* Pursuant to 5 TH C IR . R. 47.5, the Court has determined

that this opinion should not be published and is not precedent

except under the limited circumstances set forth in 5 TH C IR . R.

47.5.4. United States Court of Appeals

Fifth Circuit



## FILED

December 21, 2005

Charles R. Fulbruge III

Clerk UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

05-10070

Summary Calendar

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff-Appellee,

v.

RESOURCE DEVELOPMENT INTERNATIONAL LLC; ET AL,

Defendants,

DAVID EDWARDS; JAMES EDWARDS; GERALD J. STOCK,

Defendants-Appellants.

Appeals from the United States District Court

for the Northern District of Texas

02-cv-605

Before HIGGINBOTHAM, BENAVIDES, and DENNIS, Circuit Judges.

PER CURIAM: *

Defendants-Appellants challenge the district court’s denial of

their motion to vacate its final judgment against Appellants. For

the reasons that follow, we affirm the final judgment.2 I. Background

On March 2 5, 2002, the Securities and Exchange Commission

(“SEC”) filed a complaint against eleven defendants and four relief

defendants in the United States District Court for the Northern

District of Texas. Three of the defendants have appealed the final

judgment in the case: James Edwards (“J. Edwards”), David Edwards

(“D. Edwards”), and G erald J. Stock (“Stock”) (collectively the

“Appellants”). The complaint alleged that Appellants violated the

registration and anti -fraud provisions of the federal securities

laws by engaging in a scheme to defraud investors of almost $100

million. In addition to the complaint, the SEC filed: (1) an

Application for Appointment of Receiver, (2) an Application for

Issuance of Preliminary Injunction and Ex Parte T emporary

Restraining Order and orders freezing assets, requiring an

accounting, requiring preservation of documents, repatriation of

assets, surrender of passports, and authorizing expedited discovery

(the “TRO Application”), (3) a memorandum and exhibits in support

of these ap p lications, and (4) a Certificate under F ED

. R. C IV

. P.

65(b).

The district court, on Ma rch 25, 2002, granted both SEC

applications and appointed a temporary receiver (“Receiver”) (1) to

t ake control of Appellants’ assets, (2) to require Appellants to

deliver their assets to the Receiver, and (3) to enjoin Appellants

from (a) distur bing these assets, (b) interfering with the3

operations of the Receiver, or (c) filing a bankruptcy action. In

addition, the clerk issued summonses for the SEC to serve on

Appellants. J. Edwards and Stock were served on March 27, 2002,

and D. Edwards on March 28, 2002.

On March 27, 2002, the district court issued an amended TRO

ordering Appellants to produce an accounting within ten days. A

hearing was held on April 11, 2002, at which time the court issued

a Preliminary Injunction Order (the “Injunction”). Among other

things, the Injunction required Appellants to produce an accounting

within seventy-two hours.

On April 18, 2002, D. Edwards and J. Edwards filed a document

caption ed “Response by Special Visitation,” and Stock filed an

identically captioned document on April 24, 2002. On May 7, 2002,

t he court granted the SEC’s motion for an interlocutory default

judgment against Appellants permanently barring them from violating

the federal securities laws.

On March 26, 2002, J. Edwards withdrew $28,900 from his bank

account. On March 29, 2002, D. Edwards removed business records

and had a locksmith change the locks on his office, which had been

seized by the Receiver. J. Edwards and D. Edwards were served with

an order requiring their presence at a May 8, 2002, hearing.

Neither Appellant attended. The district court held both

Appellants in civil contempt, and struck their respective “Response

by Special Visitation” filings because their actions violated the4

court’s orders. Stock filed a petition for bankruptcy in the

United States Bankruptcy Court for the Eastern Di strict of

Wisconsin on May 24, 2002. He was served with an order requiring

his presence at a July 22, 2002, hearing. Stock did not attend.

The court also held Stock in civil contempt for failing to attend

the hearing and for instituting a bankruptcy action in violation of

t he court’s orders and struck Stock’s “Response by Specia l

Visitation.”

On October 1, 2002, the court denied the Edwardses’ motion to

vacate the interlocutory judgment. On November 10, 2004, the court

issued a final judgment against the Appellants. On January 10,

2005, Appellants filed notices of appeal. Two days later, the

district court denied t he Edwardses’ motion to vacate final

judgment.

II. Discussion

We review de novo a challenge to the subject matter

ju risdiction of the district court. R obinson v. TCI/US West

Communc’ns Inc.

, 117 F.3d 900, 904 (5th Cir. 1997). A question

about subject matter jurisdiction may be presented at any time by

a ny party. F E D

. R. C IV

. P. 12(h)(3); Gaar v. Quirk

, 86 F.3d 4 51,

453 (5th Cir. 1996).

Appellants raise three subject matter jurisdiction arguments

in their appeal. Their attempts to characterize certain due5

p rocess arguments as subject matter jurisdiction arguments fail

.

First, J. Edwards and D. Edwards assert that the “United States

District Courts” are unconstitutional as only the “district courts

of the United States” are valid. They argue that Congress replaced

Article III district courts with the United States District Courts

through its Act of June 25, 1948, Pub. L. 773, 62 Stat. 869 (“the

Act”). Claiming Congress created new, unconstitutional courts, J.

Edwards and D. Edwards contend the di strict court lacked

jurisdiction. Not only does it use the two terms interchangeably,

the Act, in section 2(b), emphasi zes that the courts therein

referenced “shall be construed as continuations of existing law.”

The Supreme Court, in reference to the Ac t, has stated that “no

changes of law or polic y are to be presumed from changes of

language in the revision unless an intent to make such changes is

clearly expressed.” Fourco Glass Co. v. Transmirra Prods. Corp.

,

353 U.S. 222, 227 (1957) (discussing the Act). Moreover, we

addressed this exact argument in Warfield v. Byron and “decline[d]

to invalidate much of the last sixty years of securities litigation

because the ‘D's’ and ‘C's’ are capitalized differently in

different statutes.” 137 Fed. Appx. 651, 654 (5th Cir. 2005)

(unpublished). Therefore, the argument is rejected.

Second, Appellants claim the SEC should have held an

administrative hearing before filing the action against them in

federal district court. Appellants argue that the failure to do so6

meant the SEC lacked standing to bring the action and the district

court accordi ngly lacked jurisdiction. We disagree. The SEC

brought the action under the Securities Act of 1933 and the

Securities Exchange Act of 1934, which both entitle the SEC to

bring actions against securities defendants in the first instance

in federal district court. 15 U.S.C. §§ 77t(b), 78u(d)(1) (2000).

Third, Stock argues he was charged with violating a regulation

that was never published in the Federal Register, and therefore the

charge was invalid and the court lacked jurisdiction. Stock was

charged with violating 17 C.F.R. § 240.10b-5, which was published

in the Federal Register. Consequently, Stock’s argument fails.

Appella nts also raise a number of due process arguments on

appeal. Their arguments are not addressed, however, because

Appellants waived their due process arguments by failing to raise

them below. “Failure to raise a due process objection before a

district court waives that objection on appeal.” N ewby v. Enron

Corp. , 394 F.3d 296, 309 (5th Cir. 2004). Not only did they fail

to raise a due process argument below, Appellants failed to file an

answer to the complaint or a motion to dismiss. Appellants filed

documents entitled “response[s] by specia l visitation” after the

twenty-day period allotted for serving answers by Federal Rule of

Civil Procedure 12(a). Moreover, this document was stricken by the

district judge. In sum, having waived any due process arguments,

Appellants have not preserved them for appeal.7 V. CONCLUSION

Appellants raise three subject matter jurisdiction arguments

on appeal. Each argument fails. Appellants also waived their due

process arguments. For the foregoing reasons, we AFFIRM the final

judgment.