Appellees Brief in Associated Recovery v. John Does 1-44 Et Al.

Case: 18-10596 Document: 00514726590 Page: 1 Date Filed: 11/16/2018
Case No. 18-10596

_______________________________________________________
IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT
_____________________________________________________
ASSOCIATED RECOVERY L.L.C.,
Plaintiff - Appellant
v.
JOHN DOES 1- 44; 744.COM; 028.COM; 3DCAMERA.COM; FNY.COM; ET

AL,
Defendants - Appellees
---------------------------------------------------------
v.
JOHN DOES 1- 44; 744.COM; 028.COM; 3DCAMERA.COM; FNY.COM;

VERISIGN INCORPORATED; ET AL,
Defendants - Appellees
---------------------------------------------------------
v.
LINDA BUTCHER; CBRE GROUP INCORPORATED; VIVIAN ROSENTHAL;

WILLIAM WOLFSON; PRIVECO INCORPORATED; STEVE PARMA; SOL
PERLSTEIN; RADICAL INVESTMENTS MANAGEMENT L.L.C.; TUMULT
INCORPORATED; DGB PARTNER INCORPORATED;
TOBYCLEMENTS.COM L.L.C.; TRUE MAGIC L.L.C.; JANNO L.L.C.;
POWER HOME TECHNOLOGIES L.L.C.; LOOKOUT INCORPORATED;

SLICE TECHNOLOGY INCORPORATED, formerly known as Project Slice
Incorporated; STEVE FORTUNA; MOINC-US; TELEPATHY
INCORPORATED; ONIG L.L.C.; NEWS LIMITED; WORLDWIDE
RETAILING L.L..C.; STATE FARM MUTUAL AUTOMOBILE INSURANCE
COMPANY; ALL-PRO FASTENERS INCORPORATED; BUYERS
INTERNATIONAL GROUP L.L.C.; CREATION MEDIA L.L.C.;
DHARSHINEE NAIDU; KATE SPADE; ALANSIS CORPORATION;
FANTASY SPIN GAME L.L.C.; GOLDRUN INCORPORATED;
ALANSIS.COM INCORPORATED,
Defendants - Appellees.
_______________________________________________________
On Appeal from the United States District Court

for the Northern District of Texas, Dallas Division, No. 3:16-cv-1025-L
RESPONSE BRIEF OF DEFENDANT-APPELLEES

ALANSIS.COM, INC.; ALL-PRO FASTENERS, INC.; CBRE GROUP INC.;
STEVE FORTUNA; LOOKOUT, INC.; POWER HOME TECHNOLOGIES,
LLC; PRIVECO INC.; RADICAL INVESTMENTS MANAGEMENT
L.L.C.; SLICE TECHNOLOGIES, INC.; STATE FARM MUTUAL
AUTOMOBILE INSURANCE COMPANY; TELEPATHY INC.; QUINN
VEYSEY; CREATION MEDIA LLC; ONIG, LLC; TRUE MAGIC, LLC;
TUMULT, INC.; VIRTUAL INVESTMENTS, LLC; FANTASY SPIN
GAME LLC; MEDIA OPTIONS INC.; AND IN REM DOMAIN NAME
DEFENDANT-APPELLEES 028.COM; 744.COM; FNY.COM; ZHD.COM;
JTZ.COM; KGJ.COM; KMQ.COM; KXQ.COM; LNM.COM; XAQ.COM;
KXW.COM; LUOHE.COM; MEQ.COM; OCU.COM; PIXIE.COM;
QMH.COM; YGX.COM; YQP.COM; YQT.COM; SQG.COM; XSG.COM;
YCX.COM; ZDP.COM; VCZ.COM; VGJ.COM; WYD.COM; XFF.COM;
ZZM.COM; YJR.COM; YJX.COM; YRN.COM; YTE.COM; YYG.COM;
AND ZULIN.COM
Dated: November 16, 2018
/s/ Michael Hassett /s/ Darin M. Klemchuk
Michael Hassett Darin M. Klemchuk

Jones Hassett, PC Brian Casper
440 North Center Klemchuk LLP
Arlington, TX 76011 8150 N. Central Expressway, 10th
(817) 265-0440 Floor
mhassett@tarrantbusinesslaw.com Dallas, TX 75206
(214) 367-6000
Counsel of Record for Defendant- darin.klemchuk@klemchuk.com
Appellee All-Pro Fasteners, Inc. brian.casper@klemchuk.com
Counsel of Record for Defendant-

Appellees Alansis.com, Inc. and
Radical Investments Management
L.L.C.
/s/ Brantley Ross Pringle, Jr. /s/ Matthew T. Furton
Brantley Ross Pringle, Jr. Matthew T. Furton

Wright & Greenhill, PC Locke Lord, LLP
900 Congress Avenue, Suite 500 111 South Wacker Drive, Ste. 4100
Austin, TX 78701 Chicago, IL 60606
(512) 476-4600 (312) 443-0445
rpringle@w-g.com mfurton@lockelord.com
Counsel of Record for Defendant- Mark R. Backofen

Appellee Steve Fortuna Locke Lord, LLP
2200 Ross Avenue, Suite 2800
Dallas, TX 75201
(214) 740-8633
mbackofen@lockelord.com

Appellee CBRE Group Inc.
/s/ Bobby Lamb /s/ J. Mark Mann
Bobby Lamb J. Mark Mann

Gillam & Smith LLP MANN | TINDEL | THOMPSON
303 S. Washington Ave. 300 West Main Street
Marshall, Texas 75670 Henderson, Texas 75652
(903) 934-8450 (903) 657-8540
wrlamb@gillamsmithlaw.com mark@themannfirm.com
Counsel of Record for Defendant- Counsel of Record for Defendant-

Appellee Power Home Technologies, Appellee, Lookout, Inc.
LLC
/s/ Joel C. Boehm /s/ Franklin M. Smith
Joel C. Boehm Debra E. Gunter

Wilson Sonsini Goodrich & Rosati Findlay Craft, P.C.
900 S. Capital of Texas Highway 102 N. College Ave., Suite 900
Las Cimas IV, Fifth Floor Tyler, TX 75702
Austin, TX 78746 (903) 534-1100
(512) 338-5418 dgunter@findlaycraft.com
jboehm@wsgr.com
Franklin M. Smith
Counsel of Record for Defendant- Dickinson Wright PLLC
Appellee Slice Technologies, Inc. 2600 W. Big Beaver Rd, Suite 300
Troy, MI 48084
(248) 433-7393

Appellee PRIVECO, Inc.
/s/ Brian Pandya /s/ R. William Beard, Jr.
Brian Pandya R. William Beard, Jr.

David Weslow Slayden Grubert Beard PLLC
Wesley Weeks 401 Congress Avenue, Suite 1650
Wiley Rein LLP Austin, TX 78701
1776 K Street, NW (512) 402-3556
Washington, DC 20006 wbeard@sgbfirm.com
(202) 719-7000
bpandya@wileyrein.com Counsel of Record for Defendant-
dweslow@wileyrein.com Appellee State Farm Mutual
wweeks@wileyrein.com Automobile Insurance Company

Appellee Telepathy Inc.
/s/ Mark J. Levine /s/ Richard D. Salgado
Mark J. Levine Richard D. Salgado

Weycer, Kaplan, Pulaski & Zuber, Dentons US LLP
P.C. 2000 McKinney Avenue, Ste. 1900
11 Greenway Plaza, Suite 1400 Dallas, TX 75219
Houston, TX 77046 (214) 259-0935
(713) 961-9045 richard.salgado@dentons.com
mlevine@wkpz.com
Counsel of Record for Defendant- Appellees Creation Media, LLC;
Appellee Quinn Veysey Unicorn Ranch, LLC (in lieu of
ONIG, LLC); True Magic, LLC;
Tumult, Inc.; Virtual Investments,
LLC; Fantasy Spin Game LLC;
Media Options Inc.; and In rem
Domain Name Defendant-Appellees
028.com; 744.com; FNY.com;
ZHD.com; JTZ.com; KGJ.com;
KMQ.com; KXQ.com; LNM.com;
XAQ.com; KXW.com; LUOHE.com;
MEQ.com; OCU.com; PIXIE.com;
QMH.com; YGX.com; YQP.com;
YQT.com; SQG.com; XSG.com;
YCX.com; ZDP.com; VCZ.com;
VGJ.com; WYD.com; XFF.com;
ZZM.com; YJR.com; YJX.com;
YRN.com; YTE.com; YYG.com; and
ZULIN.com
CERTIFICATE OF INTERESTED PERSONS
The undersigned counsel of record certifies that the following listed persons
and entities as described in the fourth sentence of Rule 28.2.1 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.
Plaintiff – Appellant
Upon information and belief:
1. Associated Recovery LLC (Plaintiff – Appellant)

a. Mr. Jeffrey Baron
b. Mr. Conrad C. Herring (counsel for Associated Recovery, LLC)
c. Mr. Jack T. Jamison (counsel for Associated Recovery, LLC)
Defendants – Appellees Joining This Brief
1. Alansis.com, Inc. (Defendant-Appellee)

a. Alansis.com, Inc. does not have a parent corporation and there is no
publicly traded corporation owning 10% or more of its stock.
b. Klemchuk LLP (counsel for Alansis.com, Inc.)
i. Mr. Darin M. Klemchuk
ii. Mr. Brian Casper
2. All-Pro Fasteners, Inc. (Defendant-Appellee)

a. All-Pro Fasteners, Inc., does not have a parent corporation, and there is
no publicly traded corporation owning 10% or more of the stock of All-
Pro Fasteners, Inc.
b. Jones Hassett, PC (counsel for All-Pro Fasteners, Inc.)
i. Mr. Michael Hassett
3. CBRE Group Inc. (Defendant-Appellee)

a. CBRE Group, Inc. is a publicly traded company and does not have a
parent corporation, and there is no publicly traded corporation owning
10% or more of the stock of CBRE Group, Inc.
b. Locke Lord, LLP (counsel for CBRE Group Incorporated)
i. Mr. Matthew Furton
ii. Mr. Mark Backofen
4. Steve Fortuna (Defendant-Appellee)

a. Steve Fortuna and domain www.parkinggames.com
b. Wright & Greenhill, PC (counsel for Steve Fortuna)
i. Mr. Brantley Ross Pringle, Jr.
5. Lookout, Inc. (Defendant – Appellee)

a. Lookout, Inc., does not have a parent corporation and there is no
publicly traded corporation owning 10% or more of the stock of
Lookout, Inc.
b. Mann/Tindel/Thompson (counsel for Lookout, Inc.)
i. Mr. J. Mark Mann
ii. Mr. G. Blake Thompson
6. Power Home Technologies, LLC (Defendant-Appellee)

a. Alliance Holdings GFD, Inc.
i. Power Home Technologies, LLC is 100% owned by Alliance
Holdings GFD, Inc.
b. Gillam & Smith, LLP (counsel for Power Home Technologies, LLC)
i. Mr. Bobby Lamb
7. PRIVECO Inc. (Defendant-Appellee)

a. PriveCo, Inc. does not have a parent corporation and there is no publicly
traded corporation owning 10% or more of the stock of PriveCo, Inc.
b. Findlay Craft, P.C. (counsel for PRIVECO Inc.)
i. Ms. Debra E. Gunter
c. Dickinson Wright PLLC (counsel for PRIVECO Inc.)
i. Mr. Franklin M. Smith
8. Radical Investments Management L.L.C. (Defendant-Appellee)

a. Radical Investments L.L.C. does not have a parent corporation and
there is no publicly traded corporation owning 10% or more of the
stock/units of Radical Investments L.L.C.
i. Mark Cuban is 100% owner of Radical Investments L.L.C.
b. Klemchuk LLP (counsel for Radical Investments Management L.L.C.)
i. Mr. Darin M. Klemchuk
ii. Mr. Brian Casper
9. Slice Technologies, Inc. (Defendant – Appellee)

a. Rakuten, Inc.
i. Slice Technologies, Inc. is a wholly owned subsidiary of
Rakuten, Inc., a publicly-traded Japanese Corporation (Tokyo
Stock Exchange, TYO: 4755).
b. Wilson Sonsini Goodrich & Rosati, PC (counsel for Slice
Technologies, Inc.)
i. Mr. Joel C. Boehm
c. Siebman, Burg, Phillips & Smith, L.L.P. (counsel for Slice
Technologies, Inc.)
i. Mr. Clyde M. Siebman
10. State Farm Mutual Automobile Insurance Company (Defendant-Appellee)

a. State Farm Mutual Automobile Insurance Company does not have a
parent corporation and there is no publicly traded corporation owning
10% or more of the stock of State Farm Mutual Automobile Insurance
Company.
b. Slayden Grubert Beard PLLC (counsel for State Farm Mutual
Automobile Insurance Company)
i. Mr. R. William Beard, Jr.
11. Telepathy Inc. (Defendant-Appellee)

a. Telepathy Inc. does not have a parent corporation and there is no
publicly traded corporation owning 10% or more of its stock.
b. Wiley Rein, LLP (counsel for Telepathy, Inc.)
i. Mr. Brian Pandya
ii. Mr. David Weslow
iii. Mr. Wesley Weeks
c. Siebman, Burg, Phillips & Smith, L.L.P. (counsel for Telepathy, Inc.)
i. Mr. Clyde M. Siebman
12.Quinn Veysey (Defendant-Appellee)
a. Quinn Veysey
b. Weycer, Kaplan, Pulaski & Zuber, P.C. (counsel for Quinn Veysey)
i. Mr. Mark J. Levine
13. Thirty-Four (34) in rem Domain Name Defendants-Appellees:

a. 028.com (Defendant-Appellee)
i. Yaoguang Zhu
b. 744.com (Defendant-Appellee)
i. Hao Wang
c. FNY.com (Defendant-Appellee)
i. Xiaosheng Liu
d. ZHD.com (Defendant-Appellee)
i. Xiaosheng Liu
e. JTZ.com (Defendant-Appellee)
i. Chang Su
f. KGJ.com (Defendant-Appellee)
i. Xiaofeng Lin
g. KMQ.com (Defendant-Appellee)
i. Xiaofeng Lin
h. KXQ.com (Defendant-Appellee)
i. Xiaofeng Lin
i. LNM.com (Defendant-Appellee)
i. Xiaofeng Lin
j. XAQ.com (Defendant-Appellee)
i. Xiaofeng Lin
k. KXW.com (Defendant-Appellee)
i. Yu Lin
l. LUOHE.com (Defendant-Appellee)
i. Fengjing Zheng
m. MEQ.com (Defendant-Appellee)
i. Jinwu Chen
n. OCU.com (Defendant-Appellee)
i. Robert Kalfayan
o. PIXIE.com (Defendant-Appellee)
i. Zhilong Chu
p. QMH.com (Defendant-Appellee)
i. Yuhau Jiang
q. YGX.com (Defendant-Appellee)
i. Yuhau Jiang
r. YQP.com (Defendant-Appellee)
i. X Yuhau Jiang
s. YQT.com (Defendant-Appellee)
i. Yuhau Jiang
t. SQG.com (Defendant-Appellee)
i. Feng Lu
u. XSG.com (Defendant-Appellee)
i. Feng Lu
v. YCX.com (Defendant-Appellee)
i. Feng Lu
w. ZDP.com (Defendant-Appellee)
i. Feng Lu
x. VCZ.com (Defendant-Appellee)
i. Teng Wang
y. VGJ.com (Defendant-Appellee)
i. Huochun Huang
z. WYD.com (Defendant-Appellee)
i. Yanbin Lin
aa. XFF.com (Defendant-Appellee)
i. Xiaoying Li
bb.ZZM.com (Defendant-Appellee)
i. Xiaoying Li
cc. YJR.com (Defendant-Appellee)
i. Xumin Huang
dd.YJX.com (Defendant-Appellee)
i. Chunmei Lin
ee. YRN.com (Defendant-Appellee)
i. Dongdong Xu
ff. YTE.com (Defendant-Appellee)
i. Domain Capital, LLC
gg.YYG.com (Defendant-Appellee)
i. Liwei Liu
hh.ZULIN.com (Defendant-Appellee)
i. Feng Yan
ii. Dentons US LLP (counsel for 34 in rem Domain Name Defendants-
Appellees)
i. Mr. Richard D. Salgado
14. Creation Media, LLC (Defendant-Appellee)

a. Creation Media, LLC does not have a parent corporation and there is
no publicly traded corporation owning 10% or more of the stock of
Creation Media, LLC.
b. Dentons US LLP (counsel for Creation Media, LLC)
15. ONIG, LLC (Defendant-Appellee)

a. Unicorn Ranch, LLC (in lieu of ONIG, LLC). Unicorn Ranch, LLC is
commonly owned with and is the successor-in-interest to ONIG, LLC,
which is an inactive corporate entity. Unicorn Ranch, LLC has no
parent corporation, and no publicly held corporation owns 10% or more
interest in Unicorn Ranch, LLC.
b. Dentons US LLP (counsel for ONIG, LLC and Unicorn Ranch, LLC)
16. True Magic, LLC (Defendant-Appellee)

a. True Magic, LLC does not have a parent corporation and there is no
publicly traded corporation owning 10% or more of the stock of True
Magic, LLC.
b. Dentons US LLP (counsel for True Magic, LLC)
17. Tumult, Inc. (Defendant-Appellee)

a. Tumult, Inc. does not have a parent corporation and there is no publicly
traded corporation owning 10% or more of the stock of Tumult, Inc.
b. Dentons US LLP (counsel for Tumult, Inc.)
18. Virtual Investments, LLC (Defendant-Appellee)

a. Virtual Investments, LLC does not have a parent corporation and there
is no publicly traded corporation owning 10% or more of the stock of
Virtual Investments, LLC.
b. Dentons US LLP (counsel for Virtual Investments, LLC)
19. Fantasy Spin Game LLC (Defendant-Appellee)

a. Fantasy Spin Game LLC does not have a parent corporation and there
is no publicly traded corporation owning 10% or more of the stock of
Fantasy Spin Game LLC.
b. Dentons US LLP (counsel for Fantasy Spin Game LLC)
20. Media Options Inc. (Defendant-Appellee)

a. Media Options Inc. does not have a parent corporation and there is no
publicly traded corporation owning 10% or more of the stock of Media
Options Inc.
b. Dentons US LLP (counsel for Media Options Inc.)
Third Parties
Upon information and belief:
1. Novo Point, L.L.C.

Arlington, TX 76011 8150 N. Central Expressway, 10th Floor
(817) 265-0440 Dallas, TX 75206
mhassett@tarrantbusinesslaw.com (214) 367-6000
darin.klemchuk@klemchuk.com
Counsel of Record for Defendant- brian.casper@klemchuk.com
Appellee All-Pro Fasteners, Inc.
Appellees Alansis.com, Inc. and Radical
Investments Management L.L.C.

(512) 476-4600 (312) 443-0445

Dallas, TX 75201
(214) 740-8633
Counsel of Record for Defendant-Appellee

CBRE Group Inc.

(903) 934-8450 (903) 657-8540

LLC

Austin, TX 78746 (903) 534-1100
jboehm@wsgr.com
Franklin M. Smith
Troy, MI 48084
(248) 433-7393

PRIVECO, Inc.

1776 K Street, NW (512) 402-3556
(202) 719-7000
bpandya@wileyrein.com Counsel of Record for Defendant-Appellee
dweslow@wileyrein.com State Farm Mutual Automobile Insurance
wweeks@wileyrein.com Company


Houston, TX 77046 (214) 259-0935
mlevine@wkpz.com
Counsel of Record for Defendant- Appellees Creation Media, LLC; Unicorn
Appellee Quinn Veysey Ranch, LLC (in lieu of ONIG, LLC); True
Magic, LLC; Tumult, Inc.; Virtual
Investments, LLC; Fantasy Spin Game
LLC; Media Options Inc.; and In rem
028.com; 744.com; FNY.com; ZHD.com;
JTZ.com; KGJ.com; KMQ.com;
KXQ.com; LNM.com; XAQ.com;
KXW.com; LUOHE.com; MEQ.com;
OCU.com; PIXIE.com; QMH.com;
YGX.com; YQP.com; YQT.com;
SQG.com; XSG.com; YCX.com;
ZDP.com; VCZ.com; VGJ.com;
WYD.com; XFF.com; ZZM.com;
YJR.com; YJX.com; YRN.com; YTE.com;
YYG.com; and ZULIN.com
STATEMENT REGARDING ORAL ARGUMENT
Appellees request oral argument. Appellees believe that oral argument
would be helpful to the Court given this case’s long and complex history.
TABLE OF CONTENTS
Page
I. PRELIMINARY STATEMENT .................................................................... 1
II. STATEMENT OF THE ISSUE PRESENTED .............................................. 3
III. STATEMENT OF THE CASE. ..................................................................... 3
IV. SUMMARY OF THE ARGUMENT ............................................................. 9
V. ARGUMENT ................................................................................................ 13
A. Standard of Review ............................................................................ 13
B. The Sales Orders Were Not Reversed in Netsphere I. ....................... 14
C. Associated Recovery’s Predecessor-In-Interest, Novo Point,

Sold Its Entire Interest in the Domain Names.................................... 20
D. The Conditions for Collateral Estoppel Apply Here. ......................... 23
E. Associated Recovery’s Lawsuit Is an Improper Collateral

Attack On this Court’s Judgment in Netsphere I and Other Prior
Orders. ................................................................................................ 30
F. Other Bases Exist to Affirm the District Court’s Judgment. ............. 33
1. Defendants – Appellees are Bona-Fide Purchasers for

Value. ....................................................................................... 34
2. Certain Associated Recovery Claims Plainly Fail on the

Statute of Limitations. .............................................................. 37
3. Associated Recovery’s “Trademark” Claims are

Deficient as Pleaded. ................................................................ 40
VI. CONCLUSION............................................................................................. 43
I
TABLE OF AUTHORITIES
Page(s)
CASES
All Am. Builders, Inc. v. All Am. Siding of Dallas, Inc.,
991 S.W.2d 484 (Tex. App. – Fort Worth 1999, no pet.) .............................43
Baron v. Vogel, 678 F. App’x 202 (5th Cir. 2017) .......................................7, 12, 31,
36
Baron v. Vogel, No. 3:15-CV-232-L, 2016 WL 1273465

(N.D. Tex. Mar. 31, 2016) ..................................................................6, 11, 30,
36
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955 (2007).........................13
Brookfield Commc’ns Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036

(9th Cir. 1999) ............................................................................................... 41
Campbell v. City of San Antonio, 43 F.3d 973 (5th Cir. 1995) ...............................13
Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285

(5th Cir. 2004) .........................................................................................14, 20
Cinel v. Connick, 15 F.3d 1338 (5th Cir. 1994).......................................................13
Copeland v. Merrill Lynch & Co., 47 F.3d 1415 (5th Cir. 1995) ............................23
Croft v. Gov. of Texas, 562 F.3d 735 (5th Cir. 2009) ..............................................29
CRS Recovery, Inc. v. Laxton, 600 F.3d 1138 (9th Cir. 2010) ................................ 34
Derrick Mfg. Corp. v. Sw. Wire Cloth, Inc., 934 F. Supp. 796
(S.D. Tex. 1996) ............................................................................................40
E. & J. Gallo Winery v. Spider Webs Ltd., 286 F.3d 270

(5th Cir. 2002) .............................................................................................. 42
EDS Corp. v. Southwestern Bell Tel., 674 F.2d 453 (5th Cir. 1982).................34, 35
Federated Department Stores, Inc. v. Moitie, 452 U.S. 394 (1981)........................ 30
ii
Geodyne Energy Income Prod. P’ship I-E v. Newton Corp.,

161 S.W.3d 482 (Tex. 2005) .........................................................................22
Gonzalez v. Kay, 577 F.3d 600 (5th Cir. 2009) .................................................35, 36
Griffin Tech., Inc. v. griffindiscount.com, No. 1:14-CV-765,

2014 WL 6712895 (E.D. Va. Nov. 26, 2014) ...............................................37
Hovey v. McDonald, 109 U.S. 150 (1883)............................................................... 23
Hudson v. Comm’r, 71 F.3d 877 (5th Cir. 1995) .....................................................26
In re Baron, 593 F. App’x 356 (5th Cir. 2014) .......................................................32
In re Davis, 3 F.3d 113 (5th Cir. 1993) ...................................................................23
Jackson v. Wildflower Prod. Co., Inc., 505 S.W.3d 80

(Tex. App. – Amarillo 2016), review denied (Mar. 10, 2017) ......................22
Lott v. Lott, 370 S.W.2d 463 (Tex. 1963) ................................................................21
Mayo v. Hartford Life Ins. Co., 354 F.3d 400 (5th Cir. 2004) ................................38
Merrill Lynch, Pierce, Fenner & Smith, P.C. v. Greystone Servicing

Corp., No. 3:06-CV- 0575-P, 2007 U.S. Dist. LEXIS 69235
(N.D. Tex. Sep. 18, 2007)..............................................................................39
Netsphere, Inc. v. Baron, 2012 U.S. App. LEXIS 27248

(5th Cir. Dec. 31, 2012) ...........................................................................10, 16
Netsphere, Inc. v. Baron, 2013 U.S. App. LEXIS 13315 (5th Cir. Apr.
4, 2013) ..........................................................................................................19
Netsphere, Inc. v. Baron, 703 F.3d 296 (5th Cir. 2012) ...................................passim
Netsphere, Inc. v. Baron, 799 F.3d 327 (5th Cir. 2015) ........................................3, 5
Netsphere, Inc. v. Baron, No. 3:09–cv–0988, 2013 WL 3327858

(N.D. Tex. May 29, 2013) ....................................................................1, 4, 23,
30, 32, 36
Netsphere, Inc. v. Baron, No. 3:09-CV-0988-L, 2015 WL 1400543

(N.D. Tex. Mar. 27, 2015) .............................................................................28
iii
Netsphere, Inc. v. Gardere Wynne Sewell, L.L.P, 657 F. App’x 320

(5th Cir. July 8, 2016) .............................................................................passim
Orca Assets, G.P. v. Burlington Res. Oil & Gas Co., 464 S.W.3d 403
(Tex. App. – Corpus Christi 2015, pet. denied) ............................................21
Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979) .............................................27
PEMEX Exploracion y Produccion v. BASF Corp., No. CIV.A. H- 10-

1997, 2013 U.S. Dist. LEXIS 144166 (S.D. Tex. Oct. 1, 2013) .............38, 39
PEMEX Exploracion y Produccion v. Murphy Energy Corp.,

923 F.Supp.2d 961 (S.D. Tex. 2013) ............................................................. 29
R2 Invs. LDC v. Phillips, 401 F.3d 638 (5th Cir. 2005) .......................................... 13
S. Co. v. Dauben Inc., 324 F. App’x 309 (5th Cir. 2009) ..................................41, 42
Savage v. Doyle, 153 S.W.3d 231 (Tex. App. – Beaumont 2004) ..........................21
Stefano v. First Union Nat. Bank of Virginia, 981 F. Supp. 417 (E.D.
Va. 1997) .......................................................................................................39
Teaching Co. P’ship v. Unapix Entm’t, Inc., 87 F. Supp. 2d 567 (E.D.

Va. 2000) .......................................................................................................40
Tex. Dept. of Transp. v. A.P.I. Pipe & Supply, LLC, 297 S.W.3d 162
(Tex. 2013) ....................................................................................................21
Torch Liquidating Tr. ex rel. Bridge Assocs. L.L.C. v. Stockstill,

561 F.3d 377 (5th Cir. 2009) .........................................................................33
Vanderbrook v. Unitrin Preferred Ins. Co. (In re Katrina Canal

Breaches Litig.), 495 F.3d 191 (5th Cir. 2007) ............................................ 13
STATUTES
15 U.S.C. § 1125 ......................................................................................................40
15 U.S.C. § 1125(d)(1)(B)(ii) ..................................................................................42
15 U.S.C. § 1127 (2013) .......................................................................................... 42
Texas Civil Practice and Remedies Code § 16.003 .................................................39
iv
Texas Civil Practice and Remedies Code § 16.003(a) ............................................38
Va. Code Ann. §§ 8.01–249 (Michie 1999 Supp.), 8.01–243(A)

(Michie 1992) ................................................................................................ 40
Va. Code § 8.3A–118(g) .......................................................................................... 39
RULES
Fed. R. Civ. P. 12(b)(6)......................................................................................13, 33
MISCELLANEOUS
Black’s Law Dictionary (10th ed. 2014) .................................................................21
David Dittfurth, Restitution in Texas: Civil Liability for Unjust

Enrichment, 54 S. Tex. L. Rev. 225, 238 (2012) ..........................................39
v
TABLE OF ABBREVIATIONS
Associated Recovery Plaintiff – Appellant Associated Recovery, LLC
Baron Mr. Jeffrey Baron
Netsphere I Netsphere, Inc. v. Baron, 703 F.3d 296 (5th Cir. 2012)
Netsphere II Netsphere, Inc. v. Baron, 799 F.3d 327 (5th Cir. 2015)
Netsphere III Netsphere, Inc. v. Gardere Wynne Sewell, L.L.P, 657 F.

App’x 320 (5th Cir. July 8, 2016)
Novo Point Novo Point L.L.C.
vi
I. PRELIMINARY STATEMENT
This is at least the sixth time this Court will address the litigation arising out
of Mr. Jeffrey Baron’s business venture involving ownership and sale of internet
domain names. As this Court explained in its opinion from the most recent appeal,
these cases have become “a nightmare,” and that “[w]hat should have been a
simple contract dispute . . . morphed into a four-year train-wreck involving
numerous attorneys, millions of dollars in legal fees, thousands of docket entries,
and massive frustrations for all parties, for [the district court], for the [b]ankruptcy
[c]ourt, and for the Fifth Circuit.” Netsphere III (quoting Netsphere, Inc. v. Baron,
No. 3:09–cv–0988, 2013 WL 3327858, at *1 (N.D. Tex. May 29, 2013)).
This situation has only gotten worse. As the Court noted, “Baron has a
proclivity for derailing otherwise orderly litigation.” Netsphere III at 320. The
current appeal involves Associated Recovery, a successor-in-interest to one of
Baron’s other companies (Novo Point LLC), which seeks to set aside sales of
domain names that were made during a receivership the district court had put in
place to “bring Baron’s vexatious litigation conduct to heel.” Id. Thus, Associated
Recovery now seeks to relitigate an issue that was resolved by this Court six years
ago in the first appeal, Netsphere I, and left undisturbed in the subsequent
decisions arising from the receivership. Like its predecessors, Associated
Recovery has cycled through numerous counsel, and filed multiple rounds of
1
pleadings, in the various cases that were consolidated below and are here on
appeal.
Unsatisfied with the answer he has received from this Court, Mr. Baron now
attacks the legitimate businesses that purchased domain names during the
receivership, or from subsequent sellers of the domain names, because the
receivership sold the domain names to try to recover receivership costs. But Mr.
Baron (or more aptly, his proxy Associated Recovery) asks a question that has
already been answered: [w]hen a receivership is improper . . . [who] is accountable
for the receivership fees and expenses. Netsphere I, 703 F.3d at 311-12. Because
“the circumstances that led to the appointment of a receiver were primarily of
Baron’s own making,” there was nothing improper about “charging the . . .
receivership fund for reasonable receivership expenses, without allowing any
additional assets to be sold.” Id. at 313. Simply put, the money that appellees or
their predecessors paid for domain names was ordered by this Court to be used to
pay receivership expenses, and because the money was not ordered to be returned
to the purchasers, it cannot be correct that those domain name sales were undone.
It is time for this litigation to finally end. As the district court held below,
collateral estoppel bars appellant from relitigating what was decided in Netsphere I
and each subsequent case. The district court’s judgment of dismissal should
therefore be affirmed.
2
II. STATEMENT OF THE ISSUE PRESENTED

1. Does Associated Recovery’s operative complaint fail to state a claim
upon which relief can be granted?
III. STATEMENT OF THE CASE

The long history preceding this litigation has been described in detail in
several cases listed in the footnote below,1 and in the District Court’s Opinion on
appeal (at ROA.2900-2906). The District Court’s Opinion also describes the
various actions that were transferred and consolidated into the action on appeal
here. ROA.2906-2914. Certain relevant history is described briefly here as well.2
This case began over twelve years ago when Netsphere, Inc. sued Jeffrey
Baron over a joint business venture involved in selling domain names. As this
Court previously put it, “[w]hat should have been a simple contract dispute . . .
morphed into a four-year train-wreck involving numerous attorneys, millions of
dollars in legal fees, thousands of docket entries, and massive frustrations for all
parties, for [the district court], for the [b]ankruptcy [c]ourt, and for the Fifth
1
The factual history of the Netsphere Action can be found in this Court’s
opinions in Netsphere, Inc. v. Baron, 703 F.3d 296 (5th Cir. 2012) (“Netsphere I”);
Netsphere, Inc. v. Baron, 799 F.3d 327 (5th Cir. 2015) (“Netsphere II”); and
Netsphere, Inc. v. Gardere Wynne Sewell, L.L.P, 657 F. App’x 320 (5th Cir. July 8,
2016) (“Netsphere III”).
2
At multiple points, Associated Recovery’s brief cites to pages that do not appear
to be in the record. Appellees have attempted to identify and respond to the
portions of the record that Associated Recovery appears to be referencing.
3
Circuit.” Netsphere III (quoting Netsphere, Inc. v. Baron, No. 3:09–cv–0988, 2013
WL 3327858, at *1 (N.D. Tex. May 29, 2013)).
Because of Baron’s vexatious litigation conduct and his practice of regularly
hiring and firing attorneys, the district court placed Baron and certain of his assets
into receivership. Netsphere I at 301-302. These assets included Associated
Recovery’s alleged predecessor in interest, Novo Point LLC,3 which at the time
owned the domain names at issue in this appeal. See id. at 304; ROA.2906.
Baron appealed the district court’s order establishing the receivership. He
also filed five motions requesting to stay the receivership pending the appeal,
which this Court denied. See Netsphere I at 304; ROA.2902, 6832. Thus, while
the appeal was pending, the receivership continued to manage Baron’s assets.
The receiver requested permission from the district court to sell domain
names to pay for Novo Point’s lawyers and to pay the administrative fees of the
receivership. See ROA.2901, 2315, 2323-24; see also N.D. Tex. Case No. 3:09-
cv-00988-L, ECF No. 242.4 Pursuant to orders from the district court, the receiver
caused Novo Point to sell the domain names at issue here, and the proceeds from
3
The Receivership also included another company, Qantec LLC. For
conciseness, this brief refers to Novo Point only.
4
Associated Recovery moved to supplement the record on appeal with
materials from N.D. Tex. Case No. 3:09-cv-00988-L, but did not seek to include
the Receiver’s motion to permit sales of domain names (ECF No. 242).
4
these sales became part of the cash assets in the receivership used to pay Novo
Point’s lawyers and the receiver’s administrative fees. See ROA.2315, 2901;
Netsphere I at 314. Baron appealed these sales orders as well, as did Novo Point,
and this Court consolidated those appeals with Baron’s appeal of the order
establishing the receivership. See Netsphere I at 305.
In its opinion in Netsphere I, this Court determined that the district court had
abused its discretion in establishing the receivership and ordered the district court
to wind down the receivership. At the same time, this Court recognized that
“Baron’s own actions resulted in more work and more fees for the receiver and his
attorneys,” and “[f]or these reasons, charging the current receivership fund for
reasonable receivership expenses, without allowing any additional assets to be
sold, is an equitable solution.” Netsphere I at 313. That fund included the money
from the domain name sales at issue, which sales were left in place. See id. at 313-
315; ROA.2903; see also Netsphere III at 321 n.1, 324 n.3 (observing that Novo
Point’s “assets were part of the receivership and Netsphere I ordered the district
court to award fees using the receivership assets) (emphasis in original). Novo
Point petitioned for certiorari, which was denied. 135 S. Ct. 436 (2014).
On remand, the district court awarded fees to the receiver to be paid out of
the cash in the receivership. Baron and Novo Point filed an interlocutory appeal of
5
the orders awarding fees. In Netsphere II, this Court dismissed for lack of
jurisdiction, pending final judgment. 799 F.3d at 331, 336.
In 2015, the district court discharged the receiver and awarded fees to cover
the work of himself, “his attorneys, and his employees” up until discharge. See
Netsphere III at 322. This fee award depleted the remaining cash in the
receivership. Baron and Novo Point appealed again. In Netsphere III, this Court
reached the merits of the orders awarding fees. This Court affirmed the fee awards
holding (1) that Novo Point had waived its challenges to the fee awards by not
objecting in the district court, and (2) that challenge to whether fees could be
charged against its assets in the receivership was “squarely foreclosed by the law
of the case doctrine,” based on this Court’s decision in Netsphere I “ordering the
district court to award fees using the receivership assets.” Netsphere III at 324 n.3
(emphasis in original).
Meanwhile, Baron and Novo Point filed suit against the receiver. The
district court dismissed the complaint, holding that the claims were barred by
judicial immunity and that “any claim by Plaintiffs based on the wrongful
establishment or continuation of the receivership or payment of receivership
expenses is an impermissible collateral attack of prior orders[.]” Baron v. Vogel,
No. 3:15-CV-232-L, 2016 WL 1273465 at *6 (N.D. Tex. Mar. 31, 2016). On the
inevitable appeal by Baron, this Court “affirm[ed] the district court’s judgment and
6
adopt[ed] its analysis in full.” Baron v. Vogel, 678 F. App’x 202, 203 (5th Cir.
2017) (emphasis added).
Novo Point has assigned its purported interests in the domain names to its
successor, Associated Recovery, but Baron maintains a beneficial interest in the
outcome of this litigation—this lawsuit is another collateral attack by Baron
through a newly-minted entity. See ROA.2273, 2275 (Associated Recovery’s
operative pleading, its Third Amended Complaint, ¶¶ 34, 39, stating Novo Point’s
purported assignment to Associated Recovery and acknowledging Baron’s
interest). Associated Recovery brought the instant lawsuit under a host of legal
theories against the third parties and their successors who bought domain names
during the receivership or from subsequent sellers of the domain names, seeking
return of the domain names, damages for alleged losses in connection with the
sales, the profits from the sales, and a constructive trust placed upon “such profits
for the benefit of Associated Recovery.” ROA.2275-2280. It alleges that the
receiver never had “any actual legal right to possess, control or manage any of the
Domain Names whatsoever, or the ability to effectuate any legally valid transfer of
any right, title or ownership interest in any of the Domain Names.” ROA.2273.
The district court dismissed the complaint, holding that because this Court
did not vacate the orders authorizing the sales of the domain names in Netsphere I,
Associated Recovery is collaterally estopped from arguing here that those orders
7
were vacated. ROA.2924-2932. It held that all of Associated Recovery’s
remaining claims depend on its assertion that the sales orders were reversed, so the
collateral estoppel issue is dispositive. ROA. 2932.5 Associated Recovery appeals
the district court’s dismissal. ROA.2966.
Throughout its brief, Associated Recovery characterizes the domain name
transfer agreements as “quitclaim” instruments. As described below, that
characterization does not withstand scrutiny for several legal reasons. It is worth
noting up front, however, that Associated Recovery in its appeal brief has
significantly mischaracterized the undisputed and unchallenged factual record
below regarding these instruments. Associated Recovery alleges that every such
instrument includes “an express disclaimer of any warranty whatsoever” and a
certain “Limitations of Liability” provision. Opening Brief at 18-19. But in
response to similarly inaccurate pleadings below, certain defendants attached an
exemplary instrument to their motion to dismiss which (1) includes a specific
warranty that “Seller [Novo Point] is the sole owner of the Domain Names” and
“has the power and authority to execute and perform its obligations under this
Agreement,” and which (2) reserved that warranty in the “Limitations of Liability”
5
The District Court initially dismissed Associated Recovery’s breach of
contract claim against certain Defendants without prejudice, ROA.2932, but
Associated Recovery elected not to attempt to re-plead that claim, or appeal it.
ROA.2953-2959, 2966 at n.2.
8
provision. ROA.2623; see also ROA.2592 n.4, ROA.2877-2878 (explaining
discrepancies between Associated Recovery’s descriptions and the actual
exemplary instrument, and explaining why such instruments are properly
considered part of the pleadings).
Finally, the arguments advanced by Associated Recovery here are the same
that have been advanced from the outset. During the original Netsphere I appeal,
Novo Point sought to un-do the receiver’s actions, including to “recover the costs
of the receivership from those who have wrongfully provoked it,” and asked for
“the return of all property the district court below ordered taken from Novo Point,
LLC” (i.e., the domain names at issue), while Baron also sought the return of “the
receivership assets disbursed while the matter has been on appeal.” Novo Point
March 28, 2011 Brief in Netsphere I at 49-50; Baron July 15, 2011 Reply Brief in
Netsphere I at 15. The Court rejected those requests in Netsphere I.
IV. SUMMARY OF THE ARGUMENT

Associated Recovery seeks return of various domain names that were sold
by its predecessor-in-interest as part of a court-established receivership. To state a
valid claim under any of its legal theories, Associated Recovery must be able to
allege that it has a valid interest in the domain names. Because the domain names
were instead sold, its claims fail.
9
The issues presented in this case have been litigated before. In Netsphere I,
this Court reversed the appointment of the receiver, but it did not immediately
dissolve the receivership, nor did it reverse the receiver’s sales of domain names.
Netsphere I at 315. Instead, this Court instructed that “[n]o further sales of
domain names or other assets are authorized,” and explicitly authorized the district
court to pay the receiver’s fees out of the cash then-currently in the receivership
“without allowing any additional assets to be sold,” in recognition of the fact that
“the circumstances that led to the appointment of a receiver were primarily of
Baron’s own making” and that “to a large extent, Baron’s own actions resulted in
more work and more fees for the receiver and his attorneys.” Id. at 313, 314
(emphasis added).
If there was any doubt as to the scope of this Court’s Netsphere I decision,
this Court removed it by issuing a clarifying order, which explained that the
Netsphere I “opinion did not dissolve the receivership immediately.” Netsphere,
Inc. v. Baron, 2012 U.S. App. LEXIS 27248, at *4 (5th Cir. Dec. 31, 2012).
Instead, this Court remanded to the district court for a “winding up of the
receivership.” Id. at *5. Thus, the order explained that “[n]o assets that were
brought under the control of the receiver will be released immediately from that
control even when the mandate is issued.” Id.
10
Associated Recovery’s predecessor had the opportunity to fully litigate
whether the receiver’s prior actions, including the sale of domain names, should be
reversed in Netsphere I. Because the Court rejected these requests and determined
not to reverse the sales orders in Netsphere I, 703 F.3d at 313, Associated
Recovery is collaterally estopped from asserting that the sales orders were, or
should be, reversed—i.e., from relitigating issues that were already decided against
its predecessors. Without establishing that the sales were reversed, Associated
Recovery cannot state a claim upon which relief can be granted.
Associated Recovery’s claims fail for another similar reason as well—they
are yet another collateral attack on this Court’s resolution of the fee issue in
Netsphere I. Since Netsphere I, Associated Recovery’s predecessors have been
trying to recover the fees that this Court said could be properly paid to the receiver.
But such arguments must be made within an original litigation, not in a collateral
attack against different defendants in another lawsuit.
After Netsphere I, Associated Recovery’s predecessors appealed the fee
order itself. This Court rejected the appeal, holding that any argument as to
“whether fees could be charged against [its] assets in the receivership” was
“squarely foreclosed by the law of the case doctrine” because Novo Point’s “assets
were part of the receivership and Netsphere I ordered the district court to award
fees using the receivership assets.” Id. at 333, n.3 (emphasis in original). Then,
11
when that did not work, they filed suit against the receiver in his personal capacity,
which the Northern District of Texas rejected as “an impermissible collateral attack
of prior orders,” which this this Court affirmed and “adopt[ed] its analysis in full.”
Baron v. Vogel, No. 3:15-CV-232-L, 2016 WL 1273465 at *6 (N.D. Tex. Mar. 31,
2016); Baron v. Vogel, 678 F. App’x 202, 203 (5th Cir. 2017). Now, they seek
recovery of the fees from the innocent third parties that bought the domain names
when they were managed by the receivership. This latest collateral attack should
also be rejected.
Finally, if this Court concludes that collateral estoppel does not bar
Associated Recovery’s claims, it should affirm on any of the following alternative
grounds supported in the record. First, Associated Recovery lacks standing, which
also defeats its claims. Second, the complaint establishes that appellees are bona
fide purchasers for value, which defeats all of Associated Recovery’s claims.
Finally, several claims are barred by the statute of limitations, and several fail due
to legally deficient pleadings.6
6
Defendants – appellees focus on certain alternative grounds in this brief,
without prejudice to arguing additional grounds presented in their original motions
to dismiss if necessary on any remand.
12
V. ARGUMENT
A. Standard of Review
A district court order granting a motion to dismiss for failure to state a claim
under Rule 12(b)(6) is reviewed de novo. See Vanderbrook v. Unitrin Preferred
Ins. Co. (In re Katrina Canal Breaches Litig.), 495 F.3d 191, 205 (5th Cir. 2007).
This Court may affirm dismissal on any basis supported by the Rule
12(b)(6) record. See R2 Invs. LDC v. Phillips, 401 F.3d 638, 642 (5th Cir. 2005).
While the Court must “accept[ ] all well-pleaded facts [of the complaint] as
true, viewing them in the light most favorable to the plaintiff,” In re Katrina Canal
Breaches Litig., 495 F.3d at 205 (quotation marks and citation omitted), the
plaintiff must plead “enough facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955 (2007). That is,
“[f]actual allegations must be enough to raise a right to relief above the speculative
level, on the assumption that all the allegations in the complaint are true (even if
doubtful in fact).” Id. at 1965 (quotation marks, citations, and footnote omitted).
“Dismissal is proper if the complaint lacks an allegation regarding a required
element necessary to obtain relief.” Campbell v. City of San Antonio, 43 F.3d 973,
975 (5th Cir. 1995) (quotation marks and citations omitted).
On a motion to dismiss, the Court may take judicial notice of prior court
papers and rulings. E.g., Cinel v. Connick, 15 F.3d 1338, 1343 n. 6 (5th Cir. 1994)
13
(“In deciding a 12(b)(6) motion to dismiss, a court may permissibly refer to
matters of public record. Accordingly, the consideration of the consent judgment
does not convert this motion into one for summary judgment.”) (citations omitted).
In addition, material documents referred to in the pleadings are part of the 12(b)(6)
record. See Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir.
2004) (“Documents that a defendant attaches to a motion to dismiss are considered
part of the pleadings if they are referred to in the plaintiff’s complaint and are
central to her claim.”).
B. The Sales Orders Were Not Reversed in Netsphere I.

As Associated Recovery admits in its brief, to resolve this case “the Court
need only determine whether the Sales Orders in the Receivership of Jeffrey
Baron, Case No. 3:09-cv-00988-L, were reversed on appeal when this Court
reversed the Receivership in Netsphere, Inc. v. Baron, 703 F.3d 296 (5th Cir. 2012)
(Netsphere I).” Op. Br. at i. Because the answer to this question is clearly “no,”
the Court should affirm the district court’s judgment dismissing Associated
Recovery’s claims.
In Netsphere I, this Court considered whether the district court’s
appointment of the receiver was proper. While this Court concluded that
appointing the receiver was an abuse of discretion, it did not immediately dissolve
the receivership, nor did it reverse any of the receiver’s prior actions—including
14
the sales of domain names. Netsphere I at 315. Instead, the Court remanded to the
district court with instructions to wind down the receivership. Id.
Importantly, while this Court instructed that “[n]o further sales of domain
names or other assets are authorized,” it did not unwind the sales that had already
occurred. Id. at 314 (emphasis added). In fact, the Court explicitly authorized the
district court to pay the receiver’s fees out of the cash then-currently in the
receivership “without allowing any additional assets to be sold,” in recognition of
the fact that “the circumstances that led to the appointment of a receiver were
primarily of Baron’s own making” and that “to a large extent, Baron’s own actions
resulted in more work and more fees for the receiver and his attorneys.” Id. at 313
(emphasis added).
The district court had authorized the domain names to be sold to pay for the
work of Novo Point’s attorneys and to pay for the administrative cost of the
receivership, e.g. ROA.2315, so the cash assets in the receivership included the
proceeds from the sale of the domain names. See Op. Br. at 23. And this Court, in
Netsphere I and in its other decisions, was well aware that that domain names were
being auctioned and those proceeds were being used to pay the receivership-related
expenses. See, e.g., 703 F.3d at 305 (“The receiver was granted exclusive control
over assets, including Baron’s personal property, that were not at issue in the
underlying litigation over domain names.”); Netsphere III at 321 n.1, 322, 324
15
(affirming use of cash proceeds from Novo Point’s domain name sales to pay
expenses of the “receiver, his attorneys, and his employees”). Associated
Recovery fails to address how this Court could have ordered the district court to
use Novo Point’s assets to pay for receivership fees if, as it contends, the sales of
Novo Point’s domain names were void ab initio and Novo Point was never
divested of the domain names. Associated Recovery cannot explain how the
domain names were somehow not transferred to defendants-appellees or their
predecessors when those purchasers’ money was not returned but instead ordered
by this Court to be used to pay receivership fees.
If there was any uncertainty as to the scope of this Court’s decision in
Netsphere I, this Court eliminated all doubt by issuing a clarifying order at the
request of the receiver. In its order, this Court explained that its “opinion did not
dissolve the receivership immediately.” Netsphere, Inc. v. Baron, 2012 U.S. App.
LEXIS 27248, at *4. Instead, this Court remanded to the district court for a
“winding up of the receivership.” Id. at *5. Thus, the order explained that “[n]o
assets that were brought under the control of the receiver will be released
immediately from that control even when the mandate is issued.” Id. This order is
likewise incompatible with Associated Recovery’s interpretation that this Court
declared the receivership void ab initio and reversed all sales made by the receiver.
16
Moreover, the Court explicitly noted that it had declined to stay the case
pending appeal, id. at 304, despite that fact that Baron moved for a stay five
separate times. See ROA.2902, 6832.7 Without a stay, the receiver was permitted
to sell and in fact sold the domain names, and this Court did not reverse those
sales, or state that the sales were not operative.
In response, Associated Recovery argues that “this Court specifically
reversed the sales orders based on the separate mandates that were entered” by this
Court. See, e.g., Op. Br. at 28. But the mandates state only that “the judgment of
the District Court is reversed, and the cause is remanded to the District Court for
further proceedings in accordance with the opinion of this Court.” ROA.2411-
2418. And as explained above, this Court’s opinion explicitly kept the
receivership in place for an orderly wind-down by the district court. That is,
instead of ruling that the receivership was void ab initio and that all actions taken
under authority of the district court were meaningless, this Court directed a wind-
down.
7
Associated Recovery suggests that this Court actually stayed the sale of the
domain names by “verbal instructions” made to the district court by telephone.
Op. Br. at 8, 36. While the record reflects that this district court “consulted with
the Clerk of the U.S. Court of Appeals for the Fifth Circuit,” before staying the
case below, it does not reflect that this Court instructed the district court to stay the
case, or for how long. ROA.6801. Indeed, after this Court denied Baron’s five
requests for stays pending appeal, the district court reexamined its previous stay
and concluded that further staying the case would be inappropriate. ROA.6832.
17
Associated Recovery’s argument seems to be that the mandates implicitly
reversed all of the orders appealed by Baron in Netsphere I. See Op. Br. at 31
(“These mandates did not say ‘affirmed’ or ‘affirmed in part.’ The mandates stated
that the appealed orders were ‘reversed and remanded.’”); see also id. at 9-10
(citing mandates at ROA.2411-2418). Of course, the mandates do not, in fact,
state that the “appealed orders” were reversed; they state that the judgment was.
See ROA.2411-2418. If there was any doubt what this refers to, the final
paragraphs of the opinion make clear that it was the “judgment appointing the
receiver” that was “REVERSED.” Netsphere I at 315. Associated Recovery
cannot cogently explain how it could be that this Court ordered one thing in its
opinions, but something different in its mandates.
Clearly Associated Recovery’s interpretation of the mandates cannot be
correct, as this Court explicitly acknowledged in its Netsphere I opinion that
“Baron appealed the appointment of the receiver and then appealed numerous
subsequent orders entered by the district court,” but that the Court’s “conclusions
about the receivership itself make most of the later appeals irrelevant.” Id. at 305.
Indeed, Novo Point and Baron specifically argued in their Netsphere I briefing for
the receiver’s actions to be undone. See, e.g., Novo Point March 28, 2011 Brief in
Netsphere I at 49-50; Baron July 15, 2011 Reply Brief in Netsphere I at 15. The
Court rejected those requests in Netsphere I, and included an instruction that if
18
there was an issue that any “party believes still needs a ruling, that claimed
oversight should be suggested on rehearing.” Netsphere I at 305. Novo Point then
petitioned for rehearing, noting that its assets consisted of domain names, and
arguing that those assets should not have been taken. See Jan. 2, 2013 Petition in
Netsphere I at 1 n.1. The Court denied the petition. Netsphere, Inc. v. Baron, 2013
U.S. App. LEXIS 13315 (5th Cir. Apr. 4, 2013). Novo Point also petitioned the
Supreme Court for certiorari, which was likewise denied. 135 S. Ct. 436 (2014).
Nor can Associated Recovery’s interpretation be reconciled with its position
that the “issues litigated in Netsphere I are not identical to the issues in this matter,
and therefore preclude the application of collateral estoppel.” Op. Br. at 35; see
also id. at 36 (arguing that the Netsphere I opinion contained “no discussion at all
as to the issues regarding the purported sale of [the] Domain Names.”). This Court
has decided precisely those issues, numerous times over.
In short, this Court never reversed the sale of the domain names that serve as
the basis of Associated Recovery’s claims. Because the sales orders were allowed
to stand, Associated Recovery cannot state a claim upon which relief can be
granted. The District Court’s analysis in this regard was correct, and should be
affirmed.
19
C. Associated Recovery’s Predecessor-In-Interest, Novo Point, Sold

Its Entire Interest in the Domain Names.
Associated Recovery contends in its brief that “Appellees purchased only
contingent interests in the Domain Names and have always known that they were
merely purchasing a quitclaim instrument, subject to the claims of Novo Point and
the reversal on appeal of the Sales Orders and Receivership Orders.” See, e.g., Op.
Br. at 23. As described above, the undisputed evidence in the record proves this
false. See ROA.2623 (actual exemplary domain name transfer instrument); see
also ROA.2592 n.4, ROA.2877-2878 (explaining discrepancies between
Associated Recovery’s descriptions and the actual exemplary instrument, and
explaining why such instruments are properly considered part of the pleadings).
Even assuming for the sake of argument that the domain name transfer instruments
are all just as Associated Recovery describes them, however, Associated
Recovery’s arguments still fail. Associated Recovery seems to be arguing that
even if the sale orders stand, they are unenforceable as to Associated Recovery
because they were “mere quitclaims.” This is wrong for multiple reasons.
First, the assignment documents state that they convey Novo Point’s “rights,
title, and interest in, to, and under the Domain Names.”8 See, e.g., ROA.5963,
8
Again, documents such as contracts referred to in the pleadings are part of
the 12(b)(6) record. See Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285,
288 (5th Cir. 2004) (“Documents that a defendant attaches to a motion to dismiss
20
ROA.2454, ROA.2621-30. “A quitclaim deed . . . does not establish title but
functions as a conveyance of whatever right, title, or interest the grantor possesses
at the time of execution.” Savage v. Doyle, 153 S.W.3d 231, 234 (Tex. App. –
Beaumont 2004). See also “Quitclaim,” Black’s Law Dictionary (10th ed. 2014)
(“1. To relinquish or release (a claim or right). 2. To convey all of one’s interest in
(property), to whatever extent one has an interest; to execute a quitclaim deed.”).9
Thus, even if the initial conveyances during the receivership were quitclaim
assignments, they were effective to divest any interest in domain names from
Associated Recovery’s predecessor, Novo Point. See Lott v. Lott, 370 S.W.2d 463,
465 (Tex. 1963) (“It is too well settled to be open to question that a quitclaim deed,
in the absence of limiting language, conveys to a grantee whatever right, title, or
interest a grantor has in the premises as fully and effectually as if the grantor had
are considered part of the pleadings if they are referred to in the plaintiff’s
complaint and are central to her claim.”).
9
Associated Recovery has never cited any authority that “quitclaim”
instruments are used for anything other than real property under Texas law. Real
property deeds present a unique context where purchasers are charged with
knowledge of recorded instruments, such that a “quitclaim” transfer makes sense
as a viable instrument. See, e.g., Orca Assets, G.P. v. Burlington Res. Oil & Gas
Co., 464 S.W.3d 403, 408-409 (Tex. App. – Corpus Christi 2015, pet. denied); Tex.
Dept. of Transp. v. A.P.I. Pipe & Supply, LLC, 297 S.W.3d 162, 169 (Tex. 2013);
see also ROA.2763, 2788 (Associated Recovery’s citation to these cases below);
ROA.2880 (certain Defendants’ reply discussing same).
21
given a deed purporting to convey the fee.”). Thus, Associated Recovery has no
claim it can assert against appellees.10
Indeed, the lack of warranty in the conveyance document that Associated
Recovery alleges is a lack of warranty against claims by third parties, not by the
seller itself. To hold otherwise would render a quitclaim deed meaningless. Cf.
Geodyne Energy Income Prod. P’ship I-E v. Newton Corp., 161 S.W.3d 482, 486
(Tex. 2005) (“We have long recognized the validity of quitclaim deeds, even if it
turns out that they convey nothing.”).
Second, while a “quitclaim deed does not of itself establish any title in those
holding under it,” the “quitclaim passes the interest of the grantor in the property,
and for the quitclaim to be a conveyance, title in the grantor must be shown.”
Jackson v. Wildflower Prod. Co., Inc., 505 S.W.3d 80, 89 (Tex. App. – Amarillo
2016), review denied (Mar. 10, 2017) (emphasis in original). Thus, if Novo Point
had any rights in the domain names, they passed to Appellees. For Associated
Recovery’s argument to be correct, it would have to assert that its predecessor,
Novo Point, did not have valid title to the domain names, which would, of course,
mean that it, too, has no valid claim (i.e., nemo dat quod non habet—no one gives
what they do not have).
10
As discussed below, this is also a standing issue.
22
Finally, any purchaser knowledge of the appeal in the Netsphere case is
immaterial because no stay was put in place to preclude any sales while the appeal
was pending. See generally Hovey v. McDonald, 109 U.S. 150, 160-62 (1883)
(receiver case; explaining that absent a stay, district court orders are operative
during an appeal). Associated Recovery argues at length in its Opening Brief (at
16-20, and without supporting facts) about the purchasers’ alleged knowledge that
the sales could be undone on appeal. Regardless, however, because no stay was
entered, the purchasers were fully entitled to rely on the seller’s court-given
authority to sell the domain names. Again, as Associated Recovery acknowledges
(Op. Br. at 14), Baron and Novo Point sought a stay—but that stay “was never
granted.” Netsphere I, 703 F.3d at 304.
D. The Conditions for Collateral Estoppel Apply Here.

The District Court’s ruling that collateral estoppel applies is correct. See
ROA.2925-2932. In the Fifth Circuit, there are at least three requirements for
collateral estoppel to apply: “(1) the issue to be precluded must be identical to that
involved in the prior action; (2) in the prior action the issue must have been
actually litigated; and (3) the determination made of the issue in the prior action
must have been necessary to the resulting judgment.” In re Davis, 3 F.3d 113, 114
(5th Cir. 1993) (citation omitted). Some cases add a fourth requirement: that
“there is no special circumstance that would make it unfair to apply the doctrine.”
23
Copeland v. Merrill Lynch & Co., 47 F.3d 1415, 1422 (5th Cir. 1995). All four
requirements are met here. See ROA.2926-2932 (district court opinion).
First, the issue presented here is the same as the issue presented in
Netsphere I—whether the Receivership was valid, and if not, what is the proper
way to unwind the receivership, i.e., what happens to the impacted assets. See
Netsphere I at 313-314. Indeed, in Netsphere I, Associated Recovery’s
predecessor, Novo Point, specifically appealed the sale of the domain names and
presented the same argument in its briefs that it makes in this case. See, e.g.,
Novo Point March 28, 2011 Brief in Netsphere I at 50 (seeking “the return of all
property the district court below ordered taken from Novo Point, LLC”); Novo
Point and Baron June 29, 2012 Brief in Netsphere I at 97-102 (arguing, inter alia,
that the “District Court was without power to make any disposition of the assets
because the District Court was not authorized to seize the property of Novo Point
LLC or Quantec LLC into receivership.”).
Once the Court had decided that the receivership was improper, deciding
how to equitably charge the costs of the receivership was difficult because the
ordinary solution of charging the costs against the party that had sought the
receivership was not available.
Netsphere I resolved this issue by holding that the receivership was
improper, but allowing the cash already in the receivership to be used to pay the
24
receiver’s fees, subject to the limitation that “[n]o further sales of domain names
or other assets are authorized.” Netsphere I at 314. Because the cash in the
receivership included the proceeds from the domain name sales, the Court’s
opinion allowed those sales proceeds to be used to pay the receiver’s fees. It was
only “further” sales that this Court prohibited.
In response, Associated Recovery argues that this Court both “specifically
reverse[d] the sales orders,” but simultaneously “did not expressly address factual
and legal issues relating to the” orders. Op. Br. at 35. In addition to the internal
contradiction, this argument is beside the point. While this Court did not address
all of Novo Point’s arguments regarding the sales order, it had no need to do so
because it concluded that the equitable solution was to wind down the receivership
by paying the receiver out of the cash in receivership without allowing any further
sales. The alleged new issues that Associated Recovery points to in its brief, id. at
36-37, all depend on the mistaken premise that this Court reversed the domain
25
name sales in Netsphere I.11 Because the Court allowed the prior sales to stand,
there are no new issues involving the sales implicated by this appeal.12
Second, Associated Recovery’s predecessor had the opportunity to fairly
litigate these issues in the prior litigation. Among other things, it submitted briefs
to this Court in Netsphere I arguing that the domain sales orders should be
reversed. See, e.g., Novo Point March 28, 2011 Brief in Netsphere I at 49-50;
Novo Point and Baron June 29, 2012 Brief in Netsphere I at 97-102.
Associated Recovery asserts that Novo Point was not permitted to submit
briefs to the district court. But this is the same argument it made in Netsphere III,
which this Court rejected. See Netsphere III at 324 (“[Novo Point] contends that it
was prevented by the district court from lodging their fee award objections, but its
11
Associated Recovery also suggests that whether the sales orders “were
properly stayed pending appeal is an issue in and of itself, not addressed in
Netsphere I.” Op. Br. at 36. This is demonstrably incorrect as the Netsphere I
opinion explicitly noted that it had declined to stay the case pending appeal.
Netsphere I at 304. (“Baron appealed to the Fifth Circuit Court of Appeals and
five days later moved for a stay. While ‘express[ing] no view on the ultimate
merits,’ we held on December 20, that he had made an inadequate showing for a
stay. Baron renewed his motion on occasion but was never granted a stay.”).
12
Associated Recovery also argues that collateral estoppel cannot apply to the
sales order because collateral estoppel “does not apply to orders or judgments that
have been reversed on appeal.” Op. Br. at 27 (quoting Hudson v. Comm’r, 71 F.3d
877 (5th Cir. 1995)). Appellees do not dispute that had this Court vacated the sales
orders in a manner undoing past sales, collateral estoppel would not attach to those
orders. Here, however, appellees seek to collaterally estop Associated Recovery
based on this Court’s decision in Netsphere I and subsequent related decisions,
which have never been vacated or reversed.
26
record citation does not support this allegation. Further, [Novo Point], through
their counsel in this appeal, filed numerous motions in the district court following
the Netsphere I remand and did object to the March 2015 order. These acts belie
the claim that [Novo Point] was prevented from objecting to the fee orders.”).13
Associated Recovery also suggests that collateral estoppel is not available
due to “differences in the quality or extensiveness of the procedure followed in the
two courts.” Op. Br. at 40. But Netsphere I and this case have been litigated in the
same courts. Similarly, Associated Recovery alludes to new “issues” it says could
not have been addressed prior to the mandate issuing in Netsphere I. But it does
not identify these issues or explain how they affect the validity of the sales orders
left in place by this Court’s decision.14
Third, the resolution of the validity of sales was necessary to this Court’s
decision in Netsphere I. Simply put, this Court could not have authorized the
13
The Netsphere III opinion refers to both NovoPoint and Quantec as “Quantec”
for convenience. See Netsphere III at n.1. The quotations above replace “Quantec”
with “[Novo Point].”
14
Associated Recovery’s Seventh Amendment argument, which it raises in a
footnote, Op. Br. at 40 n.17, was not made to the district court below and is
therefore waived. It is also meritless because the Seventh Amendment does not
trigger the avoidance of issue preclusion. See Parklane Hosiery Co. v. Shore, 439
U.S. 322, 337 (1979) (“Thus if, as we have held, the law of collateral estoppel
forecloses the petitioners from relitigating the factual issues determined against
them in the SEC action, nothing in the Seventh Amendment dictates a different
result.”).
27
payment of the receiver out of the cash in the receivership without deciding
whether the sales producing the cash should stand. Associated Recovery does not
dispute that this requirement is met (which is unsurprising since it contends that
Netsphere I reversed the sales orders).
Fourth, there is nothing unfair about applying collateral estoppel here.
While Associated Recovery asserts that the domain names were sold for less that it
thinks they were worth, e.g., Op. Br. at 16, that is an unsupported opinion and not a
reason not to apply collateral estoppel; and Associated Recovery cites nothing to
the contrary. Associated Recovery’s arguments about the expense of the
receivership are particularly misplaced as this Court has repeatedly recognized that
those expenses were incurred and magnified by Baron’s vexatious conduct. See,
e.g., Netsphere I at 313 (“We also take into account that, to a large extent, Baron’s
own actions resulted in more work and more fees for the receiver and his
attorneys.); see also Netsphere, Inc. v. Baron, No. 3:09-CV-0988-L, 2015 WL
1400543, at *3 (N.D. Tex. Mar. 27, 2015) (“[T]he court also takes into account the
disruptive conduct of Receivership Parties Jeffrey Baron, Novo Point LLC, and
Quantec LLC, which continued after the order establishing the Receivership was
reversed and increased the Receivership expenses to which Baron now objects.”).
What would be unfair would be to allow this vexatious litigation to continue,
28
which is burdening third parties who were not involved in the original litigation or
the receivership except to purchase domain names in sales authorized therein.
Finally, even if this Court were to conclude that any of the collateral
estoppel requirements are not met, the judgment still should be affirmed. As
shown above, this Court did not vacate the sales of the domain names in Netsphere
I. Because the domain names were sold and the sales were never vacated,
Associated Recovery cannot allege that it has valid title to the domain names and
therefore cannot state a claim upon which relief can be granted.
More fundamentally, without title, Associated Recovery has no standing to
bring this case. An assignee, such as Associated Recovery contends to be as to
Novo Point, only has standing to assert an “injury in fact” incurred by its assignor,
and caused by the defendant. See, e.g., PEMEX Exploracion y Produccion v.
Murphy Energy Corp., 923 F.Supp.2d 961, 965 (S.D. Tex. 2013); Croft v. Gov. of
Texas, 562 F.3d 735, 745 (5th Cir. 2009). Here, there is no injury in fact; this
Court ordered the sales proceeds to be used in Netsphere I and ratified the sales in
Netsphere III. Regardless, Associated Recovery cannot point to any injury caused
by any defendant, all of whom are—as described below—bona fide purchasers of
the domain names. This, too, defeats Associated Recovery’s standing.
29
E. Associated Recovery’s Lawsuit Is an Improper Collateral Attack

On this Court’s Judgment in Netsphere I and Other Prior Orders.
In addition to being blocked by collateral estoppel, Associated Recovery’s
claims fail because they are all improper collateral attacks on this Court’s
Netsphere I decision deciding how to apportion the costs of the receivership, and
the concomitant orders and judgments. See, e.g., Federated Department Stores,
Inc. v. Moitie, 452 U.S. 394, 398 (1981) (“A final judgment on the merits of an
action precludes the parties or their privies from relitigating issues that were or
could have been raised in that action.”).15 In Netsphere I, this Court addressed the
issue of whether prior domain name sales should be undone, and decided that issue
against Associated Recovery’s predecessor, resulting in clear estoppel. Regardless
of what this Court decided in Netsphere I, however, any challenge to that decision
or the related judgments and orders could only be brought in the context of the
original litigation, by an attempt to vacate, modify, or correct, not in a subsequent
lawsuit against different defendants. The very fact that Associated Recovery’s
predecessors actively sought but did not obtain the relief they seek here in the
Netsphere litigation, which is over and final, but instead seek relief in a new case,
also proves that Associated Recovery’s claims are barred.
15
Even an “erroneous conclusion” in a final judgment “is not open to collateral
attack, but can be corrected only by a direct review and not by bringing another
action.” Moitie, 452 U.S. at 398 (internal quotation omitted).
30
Again, this is not the first collateral attack lawsuit. Baron and Novo Point
sued the receiver in his personal capacity in state court, seeking to recover the
receivership fees. The receiver removed the case to the Northern District of Texas,
which dismissed the complaint, holding that “any claim by Plaintiffs based on the
wrongful establishment or continuation of the receivership or payment of
receivership expenses is an impermissible collateral attack of prior orders[.]”
Baron v. Vogel, No. 3:15-CV-232-L, 2016 WL 1273465 at *6 (N.D. Tex. Mar. 31,
2016) (emphasis added). This Court “affirm[ed] the district court’s judgment and
adopt[ed] its analysis in full.” Baron v. Vogel, 678 F. App’x 202, 203 (5th Cir.
2017).
As explained above, the receivership assets included proceeds from the sales
of the domain names. Over Baron’s and Novo Points objections, this Court
determined that the most equitable way to resolve the costs attributable to the
improper receivership was to allow those cash assets already in the receivership to
be used to pay the receiver’s costs, but that “[n]o further sales of domain names or
other assets [would be] authorized.” Netsphere I at 314; see also Netsphere III.
By embracing the proceeds of the sales for further use, this Court necessarily
ratified the sales that created those proceeds. By asking this Court to unwind the
sales instead, Associated Recovery seeks to recapture the very funds this Court
ordered should be used to pay the receiver’s fees incurred because of Baron’s
31
vexatious conduct, thereby undoing the orders in the earlier, concluded case.
Associated Recovery has never identified any authority that such relief may be
awarded in a collateral lawsuit against different parties.
Indeed, in Netsphere III, Novo Point argued that the award of fees against its
assets in the receivership was improper. On appeal, this Court held that Novo
Point had waived any challenge to the fee orders and noted that in Netsphere I, the
Court has already decided that “the receivership assets be charged for ‘reasonable
receivership expenses’” because the “receivership was imposed as a result of
Baron’s own vexatious conduct.” Netsphere III. The court further concluded that
Novo Point’s argument as to “whether fees could be charged against [its] assets in
the receivership” was “squarely foreclosed by the law of the case doctrine”
because Novo Point’s “assets were part of the receivership and Netsphere I ordered
the district court to award fees using the receivership assets.” Id. at 333, n.3
(emphasis in original).16 That “law of the case” was memorialized in judgments of
16
Associated Recovery argues that this Court is not “bound” by its decision in
Netsphere III but offers no reason why this is so, or why this Court should depart
from its prior decision. Op. Br. at 30 n.16. The Schurig case, cited by Associated
Recovery at Op. Br. 32, is not to the contrary. That case held that the fee order
was unenforceable against Baron, which is consistent with this Court’s Netsphere I
opinion instructing the district court to wind down the receivership. This Court did
not review the issue on appeal because the “creditors d[id] not challenge the
district court’s ruling that [this] court’s opinion in Netsphere, Inc., reversed
implicitly the fee order.” See In re Baron, 593 F. App’x 356, 360 (5th Cir. 2014).
See also ROA.2930 (District Court’s discussion of Schurig).
32
the Northern District of Texas and this Court, and thus cannot be attacked in
another lawsuit.
Having failed to recover the assets from the receiver, Baron and Novo
Point’s successor, Associated Recovery, brought this suit in an attempt to recover
from the innocent third parties that bought the domain names from Novo Point
while it was in receivership. But Associated Recovery concedes in its brief that the
cash in the receivership used to pay the receiver’s fees included cash from the sales
of the domain names. See Op. Br. at 23. Thus, its argument that Netsphere I
reversed the sales orders is simply another impermissible collateral attack on
Netsphere I, which this Court should reject.
F. Other Bases Exist to Affirm the District Court’s Judgment.

In reviewing a dismissal under Rule 12(b)(6), this Court is not limited to the
grounds relied on by the district court but “may affirm dismissal on any basis
supported by the Rule 12(b)(6) record.” Torch Liquidating Tr. ex rel. Bridge
Assocs. L.L.C. v. Stockstill, 561 F.3d 377, 384 (5th Cir. 2009). Even if this Court
concludes that the arguments for affirmance above do not apply, there are several
additional independent grounds preserved in the record on which this Court should
affirm the dismissal, in whole or in part.17
17
Appellees do not address Associated Recovery’s contract claim because it
voluntarily dismissed that claim below. ROA.2953-2959, 2966 at n.2.
33
1. Defendants – Appellees are Bona-Fide Purchasers for

Value.
In their motions to dismiss, appellees pointed out that they were bona fide
purchasers for value of the domain names. Associated Recovery does not dispute
that it cannot state a claim against a bona fide purchaser for value, but it contends
this defense requires resolving factual disputes over whether appellees are, in fact,
bona fide purchasers.
This Court need not resolve any factual disputes to conclude that that
Associated Recovery’s complaint alleges claims against bona fide purchasers.
This Court has explained that a “bona fide purchaser . . . is one who buys property
in good faith for valuable consideration and without knowledge (actual or imputed)
of outstanding claims in a third party or parties.” EDS Corp. v. Southwestern Bell
Tel., 674 F.2d 453, 459 (5th Cir. 1982); see also CRS Recovery, Inc. v. Laxton, 600
F.3d 1138, 1145 (9th Cir. 2010) (addressing title to a domain name and stating that
“an innocent purchaser for value and without notice, actual or constructive, that his
vendor had secured the goods by a fraudulent purchase, is not liable for
conversion.”) (internal citations omitted).
Associated Recovery’s complaint alleges that the “Northern District of
Texas issued orders purporting to establish a receivership, appoint the receiver, and
grant exclusive possession and control over Novo Point’s ‘assets,’” including the
domain names. ROA.2266-2267 (Third Amended Compl. ¶ 13). It also alleges
34
that “the District Court issued an order purportedly permitting the receiver to sell
Novo Point’s domain names.” ROA.2267 (Id. ¶¶ 15, 17, 19). Finally, it alleges
that the receiver sold the domain names. ROA.2268 (Id. ¶ 21). Thus, the operative
complaint itself establishes the facts necessary to conclude that appellees were
bona fide purchasers.
Although the complaint alleges that appellees had “actual knowledge” of
Novo Point’s claims, that allegation is conclusory and without supporting facts.
As such, this Court is not required to accept it as true. E.g., Gonzalez v. Kay, 577
F.3d 600, 603 (5th Cir. 2009) (explaining that to survive dismissal, “a complaint
must contain sufficient factual matter, accepted as true, to state a claim to relief
that is plausible on its face”) (internal citations omitted).
But even putting that aside, the knowledge that Novo Point disputed the
legality of the receivership is irrelevant to the bona fide purchaser determination.
To defeat a bona fide purchaser defense, Associated Recovery must show that
appellees had “knowledge (actual or imputed) of outstanding claims in a third
party,” EDS Corp., 674 F.2d at 459 (emphasis added), not that its
predecessor/assignor had a claim. The claim Associated Recovery points to is
Novo Point’s claim, the very entity that sold the domain names to appellees
through the receivership, and that assigned the purported claims in this case to
Associated Recovery.
35
The complaint also alleges that the sales of the domain name were below fair
market value. Third Amend. Compl. ¶ 27. This does not defeat the bona fide
purchaser defense for two reasons. First, the allegation is merely conclusory. See
Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009). Associated Recovery does not
allege what the fair market value of the domain names are or what they sold for.
But in its opening brief, it states that the domain names were sold for $1.6 million.
These were clearly sales for value.
Second, the complaint alleges that appellees accepted the lower sales prices
to compensate for certain “risks” and “unfavorable terms” in the sale contracts.
ROA.2271 (Third Amended Compl. ¶ 27). Taking that as true, a purported lower
sales price in recognition of risk and unfavorable terms is a market value price, one
that prices in those alleged factors. Thus, the facts alleged in the complaint
actually establish that appellees paid fair market value for the domain names.
In addition, the district court already determined that the receiver’s actions
were within the scope of authority granted by the district court and not in bad faith,
which determinations this Court adopted on appeal. Baron v. Vogel, No. 3:15-CV-
232-L, 2016 WL 1273465 at *6 (N.D. Tex. Mar. 31, 2016); Baron v. Vogel, 678 F.
App’x 202, 203 (5th Cir. 2017) (“affirm[ing] the district court’s judgment and
adopt[ing] its analysis in full.”); see also Netsphere, Inc. v. Baron, No. 3:09-CV-
36
0988-F, 2013 WL 3327858, at *15 (N.D. Tex. May 29, 2013) (finding that “that
the fees were incurred in good faith”).
Because the complaint establishes that appellees were bona fide purchasers
for value, it fails to state a claim upon which relief can be granted. This Court
should affirm the dismissal of Associated Recovery’s claims on this independent
basis.
2. Certain Associated Recovery Claims Plainly Fail on the

Statute of Limitations.
In addition to the numerous other defects, most of Associated Recovery’s
claims are barred by the statute of limitations. Associated Recovery offers two
responses in its brief, neither of which have merit.
First, Associated Recovery argues that this issue cannot be decided now
because “the applicable statute [of limitations] cannot be determined unless the
district court decides on the choice of law.” Op. Br. at 43. This objection is
meritless. While Associated Recovery does not identify which state’s law it thinks
should apply here, the only candidates are Texas, where the claims for relief were
brought and the domain name sales were consummated, or Virginia, where the
domain name registries are located. See, e.g., Griffin Tech., Inc. v.
griffindiscount.com, No. 1:14-CV-765, 2014 WL 6712895, at *2 (E.D. Va. Nov.
26, 2014) (“The defendant domain names, which have a <.com> extension, reside
with the registry VeriSign, which is responsible for maintaining the <. com>
37
registry and is located in Virginia.”). Associated Recovery’s claims are time
barred under either Texas or Virginia law, as described below, so this Court need
not decide choice of law issues to determine that the claims are barred.
Second, Associated Recovery argues that its causes of action accrued no
earlier than March 27, 2015, the date that the receiver was discharged. But its
claims, such as conversion, would have accrued when the domain names were sold
(here, by December 12, 2012), not when the receiver was discharged. In addition,
this argument is incompatible with Associated Recovery’s position that the sales
orders were all vacated and void ab initio when the Netsphere I mandates issued.
In light of the foregoing, the dismissal of the following claims should be
affirmed on the independent basis that the claims are time-barred:
Conversion / Unjust Enrichment: Under Texas law the statute of limitations
for claims for conversion is the two-year period expressly provided by Texas Civil
Practice and Remedies Code § 16.003(a). See also PEMEX Exploracion y
Produccion v. BASF Corp., No. CIV.A. H- 10-1997, 2013 U.S. Dist. LEXIS
144166, at *33 (S.D. Tex. Oct. 1, 2013); Mayo v. Hartford Life Ins. Co., 354 F.3d
400, 410 (5th Cir. 2004) (“The applicable limitations period for [plaintiff’s]
claim— whether it is formally labeled ‘unjust enrichment’ or ‘conversion’—is two
years.”). Associated Recovery alleges that the sales giving rise to this claim
occurred “before December 18, 2012,” ROA.2268 (Third Amended Compl. ¶ 21);
38
see Netsphere I (issued Dec. 18, 2012 and prohibiting any “further” sales). The
two-year statute of limitations thus expired well before Plaintiff’s Original
Complaints on December 31, 2015 and February 8, 2016.18
Unjust enrichment is not a distinct, independent claim for relief. It is a
theory of recovery. See Merrill Lynch, Pierce, Fenner & Smith, P.C. v. Greystone
Servicing Corp., No. 3:06-CV- 0575-P, 2007 U.S. Dist. LEXIS 69235, at *32
(N.D. Tex. Sep. 18, 2007); David Dittfurth, Restitution in Texas: Civil Liability for
Unjust Enrichment, 54 S. Tex. L. Rev. 225, 238 (2012) (“Most of the Texas courts
of appeals and federal courts that have considered the question under Texas law
have rejected the existence of an independent cause of action for unjust
enrichment.”). But to the extent the unjust enrichment allegation states a claim, it
would also be subject to the two-year statute of limitations period provided for by
Texas Civil Practice and Remedies Code § 16.003 and is therefore time-barred. See
PEMEX, 2013 U.S. Dist. LEXIS 144166, at *33-34.
Unfair Competition / Common Law Trademark Infringement: Under
Texas law a two-year statute of limitations also applies to claims for unfair
18
The conversion claim would also be time barred under Virginia’s three-year
statute of limitations. “[U]nder the Code, an action for conversion of an instrument
must be commenced within three years after the cause of action accrues.” Va.
Code § 8.3A–118(g); see Stefano v. First Union Nat. Bank of Virginia, 981 F.
Supp. 417, 421 (E.D. Va. 1997).
39
competition premised on common law trademark infringement. Derrick Mfg.
Corp. v. Sw. Wire Cloth, Inc., 934 F. Supp. 796, 806 (S.D. Tex. 1996)
(distinguishing such claims from Lanham Act claims for purposes of limitations
and finding “two year statute of limitations applies to [an] unfair competition
claim”). Thus, these claims are also time-barred.19
3. Associated Recovery’s “Trademark” Claims are Deficient

as Pleaded.
Similarly, certain Associated Recovery claims are also legally deficient as
pleaded. Associated Recovery alleges that simply having a domain name in the
past results in trademark protection for that domain name. See ROA.2266, 2275-
2276 (conclusory allegations in Third Amended Complaint about owning
“Marks”). That is legally incorrect. These claims should also therefore be
dismissed for these additional reasons:
Anticybersquatting: To prevail on a federal Anticybersquatting Consumer
Protection Act (ACPA) claim under 15 U.S.C. § 1125, Associated Recovery must
prove that (1) its mark “is a distinctive or famous mark entitled to protection;”
19
The trademark and unfair competition claims would also be time barred
under Virginia’s two-year statute of limitations. See Teaching Co. P’ship v. Unapix
Entm’t, Inc., 87 F. Supp. 2d 567, 585 (E.D. Va. 2000) (“The statute of limitations
applicable to TTC’s federal and common law claims for trademark infringement
and unfair competition is two years. (citing Va. Code Ann. §§ 8.01–249 (Michie
1999 Supp.), 8.01–243(A) (Michie 1992) (“[E]very action for damages resulting
from fraud, shall be brought within two years after the cause of action accrues.”)).
40
(2) Defendant’s “domain names are ‘identical or confusingly similar to’
[Plaintiff]’s mark”; and (3) Defendant “registered the domain names with the bad
faith intent to profit from them.” S. Co. v. Dauben Inc., 324 F. App’x 309, 314
(5th Cir. 2009). Associated Recovery’s allegations fail at least the first and third
prongs based on the facts that have been pleaded.
Associated Recovery cannot prove the first prong because it has no mark
entitled to protection. See, e.g., Brookfield Commc’ns Inc. v. W. Coast Entm’t
Corp., 174 F.3d 1036, 1052 (9th Cir. 1999) (holding that registering a domain
name, even with an intent to use both the domain name and a corresponding mark
commercially, does not create a right to trademark protection). Even if having a
domain name alone could equate to having a mark, Associated Recovery has
effectively admitted that neither it nor its predecessors have used any of the
disputed marks / domain names since 2012. See, e.g., Op. Br. at 37-38 (alleging
that Associated Recovery’s predecessors lacked knowledge of what domains were
transferred). Indeed, the transfer of the domain names away from Associated
Recovery’s predecessor many years ago is a fundamental premise of Associated
Recovery’s entire complaint; and Associated Recovery points to no alleged “mark”
outside of the domain names themselves. See ROA.2266, 2275-2276. “A mark
shall be deemed to be abandoned … [w]hen its use has been discontinued with
intent not to resume such use. Intent not to resume may be inferred from
41
circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of
abandonment.” 15 U.S.C. § 1127 (2013). Here, Associated Recovery makes no
assertion that it or its predecessors-in-interest are currently using the alleged marks
in commerce. Thus, even if any alleged marks were ever used in a manner that
qualifies for trademark rights, the nonuse admitted by Associated Recovery
establishes a case of prima facie abandonment of the alleged marks, extinguishing
the claim.
Associated Recovery also cannot prove the third prong because there can be
no bad-faith intent where ACPA’s safe harbor provision applies. 15 U.S.C.
§ 1125(d)(1)(B)(ii) (“Bad faith intent described under subparagraph (A) shall not
be found in any case in which the court determines that the [defendant] believed
and had reasonable grounds to believe that the use of the domain name was a fair
use or otherwise lawful.”); see also E. & J. Gallo Winery v. Spider Webs Ltd., 286
F.3d 270, 275 (5th Cir. 2002); Dauben Inc., 324 F. App’x at 315. The Court-
approved, lawful sale of the domain names falls under the ACPA safe harbor
provision. Given the Court-approved sales, Defendants had reasonable grounds to
believe the purchase and use of the domain names were lawful.
Unfair Competition / Common Law Trademark Infringement: Associated
Recovery’s claim under Texas state law for unfair competition premised on
common law trademark infringement also fails because, again, Associated
42
Recovery has not pleaded any mark that is eligible for protection. See, e.g., All
Am. Builders, Inc. v. All Am. Siding of Dallas, Inc., 991 S.W.2d 484, 488 (Tex.
App. – Fort Worth 1999, no pet.).
VI. CONCLUSION
For the foregoing reasons, the judgment of the United States District Court
for the Northern District of Texas should be affirmed.

Arlington, TX 76011 8150 N. Central Expressway, 10th Floor
(817) 265-0440 Dallas, TX 75206
mhassett@tarrantbusinesslaw.com (214) 367-6000
darin.klemchuk@klemchuk.com
Counsel of Record for Defendant- brian.casper@klemchuk.com
Appellee All-Pro Fasteners, Inc.
Appellees Alansis.com, Inc. and Radical
Investments Management L.L.C.
43

(512) 476-4600 (312) 443-0445

Dallas, TX 75201
(214) 740-8633

CBRE Group Inc.

(903) 934-8450 (903) 657-8540

LLC
44

Austin, TX 78746 (903) 534-1100
jboehm@wsgr.com
Franklin M. Smith
Troy, MI 48084
(248) 433-7393

PRIVECO, Inc.

1776 K Street, NW (512) 402-3556
(202) 719-7000
bpandya@wileyrein.com Counsel of Record for Defendant-Appellee
dweslow@wileyrein.com State Farm Mutual Automobile Insurance
wweeks@wileyrein.com Company

45

Houston, TX 77046 (214) 259-0935
mlevine@wkpz.com
Counsel of Record for Defendant- Appellees Creation Media, LLC; Unicorn
Appellee Quinn Veysey Ranch, LLC (in lieu of ONIG, LLC); True
Magic, LLC; Tumult, Inc.; Virtual
Investments, LLC; Fantasy Spin Game
LLC; Media Options Inc.; and In rem
028.com; 744.com; FNY.com; ZHD.com;
JTZ.com; KGJ.com; KMQ.com;
KXQ.com; LNM.com; XAQ.com;
KXW.com; LUOHE.com; MEQ.com;
OCU.com; PIXIE.com; QMH.com;
YGX.com; YQP.com; YQT.com;
SQG.com; XSG.com; YCX.com;
ZDP.com; VCZ.com; VGJ.com;
WYD.com; XFF.com; ZZM.com;
YJR.com; YJX.com; YRN.com; YTE.com;
YYG.com; and ZULIN.com
46
CERTIFICATE OF SERVICE
I certify that a copy of the foregoing document has been served
electronically upon counsel of record this 16th day of November, 2018 via the
CM/ECF system, in accordance with this Court’s ECF filing procedures.
Dated: November 16, 2018 /s/ Michael Hassett
47
CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMIT
Certificate of Compliance with Type-Volume Limit,

Typeface Requirements, and Type-Style Requirements
1. This document complies with the type-volume limit of FED. R. APP. P.
32(a)(7)(B) because, excluding the parts of the document exempted by F ED. R.
APP. P. 32(f), this document contains 10,326 words.
2. This document complies with the typeface requirements of FED. R. APP.
P. 32(a)(5) and the type-style requirements of FED. R. APP. P. 32(a)(6) because this
document has been prepared in a proportionally spaced typeface using Microsoft
Word 2010 in 14-point Times New Roman font.
Dated: November 16, 2018 /s/ Michael Hassett
48
United States Court of Appeals

FIFTH CIRCUIT
OFFICE OF THE CLERK
LYLE W. CAYCE TEL. 504-310-7700
CLERK 600 S. MAESTRI PLACE
NEW ORLEANS, LA 70130
November 26, 2018
Mr. Michael E. Hassett

Jones Hassett, P.C.
440 N. Center Street
Arlington, TX 76011
No. 18-10596 Associated Recovery L.L.C. v. John Does 1-

44, et al
USDC No. 3:16-CV-1025
USDC No. 3:17-CV-424
USDC No. 3:17-CV-651
Dear Mr. Hassett,

You must submit the 7 paper copies of your brief required by 5TH
CIR. R. 31.1 within 5 days of the date of this notice pursuant to
5th Cir. ECF Filing Standard E.1.
Sincerely,
LYLE W. CAYCE, Clerk
By: _________________________
Renee S. McDonough, Deputy Clerk
504-310-7673
cc:
Mr. Mark Richard Backofen
Mr. R. William Beard Jr.
Mr. Joel Christian Boehm
Mr. Brian Casper
Mr. Matthew Thomas Furton
Ms. Debra E. Gunter
Mr. Conrad C. Herring
Mr. Timothy Brooks Hyland
Mr. Darin M. Klemchuk
Mr. William Robert Lamb
Ms. Claire Molle Maddox
Mr. James Mark Mann
Mr. Jerome A. Moore
Mr. Brian Pandya
Mr. Adam Pierson

Mr. Brantley Ross Pringle Jr.
Mr. Jason Richerson Sr.
Mr. Richard Salgado
Mr. Franklin Michael Smith

Appellees Brief in Associated Recovery v. John Does 1-44 Et Al.

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Case: 18-10596 Document: 00514726590 Page: 1 Date Filed: 11/16/2018

Case No. 18-10596

IN THE UNITED STATES COURT OF APPEALS

JOHN DOES 1- 44; 744.COM; 028.COM; 3DCAMERA.COM; FNY.COM; ET

ASSOCIATED RECOVERY L.L.C.,

JOHN DOES 1- 44; 744.COM; 028.COM; 3DCAMERA.COM; FNY.COM;

ASSOCIATED RECOVERY L.L.C.,

LINDA BUTCHER; CBRE GROUP INCORPORATED; VIVIAN ROSENTHAL;

POWER HOME TECHNOLOGIES L.L.C.; LOOKOUT INCORPORATED;

On Appeal from the United States District Court

RESPONSE BRIEF OF DEFENDANT-APPELLEES

Dated: November 16, 2018

/s/ Michael Hassett /s/ Darin M. Klemchuk

Michael Hassett Darin M. Klemchuk

Counsel of Record for Defendant-

/s/ Brantley Ross Pringle, Jr. /s/ Matthew T. Furton

Brantley Ross Pringle, Jr. Matthew T. Furton

Counsel of Record for Defendant- Mark R. Backofen

Counsel of Record for Defendant-

/s/ Bobby Lamb /s/ J. Mark Mann

Bobby Lamb J. Mark Mann

Counsel of Record for Defendant- Counsel of Record for Defendant-

Joel C. Boehm Debra E. Gunter

Counsel of Record for Defendant-

/s/ Brian Pandya /s/ R. William Beard, Jr.

Brian Pandya R. William Beard, Jr.

Counsel of Record for Defendant-

/s/ Mark J. Levine /s/ Richard D. Salgado

Mark J. Levine Richard D. Salgado

CERTIFICATE OF INTERESTED PERSONS

of this court may evaluate possible disqualification or recusal.

Upon information and belief:

1. Associated Recovery LLC (Plaintiff – Appellant)

Defendants – Appellees Joining This Brief

1. Alansis.com, Inc. (Defendant-Appellee)

2. All-Pro Fasteners, Inc. (Defendant-Appellee)

3. CBRE Group Inc. (Defendant-Appellee)

4. Steve Fortuna (Defendant-Appellee)

5. Lookout, Inc. (Defendant – Appellee)

6. Power Home Technologies, LLC (Defendant-Appellee)

7. PRIVECO Inc. (Defendant-Appellee)

8. Radical Investments Management L.L.C. (Defendant-Appellee)

9. Slice Technologies, Inc. (Defendant – Appellee)

10. State Farm Mutual Automobile Insurance Company (Defendant-Appellee)

11. Telepathy Inc. (Defendant-Appellee)

13. Thirty-Four (34) in rem Domain Name Defendants-Appellees:

14. Creation Media, LLC (Defendant-Appellee)

15. ONIG, LLC (Defendant-Appellee)

16. True Magic, LLC (Defendant-Appellee)

17. Tumult, Inc. (Defendant-Appellee)

18. Virtual Investments, LLC (Defendant-Appellee)

19. Fantasy Spin Game LLC (Defendant-Appellee)

20. Media Options Inc. (Defendant-Appellee)

1. Novo Point, L.L.C.

Dated: November 16, 2018

/s/ Michael Hassett /s/ Darin M. Klemchuk

Michael Hassett Darin M. Klemchuk

/s/ Brantley Ross Pringle, Jr. /s/ Matthew T. Furton

Brantley Ross Pringle, Jr. Matthew T. Furton

Counsel of Record for Defendant- Mark R. Backofen

Counsel of Record for Defendant-Appellee

/s/ Bobby Lamb /s/ J. Mark Mann

Bobby Lamb J. Mark Mann