ok mr it's you're on a limb but on behalf of the port of corpus christi today we're here on three points on appeal but your honor is the primary point that has to be or should be reviewed first is whether or not the bankruptcy court invaded corpus christi sovereignty by effectively wiping out and extinguishing the ports easement the other two points have to do with whether or not the court had if the bankruptcy court had the jurisdiction that it that it asserted then adequacy of the pleading and eleven forty four the bankruptcy code and the beast of discretion of whether or not it should have been amended would come into play your honor there are several facts that should be looked at in order to frame this issue isn't the problem your honor is that the interim jurisdiction as developed by the texas supreme court has never been extended past the debtors property in this case by by issuing the confirmation order the bankruptcy court effectively is invading the sovereignty of the court or corpus christi by taking away its property right prior to two thousand and four the supreme bankruptcy court had interim jurisdiction but again only over property of the debtor that could decision has not been extended into property of the state sovereign your honor and your best circulatory for that i would have said it would cover this square the the circuit authority actually it's the reverse your honor there  is no it hasn't been extended there are that there is no case law that takes could and extends it into the state sovereignty area you'd have to establish that even though it goes with the property sounds like in ram it's not the person it's not the state of texas it's adjudicating the property that is to anybody and everybody that just seems to me what's the situation the the distinction you're on is that in texas a texas easement is the separate property right of  the three sixty three at which is the statute by which you actually sell property it talks about interest in the debtors property this is a separate property all the way around that there are no cases your honor there are no published federal cases that we found that allowed an easement whether the easement of a state sovereign or private property private owner being stripped under the laws of the state of texas using the complaint only talks that are three sixty three into the fraud cow then it doesn't even appear in the district court it's not in your principal briefs so they end up in their reply to treatment of the three once then it gets flushed down the reply brief but you may have a three sixty three argument but it's not been asserted and it isn't being asserted now well and i'll tell you why i don't think we do a three sixty three argument would have been an objection to the actual confirmation hearing that would be a direct  appeal in our view that the collateral attack on that order would have been raising it out of time the the that's the only avenue that the bankruptcy court allows a creditor or a party in interest to actually assert post finality on a bankruptcy court confirmation order is eleven forty four that was there at the very vehicle at the same time within that complaint were able to assert the ports eleventh amendment rights or sound your rights against the bankruptcy court from from taking the action that it did through the confirmation or so from from that perspective your honor the well let me put it this way even if that plan the front page said under three sixty three we are going to extinguish the court's easement even if it was that  it would make no difference because the court failed to have the requisite jurisdiction to impact the state's property that's where the lines of cases from tennessee the h and then the supreme court once again in two thousand and six and the cat's case by expanding what the eleventh amendment analysis should be in the important thing about cats is to keep in mind it's very specific to preference claims but what is changed though is power these courts are supposed to review and look at the the parameters of eleventh moment immunity that takes us to the historical reviews both in the in though and the unity foundation for gary morrow the federal courts have stated that the federal court jurisdiction will not allow the quiet quiet tie lashing against the state it will not allow a lawsuit that effectively rules that the state is no longer the owner of a piece of property if you look at the historical context that katz would have someone look at by going back to seven hundred eighty seven and trying to figure out what the state's thought they were doing by joining in by signing the constitution you can also look at han's from louisiana supreme court case from the eight hundred ninety three and that was the the attempt by a private citizen to sue on a contract against the state there though similar to what happened in katz there was a reference back to one of alexander hamilton federalist papers where they said the it with it was of they didn't use this word but it would be fairly repugnant to the states to think that a private citizen could sue it on its property rights in that case it could contract right that's all outside the context of the bankruptcy right which has been efficient uniform bankruptcy code i disagree your honor and the reason is this the enron jurisdiction that has been a spouse by the supreme court has always been limited to property of  jurisdiction is an exception the eleventh amendment immunity in order for that to occur you would think that there would be some indication in the two hundred years of the development and love  that has allowed the federal court to impact the property right of the state and again the when you meld if you imp properly in my view the bankruptcy court did meld the property right that's that's evidence by the easement with the surface rights of the debtor and make that interest with then the debtors property if it doesn't work right it's not a it's not appropriate legally those are two separate areas appropriate to separate property rights the the that's why i'm an interview based upon is a boat with the boat belong to the state of new york supreme court said and has continued to hold that the federal court using its admiralty in wind power which both pinions say quite fairly well to bankruptcy and empowered interim jurisdiction that the the new york to says that the federal court could not make affect new york's ownership of a boat that honor and this is what's important this should have been reviewed on rule nine being ruled twelve instead the bankruptcy court effectively tried the case based on its own perception of what may have happened conformation as this court has stated in the davis offshore case when it talks about in the in the footnote it talks about whether or not you could use a little move in eleven forty four the i think the critical point is that the fraud rarely occurs in front of the court and it it's our position that it was an improper review of the pleading itself which should have been looked at from the four corners and whether or not it alleged enough allegations and the facts that when viewed in light most favorable to the port would stab as you claim in eleven forty four ok in the specific affirmative misrepresentation was one or was that a non disclosure of a material for it was it was bo th the misrepresentation the overt misrepresentation was the testimony of debtor counsel to the court we've done a lot of changes nothing material has changed which is false it's false from the day before until twelve thirteen that morning the over the omission would be not disclosing to the core that the plan had changed in such a manner that the the court should be notified that a subset of the right of a third party who is not present before the court has been impacted as a bankruptcy attorney that's our obligation to disclose so that the combination of those two at the confirmation he is what effectively kicks in and of course the due process claim is implicated but that is still that's still before the trial that's been stayed pending this appeal then finally on the abuse of discretion the dovetails into the court's explanation of i was around here i don't see that there was enough fraud if the court if the court saw that aspects of the complaint were defective or in or unsubstantial to make eleven forty four case law suggests that the ability to a man should be given to the  plate the futility argument which i understand the that it had no backing behind it for us to do for us at the port to understand ok if it's future our why with the only answer to that question is that the court the court was using its own personal perception of what happened at trial in a prison other proceeding to evaluate the complaint and that we believe  matter of law under the supreme court's decisions in good and hats which concluded that states did not retain sovereign immunity with respect to proceedings necessary to effectuate that in ram jurisdiction of the bankruptcy court a three sixty three sale to the second claim here the ports fraud claim fails as a matter of law based on its own allegations in its complete which confirmed that the statements were neither false nor material to the confirmation of the plan it was clear from day one of these proceeds that this property was going to be sold free and clear of all liens claims and nothing about that default rule changed on the day of confirmation the only thing that changed was that the plan was altered to create some exceptions to that rule for some other parties that had come forth in objected to what was going to happen under the free and clear sale so there never was any material change there was no falsity to any of these statements and on the third point that the vendor to court certainly did not abuse its discretion by denying leave to amend here when the porton still to this day never come forward with anything that they could plead that would change the fact that these claims just fail as a matter of law based on settled precedent based on their own allegations about what happened but it's over talk a little bit more about the eleventh amendment issue here really after the supreme court's decisions in what in tatts just well established i mean the basic principle is at least as to interim proceedings and proceedings necessary to effectuate in memphis states get treated just like anyone else they didn't retain any of sovereign immunity and even to the extent they did i mean this court upheld pre cats in its texas versus walker decision than it when it comes to enron proceedings about what to do with the property of the estate there's not an eleventh amendment issue in the first place because the states not being hailed into court and if you look cats and could mean they they rely heavily on the supreme court's earlier decision in the deep sea research case dealing with the enron jurisdiction of admiralty courts and what the court said there was it is fine in the context  adjudicate interests in the property the rez that's before it even if that affects are extinguishes interests of the state the only distinction the court drew in deep sea research was if the property is physically  possession of the state such that the interim court is saying i'm going to issue a coercive order and require the state to turn over property that's in its possession here what we have is physical real property that everyone agrees was the property of the estate with they had in that property it is is an easement an interest a non possessory interest to use somebody else's physical real property this wasn't even an exclusive easement you know it's just a right for them to use would have ban would have satisfied various three sixty three of factors had they objected at the time of the sale but i think counsel correctly concedes you know those issues are not before this court and they cannot be before this court because this court is precluded from hearing collateral attacks on a confirmed bankruptcy plan as well as collateral attacks on a three sixty three sale and so they you know that they basically try to come up with these fraud in the eleventh amendment arguments because that's the only way they have to try and get in arguments that if anybody else were raising them would clearly just be for closed by general principles precluding collateral attacks on consummated bankruptcy plans and consummated three sixty three sales well again you both understand this are a lot better when we would just this may be very naive but when would the third party be able to object for lack of notice no consent no dispute when would the three sixty who are actors how well well so here in this turning you know that they had noticed so they could have objected at any point during the bankruptcy proceedings i guess what their argument there is when you look at the whole chronology the notice was very nonspecific it was these properties are excluded from this deal that these these are carried forward or whatever preserved incumbrances and never a specific notice to them about you're going to lose something that you've always had yeah and i think that there's a couple of problems with that argument i mean first of all several other parties came to the debtor and said you know hey we've got an easement and we're reading the same plan and we're reading all these same documents and we understand that when you're saying that the property is going to be sold free and clear of all liens claims incumbrances that's going to reach our eas and those that what happened is that negotiations occurred you know some of them raised three sixty three issues that's where this paragraph one away in the confirmation order came from that was the product of negotiated resolution is there is one of the ways a benghazi court can sell free and clear as with consent and there is case law that has banned that has concluded that if you never object and you have notice you consented and i would note i do think it's worth taking a look at tab five of our record excerpts has the ports own proposed confirmation order in this case so when they submitted a bid to purchase this property they submitted a proposed confirmation order that they would have had the bankruptcy court enter and in their own confirmation order they proposed that the property be sold to them free and clear of easements and they said that it could be sold to them free and clear of everybody else's easements by relying on three sixty three of two and the principle that if you have notice of the free and clear sailing don't object your deemed a concert so innocent so if they had come forward and said we don't consent then we would have to confront other factors under three sixty three af we could have you know either negotiated or they could have litigated these issues in your piece in your mind of inattention i mean exactly they did they had this information they could have come forward at any time that might have changed things it might have led to litigation who knows how things would have played out but the fact that they  realized after the fact hoops we didn't think our easement was going away none of that you know gets them out of a waiver problem but more fundamentally mean they are here on a sovereign immunity claim and i don't see how any of this has anything to do with the eleventh  because their argument is not you know that there is some special rule i mean they're making this argument but i think it's for close squarely by supreme court precedent that there's some special rule under three sixty three after that you know everybody else's property can be sold but not the states they're basically saying  easement can be sold and then saying since we happen to be a state actor for us we get to convert a statutory argument into eleventh and i'm in and i don't really think that's an appropriate way to use sovereign immunity it would essentially mean that states in kind forever issues that anybody else would have had to raise that are just straight statutory arguments not arguments about in the new unique role of courts when it comes to interests of states so i mean they certainly do you know make an argument that they think courts are wholly without the power to adjudicate the interests of states and property but deep sea research could cats all of those claims this case is for close that argument i mean in deep sea research the state was asserting title to the property that was before the admiralty court and the supreme court said that's ok the admiralty court can still adjudicate whether the state has title and i certainly don't think the state in cats was conceding that they had gotten an impermissible preferential transfer i mean i'm sure they wanted to object to that so they didn't agree with the notion that the money that was going to go back to the a state was was the property of the state in the court was saying it's ok for the courts to adjudicate that sold  think to the extent they have any arguments they various or that are interesting most of which is as i think your honor correctly noted come in their reply brief those just aren't within the scope of the issues that are before this court at this time the eleventh and then claim this fails on its own terms turning to the fraud claim i think that the basic problem there is is really derivative what i've said which is it was clear from day one i mean from the very first documents that were proposed in this case the motion to have a three sixty three sale the original asset purchase agreement the original plan they all said the property was going to be sold free and clear of all means clear and congress sets and numerous iterations of the plan said they would be sold free and clear of everything except for you permitted liens and then eventually the language became permitted incumbrances and basically what happened was that term wasn't defined up until the very last document in the plan which was the confirmation order and the rule of everything else is going to be extinguished so when when and when council represented the bankruptcy court that there hadn't been a material change i mean that's absolutely correct and particularly at least as to the only thing that matters here which is they are easement there isn't was always going to be extinguished nothing changed about that in the final documents and the fact that they realize that some other people got an exception you know that that doesn't amount to any sort of material change in their treatment and none of this comes anywhere close to making the statements that they identify that were made to the bankruptcy court for all false or fraudulent or intentionally designed to mislead anybody so they take their point you know to be that they think that the bankruptcy court kind of went beyond it role here and took into account what was going on to mean these claims as the district court correctly recognized just fail on the face of the complaining and they play all of the various iterations of the plan the various iterations of the asset purchase agreements if you walk through their own allegations explain that repeatedly for well over a year the plan set free and clear of all means claims and cost so in that it's it's not a matter i mean i think the bankruptcy court correctly did recognize that it was the actor that they were saying was defrauded and it did not believe it had been defrauded or that any of this was material but wholly apart from that the that just looking at the complaint the allegations just do not come anywhere close to no fraud because you can look at this and understand that you know i mean what maybe they didn't understand what was going on but that doesn't amount to this being fraud and nobody ever understanding and there being a material change in the treatment of their cla so you know so sick to the extent they have some objection about the notion of the sort of admittedly unusual procedure that you're always going to have in a bankruptcy case where the very judge that they're saying was defrauded is the one that they're asking to look at the claim i mean i think it's  understandably difficult for a judge to put out of their mind the notion of i kind of know if i was defrauded or not but here the fact that this also was appealed and the district court review that the same conclusion i think just gets all the comfort necessary to you know not be concerned that there was anything procedurally unusual but this was done and then on the final point i simply don't see what leave to him and you know we would achieve here i mean they have never explained what they think they would plead and i don't think they can plead anything because the basic theory of their fraud claim is what fails as a matter of law just by looking at the undisputed facts of these proceedings because they just can't change the fact that there never was any sovereign has a claim or a lien on property of the debtor what's noticeably absent an apple lease brief is there is no case law ever using three sixty three f to strip out created under texas law there's no support for it because it's a separate property right or you would have seen these cases given all the pipelines and roads and other classical easements throughout the state of texas you would have seen some authority that that's of whether or not it's a state sovereign rob in our case though when you add them the lack of of the use of three six three you have to take away a third party's property right but you overlay the special nature that the state has that the ability to stay away and protect itself by not engaging in the federal courts jurisdiction that the fish circuit has through isidro sure and through gary morrow they continually have said that this court does not have the federal court does not have the jurisdiction to rule on property in which the state has a colorable claim and that's one of the differences between both treasure sours and deep sea which both of those there was no colorable claim the courts found to the property it's undisputed that the easement was the property right again anon possessory property right but the property right of the port of corpus christi it had the ability whether it was given notice or not which i will say to you your honor the description by the debtors of what occurred is patently false if you look at how the pleadings were set out at nine thirty at night the night before they finally file in the list of excluded assets sports not on them twelve thirteen the confirmation order that center has a one sentence that nowhere does it appear anywhere in the more versions in which the point season is stripped away but that addition again depends upon the bankruptcy court having the jurisdiction to effectuate that provision and if it doesn't have the jurisdiction then whether or not the port objected or not makes no difference it didn't have to change the only the only way would have the object would have had the only point where it would be necessary for the point to object with if it if it had a claim or a lien or something against the piece of property that belonged to the debtor and the one oh  and then the other point your honor the if could and catch are red to expand the raise that a bankruptcy court has jurisdiction over there would be again some case law in the last fourteen years that would show that expansion and there just isn't