Opinion
CIVIL ACTION NO. 3:00-CV-2677-G.
June 26, 2001.
MEMORANDUM ORDER
Before the court is the plaintiffs' motion to remand this case to a district court of Tarrant County, Texas. For the reasons stated below, the motion is denied.
Background
This is the latest in a galaxy of cases in this court involving schemes by various individuals, including Edward W. Roush, Jr. ("Roush"), Malcolm Kelso ("Kelso"), R. Dale Sterritt, Jr. ("Sterritt"), and Fred Royer ("Royer"), to manipulate for personal gain the securities of WasteMasters, Inc. ("WasteMasters") and Continental Investment Corporation ("Continental"). These cases, in order of their filing, are Nikko Trading of America Corporation, et al. v. WasteMasters, Inc., No. 3:98-CV-0048-G ("the Nikko case"); Jerry B. Morris, et al. v. Scott Bush, et al., No. 3:98-CV-2452-G ("the Morris case"); Stewart Rahr, et al. v. Rescue Capital Corporation, et al., No. 3:99-CV-0628-G ("the Rescue Capital case"); and Stewart Rahr v. Grant Thornton LLP, et al., No. 3:99-CV-2305-G ("the Grant Thornton case"). Final judgments have been entered in three of these cases: Nikko, Rescue Capital, and Grant Thornton. One of those judgments, in Rescue Capital, is currently on appeal; the time for taking an appeal has expired in the others. Morris remains pending, though it has been administratively closed.
On April 19, 1999, the court issued an order in the Morris case restraining Roush, Kelso, Sterritt, and Royer, as well as all persons acting in concert with them, from filing any new lawsuit concerning (1) WasteMasters or Continental, (2) any party to the Nikko or Morris cases, or (3) the subject matter of the Nikko or Morris cases, unless an order from this court permitting such action was first obtained. See Modified Order in the Morris case, April 19, 1999. This order ("the All Writs Order"), which was affirmed by the Court of Appeals on July 10, 2000, Morris v. Bush, 226 F.3d 642 (5th Cir. 2000) (table), remains in force. See Order in the Morris case (August 29, 2000) (directing administrative closure subject to continued enforcement of the All Writs Order).
Discussion
The All Writs Order, by its terms, applies to the instant suit for a declaratory judgment that some of the watered WasteMasters stock currently in Roush's hands can properly be transferred to the plaintiffs. The court held in Nikko that the controversy which resulted in the issuance of this WasteMasters stock was not genuine, so that all of the judicial proceedings in Nikko, except for the court's determination that it lacked jurisdiction, were a nullity. It was unnecessary to decide in Nikko whether, as apparently the plaintiffs and Roush now contend, the WasteMasters shares issued to settle the pretended controversy in Nikko were nonetheless valid. The bankruptcy court has apparently decided they were not. Even if, as the plaintiffs maintain, that decision is not binding on them, the fact remains that the All Writs Order clearly applies to the subject matter of this case, which was commenced in violation of that order.
See Notice of Default Judgment filed on November 13, 2000 in In Re: W.T. Skip Leake, Miscellaneous Docket No. 3:00-MC-094-G in the United States District Court for the Northern District of Texas ("the Leake case").
See Reply to Notice of Default Judgment filed on November 29, 2000 in the Leake case.
Accordingly, the motion to remand is DENIED.