Christie’s International Plc won dismissal of a lawsuit filed by billionaire collector William Koch that claimed the auction house “induced” him into buying counterfeit wine.
U.S. District Judge Barbara Jones, in New York, today granted Christie’s motion to dismiss Koch’s suit, which included claims of fraud, civil conspiracy and aiding and abetting.
Jones said in her ruling that while Koch said he was injured by Christie’s “misrepresentations,” she concluded he also knew that the bottle “was counterfeit prior to making the purchase.”
“Here the cause of his injuries was not Christie’s’ misleading statements but plaintiff’s desire to gather evidence against Christie’s,” Jones said.
Koch alleged in his suit that he bought a bottle of 1870 Lafite for $4,200 at a Christie’s auction in order to prove that it was counterfeit. The judge rejected Koch’s arguments in his lawsuit. Koch has filed lawsuits against others claiming they sold him counterfeit wine that allegedly belonged to Jefferson was marked “Th.J.”
“Plaintiff alleges that Christie’s knowingly sold him a counterfeit bottle of wine in 2008,” Jones said in her ruling. “He alleges because Christie’s held a public auction and published catalogues, the act is sufficiently consumer- oriented.”
While Koch didn’t claim in this lawsuit that Christie’s had sold him the counterfeit Jefferson wines, he alleged that Christie’s “had previously auctioned other Th.J. bottles” owned by German wine dealer and former pop music manager Hardy Rodenstock. Koch claimed he was “induced” into buying them from Rodenstock because Christie’s had described the wines “positively” in auction catalogues when the wines were sold in the 1980s.
Koch also sued Rodenstock in 2006 over the wines. A default judgment was entered against Rodenstock in that case last year.
Jones rejected Koch’s claim that if Christie’s had disclosed that the bottle was counterfeit “Koch would never have needed to spend $4,200 to purchase the bottle,” saying he was no longer acting as a reasonable consumer.
“He was acting as an investigator who chose to pay $4,200 despite knowledge that the wine was worth far less,” the judge said.
“We have great respect for Mr. Koch but have always believed his claims were without merit and are therefore grateful for the court’s decision affirming this,” Christie’s spokesman Toby Usnik said in an e-mail statement.
In the lawsuit, Koch claimed that because Christie’s has inspected so many wine cellars and bottles of wine, it knew how to identify counterfeit wine.
“Christie’s also has unique access to facts and circumstances that might call into question the authenticity of specific wines it handles,” Koch alleged in the complaint.
Koch said in his complaint that auction houses like Christie’s may “look the other way” and offer counterfeit wine for sale so as not to decrease the consigner’s expected return and risk losing the entire consignment to a competitor. He also claimed that Christie’s employs boilerplate warnings in its catalogs telling buyers that the wine is sold “as is.”
“Because of such disclaimers, when sued, auction houses such as Christie’s routinely argue that no buyer should rely on anything in their catalogs as truthful,” Koch alleged.
Koch has filed other wine-related suits. In 2007, he sued Scarsdale, New York-based Zachys Wine Auctions. In 2008, he sued the Chicago Wine Co. and Chicago-based Julienne Importing Co. and New York auction house Acker Merrall & Condit, accusing them of selling him fakes.
The case is Koch v. Christie’s, 10-cv-2804, U.S. District Court, Southern District of New York (Manhattan).
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