Jailed in Puerto Rico: Does Bankruptcy Court have Personal Jurisdiction Over You?

Don’t try to hide in a Puerto Rican jail.

Yes, all the Correctional facilities near me advised to us that bankruptcy court does have personal jurisdiction over you, even if you are in jail in Puerto Rico (or even more tropical locations like in Guam or the Virgin Islands).

Trustee filed an adversary seeking to recoup assets against a defendant who was incarcerated in Puerto Rico.   Defendant argued that since he was locked up in Puerto Rico, the bankruptcy court lacked personal jurisdiction over him because it is outside the boundaries of its district.

Ninth Circuit BAP Panel disagreed.   “Recognizing the reality that many interested parties may not be local, bankruptcy court’s jurisdiction extends nationwide.  Under FRBP 7004(d), the summons/complaint may be served anywhere in the United States.   Although “United States” is not defined in that section, the bankruptcy court is a unit of the district court under 28 U.S.C. §151, thus, “United States” would compromise every jurisdiction in which a district court is located, which includes Puerto Rico, Guam, and Virgin Islands.”

Source:  Jones-Theophilious v. Wesley Avery (In re Jones), CC-13-1567 9th Cir BAP 2015 (unpublished).

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