Case: 22-11226 Document: 84-1 Page: 1 Date Filed: 08/13/2023
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`NO. 22-11226
`__________________________________
`
`United States Court of Appeals for
`the Fifth Circuit
`__________________________________
`SECURITIES AND EXCHANGE COMMISSION,
`
`Plaintiff-Appellee,
`
`versus
`TIMOTHY BARTON,
`
`Defendant-Appellant,
`
`
`____________________________
`Appeal from the United States District Court
`for the Northern District of Texas
`USDC No. 3:22-CV-2118
`___________________________
`PETITION FOR REHEARING EN BANC
`Date of Decision: June 19, 2023
`Panel: Wiener, Elrod, and Engelhardt
`___________________________
`Michael J. Edney
`HUNTON ANDREWS KURTH LLP
`2200 Pennsylvania Avenue NW
`Washington, DC 20037
`(202) 955-1500
`medney@huntonak.com
`
`
`
`
`
`NO. 22-11226
`__________________________________
`
`United States Court of Appeals for
`the Fifth Circuit
`__________________________________
`SECURITIES AND EXCHANGE COMMISSION,
`
`Plaintiff-Appellee,
`
`versus
`TIMOTHY BARTON,
`
`Defendant-Appellant,
`
`
`____________________________
`Appeal from the United States District Court
`for the Northern District of Texas
`USDC No. 3:22-CV-2118
`___________________________
`PETITION FOR REHEARING EN BANC
`Date of Decision: June 19, 2023
`Panel: Wiener, Elrod, and Engelhardt
`___________________________
`Michael J. Edney
`HUNTON ANDREWS KURTH LLP
`2200 Pennsylvania Avenue NW
`Washington, DC 20037
`(202) 955-1500
`medney@huntonak.com
`
`
`
`
`
`Case: 22-11226 Document: 84-1 Page: 2 Date Filed: 08/13/2023
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`CERTIFICATE OF INTERESTED PERSONS
`
`The undersigned counsel of record certifies that the following listed
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`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: Timothy Barton
`
`b. Plaintiff-Appellee: Securities and Exchange Commission
`
`c. Intervenors:
`
`i. United States of America
`
`ii. Gillespie Villas LLC
`
`iii. Venus59 LLC
`
`iv. TRTX Properties LLC
`
`v. MXBA LLC
`
`vi. Titan Investments LLC
`
`vii. HNGH Turtle Creek, LLC
`
`d. Other Personal Defendants (entity defendants included
`
`below)
`
`i. Haoqiang Fu also known as Michael Fu
`
`ii
`
`
`
`
`
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`Case: 22-11226 Document: 84-1 Page: 3 Date Filed: 08/13/2023
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`ii. Stephen T. Wall
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`2. Attorneys
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`a. For Appellant: Hunton Andrews Kurth LLP: Michael J.
`
`Edney, Roger Gibboni, Leah Nommensen, Paige Dusthimer
`
`b. For Appellee: Keefe M. Bernstein, James E. Etri, David B.
`
`Reece
`
`c. For Defendant Stephen T. Wall: Johnson Vaughn &
`
`Heiskell: Michael P. Heiskell
`
`d. For Interested Party HNGH Turtle Creek: Kirkland &
`
`Ellis LLP: Erin Angela Nealy Cox; Kane Russell Coleman &
`
`Logan PC: John Joseph Kane
`
`e. For Interested Party Maximilien Barton: Norton Rose
`
`Fulbright US LLP: Nathan Benjamin Baum, Christopher
`
`Ryan Cooke
`
`f. For Intervenors Gillespie Villas LLC, Venus59 LLC,
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`TRTX Properties LLC, MXBA LLC, and Titan
`
`Investments LLC: Norton Rose Fulbright US LLP: Nathan
`
`Benjamin Baum, Christopher Ryan Cooke
`
`
`
`
`iii
`
`
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`Case: 22-11226 Document: 84-1 Page: 4 Date Filed: 08/13/2023
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`g. For Interested Party David Dhiraj Ramolia: Chandler
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`& Shavin PLLC: Eliot Dana Shavin, Daniel Rasoul
`
`Alexander; Chandler Law PC: Corinna Pia Chandler
`
`h. For Interested Party Palisades-TC, LLC: Tillotson Law:
`
`Jonathan Patton
`
`i. For Interested Party Circle H Contractors, LP: Slates
`
`Harwell LLP: Aaron Capps
`
`j. For Interested Party MFO Venus Development, LLC:
`
`Ian Fullington
`
`3. Other
`
`a. 159 Other Entities Seized
`
`Carnegie
`
`WALL007, LLC
`
`WALL009, LLC
`
`Development, LLC
`
`(Defendant)
`
`(Defendant)
`
`(Defendant)
`
`WALL010, LLC
`
`WALL011, LLC
`
`WALL012, LLC
`
`(Defendant)
`
`(Defendant)
`
`(Defendant)
`
`WALL016, LLC
`
`WALL017, LLC
`
`WALL018, LLC
`
`(Defendant)
`
`(Defendant)
`
`(Defendant)
`
`
`
`
`iv
`
`
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`Case: 22-11226 Document: 84-1 Page: 5 Date Filed: 08/13/2023
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`WALL019, LLC
`
`DJD Land Partners,
`
`LDG001, LLC (Relief
`
`(Defendant)
`
`BM318 LLC
`
`D4KL LLC
`
`LLC (Relief
`
`Defendant)
`
`D4DS LLC
`
`Defendant)
`
`D4FR LLC
`
`Enoch Investments
`
`FHC Acquisition LLC
`
`LLC
`
`Goldmark Hospitality
`
`JMJ Acquisitions LLC JMJ Development
`
`LLC
`
`LLC
`
`JMJAV LLC
`
`JMR100 LLC
`
`Lajolla Construction
`
`Management LLC
`
`Mansions Apartment
`
`MO 2999TC, LLC
`
`Orchard Farms
`
`Homes at Marine
`
`Creek LLC
`
`Village LLC
`
`Villita Towers LLC
`
`126 Villita LLC
`
`AVEG WW, LLC
`
`AVG West, LLC fka
`
`Barton Texas Water
`
`Barton Water
`
`JMJ Acquisitions,
`
`District, LLC
`
`District, LLC
`
`LLC
`
`
`
`
`v
`
`
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`Case: 22-11226 Document: 84-1 Page: 6 Date Filed: 08/13/2023
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`BC Acquisitions, LLC BEE2019, LLC
`
`Broadview Holdings,
`
`Broadview Holdings
`
`BSJ Trading, LLC
`
`BUILD VIOLET,
`
`LLC
`
`Trust
`
`Carnegie
`
`Development, Inc.
`
`D4BM, LLC
`
`D4MC, LLC
`
`D4SMC, LLC
`
`LLC
`
`D4AT, LLC
`
`D4AVEG, LLC
`
`D4BR, LLC
`
`D4OP, LLC
`
`D4WP, LLC
`
`D4IN, LLC
`
`D4OPM, LLC
`
`Dallas Real Estate
`
`Investors, LLC
`
`Dallas Real Estate
`
`Dallas Real Estate
`
`Five Star GM, LLC
`
`Lenders, LLC
`
`Management, LLC
`
`Five Star MM, LLC
`
`FIVE STAR MM, LLC Five Star TC, LLC
`
`Glenwood (18340)
`
`HR Sterling, LLC
`
`Illuminate Dallas,
`
`Property, LLC
`
`LLC
`
`JB Special Asset, LLC JMJ Acquisitions
`
`JMJ Aviation, LLC
`
`Mgmt, LLC
`
`vi
`
`
`
`
`
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`Case: 22-11226 Document: 84-1 Page: 7 Date Filed: 08/13/2023
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`JMJ BLUES TX, LLC JMJ Centre, LLC
`
`JMJ Development
`
`Brasil, LTDA
`
`JMJ Development,
`
`JMJ Development
`
`JMJ Development
`
`Inc
`
`Fund
`
`Fund, Inc
`
`JMJ EB5 Fund, LP
`
`JMJ EB5 Fund GP,
`
`JMJ Holdings, LLC
`
`LLC
`
`JMJ Holdings US
`
`JMJ Holdings USA,
`
`JMJ Home Building
`
`LLC
`
`Inc.
`
`Inc.
`
`JMJ Hospitality, LLC JMJ Hospitality
`
`JMJ Hospitality UAE
`
`General Trading FZE
`
`JMJ Investments
`
`JMJ Land Acquisition,
`
`JMJ Land
`
`Limited
`
`Inc
`
`Development, Inc
`
`JMJ Land Venture,
`
`JMJ MF
`
`JMJ Mezzanine, Inc
`
`LLC
`
`Development, LLC
`
`JMJ Multifamily, Inc JMJ Offshore, LTD
`
`JMJ Regional Center,
`
`JMJ Residential, LLC JMJ Valley Center,
`
`JMJ VC
`
`LLC
`
`Management, LLC
`
`LLC
`
`
`
`
`vii
`
`
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`Case: 22-11226 Document: 84-1 Page: 8 Date Filed: 08/13/2023
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`JMJ148, LLC
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`JMJAV, LLC
`
`JMJD4, LLC
`
`JMJD4Allensville
`
`JMJDWG, LLC
`
`JMJKH, LLC
`
`LLC
`
`LC Aledo TX, LLC
`
`Lynco Ventures, LLC Lynn Investments,
`
`Lynco Ventures, LLC Mansion Apartment
`
`MCFW, LLC
`
`LLC
`
`Homes at Marine
`
`Creek, LLC
`
`MCRS2019, LLC
`
`Middlebury Trust
`
`MMCYN, LLC
`
`MXBA Managed, LLC MXBA Services, LLC Myra Park 635, LLC
`
`Northstar 114, LLC
`
`Northstar PM, LLC
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`One Agent, LLC
`
`One Agent Texas,
`
`ONE FHC, LLC
`
`One MFD4, LLC
`
`LLC
`
`One Pass
`
`One RL Trust
`
`ONE SF Residential,
`
`Investments, LLC
`
`LLC
`
`Residential MF
`
`Ridgeview Addition,
`
`Riverwalk Invesco,
`
`Assets, LLC
`
`LLC
`
`LLC
`
`
`
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`viii
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`
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`Case: 22-11226 Document: 84-1 Page: 9 Date Filed: 08/13/2023
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`Riverwalk
`
`Opportunity
`
`Management, LLC
`
`Riverwalk OZFM,
`
`Riverwalk OZFV,
`
`LLC
`
`LLV
`
`Riverwalk QOZBJ,
`
`Riverwalk QOZBM,
`
`Riverwalk QOZBV,
`
`LLC
`
`LLC
`
`LLC
`
`Seagoville Farms,
`
`SF Rock Creek, LLC
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`SK Carnegie, LLC
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`LLC
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`STL Park, LLC
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`The MXBA Trust
`
`The Timothy L.
`
`Barton Irrevocable
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`Life Insurance Trust
`
`TLB 2018 Trust
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`TLB 2019 Trust
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`TLB 2020 Trust
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`TRWF, LLC
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`TRWF LODGE, LLC VenusBK195, LLC
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`VenusPark201, LLC WRL2019, LLC
`
`126 Villita Towers,
`
`LLC
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`2999 Acquisitions,
`
`2999 Middlebury, LLC 2999 Roxbury, LLC
`
`LLC
`
`
`
`
`ix
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`
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`Case: 22-11226 Document: 84-1 Page: 10 Date Filed: 08/13/2023
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`2999TC Acquisitions,
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`2999TC Acquisitions
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`2999TC Founders,
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`LLC fka 2999TC, LLC
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`MZ, LLC fka MO
`
`LLC
`
`2999TC MZ, LLC
`
`2999TC JMJ, LLC
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`2999TC JMJ, LLC
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`2999TC JMJ CMGR,
`
`LLC
`
`2999TC JMJ Equity,
`
`2999TC LP, LLC
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`2999TC JMJ MGR,
`
`LLC
`
`LLC
`
`2999TC MZ, LLC
`
`2999TC MM, LLC
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`TC Hall, LLC
`
`Titan 2022
`
`Marine Creek SP,
`
`Aledo TX, LLC
`
`Investment, LLC
`
`LLC
`
`b. Interested Parties
`
`i. Bank of America, N.A. (Respondent)
`
`ii. Maximilien Barton
`
`iii. Palisades-TC, LLC
`
`iv. Circle H Contractors, LP
`
`v. MFO Venus Development, LLC
`
`c. Receiver & Amicus
`i. Cortney Thomas
`
`
`
`
`
`/s/ Michael J. Edney
`Counsel for Timothy Barton
`
`x
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`
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`Case: 22-11226 Document: 84-1 Page: 11 Date Filed: 08/13/2023
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`INTRODUCTION AND RULE 35(B)(1) STATEMENT
`By holding that a district court order authorizing a receiver to sell
`
`property is not immediately appealable, the panel decision conflicts with
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`three decisions of this Court. United States v. “A” Mfg. Co., Inc., 541 F.2d
`
`504 (5th Cir. 1976); Securities and Exchange Comm’n v. Janvey, 404 F.
`
`App’x 912, 914 (5th Cir. 2010); Netsphere, Inc. v. Baron, 799 F.3d 327,
`
`333-34 (5th Cir. 2015) (hereinafter “Netsphere II”). And by overruling
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`precedential, published decisions of this Court without involving the en
`
`banc Court, the panel’s decision is likewise in direct conflict with this
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`Court’s general rule that one panel cannot overrule another panel.
`
`Broussard v. S. Pac. Transp. Co., 665 F.2d 1387, 1389 (5th Cir. 1982)
`
`(collecting cases); see United States v. Setser, 607 F.3d 128, 131 (5th Cir.
`
`2010); Burge v. Parish of St. Tammany, 187 F.3d 452, 466 (5th Cir. 1999);
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`see also Janvey, 404 F. App’x at 914 (applying this rule to reject a
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`Securities and Exchange Commission request for a panel to hold that
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`district court orders authorizing a Commission-requested receiver to sell
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`property are not immediately appealable). Consideration by the full
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`court is necessary to secure or maintain the uniformity of this Court’s
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`decisions.
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`
`
`
`xi
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`
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`Case: 22-11226 Document: 84-1 Page: 12 Date Filed: 08/13/2023
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`In this case, the District Court appointed a receiver over nearly all
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`assets connected with the Appellant. On June 28, 2023, a separate panel
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`of this Court held that the District Court’s appointment of a receiver was
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`error and vacated it. SEC v. Barton, 72 F.4th 640, 645 (5th Cir. 2023)
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`(issuance of mandate pending).
`
`The instant appeal concerns a District Court order—subsequent to
`
`the order appointing the Receiver—that authorized the Receiver to sell
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`the Appellant’s personal residence. In dismissing the appeal for lack of
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`jurisdiction, the unpublished panel decision that is the subject of this
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`petition held that the District Court’s order authorizing the sale of the
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`Appellant’s property “is not a final decision amenable to appellate review,
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`and the collateral order doctrine is not applicable.” SEC v. Barton, No.
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`22-11226, 2023 WL 4060191, at *1 (5th Cir. June 19, 2023) (hereinafter
`
`“Op.” attached as Exhibit A).
`
`The panel’s decision is directly contrary to Circuit precedent
`
`holding that a district court order authorizing a receiver to sell property
`
`is immediately appealable. “A” Mfg., 541 F.2d at 506; Janvey, 404 F.
`
`App’x at 914 (declining SEC’s request to depart from “A” Manufacturing
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`and to hold that the Court lacked jurisdiction to hear an immediate
`
`
`
`
`xii
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`
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`Case: 22-11226 Document: 84-1 Page: 13 Date Filed: 08/13/2023
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`appeal from an order authorizing a receiver to sell property); Netsphere
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`II, 799 F.3d at 333-34 (confirming Circuit precedent that orders
`
`authorizing receivers to sell property are immediately appealable final
`
`orders).
`
`The Appellant has filed a contemporaneous petition for panel
`
`rehearing, asking the panel to reverse its decision in order to avoid the
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`direct conflict with prior decisions of this Court. Given the abbreviated
`
`and unpublished nature of the opinion, it is possible the conflict with
`
`prior precedent was inadvertent. Appellant respectfully submits that the
`
`panel reversing course and avoiding the direct conflict with this Court’s
`
`precedent is the best course of action.
`
`In the event panel rehearing were not granted, the en banc Court
`
`should grant rehearing to resolve the conflict that would then be
`
`presented—between the panel’s unpublished decision, on the one hand,
`
`and “A” Manufacturing, Netsphere II, and Janvey, on the other hand—
`
`regarding whether a district court authorizing a receiver to sell property
`
`is immediately appealable. Fed. R. App. P. 35(b)(1)(A). If the panel were
`
`not to grant rehearing, allowing its decision to stand would create
`
`another conflict with Circuit precedent, as the panel decision would stand
`
`
`
`
`xiii
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`
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`Case: 22-11226 Document: 84-1 Page: 14 Date Filed: 08/13/2023
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`for the proposition that a panel of this Court may overrule a prior,
`
`published Circuit precedent without first convening the en banc Court.
`
`Setser, 607 F.3d at 131 (“[i]t is a firm rule of this Circuit that in the
`
`absence of an intervening contrary or superseding decision by this court
`
`sitting en banc or by the United States Supreme Court, a panel cannot
`
`overrule a prior panel’s decision.”) (quoting Burge, 187 F.3d at 466);
`
`Janvey, 404 F. App’x at 914 (same).
`
`
`
`
`
`
`
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`xiv
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`
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`Case: 22-11226 Document: 84-1 Page: 15 Date Filed: 08/13/2023
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`TABLE OF CONTENTS
`
`CERTIFICATE OF INTERESTED PERSONS ......................................... ii
`INTRODUCTION AND RULE 35(B)(1) STATEMENT .......................... xi
`TABLE OF CONTENTS .......................................................................... xv
`TABLE OF AUTHORITIES .................................................................... xvi
`STATEMENT OF THE ISSUES ................................................................ 1
`STATEMENT OF THE COURSE OF PROCEEDINGS AND
`DISPOSITION OF THE CASE .................................................................. 1
`STATEMENT OF FACTS NECESSARY TO THE ARGUMENT ............ 5
`ARGUMENT AND AUTHORITIES .......................................................... 6
`I. Rehearing En Banc Is Warranted Because the Panel Decision
`Conflicts with This Circuit’s Established Precedent That Orders
`Authorizing a Receiver to Sell Property Are Immediately
`Appealable. ........................................................................................ 6
`II. Rehearing En Banc Is Also Necessary to Preserve This Circuit’s
`Rule That A Panel Cannot Overrule Prior Precedent Without the
`En Banc Court. ................................................................................ 12
`CONCLUSION ......................................................................................... 15
`Certificate of Filing and Service .............................................................. 17
`Certificate of Compliance ......................................................................... 18
`
`
`
`
`
`
`
`
`xv
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`
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`Case: 22-11226 Document: 84-1 Page: 16 Date Filed: 08/13/2023
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`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`In re Bonvillian Marine Serv., Inc.,
`19 F.4th 787 (5th Cir. 2021) ................................................................ 14
`Broussard v. S. Pac. Transp. Co.,
`665 F.2d 1387 (5th Cir. 1982) ......................................................... xi, 13
`Burge v. Parish of St. Tammany,
`187 F.3d 452 (5th Cir. 1999) ................................................ xi, xiv, 6, 12
`Douglass v. Nippon Yusen Kabushiki Kaisha,
`46 F.4th 226 (5th Cir. 2022) ................................................................ 14
`Grabowski v. Jackson Cnty. Pub. Defs. Office,
`47 F.3d 1386 (5th Cir. 1995) ................................................................ 13
`Johnson v. Moral,
`843 F.2d 846 (5th Cir. 1988) .......................................................... 13, 14
`Netsphere, Inc. v. Baron,
`703 F.3d 296 (5th Cir. 2012) .............................................................. 3, 7
`Netsphere, Inc. v. Baron,
`799 F.3d 327 (5th Cir. 2015) ........................................................ passim
`Sage v. Cent. R. Co. of Iowa,
`96 U.S. 712 (1877) .................................................................................. 7
`SEC v. Barton,
`72 F.4th 640 (5th Cir. 2023) ........................................................ passim
`SEC v. Barton,
`No. 22-11226, 2023 WL 4060191 (5th Cir. June 19, 2023) ...... xii, 2, 14
`Securities and Exchange Comm’n v. Janvey,
`404 F. App’x 912 (5th Cir. 2010) ................................................. passim
`
`
`
`
`xvi
`
`
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`Case: 22-11226 Document: 84-1 Page: 17 Date Filed: 08/13/2023
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`United States v. “A” Mfg. Co., Inc.,
`541 F.2d 504 (5th Cir. 1976) ........................................................ passim
`United States v. Calverley,
`11 F.3d 505 (5th Cir. 1993) .................................................................. 14
`United States v. Castro-Alfonso,
`841 F.3d 292 (5th Cir. 2016) ................................................................ 13
`United States v. Dial,
`542 F.3d 1059 (5th Cir. 2008) .............................................................. 13
`United States v. Hurtado,
`905 F.2d 74 (5th Cir. 1990) .................................................................. 14
`United States v. Setser,
`607 F.3d 128 (5th Cir. 2010) ........................................................ passim
`Rules
`Fed. R. App. P. 35(b)(1)(A) ................................................................ xiii, 12
`Fed. R. App. P. 35(b)(2) .............................................................................. 6
`
`
`
`
`
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`xvii
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`Case: 22-11226 Document: 84-1 Page: 18 Date Filed: 08/13/2023
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`
`
`STATEMENT OF THE ISSUES
`
`1. Whether the panel erred by holding that district court orders
`
`authorizing the sale of property are not immediately appealable, in direct
`
`conflict with this Court’s prior precedent in United States v. “A”
`
`Manufacturing Co., Inc., 541 F.2d 504 (5th Cir. 1976); Securities and
`
`Exchange Comm’n v. Janvey, 404 F. App’x 912, 914 (5th Cir. 2010); and
`
`Netsphere, Inc. v. Baron, 799 F.3d 327, 333-34 (5th Cir. 2015)?
`
`2. Whether the panel lacked authority to depart from this
`
`Court’s precedent on the above issue without first involving the en banc
`
`Court?
`
`STATEMENT OF THE COURSE OF PROCEEDINGS AND
`DISPOSITION OF THE CASE
`This case began when the Securities and Exchange Commission
`
`filed a civil suit against the Appellant, accusing him of securities fraud.
`
`Days later, the Commission asked the District Court to appoint a receiver
`
`over all entities directly or indirectly controlled by the Appellant. On
`
`October 18, 2022, the District Court granted the Commission’s request.
`
`That same day, the Receiver removed the Appellant from his company
`
`offices and seized all commercial assets controlled by him. On the third
`
`day of the receivership, the Receiver also removed the Appellant from his
`1
`
`
`
`
`
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`Case: 22-11226 Document: 84-1 Page: 19 Date Filed: 08/13/2023
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`
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`family home—a 4 bedroom, approximately 3,840-square-foot, house
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`located at 4107 Rock Creek Drive in Dallas, Texas.
`
`Appellant then sought an emergency court order to block the
`
`Receiver from removing him from his home and to clarify that the house
`
`was outside the Receiver’s control. The District Court denied the request
`
`twenty-five minutes later, without explanation. At the Receiver’s
`
`request, the District Court then authorized the Receiver to sell the
`
`Appellant’s home, and the Appellant appealed from that order. See SEC
`
`v. Barton, No. 22-11226, Rec. Exc. at 21-25.
`
`The Commission did not move to dismiss the appeal, but argued in
`
`its merits brief that the court of appeals lacks jurisdiction over it. See
`
`id., Brief of Appellee at 11-13 (5th Cir. Mar. 29, 2023) (ECF No. 45). Prior
`
`to setting the case for oral argument, a panel of this Court dismissed the
`
`appeal for lack of jurisdiction in a June 19, 2023, unpublished opinion.
`
`Op. at 1. The panel held that the order authorizing the Receiver to sell
`
`the Appellant’s home “is not a final decision amenable to appellate
`
`review,” explaining that Congress made only a certain subset of receiver-
`
`related orders—orders appointing the receiver and certain others—
`
`immediately appealable. Id.
`
`
`
`
`2
`
`
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`Case: 22-11226 Document: 84-1 Page: 20 Date Filed: 08/13/2023
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`
`
`Ten days later, on June 28, 2023, a separate panel of this Court in
`
`a published opinion held that the District Court erred in appointing the
`
`receiver and vacated the order doing so. SEC v. Barton, 72 F.4th 640,
`
`648 (5th Cir. 2023). This Court explained that the District Court did not
`
`hold the Commission to the high standards for appointing a receiver,
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`including the requirements to establish “1) a clear necessity to protect
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`the defrauded investors’ interest in property, 2) legal and less drastic
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`equitable remedies are inadequate, and 3) the benefits of receivership
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`outweigh the burdens on the affected parties.” Id. at 645 (citing
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`Netsphere, Inc. v. Baron, 703 F.3d 296, 305 (5th Cir. 2012) (hereinafter
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`“Netsphere I”)). These high standards must be enforced—before the
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`Government seizes a citizen’s property through a receivership—because
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`a “[r]eceivership is ‘an extraordinary remedy that should be employed
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`with the utmost caution.’” Id.
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`The Court further held that the District Court erred by placing
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`virtually all of the Appellant’s assets into receivership, without a specific
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`inquiry into what property was the proceeds of alleged securities fraud
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`in the underlying case. Id. at 647. At oral argument, the panel
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`repeatedly questioned the Commission about having seized and
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`3
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`Case: 22-11226 Document: 84-1 Page: 21 Date Filed: 08/13/2023
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`attempting to sell the Appellant’s home without any effort to trace
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`affected proceeds into that asset. SEC v. Barton, No. 22-11132,
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`Transcription of Oral Argument at 25:15-26:7 (5th Cir. May 1, 2023).
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`Before this Court held that the entire receivership was invalid, the
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`District Court issued orders approving the sale of several other of the
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`properties associated with the Appellant’s commercial real estate
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`business. The Appellant appealed three of those orders. In a case
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`involving the sale of the Appellant’s realty interest in two real estate
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`projects, this Court did not dismiss the appeal and has set the case for
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`oral argument in October 2023. SEC v. Barton, No. 22-11242, Oral
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`Argument Notice (5th Cir. July 26, 2023) (ECF No. 63).
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`In two other appeals that had not been briefed as of the time of the
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`instant panel’s decision, the Commission moved to dismiss the appeals
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`for lack of subject matter jurisdiction, relying exclusively on the panel
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`decision that is the subject of this petition. A motions panel of this Court
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`granted those motions on July 17, 2023, without further explanation.
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`SEC v. Barton, No. 23-10515 (5th Cir. July 17, 2023) (ECF No. 48-2); SEC
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`v. Barton, No. 23-10516 (5th Cir. July 17, 2023) (ECF No. 36-1).
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`4
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`Case: 22-11226 Document: 84-1 Page: 22 Date Filed: 08/13/2023
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`STATEMENT OF FACTS NECESSARY TO THE ARGUMENT
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`No additional facts are necessary to the argument of the issues.
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`5
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`Case: 22-11226 Document: 84-1 Page: 23 Date Filed: 08/13/2023
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`ARGUMENT AND AUTHORITIES
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`I. Rehearing En Banc Is Warranted Because the Panel
`Decision Conflicts with This Circuit’s Established
`Precedent That Orders Authorizing a Receiver to Sell
`Property Are Immediately Appealable.
`The panel decision directly conflicts with prior opinions of this
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`Court—two of which are published and precedential—that orders
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`authorizing a receiver to sell property are immediately appealable. “A”
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`Mfg., 541 F.2d at 506; see Janvey, 404 F. App’x at 914; Netsphere II, 799
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`F.3d at 333-34. Because there has been no intervening contrary decision
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`by the Supreme Court or this Court sitting en banc, the panel lacked
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`authority to hold that there was no jurisdiction over an immediate appeal
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`of an order authorizing a receiver to sell property. Janvey, 404 F. App’x
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`at 914 (rejecting Commission request to a panel of this Court to overrule
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`“A” Manufacturing and hold that orders authorizing SEC-requested
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`receivers to sell property are not immediately appealable); see also United
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`States v. Setser, 607 F.3d 128, 131 (5th Cir. 2010); Burge v. Parish of St.
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`Tammany, 187 F.3d 452, 466 (5th Cir. 1999). The en banc Court should
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`grant rehearing to resolve the conflict with this Court’s prior decisions
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`and “to secure and maintain the uniformity of the [C]ourt’s decisions.”
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`Fed. R. App. P. 35(b)(2).
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`6
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`Case: 22-11226 Document: 84-1 Page: 24 Date Filed: 08/13/2023
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`Nearly 150 years ago, the Supreme Court of the United States set
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`forth a general rule that “a decree confirming a sale . . . may be appealed
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`from” without awaiting a final judgment in the entire underlying case.
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`Sage v. Cent. R. Co. of Iowa, 96 U.S. 712, 714 (1877). In 1976, this Court
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`held that an order authorizing a sale of real property by a receiver is no
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`exception to this principle and is immediately appealable even as the
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`underlying case continues. “A” Mfg., 541 F.2d at 506. And this Court
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`has confirmed that holding twice, once in 2010 and again in 2015.
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`Janvey, 404 F. App’x at 914 (holding that an order authorizing a receiver
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`to sell property is immediately appealable); Netsphere II, 799 F.3d at
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`333-34.
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`In 2015, a panel of this Court to great care to preserve and to
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`ratify the holding that orders authorizing a receiver to sell property are
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`immediately appealable. Netsphere II, 799 F.3d at 333-34.1 In doing
`
`
`1 There are two key historical panel decisions under the title of Netsphere,
`Inc. v. Baron. The first decision concerned an appeal to an order
`appointing a receiver and set forth the standards a party seeking a
`receivership must meet to obtain one. Netsphere, I, 703 F.3d at 301, 305-
`06. A separate panel of this Court relied on the Netsphere I decision to
`overturn the order appointing the receiver in this matter. Barton, 72
`F.4th at 645-46. The second Netsphere decision involved an appeal to an
`order approving the fees charged by the receiver. Netsphere II, 799 F.3d
`at 330. In that decision, the Court considered the array of interlocutory
`7
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`Case: 22-11226 Document: 84-1 Page: 25 Date Filed: 08/13/2023
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`
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`so, the Court in Netsphere II clarified that “A” Manufacturing’s holding
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`did not arise from Section 1292(a)(2) of Title 28, the provision of the
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`United States Code directed specifically at the appealability of certain
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`orders related to a receivership. Id. To quote the Court:
`
`orders
`holding—that
`“A” Manufacturing’s
`confirming a sale are immediately appealable—
`was based on its interpretation of three cases that,
`pursuant to an entirely different jurisprudential
`line
`[than those
`interpreting 28 U.S.C. §
`1292(a)(2), regarding appeals from certain orders
`regarding receivers], had held that orders
`confirming sales were immediately appealable.
`Id. at 333. That separate line of cases, “‘spanning a century, clearly
`
`establish[es] the rule that an interlocutory order commanding a sale,
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`and one confirming a sale are appealable.’” Id. at 333 n. 35 (quoting
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`“A” Mfg., 541 F.2d at 506).
`
`Indeed, the cases the Court relied upon in “A” Manufacturing
`
`stem from an interpretation of Section 1291 of Title 28 and other
`
`doctrines of appellate jurisdiction that regard orders confirming sales
`
`as “final decisions” that are immediately appealable. See “A” Mfg., 541
`
`
`orders regarding a receiver’s activities that are immediately appealable,
`holding that the fee order was not one of them. Id. at 331-32.
`8
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`Case: 22-11226 Document: 84-1 Page: 26 Date Filed: 08/13/2023
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`
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`F.2d at 506. And the principle applies both inside and outside the
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`receivership context.
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`In other words, orders confirming sales of real property having
`
`nothing to do with a receiver also would be immediately appealable.
`
`Nothing about the additional statutory authority to seek immediate
`
`appeal of certain orders regarding a receivership changes that general
`
`principle when a receiver is involved.
`
`By clarifying that the Court’s long-standing rule that receiver sale
`
`orders are appealable is grounded outside the special statutory
`
`provision for appealing orders relating to a receivership, the Court was
`
`able to classify as dicta the “A” Manufacturing panel’s reference to
`
`Section 1292(a)(2) as one of the bases for that decision. Id. at 334. And
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`it was able to adopt a narrower interpretation of Section 1292(a)(2) in
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`denying an immediate appellate right for receiver-related orders other
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`than sale orders. Id. at 333.
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`The application of this Court’s long-standing rule to the instant
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`appeal shows its importance. Here, the District Court, with little
`
`analysis, seized the Appellant’s family home, gave it to a third-party
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`receiver, and authorized the Receiver to permanently sell it to a third
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`9
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`Case: 22-11226 Document: 84-1 Page: 27 Date Filed: 08/13/2023
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`
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`party. The District Court did so before engaging in any meaningful
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`analysis of the mandatory standards for appointing a receiver. Barton,
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`72 F.4th at 646. And it did so without determining whether the most
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`routine of Appellant’s personal assets—his only home—were somehow
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`the proceeds of allegedly illegal business-related activity. Id. at 647.
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`Indeed, at oral argument, judges of this Court pointed to the seizure of
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`the Appellant’s home as the lead symptom of uncareful decision-making
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`regarding whether there should be a receivership and, if so, what assets
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`should be included in it. SEC v. Barton, No. 22-11132, Transcription of
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`Oral Argument at 27:6-28:16 (5th Cir. May 1, 2023).
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`Absent an immediate appeal, the District Court’s order authorizing
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`the sale of the Appellant’s home could have sent that asset off to a third
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`party, had a new family move into the home, and presented a transaction
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`that would have been very difficult to unwind at the end of what could
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`have been a lengthy case. There is a permanence to allowing a sale of
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`real property to close and, for that reason, this Court hears immediate
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`appeals from lower court orders authorizing them, whether they occur
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`inside or outside the context of a receivership.
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`10
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`Case: 22-11226 Document: 84-1 Page: 28 Date Filed: 08/13/2023
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`
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`In the event the panel does not grant rehearing and resolve the
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`panel decision’s direct conflict with this Court’s prior precedents, this
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`Court should grant rehearing en banc to restore the uniformity of this
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`Court’s decisions and to vacate and reverse the panel decision dismissing
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`this case for lack of jurisdiction.
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`When a panel of this Court hears the case on the merits, recognizing
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`this Court’s long-standing rule of jurisdiction over orders authorizing
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`receivers to sell property, reversal of the District Court’s order is
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`required. This Court has held that the Receiver seizing the home and
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`seeking to sell it was illegally appointed. Barton, 72 F.4th at 648. The
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`sale order thus was also error. And it is particularly egregious that
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`allegations over the conduct of the Appellant’s business could lead to the
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`pretrial seizure and sale of his only home.
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`So clear is the course ahead, given the Court’s intervening decision
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`on the merits of the receivership, the en banc Court should consider
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`summary action reversing the District Court’s order. At a minimum,
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`however, the panel’s ruling that this Court lacks jurisdiction over orders
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`authorizing a receiver to sell property cannot stand without a full hearing
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`and consideration before the en banc Court.
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`11
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`Case: 22-11226 Document: 84-1 Page: 29 Date Filed: 08/13/2023
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`
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`II. Rehearing En Banc Is Also Necessary to Preserve This
`Circuit’s Rule That A Panel Cannot Overrule Prior
`Precedent Without the En Banc Court.
`This Court should also grant rehearing en banc to secure and
`
`maintain uniformity of the Court’s decisions regarding a panel’s ability
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`to reverse circuit precedent without the en banc Court. Fed. R. App. P.
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`35(b)(1)(A). As discussed above, the panel’s decision conflicts with three
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`panel decisions of this Court, two of which are published and
`
`precedential. Netsphere II, 799 F. 3d at 333-34; Janvey, 404 F. App’x at
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`914; “A” Mfg., 541 F.2d at 506. If not reversed, the panel’s decision also
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`would conflict with decisions of this Court making clear that a panel may
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`not rule contrary to a prior panel decision of this Court absent an
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`intervening decision by the Supreme Court or by this Court sitting en
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`banc. Setser, 607 F.3d at 131; Burge, 187 F.3d at 466.
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`When a panel of this Court confronted a prior Commission request
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`to overturn “A” Manufacturing and hold that orders authorizing sales of
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`property by receivers are not immediately appealable, the panel correctly
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`held that it lacked the authority to do so and that such a request may
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`only be made to the en banc Court. Janvey, 404 F. App’x at 914. As the
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`Court explained: “It is well-established that a panel does not have the
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`12
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`Case: 22-11226 Document: 84-1 Page: 30 Date Filed: 08/13/2023
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`authority to overrule a previous panel’s decision absent an intervening,
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`contrary, or supersedin
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