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Rosenthal second-removal remand and fee entitlement opinion — 14 May 2025 — Harris County copy 88

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observationobservation

14 May 2025 ruling; 19 May cost submission and 26 May objection dates are historical source directives, not live deadlines.

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ATLANTIC WAVE HOLDINGS, LLC, et al., Plaintiffs, v. CYBERLUX CORPORATION, et al., Defendants. § § § § § § § § § § CIVIL ACTION NO. 25-1689 MEMORANDUM AND OPINION This dispute has a long and winding history across multiple state and federal courts. The plaintiffs, Atlantic Wave Holdings LLC and Secure Community LLC, obtained a judgment in June 2023 in a Virginia state court against the defendants, Cyberlux Corporation and Mark D. Schmidt.1 Since then, Atlantic Wave has been trying to enforce that judgment. Atlantic Wave sued Cyberlux in July 2024 in the 129th Judicial District Court of Harris County, Texas, trying to collect on the judgment. Cyberlux has resisted. Three months ago, Cyberlux removed the case to federal court. This court remanded because, among other problems, the removal was untimely. (Case No. 25- cv-626, Docket Entry Nos. 15, 16, 18). Approximately two weeks after this court’s remand order, Cyberlux removed again, and Atlantic Wave moved to remand. (Docket Entry No. 3). Based on the briefing, record, and applicable law, this case is again remanded to the 129th Judicial District Court of Harris County, 1 The plaintiffs are referred to collectively as “Atlantic Wave.” The defendants are referred to collectively as “Cyberlux.” United States District Court Southern District of Texas ENTERED May 14, 2025 Nathan Ochsner, Clerk Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 1 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

This complete eight-page SDTX ECF 14 opinion in 4:25-cv-01689 is signed and filed by Judge Lee H. Rosenthal on 14 May 2025. The retained Har

This complete eight-page SDTX ECF 14 opinion in 4:25-cv-01689 is signed and filed by Judge Lee H. Rosenthal on 14 May 2025. The retained Harris County copy bears an Unofficial Copy watermark. It remands the second removal to the 129th Judicial District and grants fee/cost entitlement for responding to that removal; no quantified award is fixed here.

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ATLANTIC WAVE HOLDINGS, LLC, et al., Plaintiffs, v. CYBERLUX CORPORATION, et al., Defendants. § § § § § § § § § § CIVIL ACTION NO. 25-1689 MEMORANDUM AND OPINION This dispute has a long and winding history across multiple state and federal courts. The plaintiffs, Atlantic Wave Holdings LLC and Secure Community LLC, obtained a judgment in June 2023 in a Virginia state court against the defendants, Cyberlux Corporation and Mark D. Schmidt.1 Since then, Atlantic Wave has been trying to enforce that judgment. Atlantic Wave sued Cyberlux in July 2024 in the 129th Judicial District Court of Harris County, Texas, trying to collect on the judgment. Cyberlux has resisted. Three months ago, Cyberlux removed the case to federal court. This court remanded because, among other problems, the removal was untimely. (Case No. 25- cv-626, Docket Entry Nos. 15, 16, 18). Approximately two weeks after this court’s remand order, Cyberlux removed again, and Atlantic Wave moved to remand. (Docket Entry No. 3). Based on the briefing, record, and applicable law, this case is again remanded to the 129th Judicial District Court of Harris County, 1 The plaintiffs are referred to collectively as “Atlantic Wave.” The defendants are referred to collectively as “Cyberlux.” United States District Court Southern District of Texas ENTERED May 14, 2025 Nathan Ochsner, Clerk Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 1 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

The opinion recounts a June 2023 Virginia judgment, July 2024 Texas enforcement, first removal and prior remand. It finds Cyberlux knew the

The opinion recounts a June 2023 Virginia judgment, July 2024 Texas enforcement, first removal and prior remand. It finds Cyberlux knew the alleged federal-property issue no later than 6 January 2025 and failed to remove within the relevant thirty-day period. These are this opinion’s historical procedural findings, not a current deadline calculation.

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ATLANTIC WAVE HOLDINGS, LLC, et al., Plaintiffs, v. CYBERLUX CORPORATION, et al., Defendants. § § § § § § § § § § CIVIL ACTION NO. 25-1689 MEMORANDUM AND OPINION This dispute has a long and winding history across multiple state and federal courts. The plaintiffs, Atlantic Wave Holdings LLC and Secure Community LLC, obtained a judgment in June 2023 in a Virginia state court against the defendants, Cyberlux Corporation and Mark D. Schmidt.1 Since then, Atlantic Wave has been trying to enforce that judgment. Atlantic Wave sued Cyberlux in July 2024 in the 129th Judicial District Court of Harris County, Texas, trying to collect on the judgment. Cyberlux has resisted. Three months ago, Cyberlux removed the case to federal court. This court remanded because, among other problems, the removal was untimely. (Case No. 25- cv-626, Docket Entry Nos. 15, 16, 18). Approximately two weeks after this court’s remand order, Cyberlux removed again, and Atlantic Wave moved to remand. (Docket Entry No. 3). Based on the briefing, record, and applicable law, this case is again remanded to the 129th Judicial District Court of Harris County, 1 The plaintiffs are referred to collectively as “Atlantic Wave.” The defendants are referred to collectively as “Cyberlux.” United States District Court Southern District of Texas ENTERED May 14, 2025 Nathan Ochsner, Clerk Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 1 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

The court says the state court did not authorise seizing federal property to satisfy Cyberlux’s judgment and notes Berleth’s and creditor co

The court says the state court did not authorise seizing federal property to satisfy Cyberlux’s judgment and notes Berleth’s and creditor counsel’s representations that they did not intend to seize/sell Government property. Those representations and the then-record underpin remand; they are not proof of all subsequent conduct.

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3 II. Analysis Atlantic Wave’s original petition, filed in July 2024, made clear that Atlantic Wave sought to collect money from Cyberlux or levy and sell Cyberlux’s property located in a Texas Cyberlux facility towards satisfying the Virginia state-court judgment. (Case No. 25-cv-626, Docket Entry No. 3-3).2 Cyberlux’s motion to quash filed on January 6, 2025, shows that Cyberlux knew at that time that there was U.S. government property in its Texas facility. See (Case No. 25-cv-626, Docket Entry No. 4-1 at 14). Cyberlux has used the presence of some government property to attempt to delay and frustrate Atlantic Wave’s right to collect on its judgment. Cyberlux was aware of the alleged federal issues raised by the presence of some federal government property in Cyberlux’s facility by January 6, 2025, at the latest.3 Cyberlux did not remove for more than 30 days after January 6, 2025. See (Case No. 25-cv-626, Docket Entry Nos. 1, 3). That removal was clearly untimely. See (Docket Entry No. 1-1 at 24). On January 16, 2025, the Texas state court stated that it was going to appoint a receiver for Cyberlux’s property and instructed Atlantic Wave to file a proposed order. (Case No. 25-cv-626, Docket Entry No. 4-1 at 141, 152). The court did not authorize the receiver to attempt to collect Cyberlux’s judgment debt to Atlantic Wave by seizing any of the federal government property in the Cyberlux facility. Nor did Atlantic Wave or the receiver seek to seize federal government property to satisfy Cyberlux’s judgment debt. As this court previously held, neither the proposed receivership order filed by Atlantic Wave on January 20, 2025, nor the letter to the state-court judge from the receiver, Robert Berleth, dated February 3, 2025, provided any basis, new or 2 As Cyberlux states: “On July 30, 2024, [Atlantic Wave] filed a Petition to Enforce in Texas state court, seeking to levy and sell various Cyberlux property, including Cyberlux’s property in a Spring, Texas facility . . . leased by Cyberlux.” (Case No. 25-cv-626, Docket Entry No. 5 at 7). 3 Atlantic Wave requested an inspection of Cyberlux’s Texas facility on January 9, 2025, (Docket Entry No. 3-1 at 5–7), which was also more than 30 days before Cyberlux filed its first notice of removal. Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 3 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

The court rejects the April 1 proposed receivership order and April letters as new removal-triggering papers. It reads “Debtor’s non-exempt

The court rejects the April 1 proposed receivership order and April letters as new removal-triggering papers. It reads “Debtor’s non-exempt property” as the asset boundary and the disputed-custody/compliance provisions as allowing state-court recourse, not authority to sell Government property. Cyberlux removed before that proposed order was issued.

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4 otherwise, for federal jurisdiction or removal. See (Case No. 25-cv-626, Docket Entry Nos. 16, 18). That conclusion was bolstered by Mr. Berleth’s representations to the state court that he had “no intention” of selling government property or infringing on government property interests if appointed receiver. (Case No. 25-cv-626, Docket Entry No. 4-1 at 148, 150). Atlantic Wave’s counsel similarly represented to this court that it had “no interest in selling assets that belong to the federal government.” (Docket Entry No. 1-1 at 15). This court issued these findings before remanding. (Case No. 25-cv-626, Docket Entry Nos. 16, 18). Two weeks later, Cyberlux removed yet again. (Docket Entry No. 1). Cyberlux justified this removal on Atlantic Wave’s filing of a new proposed receivership order in the Texas state court on April 1, 2025. See (Docket Entry No. 1-7).4 Cyberlux characterizes the proposed order as “excessively broad,” “extreme and improper,” and “unconscionable.” (Docket Entry No. 1 at 7–9). It is clearly none of those things. More importantly, it is not an “other paper from which it may first be ascertained that the case is one which is or has become removable.” See 28 U.S.C. § 1446(b)(3). The proposed order does not mention U.S. government property, much less give the state￾appointed receiver power to seize and sell U.S. government property. To the contrary, the proposed order defines the “Receivership assets” as “Debtor’s non-exempt property.” (Docket Entry No. 1-7 at ¶ 14) (emphasis added); see also (id. at ¶ 25) (granting the receiver the power to “take possession of Debtor’s non-exempt property” (emphasis added)). Cyberlux objects to three paragraphs of the proposed order. (Docket Entry No. 9 at 7–8) (citing Docket Entry No. 1-7 at ¶¶ 21(h), 28, 31). But these paragraphs simply give Cyberlux 4 Cyberlux removed before the Texas state court issued an order on the receivership. Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 4 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

The opinion finds no evidence on that record of a receiver attempt to seize/sell Government property or of the asserted crossed boundary. It

The opinion finds no evidence on that record of a receiver attempt to seize/sell Government property or of the asserted crossed boundary. It distinguishes a prior hearing’s hypothetical possible removal trigger from the actual facts and notes federal-officer removal might still not apply. This is not a prospective licence or a later title adjudication.

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5 recourse through the state courts if the receiver were to violate the order (which he disavowed any intent to do) by seizing U.S. government property. See (Docket Entry No. 1-7 at ¶ 21(h)) (If Cyberlux “believes that the Receiver’s demands are inappropriate,” it “must first comply, then seek protection from the Court” and “must set the matter for the earliest possible hearing date.” (emphasis added)); (id. at ¶ 28) (In disputes about “whether an asset . . . belongs to a Debtor,” the Receiver “may take custody of the asset until the Court determines the rights of those claiming an interest in the asset”); (id. at ¶ 31) (same). Again, both Mr. Berleth and Atlantic Wave have repeatedly represented to this court and the state court that they do not intend to seize or sell U.S. Government property. See, e.g., (Case No. 25-cv-626, Docket Entry No. 4-1 at 148, 150); (Docket Entry No. 1-1 at 15); (Docket Entry No. 1-6 at 2). There is no basis for Cyberlux’s statement that the order, “if signed by the state court judge, would have given the receiver authority to take the Federal Government Property and sell it.” (Docket Entry No. 9 at 15). Rather, the proposed order reiterates what has been clear since the original petition was filed: the state court will be the ultimate determiner of which of Cyberlux’s assets can lawfully be seized to satisfy the Virginia state-court judgment. The proposed order does not provide a newly discovered basis for removal. Contrary to Cyberlux’s representation, there is also no evidence that the plaintiffs “have trampled over the line they repeatedly represented to [this court] they would not tread.” See (Docket Entry No. 1 at 2). In a cover letter to the proposed order filed in the state court, Atlantic Wave’s attorney expressly reiterated: “To be clear, the focus of Plaintiffs’ collection efforts is not to seize personal property on which the United States has or claims a mortgage or other lien as established by competent evidence, but rather to seize personal property of Judgment-Debtors as set forth in the proposed receivership order.” (Docket Entry No. 1-6 at 2). As detailed above, the Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 5 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

Fees were denied for the first removal because it had at least a colourable basis; the second lacked an objectively reasonable basis and fee

Fees were denied for the first removal because it had at least a colourable basis; the second lacked an objectively reasonable basis and fee entitlement is granted. The opinion requires proof of actual removal-related costs and permits good-faith objections. It does not fix a monetary award.

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6 proposed order does not state, or even suggest, that Atlantic Wave or Mr. Berleth intend to seize U.S. government property. And Atlantic Wave’s letter to the court on April 9, 2025, does not provide a new or different perspective. Atlantic Wave’s actions since this case was removed, remanded, and removed again are consistent with its representations to this court and to the state court. In short, Cyberlux’s second notice of removal is based on an unjustified reading of two letters and a proposed receivership order filed by Atlantic Wave. None of these documents present a new or valid basis for removal. There is still no reason to think that U.S. government property will be seized and sold as a part of the state-court case. But even if there were, Cyberlux knew on January 6, 2025, that its Texas facility contained government property. To the extent that this raises a federal question, the notice of removal must have been filed within 30 days of January 6, 2025, at the latest, to be timely. See 28 U.S.C. § 1446. It was not. All of this was true when this court previously remanded this case, and it remains true today. This case is remanded, again, to the 129th Judicial District Court of Harris County, Texas. III. Attorney’s Fees and Costs Atlantic Wave requests “the opportunity to submit a separate motion seeking an award of reasonable attorneys’ fees” incurred as a result of Cyberlux’s multiple removals. (Docket Entry No. 3 at 29). Under 28 U.S.C. § 1447(c), “[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.” “Absent unusual circumstances, courts may award attorney’s fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal.” Martin v. Franklin Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 6 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

Atlantic Wave must submit cost/fee documents by 19 May 2025 and Cyberlux may object by 26 May 2025. These are source-stated historical deadl

Atlantic Wave must submit cost/fee documents by 19 May 2025 and Cyberlux may object by 26 May 2025. These are source-stated historical deadlines; compliance, amount awarded, later review and subsequent receivership acts are not supplied.

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8 IV. Conclusion Because Cyberlux did not timely remove, Atlantic Wave’s motion to remand, (Docket Entry No. 3), is granted. Atlantic Wave’s request for an award of the attorney’s fees and costs incurred in responding to the second removal is granted. Atlantic Wave must submit documents showing its costs and expenses, including attorney fees, by May 19, 2025. Cyberlux may file objections, if any, by May 26, 2025. SIGNED on May 14, 2025, at Houston, Texas. ________________________________ Lee H. Rosenthal Senior United States District Judge Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 8 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

The opinion sets out its then-applied federal-question/federal-officer removal and thirty-day/other-paper standards. Their inclusion is sour

The opinion sets out its then-applied federal-question/federal-officer removal and thirty-day/other-paper standards. Their inclusion is source analysis for this ruling, not independent advice on present rules or another jurisdiction.

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2 Texas. Atlantic Wave’s request for attorney’s fees is granted. The reasons for these rulings are below. I. The Legal Standard Under 28 U.S.C. § 1441, a defendant may remove a “civil action brought in a State court of which the district courts of the United States have original jurisdiction.” This includes “civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Federal statute also allows for removal of a civil action commenced in state court involving “[a] property holder whose title is derived from” an officer of the United States, “where such action . . . affects the validity of any law of the United States.” 28 U.S.C. § 1442(a)(2). The federal-officer removal statute “applies to private persons ‘who lawfully assist’ the federal officer ‘in the performance of his official duty.’” Watson v. Philip Morris Companies, Inc., 551 U.S. 142, 151 (2007) (quoting Davis v. South Carolina, 107 U.S. 597, 600 (1883)). Regardless of the statutory basis for removal, a defendant must follow the removal procedures in 28 U.S.C. § 1446. Generally, a notice of removal must be filed within 30 days after the defendant receives a copy of the initial pleading or service of summons. 28 U.S.C. § 1446(b)(1). However, if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable. Id. § 1446(b)(3). The “other paper,” see id., “must result from the voluntary act of a plaintiff.” Par. of Plaquemines v. Chevron USA, Inc., 7 F.4th 362, 373 (5th Cir. 2021) (quoting reference omitted). Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 2 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation

Atlantic Wave Holdings LLC

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ATLANTIC WAVE HOLDINGS, LLC, et al., Plaintiffs, v. CYBERLUX CORPORATION, et al., Defendants. § § § § § § § § § § CIVIL ACTION NO. 25-1689 MEMORANDUM AND OPINION This dispute has a long and winding history across multiple state and federal courts. The plaintiffs, Atlantic Wave Holdings LLC and Secure Community LLC, obtained a judgment in June 2023 in a Virginia state court against the defendants, Cyberlux Corporation and Mark D. Schmidt.1 Since then, Atlantic Wave has been trying to enforce that judgment. Atlantic Wave sued Cyberlux in July 2024 in the 129th Judicial District Court of Harris County, Texas, trying to collect on the judgment. Cyberlux has resisted. Three months ago, Cyberlux removed the case to federal court. This court remanded because, among other problems, the removal was untimely. (Case No. 25- cv-626, Docket Entry Nos. 15, 16, 18). Approximately two weeks after this court’s remand order, Cyberlux removed again, and Atlantic Wave moved to remand. (Docket Entry No. 3). Based on the briefing, record, and applicable law, this case is again remanded to the 129th Judicial District Court of Harris County, 1 The plaintiffs are referred to collectively as “Atlantic Wave.” The defendants are referred to collectively as “Cyberlux.” United States District Court Southern District of Texas ENTERED May 14, 2025 Nathan Ochsner, Clerk Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 1 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation

Secure Community LLC

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ATLANTIC WAVE HOLDINGS, LLC, et al., Plaintiffs, v. CYBERLUX CORPORATION, et al., Defendants. § § § § § § § § § § CIVIL ACTION NO. 25-1689 MEMORANDUM AND OPINION This dispute has a long and winding history across multiple state and federal courts. The plaintiffs, Atlantic Wave Holdings LLC and Secure Community LLC, obtained a judgment in June 2023 in a Virginia state court against the defendants, Cyberlux Corporation and Mark D. Schmidt.1 Since then, Atlantic Wave has been trying to enforce that judgment. Atlantic Wave sued Cyberlux in July 2024 in the 129th Judicial District Court of Harris County, Texas, trying to collect on the judgment. Cyberlux has resisted. Three months ago, Cyberlux removed the case to federal court. This court remanded because, among other problems, the removal was untimely. (Case No. 25- cv-626, Docket Entry Nos. 15, 16, 18). Approximately two weeks after this court’s remand order, Cyberlux removed again, and Atlantic Wave moved to remand. (Docket Entry No. 3). Based on the briefing, record, and applicable law, this case is again remanded to the 129th Judicial District Court of Harris County, 1 The plaintiffs are referred to collectively as “Atlantic Wave.” The defendants are referred to collectively as “Cyberlux.” United States District Court Southern District of Texas ENTERED May 14, 2025 Nathan Ochsner, Clerk Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 1 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation

Cyberlux Corporation

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ATLANTIC WAVE HOLDINGS, LLC, et al., Plaintiffs, v. CYBERLUX CORPORATION, et al., Defendants. § § § § § § § § § § CIVIL ACTION NO. 25-1689 MEMORANDUM AND OPINION This dispute has a long and winding history across multiple state and federal courts. The plaintiffs, Atlantic Wave Holdings LLC and Secure Community LLC, obtained a judgment in June 2023 in a Virginia state court against the defendants, Cyberlux Corporation and Mark D. Schmidt.1 Since then, Atlantic Wave has been trying to enforce that judgment. Atlantic Wave sued Cyberlux in July 2024 in the 129th Judicial District Court of Harris County, Texas, trying to collect on the judgment. Cyberlux has resisted. Three months ago, Cyberlux removed the case to federal court. This court remanded because, among other problems, the removal was untimely. (Case No. 25- cv-626, Docket Entry Nos. 15, 16, 18). Approximately two weeks after this court’s remand order, Cyberlux removed again, and Atlantic Wave moved to remand. (Docket Entry No. 3). Based on the briefing, record, and applicable law, this case is again remanded to the 129th Judicial District Court of Harris County, 1 The plaintiffs are referred to collectively as “Atlantic Wave.” The defendants are referred to collectively as “Cyberlux.” United States District Court Southern District of Texas ENTERED May 14, 2025 Nathan Ochsner, Clerk Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 1 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation

Mark D. Schmidt

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ATLANTIC WAVE HOLDINGS, LLC, et al., Plaintiffs, v. CYBERLUX CORPORATION, et al., Defendants. § § § § § § § § § § CIVIL ACTION NO. 25-1689 MEMORANDUM AND OPINION This dispute has a long and winding history across multiple state and federal courts. The plaintiffs, Atlantic Wave Holdings LLC and Secure Community LLC, obtained a judgment in June 2023 in a Virginia state court against the defendants, Cyberlux Corporation and Mark D. Schmidt.1 Since then, Atlantic Wave has been trying to enforce that judgment. Atlantic Wave sued Cyberlux in July 2024 in the 129th Judicial District Court of Harris County, Texas, trying to collect on the judgment. Cyberlux has resisted. Three months ago, Cyberlux removed the case to federal court. This court remanded because, among other problems, the removal was untimely. (Case No. 25- cv-626, Docket Entry Nos. 15, 16, 18). Approximately two weeks after this court’s remand order, Cyberlux removed again, and Atlantic Wave moved to remand. (Docket Entry No. 3). Based on the briefing, record, and applicable law, this case is again remanded to the 129th Judicial District Court of Harris County, 1 The plaintiffs are referred to collectively as “Atlantic Wave.” The defendants are referred to collectively as “Cyberlux.” United States District Court Southern District of Texas ENTERED May 14, 2025 Nathan Ochsner, Clerk Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 1 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation

Lee H. Rosenthal

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8 IV. Conclusion Because Cyberlux did not timely remove, Atlantic Wave’s motion to remand, (Docket Entry No. 3), is granted. Atlantic Wave’s request for an award of the attorney’s fees and costs incurred in responding to the second removal is granted. Atlantic Wave must submit documents showing its costs and expenses, including attorney fees, by May 19, 2025. Cyberlux may file objections, if any, by May 26, 2025. SIGNED on May 14, 2025, at Houston, Texas. ________________________________ Lee H. Rosenthal Senior United States District Judge Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 8 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation

Robert Berleth

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3 II. Analysis Atlantic Wave’s original petition, filed in July 2024, made clear that Atlantic Wave sought to collect money from Cyberlux or levy and sell Cyberlux’s property located in a Texas Cyberlux facility towards satisfying the Virginia state-court judgment. (Case No. 25-cv-626, Docket Entry No. 3-3).2 Cyberlux’s motion to quash filed on January 6, 2025, shows that Cyberlux knew at that time that there was U.S. government property in its Texas facility. See (Case No. 25-cv-626, Docket Entry No. 4-1 at 14). Cyberlux has used the presence of some government property to attempt to delay and frustrate Atlantic Wave’s right to collect on its judgment. Cyberlux was aware of the alleged federal issues raised by the presence of some federal government property in Cyberlux’s facility by January 6, 2025, at the latest.3 Cyberlux did not remove for more than 30 days after January 6, 2025. See (Case No. 25-cv-626, Docket Entry Nos. 1, 3). That removal was clearly untimely. See (Docket Entry No. 1-1 at 24). On January 16, 2025, the Texas state court stated that it was going to appoint a receiver for Cyberlux’s property and instructed Atlantic Wave to file a proposed order. (Case No. 25-cv-626, Docket Entry No. 4-1 at 141, 152). The court did not authorize the receiver to attempt to collect Cyberlux’s judgment debt to Atlantic Wave by seizing any of the federal government property in the Cyberlux facility. Nor did Atlantic Wave or the receiver seek to seize federal government property to satisfy Cyberlux’s judgment debt. As this court previously held, neither the proposed receivership order filed by Atlantic Wave on January 20, 2025, nor the letter to the state-court judge from the receiver, Robert Berleth, dated February 3, 2025, provided any basis, new or 2 As Cyberlux states: “On July 30, 2024, [Atlantic Wave] filed a Petition to Enforce in Texas state court, seeking to levy and sell various Cyberlux property, including Cyberlux’s property in a Spring, Texas facility . . . leased by Cyberlux.” (Case No. 25-cv-626, Docket Entry No. 5 at 7). 3 Atlantic Wave requested an inspection of Cyberlux’s Texas facility on January 9, 2025, (Docket Entry No. 3-1 at 5–7), which was also more than 30 days before Cyberlux filed its first notice of removal. Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 3 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
eventattribution

Rosenthal signed and filed this remand/fee-entitlement opinion.

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ATLANTIC WAVE HOLDINGS, LLC, et al., Plaintiffs, v. CYBERLUX CORPORATION, et al., Defendants. § § § § § § § § § § CIVIL ACTION NO. 25-1689 MEMORANDUM AND OPINION This dispute has a long and winding history across multiple state and federal courts. The plaintiffs, Atlantic Wave Holdings LLC and Secure Community LLC, obtained a judgment in June 2023 in a Virginia state court against the defendants, Cyberlux Corporation and Mark D. Schmidt.1 Since then, Atlantic Wave has been trying to enforce that judgment. Atlantic Wave sued Cyberlux in July 2024 in the 129th Judicial District Court of Harris County, Texas, trying to collect on the judgment. Cyberlux has resisted. Three months ago, Cyberlux removed the case to federal court. This court remanded because, among other problems, the removal was untimely. (Case No. 25- cv-626, Docket Entry Nos. 15, 16, 18). Approximately two weeks after this court’s remand order, Cyberlux removed again, and Atlantic Wave moved to remand. (Docket Entry No. 3). Based on the briefing, record, and applicable law, this case is again remanded to the 129th Judicial District Court of Harris County, 1 The plaintiffs are referred to collectively as “Atlantic Wave.” The defendants are referred to collectively as “Cyberlux.” United States District Court Southern District of Texas ENTERED May 14, 2025 Nathan Ochsner, Clerk Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 1 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
inferenceinference

Remand and fee entitlement cannot be converted into approval of every receiver act. The opinion expressly relies on the debtor-property boun

Remand and fee entitlement cannot be converted into approval of every receiver act. The opinion expressly relies on the debtor-property boundary, representations and lack of contrary evidence in its historical record.

inferenceinference

Entitlement to second-removal costs is adjudicated here, but a recoverable dollar award is not: submissions, objections and later dispositio

Entitlement to second-removal costs is adjudicated here, but a recoverable dollar award is not: submissions, objections and later disposition remain necessary.

otherattribution

Complete supplied 8-page source reviewed at SHA-256 67e72328c13b6b4fe0a992025622c7756372ae9f1b22a8571cad3b16b7c3c882. Source assertions, ori

Complete supplied 8-page source reviewed at SHA-256 67e72328c13b6b4fe0a992025622c7756372ae9f1b22a8571cad3b16b7c3c882. Source assertions, original visual features, filing/communication context and identified missing attachments are retained. No unexamined later court outcome is inferred.

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ATLANTIC WAVE HOLDINGS, LLC, et al., Plaintiffs, v. CYBERLUX CORPORATION, et al., Defendants. § § § § § § § § § § CIVIL ACTION NO. 25-1689 MEMORANDUM AND OPINION This dispute has a long and winding history across multiple state and federal courts. The plaintiffs, Atlantic Wave Holdings LLC and Secure Community LLC, obtained a judgment in June 2023 in a Virginia state court against the defendants, Cyberlux Corporation and Mark D. Schmidt.1 Since then, Atlantic Wave has been trying to enforce that judgment. Atlantic Wave sued Cyberlux in July 2024 in the 129th Judicial District Court of Harris County, Texas, trying to collect on the judgment. Cyberlux has resisted. Three months ago, Cyberlux removed the case to federal court. This court remanded because, among other problems, the removal was untimely. (Case No. 25- cv-626, Docket Entry Nos. 15, 16, 18). Approximately two weeks after this court’s remand order, Cyberlux removed again, and Atlantic Wave moved to remand. (Docket Entry No. 3). Based on the briefing, record, and applicable law, this case is again remanded to the 129th Judicial District Court of Harris County, 1 The plaintiffs are referred to collectively as “Atlantic Wave.” The defendants are referred to collectively as “Cyberlux.” United States District Court Southern District of Texas ENTERED May 14, 2025 Nathan Ochsner, Clerk Case 4:25-cv-01689 Document 14 Filed on 05/14/25 in TXSD Page 1 of 8 UnofficialCopyOfficeofMarilynBurgessDistrictClerk
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What later fee submissions, objections and quantified order implement this fee-entitlement ruling?

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Did later actual custody, disposition or receiver conduct differ from the representations and record on which this remand rested?

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This complete eight-page SDTX ECF 14 opinion in 4:25-cv-01689 is signed and filed by Judge Lee H. Rosenthal on 14 May 2025. The retained Harris County copy bears an Unofficial Copy watermark. It remands the second removal to the 129th Judicial District and grants fee/cost entitlement for responding to that removal; no quantified award is fixed here.referencesThis complete eight-page SDTX ECF 14 opinion in 4:25-cv-01689 is signed and filed by Judge Lee H. Rosenthal on 14 May 2025. The retained Harris County copy bears an Unofficial Copy watermark. It remands the second removal to the 129th Judicial District and grants fee/cost entitlement for responding to that removal; no quantified award is fixed here.

Same complete eight-page opinion in different file hashes, not separate judgments.

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The court rejects the April 1 proposed receivership order and April letters as new removal-triggering papers. It reads “Debtor’s non-exempt property” as the asset boundary and the disputed-custody/compliance provisions as allowing state-court recourse, not authority to sell Government property. Cyberlux removed before that proposed order was issued.referencesThe draft would also require documentation of disputed credits and offsets, and after their determination and receiver compensation, return remaining funds to the debtors for Legalist SPV III’s benefit. It supplies no quantified reconciliation, actual distribution or priority ruling. Its satisfaction language and unresolved accounting must be read together rather than converted into a verified payoff.

May opinion evaluates the then-proposed receiver property boundary; June unsigned draft proposes dissolution/accounting. Different procedural instruments, neither proves later actual distributions.

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Confidence 75%Link weight 50%
He disputes the claimed $592,000 contractual fees pending Virginia breach litigation, challenges enforcement of the separate $9,392.50 Virginia fee order in this proceeding, and notes the federal second-removal fees were still awaiting quantification with objections due May 26. Distinct sources of fees and their contested enforceability must remain separate.referencesFees were denied for the first removal because it had at least a colourable basis; the second lacked an objectively reasonable basis and fee entitlement is granted. The opinion requires proof of actual removal-related costs and permits good-faith objections. It does not fix a monetary award.

Federal second-removal entitlement was granted without dollar quantification; keep separate from Virginia and contractual fees.

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Confidence 75%Link weight 50%
Walton reiterates that creditors seek Cyberlux’s non-exempt assets, including expected HII receipts above $20 million, and invokes Rosenthal’s rejection of the government-property reading. Saying the property issue is resolved is his broader characterisation: this letter does not adjudicate actual title to each drone/component or later conduct.referencesThe opinion finds no evidence on that record of a receiver attempt to seize/sell Government property or of the asserted crossed boundary. It distinguishes a prior hearing’s hypothetical possible removal trigger from the actual facts and notes federal-officer removal might still not apply. This is not a prospective licence or a later title adjudication.

The signed opinion confines the government-property conclusion to its historical record; the letter’s broader resolved wording is counsel characterisation.

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The motion recounts enforcement, removals, remands and a May 22 receiver appointment. It calls Rosenthal Chief Judge, whereas the signed opinion identifies Senior United States District Judge; it gives a July 7, 2024 enforcement filing and a Virginia cause label 23-07422 that require comparison with original records. The repeated historical narrative is not independently established by this motion.referencesThis complete eight-page SDTX ECF 14 opinion in 4:25-cv-01689 is signed and filed by Judge Lee H. Rosenthal on 14 May 2025. The retained Harris County copy bears an Unofficial Copy watermark. It remands the second removal to the 129th Judicial District and grants fee/cost entitlement for responding to that removal; no quantified award is fixed here.

Signed opinion identifies Rosenthal as Senior District Judge; receiver’s Chief Judge label is retained as a source discrepancy.

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Confidence 75%Link weight 50%
The court says the state court did not authorise seizing federal property to satisfy Cyberlux’s judgment and notes Berleth’s and creditor counsel’s representations that they did not intend to seize/sell Government property. Those representations and the then-record underpin remand; they are not proof of all subsequent conduct.supportsDid this opinion authorise seizure or sale of Government property?

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
The opinion finds no evidence on that record of a receiver attempt to seize/sell Government property or of the asserted crossed boundary. It distinguishes a prior hearing’s hypothetical possible removal trigger from the actual facts and notes federal-officer removal might still not apply. This is not a prospective licence or a later title adjudication.supportsDid this opinion authorise seizure or sale of Government property?

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
The opinion finds no evidence on that record of a receiver attempt to seize/sell Government property or of the asserted crossed boundary. It distinguishes a prior hearing’s hypothetical possible removal trigger from the actual facts and notes federal-officer removal might still not apply. This is not a prospective licence or a later title adjudication.supportsRemand and fee entitlement cannot be converted into approval of every receiver act. The opinion expressly relies on the debtor-property boundary, representations and lack of contrary evidence in its historical record.

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
The court rejects the April 1 proposed receivership order and April letters as new removal-triggering papers. It reads “Debtor’s non-exempt property” as the asset boundary and the disputed-custody/compliance provisions as allowing state-court recourse, not authority to sell Government property. Cyberlux removed before that proposed order was issued.supportsRemand and fee entitlement cannot be converted into approval of every receiver act. The opinion expressly relies on the debtor-property boundary, representations and lack of contrary evidence in its historical record.

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
Fees were denied for the first removal because it had at least a colourable basis; the second lacked an objectively reasonable basis and fee entitlement is granted. The opinion requires proof of actual removal-related costs and permits good-faith objections. It does not fix a monetary award.supportsRemand and fee entitlement cannot be converted into approval of every receiver act. The opinion expressly relies on the debtor-property boundary, representations and lack of contrary evidence in its historical record.

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
The court says the state court did not authorise seizing federal property to satisfy Cyberlux’s judgment and notes Berleth’s and creditor counsel’s representations that they did not intend to seize/sell Government property. Those representations and the then-record underpin remand; they are not proof of all subsequent conduct.supportsRemand and fee entitlement cannot be converted into approval of every receiver act. The opinion expressly relies on the debtor-property boundary, representations and lack of contrary evidence in its historical record.

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
Atlantic Wave must submit cost/fee documents by 19 May 2025 and Cyberlux may object by 26 May 2025. These are source-stated historical deadlines; compliance, amount awarded, later review and subsequent receivership acts are not supplied.supportsEntitlement to second-removal costs is adjudicated here, but a recoverable dollar award is not: submissions, objections and later disposition remain necessary.

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
Fees were denied for the first removal because it had at least a colourable basis; the second lacked an objectively reasonable basis and fee entitlement is granted. The opinion requires proof of actual removal-related costs and permits good-faith objections. It does not fix a monetary award.supportsWhat later fee submissions, objections and quantified order implement this fee-entitlement ruling?

Specifically named source propositions support the bounded distinction or question.

50%
Confidence 75%Link weight 50%
The court rejects the April 1 proposed receivership order and April letters as new removal-triggering papers. It reads “Debtor’s non-exempt property” as the asset boundary and the disputed-custody/compliance provisions as allowing state-court recourse, not authority to sell Government property. Cyberlux removed before that proposed order was issued.supportsDid this opinion authorise seizure or sale of Government property?

Specifically named source propositions support the bounded distinction or question.

50%
Confidence 75%Link weight 50%
The court says the state court did not authorise seizing federal property to satisfy Cyberlux’s judgment and notes Berleth’s and creditor counsel’s representations that they did not intend to seize/sell Government property. Those representations and the then-record underpin remand; they are not proof of all subsequent conduct.supportsDid later actual custody, disposition or receiver conduct differ from the representations and record on which this remand rested?

Specifically named source propositions support the bounded distinction or question.

50%
Confidence 75%Link weight 50%
The court rejects the April 1 proposed receivership order and April letters as new removal-triggering papers. It reads “Debtor’s non-exempt property” as the asset boundary and the disputed-custody/compliance provisions as allowing state-court recourse, not authority to sell Government property. Cyberlux removed before that proposed order was issued.supportsDid later actual custody, disposition or receiver conduct differ from the representations and record on which this remand rested?

Specifically named source propositions support the bounded distinction or question.

50%
Confidence 75%Link weight 50%
The opinion finds no evidence on that record of a receiver attempt to seize/sell Government property or of the asserted crossed boundary. It distinguishes a prior hearing’s hypothetical possible removal trigger from the actual facts and notes federal-officer removal might still not apply. This is not a prospective licence or a later title adjudication.supportsDid later actual custody, disposition or receiver conduct differ from the representations and record on which this remand rested?

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
Atlantic Wave must submit cost/fee documents by 19 May 2025 and Cyberlux may object by 26 May 2025. These are source-stated historical deadlines; compliance, amount awarded, later review and subsequent receivership acts are not supplied.supportsWhat later fee submissions, objections and quantified order implement this fee-entitlement ruling?

Specifically named source propositions support the bounded distinction or question.

50%
Confidence 75%Link weight 50%
Fees were denied for the first removal because it had at least a colourable basis; the second lacked an objectively reasonable basis and fee entitlement is granted. The opinion requires proof of actual removal-related costs and permits good-faith objections. It does not fix a monetary award.supportsEntitlement to second-removal costs is adjudicated here, but a recoverable dollar award is not: submissions, objections and later disposition remain necessary.

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%

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