receiver was without authority to participate in
the litigation involving the … liability of these men, there should be no allowance
against the estate of attorney's fees for such services.”); United States v. Larchwood
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Gardens, Inc., 420 F.2d 531, 534-535 (3rd Cir. 1970) (“the receivers' expenses and
costs in defending their allowances on appeal are not proper charges against the
receivership estate”).
The Fifth Amendment Question
Baron repeatedly moved in the District Court to be allowed access to his
own money in order to hire attorneys to represent him. E.g., R. 2720; SR. v2 p384-
390 (Doc 264); SR. v5 p139 (Doc 445). However, the District Court did not allow
Baron to hire counsel. E.g., Doc 316 (SR. v4 p119). Baron has made a similar
motion before this Honorable Court. That motion is pending ruling, and, to this
point, Baron has not been permitted to (1) Earn wages and engage in business
transactions to earn money to pay an attorney; (2) Be allowed access to his own
money held by the receiver to pay an attorney to represent him; nor (3) Hire paid
legal counsel. However, this Honorable Court has held that a civil litigant has a
constitutional right to retain hired counsel. Potashnick v. Port City Const. Co., 609
F.2d 1101, 1104 (5th Cir. 1980). Moreover, this Honorable Court has held that “the
right to counsel is one of constitutional dimensions and should thus be freely
exercised without impingement.” Id. at 1118; Mosley v. St. Louis Southwestern Ry.,
634 F.2d 942, 946 (5th Cir. 1981). An individual's relationship with his or her
attorney “acts as a critical buffer between the individual and the power of the
State.” Johnson v. City of Cincinnati, 310 F.3d 484, 501 (6th Cir. 2002). Further,
the Supreme Court has held that a party must be afforded a fair opportunity to
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secure counsel “of his own choice” and that applies “in any case, civil or criminal”
as a due process right “in the constitutional sense”. Powell v. Alabama, 287 U.S.
45, 53-69 (1932). That basic right was denied Baron by the District Court below,
and is pending ruling by this Honorable Court.
As a fundamental cornerstone of Due Process, the Constitution guarantees
every citizen the right to a meaningful opportunity to be heard in a meaningful
manner. Williams v. McKeithen, 939 F.2d 1100, 1105 (5th Cir. 1991). As a matter
of established law, this means the right to be represented by paid
legal counsel.
E.g., Mosley, 634 F. 2d at 946; Powell, 287 U.S. at 53; Chandler v. Fretag, 348
U.S. 3, 10 (1954); Potashnick v. Port City Const. Co., 609 F.2d 1101, 1104 (5th
Cir. 1980). In the instant proceedings, Jeffrey Baron is being denied this
fundamental right. Accordingly the substantive motions pending against Baron
and his property while he is being deprived of his basic constitutional right to pay
an attorney to represent him should be denied. Because the undersigned is a solo
practitioner with no funding for discovery or manpower to perform itemized
review of fee applications, or manpower to attend all of the various bankruptcy
court proceedings, etc., the representation provided Baron is limited in scope to
appellate legal issues. Baron is entitled as a matter of constitutional right to more.
A citizen is entitled to use their own money to hire paid legal counsel to fully
represent them, including conducting discovery, attending hearings, reviewing line
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by line items on fee applications, hiring expert witnesses to provide evidence that
fee requests are not reasonable, to investigate the claims against them, etc.
Standard in Granting Stay Pending Appeal
The Fifth Circuit has adopted the four factor test set out in Virginia
Petroleum Job. Ass'n v. Federal Power Com'n, 259 F.2d 921 (DC Cir. 1958) to
determine whether stay pending appeal should be granted. Belcher v. Birmingham
Trust National Bank, 395 F.2d 685 (5th Cir. 1968). Those factors are:
(1) Likelihood of success on the merits; (2) A showing of irreparable injury if the
stay is not granted; (3) Whether granting the stay would substantially harm the
other parties; and (4) Granting of the stay would serve the public interest. Id.
First, the substantive merits of the liquidation and receivership addressed
above, establish a clear likelihood of eventual success on the merits. Secondly,
irreparable injury is established as a matter of law, as Novo Point LLC may have
no right to appeal a sale that has been consummated. See Lee-Vac, Ltd., 630 F.2d
at 247. Sherman and Vogel have both argued this position. Third, there is no
harm to any party caused by granting the stay. Finally, the public interest is served
in allowing a company—not in bankruptcy— to appeal a court’s order to liquidate
their assets. There is a substantial disruptive effect to commerce
in allowing a
judge power to effectively dissolve companies not in bankruptcy by liquidating
their assets—when no claims have been pled against them-- and empowering a
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court to prevent appellate review of such orders by acting to liquidate before
the matter can be appealed.
CONCLUSION
The District Court below was stayed from liquidating the assets of
Novo Point LLC, and Quantec LLC. The District Court then advised this
Honorable Court that if allowed to rule on the motions to sell the domain name
assets it would stay the sales to allow appeal. SR. v9 p97. Contrary to the
District Court’s advisory to this Honorable Court, it has not stayed the sales, and
has ordered the sales be conducted immediately.
Neither Novo Point LLC nor Quantec LLC was the party to any claim in the District
Court. The liquidation threatens complete destruction of the companies, giving away up
to $60 Million or more in assets for $0.02 cents on the dollar in secret, private sales. The
appeal of the receivership will be meaningless if the companies are allowed to be
liquidated before the validity of the receivership is determined on appeal.
PRAYER
Wherefore, Novo Point LLC prays that this Honorable Court consider and
grant this motion and order that the sale of domain names ordered by the District
Court be stayed pending appeal, or in the alternative that sales by stayed pending
hearing and determination of a motion for permanent stay pending appeal.
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Respectfully submitted,
/s/ Gary N. Schepps
Gary N. Schepps
Texas State Bar No. 00791608
5400 LBJ Freeway, Suite 1200
Dallas, Texas 75240
(214) 210-5940 - Telephone
(214) 347-4031 - Facsimile
Email: legal@schepps.net
COUNSEL FOR APPELLANTS
CERTIFICATE OF SERVICE
This is to certify that this brief was served this day on all parties who receive
notification through the Court’s electronic filing system.
CERTIFIED BY: /s/ Gary N. Schepps
Gary N. Schepps
COUNSEL FOR APPELLANT
CERTIFICATE OF NOTICE
This is to certify that notice of the filing of this request for emergency relief was
provided by telephone to the Clerk of the Fifth Circuit Court of Appeals and to
counsel for the Appellee.
CERTIFIED BY: /s/ Gary N. Schepps
Case: 10-11202 Document: 00511742749 Page: 34 Date Filed: 01/31/2012
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Gary N. Schepps
COUNSEL FOR APPELLANT
CERTIFICATE OF EMERGENCY
This is to certify that the facts giving rise to the need for emergency relief are true
and complete.
CERTIFIED BY: /s/ Gary N. Schepps
Gary N. Schepps
COUNSEL FOR APPELLANT
Case: 10-11202 Document: 00511742749 Page: 35 Date Filed: 01/31/2012
-35-
TABLE OF AUTHORITIES
FEDERAL CASES
Alberto v. Diversified Group, Inc.,
55 F.3d 201, 203 (5th Cir. 1995)..........................................................................16
American United Mutual Life Ins. Co. v. City of Avon Park,
311 U.S. 138 .........................................................................................................28
Bank of Commerce & Trust Co. v. Hood,
65 F.2d 281, 283-4 (5th Cir. 1933).......................................................................26
Belcher v. Birmingham Trust National Bank,
395 F.2d 685 (5th Cir. 1968)................................................................................31
Bollore SA v. Import Warehouse, Inc.,
448 F.3d 317 (5th Cir. 2006)......................................................................... 15, 16
Booth v. Clark,
58 U.S. 322, 331 (1855) .........................................................................................8
Chandler v. Fretag,
348 U.S. 3, 10 (1954) ...........................................................................................30
Commodity Credit Corporation v. Bell,
107 F.2d 1001, 1001 (5th Cir. 1939)....................................................................25
In re Marcuse & Co.,
11 F.2d 513, 516 (7th Cir.1926)...........................................................................28
Jackson v. Smith,
254 U.S. 586, 589 .................................................................................................28
Johnson v. City of Cincinnati,
310 F.3d 484, 501 (6th Cir. 2002)........................................................................29
Case: 10-11202 Document: 00511742749 Page: 36 Date Filed: 01/31/2012
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Klaxon Co. v. Stentor Elec. Mfg. Co.,
313 U.S. 487, 496 (1941) .....................................................................................16
Kokkonen v. Guardian Life Ins. Co. of America,
511 U.S. 375, 377 (1994) .....................................................................................13
Liner v. Jafco, Inc.,
375 U.S. 301, 306 fn3 (1964)...............................................................................13
Locke v. Board Of Public Instruction of Palm Beach Cty.,
499 F.2d 359, 364 (5th Cir. 1974)........................................................................13
Matter of Consolidated Bancshares, Inc.,
785 F.2d 1249, 1256 (5th Cir. 1986)....................................................................28
Matter of US Golf Corp.,
639 F.2d 1197, 1202 (5th Cir. 1981)....................................................................26
McNutt v. General Motors Acceptance Corp.,
298 U.S. 178, 182-183 (1936)..............................................................................13
Mosley v. St. Louis Southwestern Ry.,
634 F.2d 942, 946 (5th Cir. 1981)................................................................. 29, 30
Palmer v. Texas,
212 U.S. 118, 126 (1909) .......................................................................................8
Potashnick v. Port City Const. Co.,
609 F.2d 1101, 1104 (5th Cir. 1980)............................................................. 29, 30
Powell v. Alabama,
287 U.S. 45, 53-69 (1932)....................................................................................30
Pusey & Jones Co. v. Hanssen,
261 U.S. 491, 497 (1923) .....................................................................................16
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Securities and Exchange Com'n v. Elliott,
953 F.2d 1560 (11th Cir. 1992)..................................................................... 25, 26
Sommers Drug Stores Co. Emp. P. Sharing Trust v. Corrigan,
883 F.2d 345, 353 (5th Cir. 1989)........................................................................16
United States v. Larchwood Gardens, Inc.,
420 F.2d 531, 534-535 (3rd Cir. 1970) ................................................................29
Virginia Petroleum Job. Ass'n v. Federal Power Com'n,
259 F.2d 921 (DC Cir. 1958) ...............................................................................31
Williams v. McKeithen,
939 F.2d 1100, 1105 (5th Cir. 1991)....................................................................30
Woods v. City Nat. Bank & Trust Co. of Chicago,
312 U.S. 262, 268 (1941) .....................................................................................28
STATE CASES
Burrow v. Arce,
997 S.W.2d 229, 237 (Tex. 1999) ........................................................................27
Texas. Lee v. Daniels & Daniels,
264 SW 3d 273, 280-281......................................................................................25
Case: 10-11202 Document: 00511742749 Page: 38 Date Filed: 01/31/2012
