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Krepps v. Reiner

February 8, 2006

MATTHEW B. KREPPS, PLAINTIFF,
v.
EDWARD REINER AND INSEAD, DEFENDANTS.



The opinion of the court was delivered by: Sweet, D.J.

OPINION

Defendant Insead has moved for entry of an order of dismissal in this action initiated by pro se plaintiff Matthew B. Krepps ("Krepps"). For the reasons set forth below, the motion is granted.

Prior Proceedings

By order and opinion of July 27, 2005 (the "July 27 Opinion"), this Court granted the motion of Insead to dismiss this action (the "Krepps II Action") for lack of personal jurisdiction and due to insufficient service of process. See Krepps v. Reiner, No. 05 Civ. 0107 (RWS), 2005 WL 1793540 (S.D.N.Y. July 27, 2005). Because of Krepps' pro se status, he was given an additional period of time to submit any factual material or to initiate any jurisdictional discovery to support a prima facie showing that jurisdiction exists. See id. at *6. The July 27 Opinion held that Krepps had failed to establish that Insead has a corporate presence in New York, that this Court possesses long-arm jurisdiction over Insead, or that Insead engaged in tortious conduct in New York such that Insead might be subject to the jurisdiction of this Court. Having completed additional jurisdictional discovery, Krepps submitted his opposition to the entry of judgment.

The motion was marked fully submitted on November 16, 2005.

Jurisdiction Has Not Been Established

Plaintiff bears the burden of establishing that the court has jurisdiction over a defendant when served with a Rule 12(b)(2) motion to dismiss. DiStefano v. Carozzi North American Inc., 286 F.3d 81, 84 (2d Cir. 2001); Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994). Because an evidentiary hearing has not been held, the plaintiff need only make a prima facie showing of jurisdiction through the complaint's allegations and affidavits in order to defeat the motion to dismiss. CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986); Network Enterprises, Inc. v. APBA Offshore Prods. Inc., 01 Civ. 11765 (CSH), 2002 WL 31050846, at *8 (S.D.N.Y. Sept. 12, 2002). The facts must be construed in the light most favorable to plaintiffs. Cooper, Robertson & Partners L.L.P. v. Vail, 143 F. Supp. 2d 367, 370 (S.D.N.Y. 2001) (citing Hoffritz for Cutlery Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985)).

Nothing submitted by Krepps since the July 27 Opinion was issued has changed the bedrock fact that this Court lacks jurisdiction over Insead.

INA

Krepps has claimed that personal jurisdiction exists over Insead due to its relationship with INA, a New York not-for-profit corporation.

INA is an independent New York State not-for-profit corporation formed in 2000 under Section 402 of New York's Not-for-Profit Corporation Law. (See Declaration of Leonard J. Bencivenga at ¶ 2) (hereinafter referred to as "Bencivenga Decl.").*fn1 While INA was established to exclusively support the education mission of Insead, and its sole member is Insead, its sole function is to serve as a conduit organization for Insead by receiving funds from Insead and disbursing these funds in U.S. dollars to professors in the United States who guest-lecture at Fontainebleau. (Id.)

INA engages in no other business. (Id. at ¶ 4.)

INA has no employees in New York or elsewhere. (Id.) In fact, INA's payments to professors are all issued by its accountants at Bencivenga Ward & Company ("Bencivenga"). (Id.) INA does not offer any product or service for sale in New York.

(Id.) INA does not own, rent or otherwise occupy any physical space in New York. (Id.) Indeed, contrary to Krepps' allegations, neither Insead nor INA has office space at either 205 East 42nd Street or 900 Third Avenue. Until February 2004, the 205 East 42nd Street office was occupied by Bencivenga, and neither Insead nor INA ever paid any rent to Bencivenga or occupied Bencivenga's space. (Id.) The 900 Third Avenue address is the home of Worms & Company, Inc., a merchant bank which agreed to accept service of process for INA from New York State's Secretary of State. (See Rondoux Decl. at ¶ 4.) Over the past six years, Insead hired, and INA paid through Bencivenga, only twelve New York-based professors for guest lecturing assignments -- one in 2000, five in 2001, two in 2002, none in 2003, and two each in 2004 and 2005. (Id.)

Essentially, INA has performed the function of a New York bank dispensing sums at the direction of Insead to pay New York-based professors for teaching in France. Insead's purchase of the services of these professors, who clearly offer their talents to the international market of high-end academic institutions, does not subject Insead to the jurisdiction of this ...


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