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10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document
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receipt of subsequent transfers of BLMIS Customer Property. (Delandmeter Mot. at 17; Access
Mot. at 19.) But the cases on which the Moving Access Defendants and Delandmeter rely,
which stand for the proposition that “passive receipt of allegedly stolen funds . . . is an
inadequate basis for” the exercise of jurisdiction, are inapposite. (See Access Mot. at 19–20.)
(citing Devinsky v. Kingsford, No. 05 Civ. 2064 (PAC), 2008 WL 857525, at *5 (S.D.N.Y. Mar.
31, 2008); Langenberg v. Sofair, No. 03 CV 8339 (KMK), 2006 WL 2628348, at *4 (S.D.N.Y.
Sept. 11, 2006)). 42 The Moving Access Defendants and Delandmeter were not third parties who
passively received subsequent transfers, but rather purposefully contracted for and earned those
substantial fees for directing investment activity to BLMIS in New York through Luxalpha and
Groupement, during the course of which they closed their eyes to numerous “red flags” relating
to Madoff and BLMIS. (See Am. Compl. 201, 220–51.) The Moving Access Defendants and
Delandmeter are subject to the Court’s jurisdiction in a case seeking the recovery of such
transfers, where these transfers arose out of their contacts with New York. Chais, 440 B.R. at
278 (“. . . foreign defendants who profited by their maintenance of BLMIS accounts and receipt
of transfers subjected themselves to personal jurisdiction of this Court with regard to the
Trustee’s claims arising from such transfers.”) (citing Cohmad, 418 B.R. at 75); see also Sole
Resort, 450 F.3d at 103 (requiring “some articulable nexus between the business transacted and
the cause of action sued upon” for jurisdiction under CPLR § 302(a)(1)).
Separately, although the Moving Access Defendants generally recognize the existence of
the mere department standard for purposes of jurisdiction, they argue that the Trustee can
42 The Moving Access Defendants and Delandmeter reveal the weakness of their position by selectively quoting
dicta in Mullins v. TestAmerica, Inc., 564 F.3d 386 (5th Cir. 2009). (Access Mot. at 20; Delandmeter Mot. at 17.)
Mullins stands for the proposition that the appropriate inquiry in the jurisdictional analysis—even for a transferee—
is whether the defendant had minimum contacts constituting purposeful availment with the forum state. Mullins,
564 F.3d at 400.
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