Bloomberg News

William Koch Loses Bid to Reinstate Counterfeit Wine Suit

October 04, 2012

Billionaire collector William Koch lost his bid to reinstate a lawsuit against Christie’s International Plc that claimed the auction house “induced” him to buy what he said was counterfeit wine.

The U.S. Court of Appeals in Manhattan today upheld a 2011 ruling by U.S. District Judge Barbara Jones dismissing Koch’s suit after finding that he waited too long to sue. The appeals court agreed that the statute of limitations had expired.

“For wine, timing is critical,” wrote U.S. District Judge John Koeltl, who was sitting on the appeals court for the case. “The same is true for causes of action.”

Koch has previously filed cases against others claiming they sold him counterfeit wine, marked “Th.J.,” that had purportedly belonged to Thomas Jefferson.

In the Christie’s case, which Koch filed in Manhattan in 2010, he said he bought a bottle of 1870 Lafite for $4,200 at a Christie’s auction in order to prove it was counterfeit, adding that London-based Christie’s had sold him counterfeit wine “for many years.”

Koch also said that Christie’s had previously auctioned other Th.J. bottles owned by Hardy Rodenstock, a German wine dealer and former pop music manager, and that he was induced to buy them from Rodenstock because Christie’s described the wines “positively” in auction catalogs during the 1980s.

Dismissal

In dismissing the case last year, Jones said Koch knew the bottles were counterfeit and that he bought the wine not because of the alleged fraud but out of a “desire to gather evidence against Christie’s.”

Jonathan Lerner, a lawyer for Christie’s, said the court’s ruling “was clearly correct.”

“Mr. Koch’s claims turned to vinegar a long time ago,” Lerner said in a telephone interview today. “The only hoax in this case was the allegation in the complaint that ‘no credible question’ had been raised about the wine until shortly before the complaint was filed.”

Koch should have made inquiries about the wine by October 2000, when a report was issued about its authenticity, the appeals court said. Koch filed his suit in 2010.

Lose Consignment

Koch said in his complaint that auction houses like Christie’s “look the other way” and sell counterfeit wine so they don’t lose the consignment to a competitor. He said Christie’s employs boilerplate warnings in its catalogs telling buyers that wine bottles are sold “as is.”

“Christie’s got away with an incredible hoax,” Brad Goldstein, a Koch spokesman, said in a telephone interview today. “We’ll examine what we can do but there are several factual problems with this ruling. Christie’s behavior in the wine auction market needs closer scrutiny.”

The wine at issue was allegedly discovered in the mid-1980s when Rodenstock claimed to have found a cache in a bricked-up cellar in Paris. The bottles bore the Th.J. initials and Rodenstock linked them to Thomas Jefferson, who served as a minister to France in the late 1700s, the complaint said.

Koch purchased a bottle marked “1787 Branne Mouton Th.J” for $100,000 in November 1988. He had the wine bottles he’d bought tested in October 2000, the appeals court said.

The appeals court said today that a historian at Monticello issued a report in December 1985 which examined records of Jefferson’s finances and purchases and determined “no solid connecting evidence could be found between Jefferson and the Th.J wine.”

‘Scholarly Doubt’

While the report didn’t become public at the time, the circuit judges said in their ruling that newspaper including the New York Times published articles saying there was “scholarly doubt” about the authenticity of the wine.

Koch has filed other wine-related suits, including one against Rodenstock in 2006. Rodenstock didn’t respond to the case. A New York judge entered a default judgment against him in 2010 and ordered him to pay more than $622,000.

Rodenstock, who lives in Germany, doesn’t have an attorney and couldn’t be immediately reached for comment.

The case is Koch v. Christie’s, 10-cv-2804, U.S. District Court, Southern District of New York (Manhattan), and 11-522, U.S. Court of Appeals for the Second Circuit (Manhattan).

To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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