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Saturday, June 15, 2024 | Back issues
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Koch Jury Award, Like His Wine, Was Overvalued

MANHATTAN (CN) - Defrauded on counterfeit bottles of supposedly rare French wine, billionaire William Koch will collect less than 10 percent of a $12 million jury award, a federal judge ruled.

The 2012 federal complaint at issue was one of several Koch filed in New York, California and Florida against wine dealer Eric Greenberg over the fraudulent sale of 2,600 bottles of wine at auction.

A Manhattan jury ordered Greenberg to pay Koch $12 million almost exactly one year ago.

Greenberg sought to strike or reduce the heavy penalty because he said neither the law nor the facts would support it.

U.S. District Judge J. Paul Oetken on Monday called this a rare case in which he would alter, but not wipe out, a jury's findings before an appeal.

Quoting Founding Father John Adams, Oetken said jury trials represent "indemnification against being ridden like horses, fleeced like sheep, worked like cattle, and fed and clothed like swine and hounds."

In this case, however, the jury had failed to account for a $250,000 settlement that Koch reached with Zachys Wine Auctions over the same bottles as compensation for being defrauded.

The punitive damages are "excessive and cannot stand," Oetken wrote.

"This harm was economic in nature and none of its targets - neither Koch nor other potential buyers at auction - were financially vulnerable," Oetken wrote. "Moreover, the tortious conduct did not evince an indifference to, or reckless disregard for, the health or safety of others, as Koch himself characterized the wine at issue as collectible artifacts rather than something that he would actually imbibe."

Koch must accept a reduced award of $924,321 before April 25, or face a new trial.

Brad Goldstein, the director of corporate affairs at Koch's company Oxbow Carbon, celebrated the fact that the jury's findings were left undisturbed.

"We are very pleased that the Court found today that the jury correctly decided every cause of action in favor of Mr. Koch and that Mr. Greenberg's 'reprehensible' conduct was an appropriate basis for punitive damages," Goldstein said in a statement. "Our goal from the start was to 'shine a bright light' on fraud that had formerly lurked undetected, and today's decision represents yet another spotlight on a wine fraudster's conduct."

The lawyer also emphasized other successful actions against Hardy Rodenstock, against whom Koch won a default judgment, and Rudy Kurniawan, whom a federal jury convicted of a related scheme.

David Frederick, an attorney for Greenberg with Kellogg, Huber, Hansen, also praised the ruling.

"We're gratified by the court's ruling to reduce the compensatory and punitive damages by significant amounts and to reject Koch's claim for attorney's fees," Frederick said in an email.

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