Koch Brother Loses Suit Due to Statute of Limitations

On October 4 the United States Court of Appeals for the Second Circuit entered an order dismissing a suit by William I. Koch against Christie’s auction house regarding counterfeit wine because the statute of limitations had expired. Koch purchased a number of bottles of wine during the 1980s that supposedly belonged to Thomas Jefferson. Unfortunately for Mr. Koch, he did not file suit in the matter until 2011, barring his claims.

William Koch is member of the Koch family, members of whom are highly involved in America’s oil industry. Aside from his business endeavors, Mr. Koch is also a sailor and a collector of art and wine. It was his love of wine that initially brought to his attention the discovery of a wine cellar in Paris containing bottles marked “Th.J.” The bottles were promoted as authentic by Christie’s auction house, although the staff of Jefferson’s estate at Monticello was doubtful of the authenticity and declined to engage in speculation about the wine’s history.

Despite the lack of evidence confirming the wine’s authenticity, Mr. Koch purchased a single bottle of the wine in November of 1988 for $100,000. The following month he purchased three more bottles for a total of $211,804.40. In the early 1990s, Koch read some articles questioning the authenticity of the Jefferson wine, and hired attorneys to investigate those claims in light of a lawsuit that had been brought against the discoverer of the wine. But despite these events, no suit was brought during the 1990s.

In October of 2000, Mr. Koch hired the Woods Hole Oceanographic Institute to radiocarbon date the bottles, which resulted in only a 4.6% probability that the wine was from the time period consistent with the claims about its origins. Still, Koch did not institute proceedings against anyone in connection with the wine until 2006, when he finally sued the discoverer of the wine and received a default judgment. The suit against Christie’s (based on a RICO claim) was not filed until March of 2010—nearly 10 years after the District Court determined that he “was on inquiry notice of his injuries.” (Order, p. 12, ln. 11.) Since RICO has a 4-year statute of limitations, the District Court dismissed the suit due to a Rule 12(b)(6) motion, and the Court of Appeals affirmed.

(photo: http://www.flickr.com/photos/felipe_gabaldon/5917376027/sizes/n/)