Second Circuit: Wine lawsuit came too late
NEW YORK (Legal Newsline) - A federal appeals court last week dismissed claims against fine arts auction house Christie's over allegations that it falsely attributed bottles of wine to a collection of President Thomas Jefferson's.
The U.S. Court of Appeals for the Second Circuit ruled in its Oct. 4 opinion that plaintiff William I. Koch's claims of civil Racketeer Influenced and Corrupt Organizations Act, or RICO, conspiracy and common law fraud were time-barred.
"For wine, timing is critical. The same is true for causes of action," wrote U.S. District Judge John G. Koeltl. Koeltl, of the Southern District of New York and sitting by designation, authored the Second Circuit's opinion.
Koch, who purchased four bottles of the now-discredited "Jefferson wines" from third-party dealers in November and December 1988, relying on promotional representations made by Christie's, alleged that the auction house promoted as authentic the cache of wine.
In his lawsuit filed in March 2010, Koch alleged that the wines were, in fact, counterfeit and that Christie's knew or was reckless in not knowing of the wines' "dubious authenticity."
In its 38-page ruling, the Second Circuit said it "found no error" in a decision by the U.S. District Court for the Southern District of New York.
The federal court dismissed the claims against Christie's International PLC, Christie's Inc. and Christie, Mason and Woods Ltd. after determining that the statute of limitations for Koch's claims had expired.
On appeal, Koch argued that the district court erred in describing and applying the legal standard with respect to the doctrine of inquiry notice.
He also argued that the court erred in dismissing his New York state law claims as time-barred because the standard for inquiry notice under New York law is different from the standard under federal law in RICO cases, and his claims should survive under the New York standard.
The Second Circuit didn't see it that way.
"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," Koeltl wrote.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.