NEW YORK (Reuters) - The clock could be running out for billionaire William I. Koch in a lawsuit against Christie’s in which he accused the auction house of fraud over his purchase of wines said to have been owned by third American president Thomas Jefferson.
A federal appeals court panel in New York on Wednesday questioned whether Koch had conducted timely due diligence when doubts were raised about four bottles of 1787 wine engraved “Th.J” that were sold to him in 1987 and 1988 by dealer Hardy Rodenstock through intermediaries.
In March last year, U.S. District Judge Barbara Jones threw out the lawsuit Koch filed in Manhattan federal court in 2010, ruling that his claim of fraudulent concealment was barred by the statute of limitations.
The founder of Oxbow Group energy company appealed the decision, saying that Rodenstock and long time head of Christie’s wine department, Michael Broadbent, were associates in the purported fraud.
Christie’s fought the lawsuit, arguing that Koch falsely claimed he did not learn about credible issues of the authenticity of the wine until 2005.
Much of Wednesday’s questioning by three judges on the 2nd U.S. Circuit Court of Appeals panel focused on the statute of limitations and the timeliness of Koch’s investigations into the wine.
“I have trouble getting the real additional injury ... that would have added to knowledge already in the mainstream media in 1992 or 1993,” said U.S. District Judge John Koeltl, who is sitting on the appeals court by invitation.
Koch, whose worth is about $4 billion according to Forbes magazine, sued Christie’s on the grounds that it had agreed to promote Rodenstock’s reputation and sell his wines. The lawsuit also said Christie’s had lobbied Monticello, Jefferson’s Virginia home and a national landmark, to vouch for the wine.
The appeals court heard that a 1985 report by Monticello had raised doubts about the provenance of the wine and that there had been more articles in the wine trade press in the early 1990s reporting no one had proven the wines were Jefferson’s.
Koch’s lawyer argued that the lawsuit should be allowed because more details had been revealed in a Monticello report from 2005, including that Jefferson ordered an entire year’s supply of wine in a single purchase. The orders from 1787 to 1792 were intact and none reflected purchases of the “Th.J” wine.
The court did not immediately issue a ruling but will give a written opinion at a later date.
The case is William I. Koch v Christie’s International Inc in the 2nd U.S. Circuit Court of Appeals No. 11-1522
Reporting By Grant McCool