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Court of Appeals for the Second Circuit Dismisses Koch Wine Suit on Statute of Limitations

Last year, On Reserve posted an article about the suit brought by Koch against Christie’s in a New York federal district court. New York District Court Judge, Honorable Barbara Jones, granted the motion to dismiss of the auction house Christie’s and dismissed the suit against the acclaimed auction house. In that suit, William Koch, billionaire and avid wine collector, filed suit against the auction house last year claiming Christie’s “induced” him to buy a fraudulent bottle of 1870 Lafite wine at an auction for $4,200. (See Christie’s Wines Dismissal of Koch’s Counterfeit Wine Suit.) In his complaint, Koch claimed fraud, civil conspiracy, and aiding and abetting — alleging that the London-based auction house has sold counterfeit wine “for many years.” (Id.) Judge Jones, in her ruling, reasoned that while Koch alleged he was injured due to misrepresentation made on behalf of the auction house, Koch placed bids on the wine while he knew it was fake, and could thus not recover for his injury. (See Judge Dismisses Koch Suit Against Christie’s.)

This year, Koch appealed to the United States Court of Appeals for the Second Circuit. On appeal, Koch argued—among other points—that the District Court erred in its application of the legal standard of doctrine of inquiry notice. The doctrine of inquiry notice allows a court—in some circumstances—to impute knowledge on a plaintiff of facts that are sufficient to allow the statute of limitations to run in situations where a plaintiff could have discovered the facts by a reasonably diligent search or examination. His argument was also rejected by the Second Circuit, but this time for matters relating to the statute of limitation. On October 4, 2012, the Court of Appeals for the Second Circuit dismissed the case brought by Koch on the grounds that the statute of limitations expired. (See Koch Brother Loses Suit Due to Statute of Limitations.) The Court of Appeals reasoned that, while Koch bought a bottle of wine from an auction at Christie’s in the 1980s that allegedly belonged to Thomas Jefferson, the statute of limitations had run, as Koch did not file suit against Christie’s until 2011. Despite numerous instances that allowed Koch question the authenticity of the wine, the suit against Christie’s was not filed until 2011. (In the 1990s, Koch reach several articles questioning the authenticity of Jefferson wine and hired attorneys to investigate claims after a lawsuit had been brought against the individual who discovered the alleged Jefferson wine; in addition, in 2010, Koch hired Woods Hole Oceanographic Institute to perform radiocarbon analysis on the wine, results of which indicated there was less than 4.6% probability that the wine was from the time period alleged. Koch later sued the discoverer of the wine in 2006 and received a default jdugment, but Koch did not proceed to file suit against Christie’s until 2011.)

For an interesting and wine-related read, see Judge John G. Koeltl’s opinion here

Lindsey A. Zahn


Lindsey is the founder and author of On Reserve: A Wine Law Blog. She is an alcohol beverage and food attorney and is admitted to the New York State Bar.

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