Former Koch Employee Can Refile False-Imprisonment Suit

A former employee of William Koch can refile a lawsuit alleging the billionaire energy-company executive held him captive at a Colorado ranch, ruled a judge, who said it’s “not a case that’s just going to go away.”

U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco dismissed Kirby Martensen’s lawsuit at a hearing today, giving him leave to file again to address the issue of whether his case should be brought in another jurisdiction.

The judge said she “didn’t buy” Koch’s arguments that, because he had his mobile phone, Martensen can’t claim he was falsely imprisoned at Koch’s ranch over two days in March and in his private jet. She also said a claim by a Koch lawyer that there’s no evidence people at the ranch were acting as Koch’s agents “isn’t plausible.”

“The allegations are sufficient to allege false imprisonment,” Corley said. She said a question remained whether to try the case in California or elsewhere.

John Hueston, Koch’s lawyer, said the suit should be dismissed or brought in Colorado or Florida. While Martensen alleges he was flown in Koch’s jet to California after leaving the ranch, that’s not sufficient to bring the lawsuit in California, Hueston told Corley.

‘Reasonable Conclusion’

John Scott, Martensen’s lawyer, said the lawsuit was properly filed in California because that’s where his client lived while working for Koch. He said the only “reasonable conclusion” is that the people at Koch’s ranch were acting as his agents.

“All of these events occurred on Koch’s private ranch,” Scott said. “All the persons there were acting with his authorization and consent.”

Corley said that after Martensen refiles, she would reconsider Koch’s motion to dismiss and decide whether the lawsuit should have been brought somewhere else.

Scott didn’t immediately return a voice-mail message seeking comment on today’s ruling.

Martensen was fired from his job as senior vice president of Oxbow Carbon & Minerals LLC while he was at the ranch in March. Oxbow alleges in a lawsuit filed in Florida at the time Martensen was at the ranch that he accepted illegal bribes and payments from Oxbow competitors.

Martensen sued in October. He alleged he was held captive because he voiced concerns about a plan at Oxbow to avoid U.S. taxes on $200 million in profit, and was interrogated and fired.

‘Without Merit’

“We believe Mr. Martensen’s entire case is without merit,” Brad Goldstein, director of corporate affairs for Oxbow, said in an e-mail. “Mr. Martensen filed his case to deflect attention away from his own egregious conduct.”

The brother of David Koch and Charles Koch, William Koch, 72, made his fortune partly by developing underground coal deposits in Somerset, Colorado. He maintains a working cattle operation at the ranch, located southwest of Aspen.

Oxbow, a West Palm Beach, Florida-based petroleum coke export broker, and two affiliates have combined annual sales of more than $4 billion and more than 1,100 employees worldwide, according to the company.

The case is Martensen v. Koch. 12-05257, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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