Rodriguez

Filing 7

MEMORANDUM OPINION. The Bankruptcy Court's Reprimand of Appellant's Attorney is AFFIRMED. (Signed by Judge George P. Kazen) Parties notified. (dmorales)

o

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS LAREDO DIVISION § § In re GERARDO GARCIA RODRIGUEZ, § § Debtor/Appellant. § § §

CIVIL ACTION NO. L-09-63 BANKRUPTCY NO. 08-50183

MEMORANDUM OPINION This case is an appeal from the Bankruptcy Court's written reprimand of Attorney Edward P. Fahey, Jr., for his failure to sign Appellant's first bankruptcy petition. Oddly, the appeal

is submitted in the name of Mr. Fahey's client, Mr. Gerardo Garcia Rodriguez. Order of August Appellant complains of the Bankruptcy Court's 18, 2008, titled Written Reprimand and

Admonition of Debtor's Counsel/Referral to State Bar of Texas ("the Reprimand and Referral") (Dkt. 2-7, Bankr. Dkt. 20).

(Dkt. 1-1, Notice of Appeal.) I. BACKGROUND Bankruptcy petitions not signed by counsel are subject to dismissal under Rule 9011(a), Fed. R. Bankr. P. Appellant

admits that Fahey did not sign Appellant's first petition filed June 23, 2008. (Dkt. 4, Appellant's Br. 1.) On July 1, 2008,

the Bankruptcy Court ordered a hearing "to determine whether sanctions are appropriate for violation of [Rule] 9011 and

whether the case should be dismissed for failure to file the petition correctly." Hrg.) (Dkt. 2-4, Bankr. Dkt. 2, Order Setting The record

The hearing occurred on August 14, 2008.

submitted by Appellant contains no evidence of what occurred at the hearing. the Reprimand On August 18, 2008, the Bankruptcy Court issued and Referral from which Appellant appeals.

(Dkt. 2-7, Bankr. Dkt. 20, Reprimand and Referral.) The Reprimand and Referral and has three sections, and titled of

"Reprimand,"

"Admonition

Warning,"

"Report

Professional Misconduct." these remarks:

The "Reprimand" section begins with

Edward Fahey, Debtor's counsel, did not sign the bankruptcy petition that he filed in this case until the Court issued an order for a hearing on dismissal and on imposition of sanctions. The same facts apply to case number 08-50184. By itself, failure to sign a petition is not terribly significant. Mistakes happen. However, the instant failure follows a number of cautions that the Court has previously issued to Debtor's counsel. (Id. at 1.) of The Bankruptcy Court in then other recounts cases, numerous including

incidents

Fahey's

misconduct

several instances in which petitions were ultimately dismissed for facial deficiencies or failure to pay the filing fee. at 2-3.) (Id.

The "Reprimand" section concludes: "The Court has

previously cautioned Mr. Fahey about negligent and incompetent professional work. This time, Mr. Fahey is reprimanded." (Id.

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at 3.)

The Court did not impose monetary sanctions or any other

punitive measure as a consequence of this reprimand. In the "Admonition and Warning" section, the Bankruptcy

Court warned Fahey that continued misconduct would prompt the Court to recommend to the Court's Chief District Judge that Fahey be barred from practicing before the Bankruptcy Court. The Court also warned that it may take action under 11 U.S.C. § 526 to enjoin Fahey from violating the provisions of that

section.

The "Report of Professional Misconduct" section states

that the Bankruptcy Court would forward a copy of the Reprimand and Referral to "to the State Bar of Texas for any action it considers appropriate." (Id. at 3.) II. DISCUSSION 28 U.S.C. § 158 confers jurisdiction on this Court to hear appeals from "orders and decrees" of the Bankruptcy Court. The

only part of the Reprimand and Referral that is appealable is the formal reprimand appearing at the end of the "Reprimand" section (Reprimand and Referral 2). Nothing else in the

Reprimand and Referral constitutes a Court-imposed sanction from which to appeal. The "Admonition and Warning" does nothing more

than advise Fahey that he may face certain sanctions in the future. The "Report of Professional Misconduct" informed Fahey

that the Bankruptcy Court would send the Reprimand and Referral to the Texas State Bar. 3/7 Assuming that was done, it did not

amount orders

to are

a

Court-ordered public matters

sanction. which any

The

Bankruptcy

Court's or The

government

officer

private citizen is free to call to the attention of anyone. Bankruptcy Court's prerogative to send a copy of a

public

document to the State Bar does not depend on its power to impose sanctions on counsel appearing in cases before it. does not have to authority to review the This Court Court's its

Bankruptcy merely

decision

exercise

that

prerogative

because

intentions were memorialized in an order.

Even if this Court

were empowered to review that decision, it is doubtful there would be any means of redressing an error if one were found. The Court's even formal if not reprimand attended is by appealable. any other A written

reprimand,

sanctions,

constitutes a sanction from which a litigant may seek vacatur on appeal. Cf. Walker v. City of Mesquite, 129 F.3d 831, 832-33 (5th Cir. 1997) (holding that under 28 U.S.C. § 1291 the Courts of Appeal have jurisdiction to hear an appeal of a district court's memorandum opinion issuing reprimands without further sanctions). sanctions. The appeal is not mooted by the absence of monetary See Fleming & Associates v. Newby & Tittle, 529 F.3d

631, 640, 640 n.4 (5th Cir. 2008) (although parties settled their dispute concerning the monetary portion of a district

court's sanctions order, the remaining non-monetary sanction was

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nonetheless "appealable for its residual reputational effects on the attorney") (citing Walker, 129 F.3d at 832-33). Appellant "[w]hether imposing the states that the court single abused without issue its on appeal is by and

bankruptcy on

discretion notice

sanctions

[Fahey],

adequate

opportunity to be heard." Matters in Record.)

(Dkt. 2-1, Appellant's Designation of

Specifically, Appellant asserts that the

Court violated Fahey's due process rights by sanctioning him for acts and omissions in other cases without giving him reasonable notice that he would have to defend that conduct at the August 14 hearing. Appellant concedes that Fahey had adequate notice

that the hearing would address his failure to sign the petition in his case. (Appellant's Br. 5-6.)

The Court rejects the suggestion that the Bankruptcy Court sanctioned Fahey for anything other than his failure to sign Appellant's petition. The Court construes the Reprimand and

Referral's recitation of Fahey's misconduct in other cases as background to put the violation in context. Thus, the

Bankruptcy Court indicated, properly so, that it would not have regarded one isolated failure to sign a petition as meriting a written reprimand. The purpose of sanctions is to deter

misconduct, and a court's choice of sanctions is governed by the basic principle that the least severe sanction adequate to serve that purpose should be imposed. Thomas, 836 F.2d at 878.

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Mindful of that principle, the Bankruptcy Court was unwilling to subject Fahey to even the most modest of sanctions without

thoroughly explaining the background of its conclusion that a reprimand was necessary to deter future misconduct. Appellant

urges that this background was sprung on Fahey, who had been lead into a "carefully crafted trap" this Court views the explanation as (Appellant's Br. 7), but reflecting a scrupulous

attention on the part of the Bankruptcy Court to the limits of its own powers. The Court finds that Fahey was sanctioned

solely for his failure to sign the petition, and no due process violation occurred by the review of Fahey's past transgressions. As perhaps a subset of his sole appellate issue, Appellant argues that, if the sanction was imposed solely for Fahey's failure to sign the petition, the Bankruptcy Court acted in excess of its authority under Rule 9011(a), which Appellant

interprets as "not admit[ing] of any sanction, except for the striking of the petition." (Id. at 5-6.) Rule 9011(a) reads:

(a) Signature. Every petition . . . shall be signed by at least one attorney of record in the attorney's individual name. A party who is not represented by an attorney shall sign all papers. Each paper shall state the signer's address and telephone number, if any. An unsigned paper shall be stricken unless omission of the signature is corrected promptly after being called to the attention of the attorney or party. Appellant asserts that "[b]y its plain language, Rule 9011(a) provides for only one type of sanction: striking the petition."

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(Appellant's

Br.

3.)

In

Appellant's

view,

Fahey

insulated

himself from any form of sanction for failing to sign the first petition by promptly Rule filing a new petition no that bore his

signature.

9011(a)

contains

language

explicitly

limiting the Bankruptcy Court's power to sanction an attorney who files an unsigned petition. Indeed, § 9011(a)'s final

sentence requires the Court to sanction the attorney by striking the petition, though that requirement is relaxed if the omission is promptly corrected. argument that The Rule Court 9011(a) finds no support a for

Appellant's

prevents

bankruptcy

court from imposing any sanction on an attorney who has promptly corrected an unsigned petition. The Bankruptcy Court's Reprimand of Appellant's Attorney (Bankr. Dkt. 20) is AFFIRMED. DONE at Laredo, TX, this 7th day of April, 2010.

___________________________________ George P. Kazen Senior United States District Judge

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