So said Koeltl J of the 2d Circuit in dismissing claims brought by William Koch against Christie’s, the auction house, for its alleged part in a scheme to sell wine that was fraudulently described as having come from the private stock of Thomas Jefferson (new wine in old bottles, essentially): Koch v Christie’s International plc (2d Cir, 4 October 2011). Hardy Rodenstock claimed to have discovered the wine in a bricked-up cellar in Paris in the 1980s. Doubts were expressed about the authenticity of the wine pretty much from the get-go, including in a report commissioned by the curator at Monticello, Jefferson’s house in Virginia, in 1985. Koch alleged that Rodenstock had a ‘longstanding and symbiotic relationship’ with Michael Broadbent, the in-house wine expert at Christie’s, which initially offered the wine for sale at auction. Koch’s purchases of some of the ‘Jefferson’ wine in 1987 and 1988 were from Rodenstock or other wine dealers, but allegedly in reliance on representations made by Broadbent in Christie’s materials. In the face of mounting doubts about the provenance of the wine, Koch considered legal action in 1993 and 1995, but did nothing; scientific tests he commissioned in 2000 proved in his view inconclusive. In 2006, Koch obtained a copy of the 1985 Monticello report and sued Rodenstock 18 months later. Rodenstock, a German resident, did not appear and default judgment was entered against him. In 2010, Koch went after Christie’s.
The district court dismissed Koch’s claim as time-barred: he was sufficiently on notice of a potential claim when he submitted his bottles for testing in 2000, and limitation periods under both the Racketeer-Influenced and Corrupt Practices Act and New York common law had passed. On appeal, the 2d Circuit agreed. Koch’s claim accrued on discovery of his injury, and this had clearly occurred in 2000 (if not earlier). Both the statutory and common-law limitation periods are triggered when a plaintiff has reasonable notice that there may be a claim but fails to investigate it. In 2000, Koch clearly had sufficient ‘storm warnings’ to put him under a duty of inquiry, and sufficient knowledge of facts that would suggest to a reasonable person that there had been injury. The 2000 tests had indicated, in fact, that there was a more than 90% probability that the wine was fake. Koch’s lack of reasonable diligence in investigating a potential claim also deprived him of the argument that alleged fraudulent concealment on the part of Christie’s suspended the limitation period.