1. Bankruptcy Docket No. 04-32908SR

2. Bankruptcy Docket No. 04-32066SR

3. Bankruptcy Docket No. 04-32064SR

4. According to the Bankruptcy Court, Appellant had filed at least fifteen bankruptcy petitions before filing the

bankruptcy petitions of Jessie Darden, Leto Wilson and Norma Keith. 

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

IN RE: :

:

GENNARO RAUSO, : CIVIL ACTION NO. 05-0025

:

Appellant. :

:

MEMORANDUM

BUCKWALTER, S. J. September 19, 2005

Gennaro Rauso (“Appellant”) appeals the Bankruptcy Court’s Memorandum Sur

Orders of October 8, 2004 and October 19, 2004 (Bankruptcy Docket No. 3) and the Bankruptcy

Court’s December 1, 2004 Order (Bankruptcy Docket No. 18). Presently before the Court is

Appellant’s Brief (Docket No. 4). No brief was filed by any other party. For the reasons set

forth below, Appellant’s appeal is granted. 

I. FACTUAL AND PROCEDURAL HISTORY

The Bankruptcy Court’s October 8, 2004 Order concerns the bankruptcy cases of

Jessie Darden,1 Leto Wilson2 and Norma Keith.3 As the bankruptcy petitions in the cases all

listed Appellant’s address, the Bankruptcy Court scheduled a status hearing to determine if the

cases were filed in good faith because of Appellant’s history of filing bankruptcy petitions.4

Although the Bankruptcy Court notified Jessie Darden, Leto Wilson and Norma Keith of the

Case 2:05-cv-00025-RB Document 5 Filed 09/20/05 Page 1 of 8
5. Appellant’s Certificate of Appeal is Docket No. 1.

2

October 8, 2004 hearing, the three petitioners failed to appear. Their absence raised the

Bankruptcy Court’s suspicion that Appellant was “1) acting as a bankruptcy petition preparer but

failing to comply with the requirements of the Bankruptcy Code with respect thereto; 2) engaged

in the unauthorized practice of law, or 3), worse yet, engaged in a pattern and practice of

bankruptcy fraud . . . .” (Certificate of Appeal, Ex. 7 at 1-2.)5 Pursuant to the Bankruptcy

Court’s Order of October 8, 2004, the Clerk of the Bankruptcy Court was directed not to accept

bankruptcy petitions involving Appellant or Appellant’s address, and Appellant was ordered to

appear before the Bankruptcy Court on October 29, 2004 “to address the foregoing issues.” (Id.

at 2-3.)

On October 13, 2004, Appellant appeared at the Bankruptcy Court Clerk’s Office

and attempted to file six additional bankruptcy petitions, which the Bankruptcy Court Clerk’s

Office refused to file based on the Bankruptcy Court’s October 8, 2004 Order. According to the

Bankruptcy Court, Appellant apparently was unaware of the Bankruptcy Court’s October 8, 2004

Order when he attempted to file the petitions. After the Bankruptcy Court Clerk’s Office refused

to file the petitions, Appellant proceeded to place the six petitions in the U.S. District Court night

filing box. When the six bankruptcy petitions were forwarded to the Bankruptcy Court Clerk’s

Office by the U.S. District Court on October 14, 2004, the Bankruptcy Court Clerk’s Office did

not file the petitions; instead they were referred to the Bankruptcy Court. The Bankruptcy Court

successfully contacted four of the petitioners and notified them that Appellant could not file on

their behalf. The Bankruptcy Court was alerted that the petitions were of an emergency nature so

Case 2:05-cv-00025-RB Document 5 Filed 09/20/05 Page 2 of 8
3

the Bankruptcy Court decided to hold an impromptu hearing on October 15, 2004. The

petitioners contacted were encouraged to attend. 

Separate from the six petitions filed by Appellant, late in the afternoon October

14, 2004, three separate emergency motions were filed in unrelated bankruptcy cases, seeking

relief from an automatic stay or case dismissal. These cases also involved Appellant and

allegedly concerned the fraudulent conveyance of title. On October 15, 2004, the movants were

granted relief.

As written above, on October 14, 2004, the Bankruptcy Court scheduled an

impromptu hearing regarding the six petitions for the morning of October 15, 2004 (the

“Hearing”). The original purpose of the Hearing was apparently to determine whether to file the

petitions as Appellant could not file them on behalf of the petitioners. According to the

Bankruptcy Court, the six petitioners attended the Hearing. The Bankruptcy Court took sworn

testimony from the petitioners. Both the Bankruptcy Court and a representative of the U.S.

Trustee’s Office participated in the questioning.

Appellant did attend the Hearing even though the Bankruptcy Court failed to

notify him of the Hearing. According to the Bankruptcy Court, Appellant was notified of the

existence of the Hearing by one of the petitioners. During the Hearing, the Bankruptcy Court did

not allow Appellant to question the witnesses. The Bankruptcy Court called U.S. Marshals

during the Hearing to prevent Appellant from doing so. Later in the Hearing, the Bankruptcy

Court made Appellant leave the courtroom during the testimony of one of the witnesses. The

Bankruptcy Court and the representative of the U.S. Trustee’s Office questioned Appellant

Case 2:05-cv-00025-RB Document 5 Filed 09/20/05 Page 3 of 8
4

during the Hearing. At one point during the Hearing, the Bankruptcy Court commented that the

Hearing was an “ad hoc proceeding.” (Certificate of Appeal, Ex. 8 at 78.)

In its October 19, 2004 Order, the Bankruptcy Court wrote that based on the

Hearing, it had determined that Appellant had “1) acted as a bankruptcy petition preparer within

the meaning of 11 U.S.C. § 110, but failed to comply with the requirements thereof; 2) engaged

in the unauthorized practice of law; 3) demonstrably engaged in other fraudulent, unfair and

deceptive conduct . . . .” (Certificate of Appeal, Ex. 2 at 1.) Based on these determinations, the

Bankruptcy Court permanently enjoined Appellant from acting as a bankruptcy petition preparer

and engaging in unauthorized practice of law. The Bankruptcy Court also fined Appellant

$2,500.00 for five violations of § 110.

In response to the Memorandum Sur Orders of October 8, 2004 and October 19,

2004, Appellant filed his Motion for Judgment Notwithstanding the Verdict, Alternatively, to

Alter, Amend or Vacate, Alternatively, for a New Hearing and or Movant’s Objections to the

October 19, 2004 Memorandum. The Bankruptcy Court held an oral argument on Appellant’s

Motion, which Appellant and a representative of the U.S. Trustee’s office attended. In his

argument, Appellant objected to the lack of notice provided to him as to the subject of the

Hearing, with Appellant noting that the Bankruptcy Court had already scheduled a hearing for

October 29, 2004 to address Appellant’s alleged violations of § 110. The Bankruptcy Court

denied this Motion in its December 1, 2004 Order, finding two of Appellant’s requests

inapplicable and denying the other requests because it had committed no error. In its December

1, 2004 Order, the Bankruptcy Court explained its authority to enjoin and sanction Appellant was

derived from 11 U.S.C. § 105(a) of the Bankruptcy Code.

Case 2:05-cv-00025-RB Document 5 Filed 09/20/05 Page 4 of 8
5

Appellant appeals the Bankruptcy Court’s Memorandum Sur Orders of October 8,

2004 and October 19, 2004 and Bankruptcy Court’s Order of December 1, 2004. Appellant

states the issues as follows:

1. Whether this case should be remanded to the Bankruptcy Court

with instructions that it address the issues presented to it in

Appellant’s motion to alter, amend or vacate in order that [the

Bankruptcy] Court provides the Appellant a full review of his claims?

2. Whether the [Bankruptcy] Court violated Appellant’s Fifth

Amendment constitutional right to notice thereby rendering the

[Bankruptcy] Court’s October 19, 2004 Memorandum void?

3. Whether the Bankruptcy Court deprived the Appellant of his Fifth

Amendment constitutional right to a fundamentally fair tribunal and

. . . a fair hearing?

4. Whether the Bankruptcy Court erred as a matter of law in

implicitly finding that the Appellant was a bankruptcy petition

preparer?

5. Whether the Bankruptcy Court lacks subject matter jurisdiction to

enjoin him from “continuing his scheme”?

(Certificate of Appeal, Ex. 4 at 2.)

II. STANDARD

This Court has jurisdiction over appeals from final judgments, orders and decrees

from the Bankruptcy Court pursuant to 28 U.S.C. § 158(a). 28 U.S.C.A. § 158 (West 1995 &

Supp. 2005). The Court reviews the Bankruptcy Court's “legal determinations de novo, its

factual findings for clear error and its exercise of discretion for abuse thereof.” In re Trans

World Airlines, Inc., 145 F.3d 124, 131 (3d Cir. 1998)(citation omitted). Whether due process

was given in any particular instance is a mixed question of law and fact that is reviewed de novo. 

In re Bankruptcy Petition Preparers Who Are Not Certified Pursuant to Requirements of Arizona

Supreme Court, 307 B.R. 134, 140 (B.A..P. 9th Cir. 2004))(citing In re Graves, 279 B.R. 266,

270 (B.A.P. 9th Cir. 2002)).

Case 2:05-cv-00025-RB Document 5 Filed 09/20/05 Page 5 of 8
6

Appellant pursues this appeal pro se. The Court will liberally construe

Appellant’s brief and apply the applicable law regardless of whether Appellant specifically

mentions it. Johnson v. Ogershok, 134 Fed. Appx. 535, 537 n. 4 (3d Cir. 2005)(citing Higgins v.

Beyer, 293 F.3d 683, 688 (3d Cir. 2002)). 

III. DISCUSSION

"An elementary and fundamental requirement of due process in any proceeding

which is to be accorded finality is notice reasonably calculated, under all the circumstances, to

apprise interested parties of the pendency of the action and afford them an opportunity to present

their objections." Memphis Light, Gas and Water Div. v. Craft, 436 U.S. 1, 11 (1978)(quoting

Mullane v. Cent. Hanover Trust Co., 339 U.S. 306, 314 (1950)). “The notice must be of such

nature as reasonably to convey the required information . . . , and it must afford a reasonable time

for those interested to make their appearance . . . .” Mullane, 339 U.S. at 314 (internal citations

omitted). 

In the instant case, Appellant received no notice from the Bankruptcy Court that

the Hearing would concern Appellant’s alleged violations of § 110 and could result in not only

monetary penalties but also a permanent injunction preventing him from filing bankruptcy

petitions. In its Memorandum Sur Orders of October 8, 2004 and October 19, 2004, the

Bankruptcy Court implicitly recognized its failure to notify Appellant – writing that one of the

petitioners contacted Appellant about the Hearing, which resulted in the Appellant’s attendance. 

(Certificate of Appeal, Ex. 2, Memorandum at 7.) In penalizing and enjoining under § 110, a

bankruptcy court must provide due process. See In re Graves, 279 B.R. at 275-76. In the instant

case, it appears that Appellant was not notified of the subject of the Hearing and the existence of

Case 2:05-cv-00025-RB Document 5 Filed 09/20/05 Page 6 of 8
6. There are also questions as to the original purpose of the Hearing, timing of the Hearing and treatment of

Appellant during the Hearing. First, in reading the transcript, the Court believes the original purpose of the Hearing

was not to determine Appellant’s alleged violations. Instead, the transcript reveals that the purpose of the hearing

was to determine if the six petitioners wanted to file their petitions. Second, it is questionable whether the last

minute nature of the Hearing, which was scheduled on October 14, 2004 and held on October 15, 2004, afforded

Appellant enough time to prepare for a hearing of such magnitude. Third, the notes reflect that during the Hearing,

the Bankruptcy Court prevented Appellant from questioning witnesses and attending portions of the Hearing. It is

not clear whether Appellant’s behavior was such as to warrant his removal from the Hearing. Obdurate behavior

could warrant removal if it continued despite warnings from the court.

7

the Hearing by the Bankruptcy Court.6 Under the circumstances, the orders should be vacated

and remanded to the Bankruptcy Court.

IV. CONCLUSION

Appellant’s appeal is granted. An appropriate order follows.

Case 2:05-cv-00025-RB Document 5 Filed 09/20/05 Page 7 of 8
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

IN RE: :

:

GENNARO RAUSO, : CIVIL ACTION NO. 05-0025

:

Appellant. :

:

ORDER

AND NOW, this 19th day of September, 2005, upon consideration of Appellant’s

appeal of the Bankruptcy Court’s Memorandum Sur Orders of October 8, 2004 and October 19,

2004 (Bankruptcy Docket No. 3) and the Bankruptcy Court’s December 1, 2004 Order

(Bankruptcy Docket No. 18), it is hereby ORDERED that said orders are VACATED and this

case is REMANDED to the Bankruptcy Court for such proceedings as may be appropriate

consistent with this opinion.

BY THE COURT:

_____________________________________

 RONALD L. BUCKWALTER, S.J.

Case 2:05-cv-00025-RB Document 5 Filed 09/20/05 Page 8 of 8