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Thursday, May 23, 2024 | Back issues
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Koch Lashes Back at Kidnapping Charges

(CN) - Industrialist William Koch claims that his former employee filed sensational kidnapping allegations against him to divert attention from the man's own alleged fraud.

John Hueston of Irell & Manella LLP, who represents Koch, details his billionaire client's counter-narrative toward the beginning of his motion to dismiss.

"Plaintiff Kirby Martenson was an executive at Oxbow Carbon & Minerals, Inc. and certain affiliated entities, until he was terminated in March 2012, after his employers discovered that he had participated in a wide-ranging scheme to defraud the Oxbow companies," the 32-page motion states. "Three Oxbow companies sued Martensen and two other Oxbow executives in Florida state court ten months ago, alleging, among other things, breach of fiduciary and other duties, conversion, usurpation of corporate opportunity, and unjust enrichment.

"Angered and likely embarrassed that his extensive wrongdoing has been exposed, Martensen has retaliated by filing in this court the instant threadbare, legally insufficient complaint against William Koch, whom Martensen alleges owns or controls the Oxbow entities. The crux of Martensen's complaint is that he was 'falsely imprisoned' by agents of Koch in March 2012, when he was invited to stay at Koch's ranch in Colorado."

When he filed the lawsuit in the Northern District of California in October, Martensen had presented himself as a whistle-blower, rather than perpetrator, of fraud.

The former executive claimed to have suspected his employers of tax evasion to the tune of $200 million a year when he received an assignment in Singapore.

Martensen depicted the fraud allegations against him as a campaign to "intimidate and discredit" him, culminating in a fateful encounter at Koch's Bear Ranch near Aspen.

In the colorful complaint, Martensen described a helicopter ride over the grounds of the ranch, which he said included 50 buildings designed to resemble an authentic 19th century Western town.

Martensen claimed that, later in his visit, Koch's agents interrogated him for several hours, escorted him to an SUV to be served with termination papers and a lawsuit, called a sheriff to watch him, and took him against his will to a private plane.

Rather than admit or deny this account of events in their motion to dismiss, Koch's lawyers try to fend off the lawsuit on procedural grounds.

The motion claims that the Northern District of California lacks jurisdiction over Koch, a Florida resident. The brief also notes that the ranch where the alleged kidnapping occurred is in Colorado.

Even if these allegations are true, they do not describe kidnapping or false imprisonment, Koch says.

"Martensen does not allege that Koch perpetrated any of the alleged conduct on which the false imprisonment claim is premised," the motion states. "Martensen appears to base his false imprisonment claim on three episodes: (a) an interview by 'two agents of Koch' that allegedly lasted several hours; (b) a period of alleged 'captivity' that occurred later the same day, when Martensen was allegedly escorted to an SUV and driven by an unnamed driver to a cabin on the ranch, where he remained for three hours; and (c) another period of time the same day when Martensen was driven in an SUV, accompanied by 'two agents of William Koch (driver and escort),' to a Denver airport, and was then a passenger on a private jet 'manned by a pilot, co-pilot and escort.' Martensen does not allege that Koch was present during or participated in any of these alleged acts."

Likewise, Martinsen never alleged that he was subjected to physical force or threat of force necessary to prove false imprisonment, according to the motion.

"In short, the complaint simply does not describe Martensen as confined against his will at the Colorado ranch, which is what the tort requires," the motion states. "Rather, the allegations make clear that Martensen is a disgruntled former employee of the Oxbow companies who may have been embarrassed and upset that his corporate wrongdoing was discovered, but who was free at all times to leave."

Koch also asked the court to toss conspiracy claims that paint him as in cahoots with the sheriff.

"Martensen alleges only that an unnamed driver told Martensen that '[a] sheriff is here to make sure you don't wander off,' and that Martensen observed a police car 'parked nearby with a man in uniform behind the wheel,'" the motion states. "Martensen does not allege facts showing an 'agreement or meeting of the minds' between Koch and the 'man in uniform' (or any alleged law enforcement officer) to do anything, much less violate Martensen's constitutional rights. Nor does Martensen allege that the 'man in uniform' or any alleged law enforcement officer participated in any of the alleged detention events, had knowledge of the alleged events, or acknowledged or even knew of Martensen's presence."

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