A New York federal judge has denied an attempt by a wine collector to dismiss a fraud lawsuit brought by William Koch.
In an 31 October ruling, Judge Barbara Jones said Florida collector Koch is entitled to seek punitive damages from major California collector Eric Greenberg.
The ruling said Koch alleged that 'when Greenberg decided to sell part of his collection' he 'approached Sotheby's.'
Koch said that when Sotheby's wine department inspected the cellar they found many of his bottles were counterfeit. Sotheby's declined to auction Greenberg wines.
Koch said Greenberg then hired William Edgerton, a noted assessor, to check his holdings, and Edgerton 'confirmed Sutcliffe's conclusion that some of the wine was counterfeit.'
Despite these findings, Koch asserted, Greenberg consigned fakes to Zachys.
After Koch bought Greenberg bottles for US$228,603 at a 2005 auction, he concluded that seven were 'counterfeit' and four 'possibly counterfeit.'
Greenberg later sent Koch a $272,555 check to cover the purchase, 9% interest and $1,000 in court costs.
The check wasn't cashed, and the wine wasn't returned. Asked why, Brad Goldstein, Koch's spokesman replied, 'In what country does the defendant get to decide the verdict, the penalty and the damages?'
A Greenberg lawyer, Anthony Coles, told decanter.com: 'The allegations in the lawsuit are false, and Mr Greenberg expects to prevail in court. It's hard to imagine a lawsuit as wasteful as this one.
'Mr Koch was offered a full refund so that the wine could be used to support a charity wine tasting to benefit children. Rather than accept a generous, public-spirited solution, Mr Koch, a billionaire, is financing a pointless claim.
'The only finding this case could show is that Mr Greenberg and Mr Koch were victims of wine counterfeiters.'
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In general, I would agree with Mr. Koch's plan to eliminate the trade in counterfeit wine. However, his damages in this case could only be the value (as defined by the amount paid) of the loss. I don't see this as a case of the defendant establishing the damages; it is a case of the law establishing the damages. I thought Mr. Greenberg was even quite generous in including an interest component in the refund check he sent Mr. Koch. But it is ridiculous that the judge remanded this case to trial--it should be dismissed immediately for frivolity and for wasting the court's time. But they say that justice is blind, even with the facts so blatantly obvious and staring it in the face.
Kevin Beck, Broken Arrow, OK USA
In your rush for brevity you failed to provide the full context of this lawsuit. Your readers should know that Eric Greenberg on two separate occasions assured us that he would provide information pertaining to his purchase of counterfeit wines and his settlement agreement with Royal Wine Merchants. In both instances, Mr. Greenberg encouraged us to serve him with a subpoena for his records. He stated to our investigator and Mr. Koch that he would willingly cooperate in our attempt to go back to the source of these counterfeit wines. When we complied with his request and filed suit against him, Mr. Greenberg suddenly had a change of heart and fought us. Why? Judge Barbara Jones said it best in her order:
"Additionally, the particularly egregious nature of Greenberg's alleged conduct is demonstrated by his decision to sell at auction wine that he knew two experts [Edgerton and Sutcliffe] had determined to be counterfeit. Plaintiff's further allegation that Greenberg only sold this counterfeit wine at the Zachys auction after recovering a settlement on the wine from the company (Royal Wine) that had sold the wine to him highlights the wantonly dishonest nature of Greenberg's conduct." P. 11
“Given the large number of bottles Greenberg consigned for the October 2005 auction, and the fact that Plaintiff's purchase of a small percentage of those bottles contained counterfeits, it seems possible that other consumers at the auction were impacted by Greenberg's alleged misconduct. Thus, assuming the allegations of the complaint to be true, it is reasonable to conclude that conduct complained of affected other similarly situated consumers, other purchasers at the October 2005 auction, and therefore had a broad impact on consumers at large.” p.17.
This issue is larger than a simple check. Mr. Greenberg's lawyer can try and “spin” this as best he can, but he cannot run from the facts. It's time for his client to honor his commitment and turn over the records. This has nothing to do with money and everything to do with “right and wrong.” Brad Goldstein, Director Corporate Affairs, Oxbow Corporation, Florida
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In general, I would agree with Mr. Koch's plan to eliminate the trade in counterfeit wine. However, his damages in this case could only be the value (as defined by the amount paid) of the loss. I don't see this as a case of the defendant establishing the damages; it is a case of the law establishing the damages. I thought Mr. Greenberg was even quite generous in including an interest component in the refund check he sent Mr. Koch. But it is ridiculous that the judge remanded this case to trial--it should be dismissed immediately for frivolity and for wasting the court's time. But they say that justice is blind, even with the facts so blatantly obvious and staring it in the face.
