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Koch’s Wine Claims Still Sour, 2nd Circuit Says

MANHATTAN (CN) - Billionaire industrialist William Koch uncorked his racketeering claims too late to implicate Christie's auction house in an alleged conspiracy to snooker him into buying phony "Thomas Jefferson" vino, the 2nd Circuit ruled.

"For wine, timing is critical," the appellate court's ruling begins. "The same is true for causes of action."

The unanimous decision affirms a district judge's ruling last year.

In 1988, Koch bought four bottles engraved with the initials "Th.J." for $311,800 directly from Hardy Rodenstock, a German wine connoisseur who claimed to have discovered a cache of Jefferson's wine in bricked-up Paris cellar.

Though Christie's was not involved in the direct sale of those bottles, Koch said that the auction house engaged in a "decades-long scam of promoting, authenticating, and selling supposedly rare wines that it knew to be counterfeit."

Koch alleged in a March 2010 complaint that Christie's had "acquired direct and specific knowledge of facts and circumstances that challenged the authenticity of the Th.J wine" as early as 1985. To support these claims, Koch bought a bottle of 1870 Lafite at Christie's for $4,200 in 2008, and had his experts confirm that the wine was counterfeit.

But the time Koch spent amassing this evidence ultimately ensured his defeat. A federal judge dismissed the complaint against Christie's in March 2011, finding that Koch had far exceeded the four-year statute of limitations for civil claims under anti-racketeering law.

"The District Court in this case concluded that '[i]t is clear that as of the testing of the wine in 2000, plaintiff 'had knowledge of facts from which the alleged fraud might reasonably be inferred,'" Judge John Koetl wrote for the panel. "This conclusion was correct."

That October, Koch sent the Woods Hole Oceonographic Institution samples of the wine for radiocarbon testing.

Wood Hole's report later that month found that there was only a 26.5 percent chance the wine was made between 1680 and 1740.

Both courts found that the report put him on notice to pursue his claims.

So did a 1985 report by the Thomas Jefferson Foundation at Monticello, which also expressed skepticism about the wine's authenticity, the judges added.

Koch claimed that Christie's interfered with his investigation from keeping him from getting a copy of this report, and that the auction house's alleged misconduct should have led to the tolling, or pausing, of the statute of limitations.

The 2nd Circuit called that argument "without merit."

"Koch's allegations with respect to the period before the Woods Hole Report, such as the somewhat generalized allegation that Christie's intentionally failed to disclose the details of the Monticello Report, do not indicate how Christie's prevented Koch from discovering his claim," the order states. "Koch alleges that he was able to obtain the Monticello Report by simply making a phone call and that within two years he had uncovered the fraud. There is no allegation that any defendant took any action that prevented Koch from making the same phone call immediately after he had seen the Woods Hole Report in October 16, 2000. The ineluctable conclusion is that Koch failed to file his claim within the statute of limitations not due to the defendants' fraudulent concealment, but due to his own failure to exercise reasonable diligence."

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