Case No. 10-11202

______________________________________________________________________

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

______________________________________________________________________

Netsphere, Inc. et. al.,

Plaintiffs

Jeffrey Baron,

Defendant / Appellant

Daniel J. Sherman

(

Ondova Limited Company)

Defendant / Appellee

______________________________________________________________________

Interlocutory

Appeal of Order Appointing Receiver

From the United States District Court

Northern District of Texas, Dallas Division

Civil Action No. 3-09CV0988-F

____________________________________________________________________________

EMERGENCY MOTION TO STAY ORDER APPOINTING

RECEIVER OVER JEFFREY BARON PENDING APPEAL

____________________________________________________________________________

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

FOR JEFFREY BARON

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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. Appellant/Defendant: JEFFREY BARON

b. Appellee/Defendant: DANIEL J. SHERMAN, Trustee

for ONDOVA LIMITED COMPANY

c. Intervenor: VeriSign, Inc.

d. Plaintiffs: (1) Netsphere Inc

(2) Manila Industries Inc

(3) Munish Krishan

2. ATTORNEYS

a. For Appellant: Gary N. Schepps

5400 LBJ Freeway, Suite 1200

Dallas, Texas 75240

b. For Appellee: 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: DORSEY & WHITNEY (DELAWARE) LLP

(1) Eric Lopez Schnabel, Esq.

(2) Robert W. Mallard, Esq.

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d. For Plaintiffs:

(1) John W MacPete, Locke Lord Bissell & Liddell

(3) Douglas D Skierski, Franklin Skierski Lovall Hayward

(4) George M Tompkins, Tompkins PC

(5) Melissa S Hayward, Franklin Skierski Lovall Hayward

3. OTHER

a. Companies and trusts seized:

(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

b. Receiver: Peter Vogel

c. Counsel for Receiver: Gardere Wynne Sewell LLP

(1) Peter Vogel

(2)

Barry Golden

(3) Peter L. Loh

CERTIFIED BY: /s/ Gary N. Schepps

Gary N. Schepps

COUNSEL FOR APPELLANT

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I. TABLE OF CONTENTS

CERTIFICATE OF INTERESTED PERSONS .......................................................... 2

I. TABLE OF CONTENTS ............................................................................................ 4

II. SUMMARY ................................................................................................................ 5

III. STATEMENT OF THE CASE AND FACTS......................................................... 7

IV. STANDARD IN GRANTING STAY PENDING APPEAL ................................. 12

V. ARGUMENT & AUTHORITY............................................................................... 12

A. LIKELIHOOD OF SUCCESS ON APPEAL ............................................................12

Appointment of a receiver in this case is prohibited by law .................................... 12

The purpose for which the receiver was sought is clearly unconstitutional............. 15

The means of the receivership order is clearly unconstitutional .............................. 16

The application for receivership was grossly defective ........................................... 16

The order appointing receiver was issued without even minimal procedural

due process and should be declared void.................................................................. 19

B. IRREPARABLE INJURY...........................................................................................20

Deprivation of constitutional rights is irreparable injury as a matter of law............ 20

Serious and irreparable harm to Mr. Baron personally............................................. 21

No party from which to recover damages ................................................................ 22

C. NO SUBSTANTIAL HARM TO OTHER PARTIES...............................................23

D. PUBLIC INTEREST ...................................................................................................23

VI. CONCLUSION ....................................................................................................... 24

VII. PRAYER ................................................................................................................ 24

VIII. TABLE OF AUTHORITIES .............................................................................. 25

CERTIFICATE OF SERVICE .................................................................................... 27

CERTIFICATE OF NOTICE ...................................................................................... 27

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TO THE HONORABLE FIFTH CIRCUIT COURT OF APPEALS:

COMES NOW JEFFREY BARON, Appellant, and pursuant to Federal Rule of

Appellate Procedure 8(a)(2) moves this Honorable Court to stay the District Court’s

Order Appointing Receiver over Mr. Baron and all his assets signed on November 24,

2010 [Docket #124, and Docket #130, Entered 11/30/2010] in the District Court below,

pending appeal of that order to this Court pursuant to 28 U.S.C. §1292(a)(2).

The granting of this motion is required because Jeffrey Baron has a very

substantial likelihood of success on appeal, his constitutional rights are being trampled,

and he will suffer acute and irreparable injury–that no citizen of should have to suffer–

unless the District Court’s order is immediately stayed.

II. SUMMARY

Jeffrey Baron was a defendant and counter-plaintiff in the District Court. The

lawsuit before the District Court settled. (Exhibit C). Jeffrey Baron then had the

audacity to object in a separate bankruptcy case to the fee application of one Raymond

Urbanik. (Exhibit G). Within three business days Mr. Urbanik had the US District

Court judge sign, without a hearing, an ex-parte order: (1) seizing all of Mr. Baron’s

assets, along with the assets of independent trusts to which Mr. Baron is a beneficiary

(approximately $20,000,00.00 to $40,000,000.00 in assets); and (2) appointing the

receiver over Mr. Baron in the nature of a guardianship over an incompetent. (Exhibits

A, F). Mr. Baron’s attorneys were told they were fired and Mr. Baron was threatened

that if he tried to hire an attorney he could be held in contempt. (Exhibits P, R).

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The receiver seized all of Mr. Baron’s assets, appeared in the bankruptcy court

asserting to hold Mr. Baron’s rights, and withdrew the objection to Mr. Urbanik’s fee

application. (Exhibit G). The bankruptcy court then approved the fees and sealed Mr.

Urbanik’s fee application so that it could not be examined by the public. (Exhibit H).

When Mr. Baron appealed and asked the District Court for emergency relief, the

District Court eventually held a ‘hearing’ (on December 17, 2010) and entered further

orders. The District Court declined to grant the emergency stay requested by Mr. Baron,

and instead ordered that the seized domain name assets must not be renewed, i.e., must

be abandoned, unless their current income exceeds current expenses (no matter what their

capital value). (Exhibit M). Unless the receivership is immediately stayed, over a million

dollars in domains will be intentionally abandoned by the receiver beginning today and

continuing over the next seven days. See page 22, below. The District Court is also poised to

order in 3 days that Mr. Baron must sign over his bank accounts (approximately $2 Million

in cash) to the receiver with a $1,000.00 bond as ‘adequate protection’. (Exhibit Q, F).

The District Court also announced at the December 17 hearing, that it is going to

have the ‘claimants’ paid from Mr. Baron’s money, without the bother of trials or even

lawsuits—despite the fact the claimants are not parties to the district court lawsuit and

the ‘claims’ are wholly outside of the District Court’s subject matter jurisdiction.

The relevant law is clear and longstanding. A District Court may not bypass the

Constitution by a newly created ‘equitable remedy’ whereby a party’s property is seized

and without formal complaints or trial is distributed to ‘claimants’ as the District Court

feels is ‘equitable’. The suspension of Mr. Baron’s constitutional rights and seizure of

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his assets has absolutely no basis in law and is a gross violation of the US Constitution,

and the controlling precedent of this Court.

The District Court’s order appointing receiver was issued without due process for

a clearly improper and unconstitutional purpose. The damages being inflicted upon Mr.

Baron by virtue of the order are very real, harsh, irreparable and immediate.

III. STATEMENT OF THE CASE AND FACTS

This motion and appeal arise out of a breach of contract lawsuit filed in the

District Court.

In this lawsuit Netsphere sought to enforce an alleged contract entered

into with Jeffrey Baron and Ondova Limited Company. (Exhibit B). Subsequent to

the filing of the lawsuit, Ondova was forced to file for bankruptcy protection.

Thereafter, all claims and controversies in the District Court lawsuit settled. (Exhibit C).

Jeffrey Baron is not

a judgment debtor and is not in bankruptcy. Mr. Baron

is a defendant and counter-plaintiff in the District Court lawsuit and the beneficial

owner of the equity of Ondova, the company in bankruptcy.

Mr. Baron became concerned that the attorney for the trustee in the Ondova

bankruptcy, Mr. Raymond J. Urbanik, was charging grossly excessive fees

. On

November 19, 2010, Mr. Baron filed an objection to Mr. Urbanik’s latest fee

application in the bankruptcy court. (Exhibits A, D).

Netsphere, Inc., et.al., v. Jeffrey Baron, and Ondova Limited Company, Civil action no. 3-

09CV0988-F in the Northern District of Texas.

Cloaked with authority and legitimacy as the attorney for the bankruptcy trustee, Mr. Urbanik

has effectively drained the equity in Ondova through massive attorney fee billings. Mr.

Urbanik’s latest billing was for over three hundred thousand dollars, and he has billed a total of

about a million dollars in fees. (Exhibit D).

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Mr. Urbanik responded by filing a motion to appoint a particular receiver over

Mr. Baron in the settled District Court lawsuit. Mr. Urbanik had the District Court act

without a hearing, ex-parte

, to strip Mr. Baron of all his possessions and appoint the

desired receiver over Mr. Baron in the nature of a guardianship

-- expressly so that Mr.

Baron would be unable to hire legal counsel.

(Exhibit E).

Mr. Urbanik cited as the sole necessity for his ex-parte motion that:

“13. Therefore, the appointment of a receiver is necessary under the circumstances in

order to remove Baron from control of his assets and end his ability to further hire and

fire a growing army of attorneys.”

(Exhibit E).

Without any notice or opportunity for Mr. Baron to be heard; without any

supporting affidavits; and without the entry of any findings, the District Court below

entered an order stripping Mr. Baron of all his possessions and appointed the requested

receiver over Mr. Baron’s person

(Exhibit F).

Mr. Baron has been put in essentially house arrest in Dallas. (Exhibit A).

Mr. Urbanik offered the specious argument that a couple of Mr. Baron’s former counsel were

making claims in Ondova’s bankruptcy case (which has no connection to the district court

action) asserting that Mr. Baron provided a substantial contribution to the case under

§503(b)(3)(D) and therefore the former counsel were entitled to compensation for professional

services rendered. This was the argument why Mr. Baron needed to be stripped of all his assets,

and trusts he is a beneficiary of be seized. The argument is as absurd as it is fallacious.

If Mr. Baron provided a substantial benefit to the bankruptcy case, he should not be sanctioned.

If Mr. Baron paid an attorney who provided the services creating that benefit Mr. Baron

entitled to file a claim and recover his expenses. E.g., In re Energy Partners, Ltd., 422 BR 68

(Bankr.S.D.Tex. 2009). Assuming arguendo that Mr. Baron provided a substantial benefit but

did not pay the former attorney, the attorney would be entitled to file a claim to recover a

reasonable fee. In either case, whether or not the former attorney was paid, a claim for allowance

of the fees could be lawfully filed. The entire issue has zero

net effect on the bankruptcy case

under §503(b)(3)(D). A claim for allowance can be made either way.

Moreover, there can only be such a claim if Mr. Baron provided a substantial benefit to the

bankruptcy case. That is 100% inconsistent with claims that Mr. Baron hindered the bankruptcy.

The order appointing receiver and seizure actions of the receiver actually go further, seizing the

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Within just 3 business days after Mr. Baron filed his objection to Mr.

Urbanik’s fees, Mr. Urbanik had Mr. Baron’s person and property under receivership.

The receiver then withdrew the objection to Mr. Urbanik’s $334,262.00

fee

application, and the bankruptcy court approved the fee, and sealed Mr. Urbanik’s fee

application from public view. (Exhibits G, H).

On December 3, 2010, Appellant filed an emergency motion in the District Court

seeking an order vacating the appointment of a receiver and in the alternative the

issuance of a stay pending appeal. (Exhibit I). Appellant requested from the District

Court, at a three day intervals, emergency consideration of the request for emergency

relief. (Exhibit J). After an emergency motion was filed in the Court of Appeals, the

District Court set the matter for an ‘expedited hearing’ on December 17.

At the December 17th hearing the District Court declined to grant the relief

requested by Mr. Baron. Instead, the District Court ruled against the factual claims

in Mr. Baron’s declaration that he would suffer irreparable injury, and found there

was a ‘lawful basis’ to delete (abandon) the domain name assets seized by the receiver

(regardless of their value) because their cost of upkeep exceed their income. (Exhibits M,S).

The District Court ordered the deletion of thousands of Trust assets seized by

assets of retirement and spendthrift trusts for which Mr. Baron is the beneficiary, as well as the

assets of the companies owned by the spendthrift trusts. Again, Mr. Baron is not

in bankruptcy

and is not a judgment debtor. A court is moreover prohibited by law from attempting to

appoint a receiver in a bankruptcy case. 11 U.S.C. §105(b).

No party has made any claim to any property right in any of Mr. Baron’s assets. Rather, the

express and only purpose of the receivership and summary confiscation of all of Mr. Baron’s

property is to prevent Mr. Baron from being able to hire legal counsel. (Exhibit E).

A sum in addition to the $670,000.00 in fees previously approved. (Exhibit D).

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the receiver, and proposed in 3 days to order Mr. Baron to turn over private materials

such as past years’ tax returns, and to sign over approximately $2,000,000.00 in cash

from his now frozen bank and retirement accounts to the receiver (serving on a

$1,000.00 bond). (Exhibits A, M, Q, F).

The District Court also announced that it was going to pay ‘claimants’ (not

parties to the District Court Lawsuit) out of Mr. Baron’s assets in the receivership.

(Exhibit A). The District Court set a hearing date for further proceedings next year.

Substantial irreparable injury will occur if a stay is not granted

immediately. Notably, whether an asset is profitable or not, does not make its loss not

irreparable. Especially where a unique asset has no economic value, its loss cannot be

compensated for with damages. See e.g,. Wildmon v. Berwick Universal Pictures, 983

F.2d 21, 25 (5th Cir. 1992) (“By definition, ‘irreparable injury’ is that for which

compensatory damages are unsuitable”).

The District Court has no lawful basis and no subject matter jurisdiction to tell

Mr. Baron which assets he must part with forever. Mr. Baron is not

in bankruptcy. Mr.

Baron is not

a judgment debtor—he as not lost a single jury trial. Mr. Baron has not

been charged with any crime, he has not

been held in contempt of any court order, nor

has any attorney representing him been found to have filed any frivolous or groundless

pleading or motion. Mr. Baron had almost two million dollars in the bank (which were

seized by the receiver).

If he wants to maintain unique assets that have no economic

Mr. Baron is now effectively a pauper. A few thousand dollars have been released to him to

pay his utilities, buy some food, and minimal medical supplies. His money being seized, Mr.

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worth, that is his right. The District Court’s order to delete the domains instead of

staying the receivership order causes direct, irreparable and immediate injury.

No less significantly, Mr. Baron is also currently being deprived of most of his

civil rights. (Exhibit F). His assets, bank accounts, credit cards, and legal rights have

been taken from him. Mr. Baron’s right to a jury trial with respect to other’s claims

against him (and his claims against them) has been suspended.

In a side-step of the Constitution, the District Court Judge and the receiver are in

the active process of administering star-chamber ‘justice’ and determine who gets Mr.

Baron’s money. The receiver has already waived Mr. Baron’s rights with regard to Mr.

Baron’s objection to Mr. Urbanik’s fees. Daily more money is being siphoned from Mr.

Baron’s assets as more and more ‘costs of receivership’ are incurred. Daily more rights

are lost and waived as Mr. Baron is prevented from asserting his rights in court.

Mr. Baron is handicapped and the emotional and physical impact has been

debilitating. The impact to his health from the stress of the daily irreparable loss of his

life’s work, coupled with restricted access to legal counsel and has reached the point

Baron cannot travel out of Dallas to be with friends & family for the holiday, and must suffer the

embarrassment of being unable to give Christmas gifts and the harsh stigma of being placed into

receivership. All of which is irreparable injury but which pales in comparison to the irreparable

physical suffering and damage the stress is causing to Mr. Baron physically. (Exhibit A).

In addition to the assets without market value, the District Court has ordered literally more than

a million dollars in domains to be lost. (Exhibit A). Notably, market value of an asset is not

determined simply by its cash flow. A million dollar diamond will have negative cash flow

because it generates no income but costs thousands to insure. Negative cash flow is not a

legitimate sole basis to throw away assets—especially someone else’s.

For example, tomorrow Mr. Baron will lose his right to object to Mr. Power’s application for

allowance (in the Ondova bankruptcy case), which unless objected to by tomorrow, December

20, is waived. (Exhibit N). The bankruptcy court recognizes the receiver in place of Mr. Baron.

(Exhibit G).

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that further delay is no longer an option. Emergency relief is necessary. (Exhibit A).

IV. STANDARD IN GRANTING STAY PENDING APPEAL

The Fifth Circuit has adopted the four standards 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) Whether the movant has made a

showing of likelihood of success on the merits; (2) Whether the movant has made a

showing of irreparable injury if the stay is not granted; (3) Whether the granting of the

stay would substantially harm the other parties; and (4) Whether the granting of the stay

would serve the public interest. Id.

V. ARGUMENT & AUTHORITY

A. LIKELIHOOD OF SUCCESS ON APPEAL

Appointment of a receiver in this case is prohibited by law

The Fifth Circuit has recognized three grounds under Federal law pursuant to

which a District Court may appoint a receiver: (1) the appointment of a receiver can be

sought “by anyone showing an interest in certain property

or a relation to the party in

control or ownership

thereof such as to justify conservation of the property by a court

officer”; (2) receivers may be appointed “to preserve property pending final

determination of its distribution in supplementary proceedings in aid of execution

”; and

(3) receivership may be an appropriate remedy for a judgment creditor who: (a) “seeks

to set aside allegedly fraudulent conveyances by the judgment debtor”, (b) “has had

execution issued and returned unsatisfied”, (c) “proceeds through supplementary

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proceedings pursuant to Rule 69”, (d) “seeks to subject equitable assets to the payment

of his judgment”, or (e) “otherwise is attempting to have the debtor's property preserved

from dissipation until his claim can be satisfied.” Santibanez v. Wier McMahon & Co.,

105 F. 3d 234, 241 (5th Cir. 1997)(emphasis).

The appointment of a receiver to prevent a defendant from hiring legal counsel is

not one of the three grounds recognized by the Fifth Circuit, nor by the US Supreme

Court.

The appointment of a receiver is subject to close scrutiny by the appellate court.

Tucker v. Baker, 214 F. 2d 627, 631 (5th Cir. 1954). Appointment of a receiver where

there is no claim to the assets seized is strictly prohibited— there is no

occasion for a

court to appoint a receiver of property of which it is asked to make no further

disposition. Id. Accordingly, to prevent an individual from being able to hire an

attorney can never

be a lawful purpose for the appointment of a receiver.

Similarly, the appointment of a receiver may not

be used as a means to provide

substantive relief. Kelleam v. Maryland Casualty Co. of Baltimore, 312 U.S. 377, 381

(1941). The Supreme Court has frequently admonished that a federal court should not

appoint a receiver where the appointment is not a remedy auxiliary to some primary

relief which is sought. Id. As explained by the Fifth Circuit, and by the Supreme Court,

Receiverships “are to be watched with jealous eyes lest their function be perverted.”

Id.; Tucker at 631. The appointment of a receiver to force an individual to do

something having nothing to do with the property seized is a gross perversion of

Receivership.

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With respect to the argument that some former attorneys may have claims for

fees against Mr. Baron, as a matter of longstanding Federal law an unsecured contract

creditor

has, in the absence of statute, no substantive right, legal or equitable, in or to

the property of his debtor and may not be granted an order of receivership against

the debtor. Pusey & Jones Co. v. Hanssen, 261 U.S. 491, 497 (1923). The

appointment of a receiver to bypass the district court’s lack of subject matter

jurisdiction and to bypass constitutional protections such as an individual’s right to trial,

is a prohibited exercise of the receivership power—receiverships may not be granted in

favor of unsecured contract creditors.

Mr. Sherman (in whose putative name Mr. Urbanik filed the motion for

receivership) is neither individually nor as trustee a judgment creditor of Jeffrey Baron.

Mr. Sherman neither individually nor as trustee has any interest in Mr. Baron’s

property.

Accordingly, as a matter of law Mr. Sherman lacks standing to bring a

motion for appointment of a receiver under Federal law. Williams Holding Co. v.

Pennell, 86 F. 2d 230 (5th Cir. 1936).

The putative movant for receivership below, Daniel J. Sherman, is notably not a creditor of

Mr. Baron’s. The opposite, Mr. Baron is a creditor of the bankruptcy estate. Further, with

respect to any actual claims Mr. Sherman or Ondova Limited might have against Mr. Baron

(none have been asserted), the District Court notably lacks subject matter jurisdiction as there is

no diversity of citizenship.

In his motion Mr. Urbanik recast the Ondova bankruptcy court’s recommendation on enforcement

of the settlement agreement. Notably, the bankruptcy court did not order or recommend the

appointment of a receiver, but merely threatened to do so if needed to enforce compliance with the

settlement agreement. Mr. Baron fully complied with the settlement agreement—well prior to Mr.

Urbanik’s motion to appoint a receiver. Since the bankruptcy court did not take the step of

recommending receivership, the issue is moot. Suffice to say, no law allows bypassing a party’s

right to due process (such as the right to a trial) when charged with breaching a contract, and had the

bankruptcy court taken the step to recommend putting someone into receivership prior to

adjudication of liability for breach of contract, substantial issues of law would be raised. E.g., see

note 5, above. Notably, Mr. Urbanik did not allege any breach of contract in his motion.

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The purpose for which the receiver was sought is clearly unconstitutional

The Fifth Amendment to the United States Constitution establishes 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, “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). A defendant must be afforded a fair opportunity to 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).

If in any case, civil or criminal, a state or federal court were arbitrarily to refuse

to hear a party by counsel, employed by and appearing for him, it reasonably may not

be doubted that such a refusal would be a denial of a hearing, and, therefore, of due

process in the constitutional sense. Chandler v. Fretag, 348 U.S. 3, 10 (1954). A

necessary corollary is that “a defendant must be given a reasonable opportunity to

employ and consult with counsel; otherwise, the right to be heard by counsel would be

of little worth.” Id.

Obviously, the District Court below can directly control what attorneys are

allowed to appear before it, so long as not exercised arbitrarily. However, the purpose

of the receivership order is much broader—including to restrict Mr. Baron’s ability to

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secure legal counsel to prosecute an appeal from the District Court or to assert his rights

in the Bankruptcy Court. The express purpose for which the receivership order was

sought is to restrict Jeffrey Baron from securing legal counsel and advice from the

attorneys of his choice– not only inside, but outside of the District Court. (Exhibit E).

The means of the receivership order is clearly unconstitutional

The seizure clause of the Fourth Amendment prohibits the unreasonable

interference with possession of a person’s property. Severance v. Patterson, 566 F.3d

490 (5th Cir. 2009). The seizure ordered by the District Court was purely arbitrary—

based on no case law or statute, ordered without a trial on the merits of any claim,

and entered based on no objective guidelines or guiding principles.

The application for receivership was grossly defective

Most Federal courts of appeal have held that a receivership is an “extraordinary”

equitable remedy to be “employed with the utmost caution” and “granted only in cases

of clear necessity.” See e.g., Solis v. Matheson, 563 F.3d 425, 437 (9th Cir. 2009); Rosen

v. Siegel, 106 F.3d 28, 34 (2d Cir. 1997); Aviation Supply Corp. v. R.S.B.I. Aerospace,

Inc., 999 F.2d 314, 316 (8th Cir. 1993); Consolidated Rail Corp. v. Fore River Ry. Co.,

861 F.2d 322, 326-27 (1st Cir. 1988).

Accordingly, the circuits that have addressed the issue have held that the district

court has discretion to appoint a receiver “only after evidence has been presented and

findings made showing the necessity of a receivership.” E.g., Solis, 563 F.3d at 438. ,

The Fifth Circuit has noted six factors considered as indicating the need for a

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receivership in those circumstances where the appointment of a receiver is permitted by

Federal law, (e.g., supplementary proceedings in aid of execution, etc..). Santibanez,

105 F. 3d at 241-242. Those factors are:

(1) A valid claim by the party seeking the appointment;

(2) The probability that fraudulent conduct has occurred or will occur to frustrate

that claim;

(3) Imminent danger that property will be concealed, lost, or diminished in value;

(4) Inadequacy of legal remedies;

(5) Lack of a less drastic equitable remedy; and

(6) Likelihood that appointing the receiver will do more good than harm.

In addition for failing to allege a lawful grounds for the issuance of an order

appointing receiver, the application for receivership below failed to allege

any of the six

factors recognized by the Fifth Circuit. There is no claim against Mr. Baron by the party

seeking the appointment. There is no allegation of fraudulent conduct. There is no

finding of any danger of property being concealed or lost. There is no allegation of

inadequacy of legal remedies. There is no allegation that a less drastic equitable remedy

was not available. There is no reference in the application to the harm that appointing a

receiver would do. (Exhibit E). Accordingly, it was an abuse of discretion to enter the

receivership order because no finding supported it, even had the order been sought for a

lawful purpose.

And the District Court below failed to enter supporting findings as to.

If the order had been sought for a lawful purpose, the District Court must exercise the “least

possible power adequate to the end proposed.” Spallone v. United States, 493 U.S. 265, 280

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In sum, a legally groundless motion

sought for an unlawful purpose by a party

lacking standing as a matter of law. The result has been the suspension of almost every

civil liberty of Mr. Baron, taking all his property, suspending his right to contract, his

right to privacy, his right to privileged communications with his attorneys, and, by

design, impairing is right to travel and to hire legal counsel to defend and protect his

rights.

While those who have inflicted this upon Mr. Baron are now gorging themselves

on his money, Mr. Baron is effectively imprisoned in Dallas, dependent like an

indentured servant on the desires of a Receiver the District Court below has ordered in

essence to be Mr. Baron’s legal guardian, with a twist—a guardianship not to protect an

individual, but the opposite—with a duty to, and for the benefit of an individual’s

adversaries. (Exhibits A, F).

And Mr. Baron’s infraction ? Jeffrey Baron tried to object to Mr. Urbanik’s

milking of almost all the equity—almost one million dollars for attorney’s fees for the

bankruptcy trustee— from the small company in which Baron is the beneficial equity

holder. Of course, there are two sides to every story. As Mr. Urbanik expressly stated

in his motion, appointing a receiver over Mr. Baron and all his assets is one sure way to

stop Mr. Baron from hiring an “army of lawyers” to defend his rights against what he

(1990). If a party is shown, after a hearing, to be threatening some irreparable injury over which

the court has subject matter jurisdiction, an injunction will solve the problem.

Brought in a court lacking subject matter jurisdiction over the non-diverse parties.

Case: 10-11202 Document: 00511326320 Page: 18 Date Filed: 12/20/2010

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was concerned were improper, unlawful actions on the part of Mr. Urbanik.

The order appointing receiver was issued without even minimal procedural

due process and should be declared void

Where the taking of one's property is so obvious, it needs no extended argument

to conclude that absent notice and a prior hearing the order violates the fundamental

principles of due process. Sniadach v. Family Finance Corp. of Bay View, 395 U.S.

337, 342 (1969). Even the temporary taking of property that is not in execution of a

final judgment is a “deprivation” as contemplated by the constitution and “had to be

preceded by a fair hearing”. Fuentes v. Shevin, 407 U.S. 67 (1972). Notably, due

process requires an evidentiary hearing prior to the deprivation of some type of

property interest even if such a hearing is provided thereafter. Mathews v. Eldridge, 424

U.S. 319, 333.

The District Court’s order appointing receiver was not preceded by any type of

hearing prior, and was not even supported by affidavit. It is therefore void

for lack of

procedural due process. See Pennoyer v. Neff, 95 U.S. 714, 737 (1878) (“such

Mr. Urbanik’s motion makes the seemingly supported, but wholly fallacious complaint that

Mr. Baron hired quite a few lawyers and didn’t pay his bill. Firstly, that is not a legal basis to

appoint a receiver and seize an individual’s assets. Mr. Baron is not in bankruptcy. If he owed

money to his former counsel they can sue and recover for any fees due. But Mr. Urbanik’s

claims don’t stand up to a close examination. Firstly, he conflates the counsel retained for

Ondova and other companies with Mr. Baron’s counsel. Secondly, although not in short supply,

when each is individually examined the attorney’s claims against Mr. Baron seem dubious at

best. The claims are not before the District Court and are not diversity claims. Accordingly,

extensive analysis of each claim is beyond the scope of this appeal, but by way of example, the

attorney that Mr. Urbanik has highlighted by attaching a lawsuit to his motion for receivership

(exhibit b to Mr. Urbanik’s motion) is suing Mr. Baron for one million dollars. Close reading of

the petition reveals that the attorney had no contract, and worked less than two weeks. Notably,

that same attorney’s previous employer has sued the attorney in an unrelated lawsuit, alleging

fraud, theft, breach of fiduciary duty, and other grossly unethical practices. (Exhibit K).

Case: 10-11202 Document: 00511326320 Page: 19 Date Filed: 12/20/2010

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proceeding is void as not being by due process of law”); World-Wide Volkswagen Corp.

v. Woodson, 444 U.S. 286, 291 (1980) (“rendered in violation of due process is void in

the rendering”); Margoles v. Johns, 660 F. 2d 291,295 (7th Cir. 1981)(“void only if the

court that rendered it lacked jurisdiction ... or if it acted in a manner inconsistent with

due process of law”). (Exhibit L).

B. IRREPARABLE INJURY

Deprivation of constitutional rights is irreparable injury as a matter of law

It is well settled that the loss of constitutional freedoms for even minimal periods

of time constitutes irreparable injury. Deerfield Med. Center v. City of Deerfield Beach,

661 F.2d 328, 338 (5th Cir. 1981). Accordingly, the receivership order—expressly

designed to interfere with Mr. Baron’s constitutional right to hire legal counsel—

involves irreparable injury as a matter of law.

Each day, in fact each hour that Mr. Baron is deprived of property taken by an

unreasonable seizure, as a matter of law he is suffering irreparable injury.

Similarly, with each piece of private and personal information about his private

life and affairs that Mr. Baron is compelled to disclose, his constitutional right to

privacy is either threatened or in fact being impaired. This “mandates a finding of

irreparable injury”. Deerfield at 338.

When a persons’ very right to control assets

is stripped from them, a cascade of

constitutional rights are impaired. It is the right to own and control property that is the

cornerstone of a democratic society. For example, suspending an individual’s right to

possess property directly acts to impair their First Amendment interests by depriving

Case: 10-11202 Document: 00511326320 Page: 20 Date Filed: 12/20/2010

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them of access to the primary medium of public expression—paid advertisements.

Such an impairment of an individual’s First Amendment freedoms, for even minimal

periods of time constitutes irreparable injury. Elrod v. Burns, 427 U.S. 347, 373-4 (1976).

Serious and irreparable harm to Mr. Baron personally

As detailed in Mr. Baron’s declaration attached hereto as Exhibit A, and

incorporated herein by reference, as discussed above, the receivership is imposing

serious and irreparable injury to Mr. Baron personally.

Mr. Baron very literally is living in constant fear, day and night. He is being,

against his will, forced to reveal all sorts of private, personal information. He is severely

suffering emotionally, to the point of becoming despondent. He is suffering from

attacks of shortness of breath and dizziness to the extent that he cannot stand upright.

Even Mr. Baron’s freedom to communicate freely has been stripped from him.

MR. BARON’S PRIVACY, AND SENSE OF SELF CONTROL HAS

BEEN TAKEN FROM HIM, NO LESS THAN IF HE HAD BEEN THROWN IN

JAIL. Mr. Baron is being deprived of the fundamental right to manage his own affairs,

and make decisions about his own assets. He cannot travel, and cannot hire lawyers to

defend himself. Mr. Baron’s health and medical condition as a very real matter have

dramatically deteriorated under the stress of the receivership order in the past three weeks.

Because his money and credit cards have been seized, Mr. Baron has no means to retain expert

to testify as to his condition. The treating physician’s diagnoses is attached to Exhibit A. Mr.

baron is suffering very real symptoms from the stress of the receivership, including heart

irregularity requiring the care of a cardiologist specialist, thrombocytopenia, hypokalemia, and

hx seizures. (Exhibit A).

The District Court ordered Mr. Baron to turn over his cell phones to the receiver (Exhibit F,

page 7).

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Mr. Baron is unable to sleep and is suffering from frequent panic attacks, and

nausea. Mr. Baron’s diabetes is worsening materially under the stress of the District

Court’s order and he is no longer able to control his blood sugar level causing his blood

glucose levels to jump over 500 (normal readings are less than 100).

There is no way to quantify the damage physically suffered by Jeffrey Baron’s

due to the stress naturally arising out of being stripped of one’s assets and control over

his own affairs. Similarly, there is no way to prove the amount of damages Mr. Baron is

suffering from being unable to choose how his money is invested and his assets

managed. Jeffrey Baron is suffering very real irreparable injury.

Unique domain name assets which mark the apex of Mr. Baron’s life work are

under immediate threat of deletion by the District Court’s order, and unless stopped, in

addition to unique names for which there is no replacement price, over a million dollars

in domains will be intentionally abandoned by the receiver beginning today and

continuing over the next seven days. Thereafter, over the next 45 days, the receiver will

throw away over three million dollars worth of domains. (Exhibit A). The receiver’s

bond is only $1,000.00.

No party from which to recover damages

Mr. Baron is faced with a situation where the wrongful actors carry a mantle of

immunity. E.g. Boullion v. McClanahan, 639 F.2d 213 (5th Cir. 1981). To the extent that

absolute judicial immunity attaches to the actions of Mr. Urbanik in his capacity as

attorney for a bankruptcy trustee, Mr. Baron has no party from which to seek redress for

his damages.

Case: 10-11202 Document: 00511326320 Page: 22 Date Filed: 12/20/2010

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Since Mr. Baron is the equitable owner of Ondova (the entity ultimately in who’s

name Mr. Urbanik has acted), any recovery against Ondova would just be taken out of

Mr. Baron’s own pocket. Accordingly, as a very real matter the damages being caused

to Mr. Baron, including the ever-increasing costs of the receiver and the receiver’s

attorney, are irreparable.

C. NO SUBSTANTIAL HARM TO OTHER PARTIES

This case has settled. Moreover, no party has a legitimate interest in denying Mr.

Baron his constitutional right to legal counsel of his choice. If such an interest could be

constitutionally served, an injunction prohibiting Mr. Baron from retaining counsel

would serve the same interest, without taking away Mr. Baron’s constitutional right to

own and possess property.

D. PUBLIC INTEREST

There is a compelling public interest in upholding the US Constitution.

Protecting an individual’s rights in his property and his privacy, and his right to hire

legal counsel of his choice, are important public interests served by granting the relief

requested by Mr. Baron.

It is frightening to think that if an individual refuses to pay the excessive

demands of an attorney or desires to object to grossly excessive fees sought by an

attorney in a bankruptcy case, that instead of a right to trial by jury or impartial hearing

before a judge, he can have all his assets and private documents immediately stripped

from him, and become a ward of the court– incarcerated in ‘house arrest’ in one city,

and prohibited from hiring legal counsel to protect his rights.

Case: 10-11202 Document: 00511326320 Page: 23 Date Filed: 12/20/2010

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The actions taken against Mr. Baron shock the conscious. Prior to the filing of

this appeal his attorneys were told by the receiver that they were fired, and Mr. Baron

was warned— including warnings made in writing—that he faced contempt and going

to jail if he dared attempt to hire an attorney to protect his rights. (Exhibit A, P, R).

Appellate counsel believes the deprivations Mr. Baron’s has been—and at this

hour is subject to— are grave. Appellant prays this Court agrees.

VI. CONCLUSION

The District Court below suspended Mr. Baron’s constitutional right to own,

access, and control his own property, for the purpose of denying Mr. Baron the

ability to retain counsel. Such an order is unlawful and violates the US Constitution.

VII. PRAYER

Wherefore, Jeffrey Baron prays that this Honorable Court consider and grant this

motion on an expedited basis, and Stay pending appeal the Order Appointing Receiver

over the person and property of Mr. Baron signed by the District Court below on

November 24, 2010 [Docket #124, and Docket #130, Entered 11/30/2010].

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

FOR JEFFREY BARON

Case: 10-11202 Document: 00511326320 Page: 24 Date Filed: 12/20/2010

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VIII. TABLE OF AUTHORITIES

EDERAL

ASES

Aviation Supply Corp. v. R.S.B.I. Aerospace, Inc., 999 F.2d 314, 316

(8th Cir. 1993) ..................................................................................................... 16

Belcher v. Birmingham Trust National Bank, 395 F.2d 685 (5th Cir. 1968)......... 12

Boullion v. McClanahan, 639 F.2d 213 (5th Cir. 1981)............................................... 22

Chandler v. Fretag, 348 U.S. 3, 10 (1954)........................................................ 15, 16

Consolidated Rail Corp. v. Fore River Ry. Co., 861 F.2d 322, 326-27

(1st Cir. 1988)...................................................................................................... 16

Deerfield Med. Center v. City of Deerfield Beach, 661 F.2d 328, 338

(5th Cir. 1981) ..................................................................................................... 20

Elrod v. Burns, 427 U.S. 347, 373-4 (1976)................................................................. 21

Fuentes v. Shevin, 407 U.S. 67 (1972) ................................................................... 19

In re Energy Partners, Ltd., 422 BR 68 (Bankr.S.D.Tex. 2009) ...............................8

Johnson v. City of Cincinnati, 310 F.3d 484, 501 (6th Cir. 2002) ................................ 15

Kelleam v. Maryland Casualty Co. of Baltimore, 312 U.S. 377, 381 (1941) ........ 13

Margoles v. Johns, 660 F. 2d 291,295 (7th Cir. 1981) ........................................... 20

Mathews v. Eldridge, 424 U.S. 319, 333................................................................ 19

Mosley v. St. Louis Southwestern Ry., 634 F.2d 942, 946 (5th Cir. 1981) ........... 15

Pennoyer v. Neff, 95 U.S. 714, 737 (1878) ............................................................ 19

Potashnick v. Port City Const. Co., 609 F.2d 1101, 1104 (5th Cir. 1980)............. 15

Powell v. Alabama, 287 U.S. 45, 53-69 (1932)........................................................... 15

Case: 10-11202 Document: 00511326320 Page: 25 Date Filed: 12/20/2010

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Pusey & Jones Co. v. Hanssen, 261 U.S. 491, 497 (1923)..................................... 14

Rosen v. Siegel, 106 F.3d 28, 34 (2d Cir. 1997) .................................................... 16

Santibanez v. Wier McMahon & Co., 105 F. 3d 234, 241 (5th Cir. 1997) ...... 13, 17

Severance v. Patterson, 566 F.3d 490 (5th Cir. 2009)............................................ 16

Sniadach v. Family Finance Corp. of Bay View, 395 U.S. 337, 342 (1969) ......... 19

Solis v. Matheson, 563 F.3d 425, 437 (9th Cir. 2009) ........................................... 16

Spallone v. United States, 493 U.S. 265, 280 (1990) ............................................. 18

Tucker v. Baker, 214 F. 2d 627, 631 (5th Cir. 1954) ............................................. 13

Virginia Petroleum Job. Ass'n v. Federal Power Com'n, 259 F.2d 921

(DC Cir. 1958)..................................................................................................... 12

Wildmon v. Berwick Universal Pictures, 983 F.2d 21, 25 (5th Cir. 1992)............ 10

Williams Holding Co. v. Pennell, 86 F. 2d 230 (5th Cir. 1936)............................. 14

World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980).............. 20

EDERAL

TATUTES

11 U.S.C. §105(b) ......................................................................................................8

28 U.S.C. §1292(a)(2)................................................................................................5

EDERAL

ULES

Federal Rule of Appellate Procedure 8(a)(2).............................................................5

Case: 10-11202 Document: 00511326320 Page: 26 Date Filed: 12/20/2010

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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 and by e-mail to:

Raymond J. Urbanik, Esq.

MUNSCH HARDT KOPF & HARR, P.C.

3800 Lincoln Plaza

500 N. Akard Street

Dallas, Texas 75201-6659

Telephone: (214) 855-7500

Facsimile: (214) 855-7584

CERTIFIED BY: /s/ Gary N. Schepps

Gary N. Schepps

COUNSEL FOR APPELLANT JEFFREY BARON

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

Gary N. Schepps

COUNSEL FOR APPELLANT JEFFREY BARON

Case: 10-11202 Document: 00511326320 Page: 27 Date Filed: 12/20/2010