REPLY TO [DOC 222] SHERMAN RESPONSE TO MOTION TO STRIKE - Page 1

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

NETSPHERE, INC., § Civil Action No. 3-09CV0988-F

MANILA INDUSTRIES, INC., and §

MUNISH KRISHAN, §

Plaintiffs. §

§

TO THE HONORABLE ROYAL FURGESON, U.S. DISTRICT COURT JUDGE:

COMES NOW, Jeffrey Baron, Appellant, and respectfully replies to Mr.

Sherman’s response to [DOC 222], (Mr. Sherman’s Response to Mr. Baron’s

motion to strike the bankruptcy court’s report and recommendation and to vacate

the order adopting same).

I. LACK OF SUBJECT MATTER JURISDICTION CANNOT BE WAIVED

1. Subject matter jurisdiction is never waived. Mansfield C. & L. M. R. Co.

v. Swan, 111 U. S. 379, 382 (1884). As Justice Harlan explained, “the presumption

. . . is that the court below was without jurisdiction” unless “the contrary appears

affirmatively from the record.” King Bridge Co. v. Otoe County, 120 U. S. 225,

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that power, it is called to act.”). The facts supporting jurisdiction must appear

affirmatively from the record. Id.

2. Other than a misplaced hope that the defect could be waived, Mr.

Sherman has no response to the bankruptcy court’s lack of subject matter

jurisdiction over the subject matter of the report.

II. BANKRUPTCY RULE 9033 APPLIES TO ALL NON-CORE

PROCEEDINGS

3. Two courts cannot exercise concurrent jurisdiction over the same matter.

Accordingly, the only way for the district court to act as a ‘supervisor’ of the

bankruptcy court (to use this Court’s terminology), is either by withdrawing the

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procedure.

5. The bankruptcy court's report was either a motion to withdraw its

reference or it wasn't. If it wasn't, it was dressed up in a false wrapper, and Mr.

Sherman's argument fails. If it was, the Federal and local rules were circumvented,

and the report must be stricken.

6. The Bankruptcy Rules require that a motion to withdraw reference be

made in the bankruptcy proceeding. The Bankruptcy Rules do not provide for the

bankruptcy court to act in he absence of such motion. 28 U.S.C. 157(d) (“The

district court may withdraw, in whole or in part, any case or proceeding referred

under this section, on its own motion or on timely motion of any party, for cause

shown.”)(emphasis). Even the case cited by Mr. Sherman, In re Moody, 64 B.R.

is required, and there is a specific rule for the handling of the motion.

7. In the Northern District of Texas, withdrawal of reference is governed by

local rule 5011-1. Local Rule 5011-1 ‘Withdrawal of Reference’ requires that “a)

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proceeding of which the reference is proposed to be withdrawn.” Moreover, the

bankruptcy and local rules lay out the appropriate method for a bankruptcy court to

communicate to a district court regarding the withdrawal of reference. Suffice to

say the bankruptcy court’s report violates almost every requirement mandated by

law. See e.g., L.B.R. 5011-1.

a case or proceeding shall be heard by a district judge. Accordingly, if the order

9. Similarly, Mr. Sherman offers no rule or authority to excuse the Court's

failure to allow 14 days to object to the report before adopting it, especially where

no notice of a shorter period was provided prior to the report’s adoption.

10. Finally, no rule imposes a time limit for which to move to vacate or

strike filings or orders in an active lawsuit. The matter is not moot because the

adopted findings form a principal asserted grounds of the motion for receivership.

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This is to certify that this was served on all parties who receive notification