In the United States, a federal court must have both personal and subject-matter jurisdiction to hear and rule on a case. Subject-matter jurisdiction can be met by satisfying the requirements under §1331 or §1332 of title 28 of the United States Code. These are typically referred to as “federal question” jurisdiction and “diversity” jurisdiction. §1331(a) allows district courts to exercise original jurisdiction over “civil actions arising under the Constitution, laws, or treaties of the United States”. §1332(a) allows district courts to exercise original jurisdiction over civil actions “where the matter in controversy exceeds the sum or value of $75,000…and is between citizens of a State and citizens or subjects of a foreign state…”. Due process also requires a court to establish personal jurisdiction over all parties. As a threshold matter, this requirement is satisfied where a party has certain “minimum contacts” within the forum state in which the court sits. The party filing the suit submits itself to the court’s jurisdiction by filing its claim in that court. Similarly, a defendant’s voluntary appearance, without raising objections to the court’s jurisdiction in its initial pleadings, constitutes submission to the jurisdiction of the court. By not raising the issue of jurisdiction from the out-set the party waives its right to make such objections in the future and is deemed to have consented to the court’s jurisdiction.
This memo aims to address a bankruptcy court’s jurisdiction over a foreign creditor. Part I discusses Rule 2004 of the Federal Rules of Bankruptcy Procedure (“Rule 2004”) and a court’s requirement to have jurisdiction in order to compel discovery. Part II discusses how a creditor submits themselves to a court’s jurisdiction by filing a proof of claim. Part III discusses how a court’s jurisdiction over a foreign creditor who has filed a proof of claim extends to related court proceedings.