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#6401 Post by John Morris » March 31st, 2014, 5:28 pm

Reuters: "A federal judge has thrown out a $12 million punitive damages award to billionaire William Koch in his lawsuit accusing a fellow oenophile [Eric Greenberg] of selling him 24 bottles of fake Bordeaux, and reduced the award to just $711,622."

U.S. District Judge J. Paul Oetken also reduced the compensatory damages "to $212,699, reflecting Koch's prior settlement with Zachys Wine Auctions Inc, reducing the total award to $924,321 from nearly $12.4 million."

According to Bloomberg News, the judge also "denied Koch’s request for more than $7.8 million in attorneys fees, saying that they “bore no relationship to the amount of actual damages at issue.”

My thought: Koch still got a stinging judgment against Greenberg, even if Greenberg can easily afford to pay the judgment.
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Koch v. Greenberg -- Important Update

#6402 Post by Don Cornwell » March 31st, 2014, 7:21 pm

KOCH'S PUNITIVE DAMAGES AGAINST GREENBERG REDUCED FROM $12 MILLION TO $711K; KOCH'S MOTION FOR $7.8 MILLION IN ATTORNEY'S FEES DENIED

There is important news on the Koch v. Greenberg case. Judge Paul Oetken, of the United States District Court for the Southern District of New York, issued his ruling on the parties' respective post-trial motions today. In a 61-page opinion, he rejected Greenberg's motion for judgment notwithstanding the verdict and a motion for new trial. However, he did find that based on Koch's pre-trial settlement with former co-defendant Zachys, New York General Obligations Law § 15-108 requires a reduction of the compensatory damages awarded to Koch from $355,811 to $212,699. (The statutory damages of $24,000 awarded by the jury pursuant New York General Business Law § 349 are not affected.) The Judge also reduced the punitive damages awarded by the jury from $12 million to $711,622 -- twice the amount awarded by the jury for compensatory damages. If Mr. Koch does not accept the reduced punitive damages amount, a new trial will be held on the issue of punitive damages. (See the explanation below.) The Court also denied in its entirety Koch's motion for an award of $7.8 million in attorney's fees and denied Koch's motion for a permanent mandatory injunction against Greenberg. Koch's motion for aware of pre-trial and post-trial interest on the damages was granted.

The bottom line here is that Koch's $12.4 million jury verdict has been reduced to a little more than $1 million including interest and Mr. Koch's attorneys fees in excess of $7.8 million the Court has determined are his own responsiblity.

In explaining the reduction of the punitive damage award, the Court stated:
  • "Here, the jury’s $12 million award of punitive damages was over 33 times that of the compensatory award of $355,811 (and 56 times the reduced compensatory award of $212,699 following the setoff discussed above)—well beyond four times the amount of compensatory damages, which may be “close to the [constitutional] line,” and even well beyond the presumptive constitutional limit of 10 times compensatory damages suggested in [the US Supreme Court's decision in] State Farm. 538 U.S. at 425. These ratios are not binding limits, but they do stake off the zone of the harshest possible punitive damages the Constitution will tolerate—a zone that should be reserved for the most egregious conduct. The fraud in this case did not result in death, serious physical injury, or even minor physical injury. The fraud did not risk any such injury. The fraud did not result in a restriction of liberty or an insult to Koch’s human dignity by way of discrimination. The fraud did not cause an economic loss that interrupted Koch’s life by interference with his housing, employment, or savings for retirement. And the fraud did not involve actually or potentially vulnerable victims. In the scheme of conduct that can be punished by damages in a civil case, this is not a fraud deserving of punishment that pushes the limits of the Due Process Clause.
    * * * *
    While Greenberg would have the Court believe that his fraud was minor and devoid of the reprehensibility meriting a punitive award, adopting that view would ultimately require the Court to reject the interpretation of the evidence adopted by the jury. The jury found that Greenburg had shamelessly defrauded customers with “garbage.” Yet his conduct did not cause a particularly egregious harm: he was dealing in luxury goods marketed to a sophisticated and wealthy subset of the population. The harm was strictly economic, and the victims were far from vulnerable consumers. These facts merit a relatively low award of punitive damages. However, given Greenberg’s wealth and the context of the high-end auctions at issue, a punitive damages award less than or equal to the compensatory amount in this case would be insufficient to punish Greenberg and deter other fraudsters considering following in his footsteps.

    The Court ultimately concludes that punitive damages in an amount greater than two times compensatory damages would be so exorbitant as to be actuated by passion, and therefore excessive under New York law. Accordingly, the Court will remit the punitive damages award to $711,622 (twice the compensatory damages award of $355,811). If Koch does not accept the reduced punitive damages award of $711,622, a new trial on punitive damages will be held."
Opinion at pages 44 and 46.

With respect to Koch's motion to award him $7.8 million in attorney's fees, the Court denied the motion in its entirety. The Court pointed out that the decision as to whether or not to award attorney's fees in a case based on violation of New York General Business Law §§ 349-350 is entirely discretionary with the court. Judge Oetken explained that a fee award was inappropriate here for several reasons:
  • "First, the attorney’s fees incurred in this case—by extraordinarily talented trial lawyers on both sides—bore no relationship to the amount of actual damages at issue. The legal teams in this case have aggressively fought a battle royale for six years, incurring millions of dollars in fees on each side. Yet the compensatory damages ultimately sought and awarded were only $355,811. In terms of the attorney’s fees incurred, the case was litigated in a manner more typical of a nine-figure case than a six-figure case.

    Second, this is not a case in which the compensatory damages fail to “capture the extent of the plaintiff’s success at trial,” such as where “the intangible value of the rights vindicated [is] far greater than the actual physical injuries sustained.” Wilson v. Car Land Diagnostics Ctr., Inc., No. 99 Civ. 9570, 2001 WL 1491280, at *2 (S.D.N.Y. Nov. 26, 2001) (Lynch, J.). As Judge Lynch has noted, GBL §§ 349 and 350 protect consumer rights, which, in commercial cases, “are directly measured by the financial damages imposed.” Id.

    Third, the purposes of the GBL statute do not ultimately support an award of fees under the circumstances of this case. This was fundamentally a fraud case: the fraud claim was the focus of the trial; and the availability of punitive damages on the fraud claim prevented the case from being rendered moot by Greenberg’s refund offers. (See Dkt. No. 37, at 5-12.) But it is only the GBL claims, not the fraud claim, that provide for potential fee-shifting. To be sure, this Court has held that Greenberg’s conduct was sufficiently “consumer-oriented” to come within the scope of the GBL provisions. (See Dkt. No. 335, at 14-15.) At the same time, however, this case is not within the heartland of the types of cases animating the fee-shifting provisions of the GBL, for two reasons: (1) it does not involve consumers who are “vulnerable” or “disadvantaged,” and (2) it does not involve conduct with a “broad impact on consumers at large. * * * *

    Finally, it is relevant that Koch refused Greenberg’s offers of a full refund for the bottles of wine at issue. It was Koch’s choice to decline the refund offers and bring this case to trial, in the hopes of sending a message and exposing what he perceived as Greenberg’s wrongdoing. In the wake of trial, Koch has now succeeded in doing exactly that. The Court does not in any way question or denigrate the intentions of Mr. Koch, who clearly feels strongly about this subject and is willing to expend significant resources on it. But there is a real sense, reinforced by the amount of attorney’s fees and Koch’s rejection of the refund offers, in which this was a litigation of choice and of principle, rather than of necessity or monetary recompense."
Opinion at pages 48-50 (emphasis added).

Either side could potentially appeal from the final judgment, including the Judge's reduction of punitive damages or denial of attorney's fees. While one might quibble about whether punitive damages of two times, three times or four times the amount of the compensatory damages were the appropriate measure, it is doubtful in my opinion that an appeal by either side would be successful.

While the judgment is only for $1+ million, I'm sure Mr. Koch feels vindicated, and rightly so. Zachys is a far different company today in terms of its practices than it was in 2005 when the first of Greenberg's three mega-auctions were held. I know that one of Mr. Koch's avowed objectives was to make sure that Eric Greenberg could never sell wine at auction again. I think that mission has been accomplished. I can't imagine that any auction house would ever again sell Eric Greenberg's wines without disclosing his identity as the seller (because it would be fraudulent to fail to do so), and disclosing Greenberg's name as the seller would be the kiss of death for the auction.
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#6403 Post by John Morris » March 31st, 2014, 9:04 pm

Most amusing line in the opinion:

Koch’s counsel questioned Cortes [an expert] on the basis for his belief at the time of the email that Greenberg was an “*sshole.”

(Note to lawyer WBs: Couldn't the judge have taken judicial notice of that?)
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Koch v. Greenberg -- Important Update

#6404 Post by Tom Wheltle » March 31st, 2014, 9:40 pm

Don Cornwell wrote: ...In explaining the reduction of the punitive damage award, the Court stated:
  • "...Yet his conduct did not cause a particularly egregious harm: he was dealing in luxury goods marketed to a sophisticated and wealthy subset of the population...."
.
So the judge thinks that damage done by one rich person to another isn't really damage?

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#6405 Post by NJBruce » April 1st, 2014, 2:02 am

Tom,
This seems consistent with this era's "too big to fail" malaise - "necessity of monetary recompense" outweighing "principle" (i.e. the systemic moral turpitude and the potential financial impact of such behavior). You'd think the whole rationale behind a scale of penalties would be to "discourage others"; not in this day and age, it seems. Clearly it takes deep pockets to take on the burden of proof in this kind of case - a class action in all but name. If you measure the defendant's overall income from his mega-auction sales, these damages are paltry.
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#6406 Post by John Morris » April 1st, 2014, 6:00 am

Tom and Nigel -- I think the ruling is consistent with the law, and with common sense. The law is that punitive damages can't be disproportionate to the harm. The monetary harm wasn't that great here and no one was physically hurt, nor was the victim particularly vulnerable. I think it's that last point that prompted the judge's language about the parties. On the scale of moral outrages, I think this is pretty small. It's not like ignoring safety defects that kill people, deliberately inflicting physical harm or victimizing poor people in an investment scam.

On top of that, Greenberg offered to settle for a full refund.

It's worth bearing in mind, too, that if Koch's legal fees ran to $7 million, Greenberg's were no doubt of the same order of magnitude. The judge referred to the ferocity of the litigation, so that may have been a factor, too. Greenberg was financially penalized far beyond the damages award.
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#6407 Post by Don Cornwell » April 1st, 2014, 6:52 am

John Morris wrote:Tom and Nigel -- I think the ruling is consistent with the law, and with common sense. The law is that punitive damages can't be disproportionate to the harm. The monetary harm wasn't that great here and no one was physically hurt, nor was the victim particularly vulnerable. I think it's that last point that prompted the judge's language about the parties. On the scale of moral outrages, I think this is pretty small. It's not like ignoring safety defects that kill people, deliberately inflicting physical harm or victimizing poor people in an investment scam.

On top of that, Greenberg offered to settle for a full refund.

It's worth bearing in mind, too, that if Koch's legal fees ran to $7 million, Greenberg's were no doubt of the same order of magnitude. The judge referred to the ferocity of the litigation, so that may have been a factor, too. Greenberg was financially penalized far beyond the damages award.
John:

Koch's official request was $7.8 million in fees, and they indicated to the court that they excluded half of the fees prior to the Zachys settlement. So I think the Koch figure was more likely about $8.5 million. In the Koch fee motion they quoted Greenberg and his lawyers several times saying he spent more than $5 million on attorney's fees.
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#6408 Post by Glenn Gallup » April 1st, 2014, 8:11 am

Actually I'm thinking you could boil the judges prose down to two words. Caveat Emptor.
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#6409 Post by John Morris » April 1st, 2014, 8:33 am

That's not an accurate characterization at all, Glenn. The judge upheld the liability verdict against Greenberg even though Koch didn't bother to inspect the bottles, which showed obvious indicia that they were fake, and he upheld a sizable punitive damage award. He just said that the punitive award couldn't be so out of proportion to the economic loss (the difference between the price and the true value of the fakes), and he declined to give attorneys fees to Koch where it was obvious that Koch was waging a larger war and could easily have settled this case for his economic losses.
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#6410 Post by Bruce Leiser_owitz » April 1st, 2014, 8:37 am

John Morris wrote:Tom and Nigel -- I think the ruling is consistent with the law, and with common sense. The law is that punitive damages can't be disproportionate to the harm. The monetary harm wasn't that great here and no one was physically hurt, nor was the victim particularly vulnerable. I think it's that last point that prompted the judge's language about the parties. On the scale of moral outrages, I think this is pretty small. It's not like ignoring safety defects that kill people, deliberately inflicting physical harm or victimizing poor people in an investment scam.
I haven't read the opinion, but what Don quoted certainly seems consistent with the US Supreme Court's opinions in this area. A certain US car manufacturer would have had much greater exposure to punitive damages for faulty ignition switches, putting aside issues such as the effect of bankruptcy and statutes of limitation.

Koch certainly has the resources, energy, and motivation to pursue claims related to sales of fraudulent wine, so this ruling may not affect that much his own litigation decisions. But the limitation of punitive damages and/or attorneys fees certainly could inhibit other people from pursuing similar claims.

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#6411 Post by Art K u o » April 1st, 2014, 9:51 am

Bruce Leiser_owitz wrote:
John Morris wrote:Tom and Nigel -- I think the ruling is consistent with the law, and with common sense. The law is that punitive damages can't be disproportionate to the harm. The monetary harm wasn't that great here and no one was physically hurt, nor was the victim particularly vulnerable. I think it's that last point that prompted the judge's language about the parties. On the scale of moral outrages, I think this is pretty small. It's not like ignoring safety defects that kill people, deliberately inflicting physical harm or victimizing poor people in an investment scam.
I haven't read the opinion, but what Don quoted certainly seems consistent with the US Supreme Court's opinions in this area. A certain US car manufacturer would have had much greater exposure to punitive damages for faulty ignition switches, putting aside issues such as the effect of bankruptcy and statutes of limitation.

Koch certainly has the resources, energy, and motivation to pursue claims related to sales of fraudulent wine, so this ruling may not affect that much his own litigation decisions. But the limitation of punitive damages and/or attorneys fees certainly could inhibit other people from pursuing similar claims.

Bruce
now the fraudsters are put on notice! don't defraud the rich guy, go after the middle class who might have saved up a year to get a bottle of wine he only dreamed about tasting, and when he found out he bought a fake bottle, can't afford to sue.....
the line separating being obnoxious and sarcatic is not as thick as you think... especially on the internet.

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#6412 Post by SteveG » April 1st, 2014, 10:22 am

Art K u o wrote:
now the fraudsters are put on notice! don't defraud the rich guy, go after the middle class who might have saved up a year to get a bottle of wine he only dreamed about tasting, and when he found out he bought a fake bottle, can't afford to sue.....
I read Don's comments as that the judge allowed significant punitive damages which for most victims would be quite adequate, reducing the award specifically because the harm to Mr. Koch on a personal financial basis was insignificant. Further, he chose not to allow attorney fees because they were driven more by desire to prosecute than to recover losses. To me this sounds like someone of more modest means would be treated more generously as long as their efforts were directed at recovery rather than punishment.

Just my own viewpoint, of course.
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#6413 Post by Art K u o » April 1st, 2014, 2:08 pm

so you buy a $8,000 bottle of wine and find out it's a fake.... you are now suing and you may get $8000 back in compensatory damage, another $16,000 in punitive damages, and let's say you also get the $24,000 of statutory damages, you're looking at a $50k judgement.... how much would you spend on attorney fees, and how long would it take to get to the judgement?
the line separating being obnoxious and sarcatic is not as thick as you think... especially on the internet.

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#6414 Post by Bruce Leiser_owitz » April 1st, 2014, 2:09 pm

SteveG wrote:
Art K u o wrote:
now the fraudsters are put on notice! don't defraud the rich guy, go after the middle class who might have saved up a year to get a bottle of wine he only dreamed about tasting, and when he found out he bought a fake bottle, can't afford to sue.....
I read Don's comments as that the judge allowed significant punitive damages which for most victims would be quite adequate, reducing the award specifically because the harm to Mr. Koch on a personal financial basis was insignificant. Further, he chose not to allow attorney fees because they were driven more by desire to prosecute than to recover losses. To me this sounds like someone of more modest means would be treated more generously as long as their efforts were directed at recovery rather than punishment.

Just my own viewpoint, of course.
+1.

I don't know Mr. Greenberg at all, but I suspect that having gone through this litigation, spending all the time and money he's spent, and ending up with a still significant adverse judgment and the effect on his reputation, he's probably not very eager to repeat the experience.

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#6415 Post by Peter Kleban » April 1st, 2014, 2:28 pm

John Morris wrote:Tom and Nigel -- I think the ruling is consistent with the law, and with common sense. The law is that punitive damages can't be disproportionate to the harm. The monetary harm wasn't that great here and no one was physically hurt, nor was the victim particularly vulnerable. I think it's that last point that prompted the judge's language about the parties. On the scale of moral outrages, I think this is pretty small. It's not like ignoring safety defects that kill people, deliberately inflicting physical harm or victimizing poor people in an investment scam.

On top of that, Greenberg offered to settle for a full refund.

It's worth bearing in mind, too, that if Koch's legal fees ran to $7 million, Greenberg's were no doubt of the same order of magnitude. The judge referred to the ferocity of the litigation, so that may have been a factor, too. Greenberg was financially penalized far beyond the damages award.

IANAL but this makes perfect sense to me, and agrees with the Judge's words quoted by Don. What he's saying is that the amount Koch was asking for is out of line with the damage and type of damage done to him, and the fact that he refused to settle for a refund. If you want to spend $7 million to litigate a far lesser monetary harm, that's your business, but why should you be recompensed for that? Not that I like Greenberg, mind you, but these decisions should be made objectively and that seems to be the case here.
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#6416 Post by Don Cornwell » April 1st, 2014, 2:39 pm

SteveG wrote:
Art K u o wrote:
now the fraudsters are put on notice! don't defraud the rich guy, go after the middle class who might have saved up a year to get a bottle of wine he only dreamed about tasting, and when he found out he bought a fake bottle, can't afford to sue.....
I read Don's comments as that the judge allowed significant punitive damages which for most victims would be quite adequate, reducing the award specifically because the harm to Mr. Koch on a personal financial basis was insignificant. Further, he chose not to allow attorney fees because they were driven more by desire to prosecute than to recover losses. To me this sounds like someone of more modest means would be treated more generously as long as their efforts were directed at recovery rather than punishment.

Just my own viewpoint, of course.
Steve:

I think your reading of the Judge's comments is quite perceptive. While I quoted all four of the factors he cited, I thought the implication was pretty clear that if this had been a person of more limited means bringing a claim under New York General Business Law Sections 349 and 350 he would have been inclined to grant attorney's fees. He also seemed to be saying something else -- that where the recovery is only $211,000 plus $24,000 in statutory damages, it would be difficult to justify awarding several million dollars in attorney's fees.
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#6417 Post by David Glasser » April 1st, 2014, 3:37 pm

Art K u o wrote:so you buy a $8,000 bottle of wine and find out it's a fake.... you are now suing and you may get $8000 back in compensatory damage, another $16,000 in punitive damages, and let's say you also get the $24,000 of statutory damages, you're looking at a $50k judgement.... how much would you spend on attorney fees, and how long would it take to get to the judgement?
If we want to compare apples to apples, let's start with the same facts as in Koch vs Greenberg. Greenberg offered Koch a full refund. So you buy an $8,000 bottle and find out it's fake. Say you ask for your money back and you get it. No lawsuit. No attorney's fees.

OTOH, if you are refused a refund and are forced to sue, and win, then I bet the judge awards you the attorney's fees in addition to punitive damages.

OTOOH, if you are offered a refund and decide to sue anyway, because you want to publicly expose the fraudster and teach him a lesson, that's your decision and the judge may well decide to let you pay for the privilege of doing so by allowing you to pay your own attorney fees, even if you win.

At least, that's the way I read the ruling.

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#6418 Post by Mark Golodetz » April 1st, 2014, 9:26 pm

Peter Kleban wrote:
John Morris wrote:Tom and Nigel -- I think the ruling is consistent with the law, and with common sense. The law is that punitive damages can't be disproportionate to the harm. The monetary harm wasn't that great here and no one was physically hurt, nor was the victim particularly vulnerable. I think it's that last point that prompted the judge's language about the parties. On the scale of moral outrages, I think this is pretty small. It's not like ignoring safety defects that kill people, deliberately inflicting physical harm or victimizing poor people in an investment scam.

On top of that, Greenberg offered to settle for a full refund.

It's worth bearing in mind, too, that if Koch's legal fees ran to $7 million, Greenberg's were no doubt of the same order of magnitude. The judge referred to the ferocity of the litigation, so that may have been a factor, too. Greenberg was financially penalized far beyond the damages award.

IANAL but this makes perfect sense to me, and agrees with the Judge's words quoted by Don. What he's saying is that the amount Koch was asking for is out of line with the damage and type of damage done to him, and the fact that he refused to settle for a refund. If you want to spend $7 million to litigate a far lesser monetary harm, that's your business, but why should you be recompensed for that? Not that I like Greenberg, mind you, but these decisions should be made objectively and that seems to be the case here.
The judge seems to have taken a common sense view of this, although I see nothing to stop Koch appealing again. I assume that his net worth is several times that of Greenberg, and he may decide that he has nothing to lose taking another pass at him, and at the same time keep Greenberg in litigation, and paying attorneys for another year. I get the feeling that Koch likes the process.
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#6419 Post by jcoley3 » April 1st, 2014, 10:11 pm

Mark Golodetz wrote:I get the feeling that Koch likes the process.
I am reminded of the phrase "f--k you money" when I think of Koch and his wine lawsuits. I am not sure if that is a legal term or not.
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#6420 Post by Tom Wheltle » April 1st, 2014, 10:38 pm

OK, I'm not a lawyer and I've never played one on TV. I know the boys -- Koch and Greenberg -- each spent more money on legal fees than most of the worlds inhabitants will make in a lifetime, so this can't be seen as a "typical man on the street" case. It still seems like a new legal standard has been established that can be used as precedent against anyone else with a positive net worth -- yes, few and far between these days -- foolish enough to suggest that they were sold illegitimate goods.

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#6421 Post by jcoley3 » April 1st, 2014, 11:05 pm

Tom,

It's a civil case. I fall very much into the IANAL category, but if I were to buy, say, counterfeit jeans in some secondary market that cost me $200 but proved to be garbage, I don't get to run the seller into the ground to the tune of six figures because they did a bad thing. Justice is supposed to have proportions.

You may want to see Greenberg pilloried, beaten and on the hook for all the legal bills, but at the end of the day Koch went out of his way to win what he won. He paid a lot to prove a point, and it may seem sad that someone lacking his wealth would have had to settle for simply being made whole. Koch refused wholeness because he could. He passed on the basic proportions of justice to beat down Greenberg. At least that's how I read it.

It also seems Greenberg had it coming.
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#6422 Post by Walt Hoehler » April 3rd, 2014, 4:17 am

Devil's advocate for a moment.... regarding the thus far, very reasonable views on the merits of paying Koch's legal fees... Did Koch save the government money by setting up a criminal case against Greenberg for them? Can there be a criminal case at this point? Is there value to that?

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#6423 Post by John Morris » April 3rd, 2014, 4:35 am

Walt Hoehler wrote:Devil's advocate for a moment.... regarding the thus far, very reasonable views on the merits of paying Koch's legal fees... Did Koch save the government money by setting up a criminal case against Greenberg for them? Can there be a criminal case at this point? Is there value to that?
In the U.S., the general rule is that each side pays its own fees unless there's a statute authorizing the winner (plaintiff or defendant) to be awarded fees. The antitrust, racketeering and some whistle-blowing laws have such provisions, as did the New York law on which Koch relied. But so far as I know, the fact that your civil suit might help the government isn't a factor except in whistle-blower cases where the government was the victim. So I don't think the hypothetical possibility of a criminal case against Greenberg could be grounds to charge Greenberg for Koch's lawyers.
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#6424 Post by Don Cornwell » April 3rd, 2014, 6:53 am

John Morris wrote:
Walt Hoehler wrote:Devil's advocate for a moment.... regarding the thus far, very reasonable views on the merits of paying Koch's legal fees... Did Koch save the government money by setting up a criminal case against Greenberg for them? Can there be a criminal case at this point? Is there value to that?
In the U.S., the general rule is that each side pays its own fees unless there's a statute authorizing the winner (plaintiff or defendant) to be awarded fees. The antitrust, racketeering and some whistle-blowing laws have such provisions, as did the New York law on which Koch relied. But so far as I know, the fact that your civil suit might help the government isn't a factor except in whistle-blower cases where the government was the victim. So I don't think the hypothetical possibility of a criminal case against Greenberg could be grounds to charge Greenberg for Koch's lawyers.
The other thing I can add is that Koch's claims against Greenberg couldn't give rise to any criminal prosecution against Greenberg at this point unless it would be for perjury during the trial. The underlying sales in the case all occurred in October 2005 -- those are well beyond the mail and wire fraud statute of limitations at this point.
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#6425 Post by Don Cornwell » April 3rd, 2014, 6:56 pm

The New York Court of Appeals (which is New York's highest level appellate court) today unanimously affirmed the decision of the New York Appellate Division rejecting the latest appeal by John Kapon and Acker Merrall to avoid having the depositions of John Kapon and Justin Christophe taken in New York for use in the Koch v. Kurniawan litigation in California. The opinion clarifies New York law with respect to civil discovery and holds that in order for an out of state litigant to take discovery of a resident of New York, the party seeking the deposition must only making a minimal demonstration that the testimony of the New York resident is relevant to the issues to be tried and that the burden rests upon the New York resident seeking to avoid the discovery to demonstrate that the discovery sought is irrelevant. As the Court stated:
  • "An application to quash a subpoena should be granted [o]nly where the futility of the process to uncover anything legitimate is inevitable or obvious or where the information sought is 'utterly irrelevant to any proper inquiry'" (Anheuser-Busch, Inc. v Abrams, 71 NY2d 327, 331-332 [1988], citing Matter of Edge Ho Holding Corp., 256 NY 374, 382 [1931] and La Belle Creole Intl., S.A. v Attorney-General of State of N.Y., 10 NY2d 192, 196 [1961], quoting Matter of Dairymen's League Coop. Assn. v Murtagh, 274 AD2d 591, 595 [1948], affd 299 NY 534 [1949]). It is the one moving to vacate the subpoena who has the burden of establishing that the subpoena should be vacated under such circumstances (see Matter of Dairyman's League Coop. Assn., 274 AD2d at 595-596; see also Ledonne v Orsid Realty Corp., 83 AD3d 598, 599 [1st Dept 2011])."
The Court then went on to explain that Koch had clearly demonstrated a proper basis to take the depositions of John Kapon and Justin Christoph and that Acker and Kapon had failed to demonstrate any basis to prevent the taking of their depositions:
  • The subpoenas here plainly satisfy the notice requirement. They not only included the date, time and location of the depositions, but also affixed copies of the amended complaint in the California action detailing the relationship between AMC and Kurniawan. The notice served the function intended by the Legislature: it gave petitioners sufficient information to challenge the subpoenas on a motion to quash. Once Koch met that minimal obligation, it was then petitioners' burden to establish that they were entitled to prevail on the motion to quash. The Appellate Division applied the correct standard when it held that the trial court did not abuse its discretion in denying petitioners' motion on the ground that they failed to meet their burden of establishing that their deposition testimonies were irrelevant to the California action.
In a footnote, the Court cautioned that: "This is not to say that a pleading will always provide sufficient notice, or that the only way the subpoenaing party can comply with the 'circumstances or reasons' notice requirement is to affix a copy of the pleadings to the subpoena."

For just over two years, John Kapon, Justin Christophe and Acker Merrall have done everything in their power to prevent the depositions of Messrs. Kapon and Christophe from being taken, including filing two levels of appeals to the New York Court of Appeals. It has likely cost Acker well over a hundred thousand dollars to in effect delay the depositions being taken for two years. Mr. Koch will finally get Mr. Kapon and Mr. Christoph in the witness chair. Nevertheless, I would wager that, one way or the other, Mr. Kapon and Mr. Christophe will either refuse to answer questions invoking their 5th amendment rights against self-incrimination (as Eric Greenberg did last month when his deposition was taken in the Koch v. Royal Wine Merchants lawsuit) or Kapon and Christophe will refuse to answer legitimate questions on some other grounds, resulting in yet more court proceedings to force them to respond.
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#6426 Post by John Danza » April 5th, 2014, 6:56 am

Don Cornwell wrote: Nevertheless, I would wager that, one way or the other, Mr. Kapon and Mr. Christophe will either refuse to answer questions invoking their 5th amendment rights against self-incrimination (as Eric Greenberg did last month when his deposition was taken in the Koch v. Royal Wine Merchants lawsuit) or Kapon and Christophe will refuse to answer legitimate questions on some other grounds, resulting in yet more court proceedings to force them to respond.
How can they be forced to respond Don? Their 5th Amendment rights are absolute. Can they be given a civil court form of immunity where they can't be sued by anyone for their actions? If not, I would guess they'll invoke on everything beyond "state your name".
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#6427 Post by Don Cornwell » April 5th, 2014, 10:22 am

John Danza wrote:
Don Cornwell wrote: Nevertheless, I would wager that, one way or the other, Mr. Kapon and Mr. Christophe will either refuse to answer questions invoking their 5th amendment rights against self-incrimination (as Eric Greenberg did last month when his deposition was taken in the Koch v. Royal Wine Merchants lawsuit) or Kapon and Christophe will refuse to answer legitimate questions on some other grounds, resulting in yet more court proceedings to force them to respond.
How can they be forced to respond Don? Their 5th Amendment rights are absolute. Can they be given a civil court form of immunity where they can't be sued by anyone for their actions? If not, I would guess they'll invoke on everything beyond "state your name".
John:

That's not quite accurate. There are some limits. Some of the criminal lawyers or ex-criminal lawyers can speak better to limits on the right to invoke the Fifth Amendment in civil proceedings than I can, but, for example, one can't refuse to answer questions about events that are sufficiently far in the past that the applicable statutes of limitation have expired. That probably means that Mr. Koch could probably bring a motion to force Eric Greenberg to answer questions about his dealings with Royal Wine Merchants from 1998 to 2003 if he wanted to (and the Judge was willing to put up with yet another delay of the trial that such a motion would likely entail.) Mr. Kapon could probably be forced to answer questions about the sales of wine to Koch in 2004 and 2005 that are alleged in the Koch v. Kurniawan complaint again because all of the potential criminal statutes as to that conduct by Mr. Kapon are now passed. My original point was that if people like Greenberg and Kapon are willing to spend endless amounts of money by simply refusing to comply they can usually buy a lot of delay, and raise the economic price of pursuing them, but they can't really stop a determined adversary. And so far, Mr. Koch has definitely fit that description.
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#6428 Post by Paul Jaouen » April 5th, 2014, 12:14 pm

Don, just a very minor point. I don't think Justin has an e at the end of his name.
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#6429 Post by R. Frankel » April 5th, 2014, 2:13 pm

Given how active this legal activity is right now, and how smeared Acker's name is, any comments on the effect on today's Acker auction in NY? As a casual web observer, seems like low bidding competition, lots of pricing at/below the lower end of ranges, and lots of no-bid lots. Who is hearing about people staying away because of these ongoing legal battles (and the constant reminders of the fake wines' existence)?
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#6430 Post by David Glasser » April 5th, 2014, 2:17 pm

I looked elsewhere to send my wines off to auction specifically because of Acker's involvement with Rudy. But I think most buyers and sellers are unaware.

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#6431 Post by John Danza » April 5th, 2014, 4:24 pm

Don Cornwell wrote:
John Danza wrote:
Don Cornwell wrote: Nevertheless, I would wager that, one way or the other, Mr. Kapon and Mr. Christophe will either refuse to answer questions invoking their 5th amendment rights against self-incrimination (as Eric Greenberg did last month when his deposition was taken in the Koch v. Royal Wine Merchants lawsuit) or Kapon and Christophe will refuse to answer legitimate questions on some other grounds, resulting in yet more court proceedings to force them to respond.
How can they be forced to respond Don? Their 5th Amendment rights are absolute. Can they be given a civil court form of immunity where they can't be sued by anyone for their actions? If not, I would guess they'll invoke on everything beyond "state your name".
John:

That's not quite accurate. There are some limits. Some of the criminal lawyers or ex-criminal lawyers can speak better to limits on the right to invoke the Fifth Amendment in civil proceedings than I can, but, for example, one can't refuse to answer questions about events that are sufficiently far in the past that the applicable statutes of limitation have expired. That probably means that Mr. Koch could probably bring a motion to force Eric Greenberg to answer questions about his dealings with Royal Wine Merchants from 1998 to 2003 if he wanted to (and the Judge was willing to put up with yet another delay of the trial that such a motion would likely entail.) Mr. Kapon could probably be forced to answer questions about the sales of wine to Koch in 2004 and 2005 that are alleged in the Koch v. Kurniawan complaint again because all of the potential criminal statutes as to that conduct by Mr. Kapon are now passed. My original point was that if people like Greenberg and Kapon are willing to spend endless amounts of money by simply refusing to comply they can usually buy a lot of delay, and raise the economic price of pursuing them, but they can't really stop a determined adversary. And so far, Mr. Koch has definitely fit that description.
In re-reading the Fifth Amendment, I see that it specifies criminal cases. However, if I were someone with millions at stake in a civil suit, I would probably be inclined to push it as a constitutional test and hope the Supremes take it, if it gets that far. I don't see a practical difference between jail time and being forced to testify against yourself and ending up in financial ruin.
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#6432 Post by Don Cornwell » April 9th, 2014, 2:28 pm

NEWS FLASH --- BILL KOCH AND ROYAL WINE MERCHANTS SETTLE LAWSUIT ON COURTHOUSE STEPS

While I have been waiting to hear about the rescheduled trial date, and the Judge's final take on appropriate evidentiary sanctions against Royal Wine Merchants, I was amazed to learn today that the parties have settled the case and it has been dismissed.

Here is the text of an Order signed by the Judge earlier today:


UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 11-81197-CV-HURLEY/HOPKINS

WILLIAM I. KOCH,
Plaintiff,
v.
ROYAL WINE MERCHANTS, LTD.,
Defendant.
_________________________________________/
FINAL JUDGMENT OF DISMISSAL

THIS CAUSE comes before the Court upon the parties’ Stipulated Motion for Dismissal With Prejudice and Entry of Stipulated Injunction [ECF No. 220]. The parties have informed the Court that they have entered into a settlement agreement providing for the complete disposition of this case. In addition to the terms of their settlement agreement, the parties have agreed to the following conditions:

(a) Neither Royal Wine Merchants, Ltd. nor Jeffrey Sokolin will ever, directly or indirectly, sell, cause to be sold, offer for sale, consign, or distribute “Certain Fine and Rare Wine,” meaning any bottle, magnum, imperial, or other format of wine that (1) is or purports to be of a 1975 or earlier vintage, or (2) is priced for sale (a) above $2,500 for any bottle, (b) above $5,000 for any magnum, (c) above $10,000 for any double-magnum, or (d) above a proportionate price limit for any format larger than double-magnum;

(b) Should Royal Wine Merchants, Ltd. be dissolved and discontinue operations for any reason, Jeffrey Sokolin may, consistent with this order, subsequently become employed by a company the business of which includes the sale or consignment of Certain Fine and Rare Wine, provided that, in connection with such employment, Mr. Sokolin may not acquire (a) any controlling interest in such company, or (b) any profit participation, equity or other interest in such company exceeding 15%.

The parties now move, pursuant to Federal Rule of Civil Procedure 41(a), for a court order dismissing Plaintiff’s claims with prejudice. Because their motion is “on terms that the [C]ourt considers proper,” Fed. R. Civ. P. 41(a)(2),

It is hereby
ORDERED and ADJUDGED that:
1. The parties’ Stipulated Motion for Dismissal With Prejudice and Entry of Stipulated Injunction [ECF No. 220] is GRANTED.
2. All Plaintiff’s claims against Defendant are DISMISSED WITH PREJUDICE.
3. The Court SHALL RETAIN JURISDICTION to enforce any and all of the conditions of this order, as well as the terms of the parties’ settlement agreement.
4. The Clerk is directed to mark this case CLOSED.

DONE and SIGNED in Chambers at West Palm Beach, Florida this 9th day of April, 2014.
Daniel T. K. Hurley United States District Judge

______________________________________
Now, is that an unexpeected ending or what? At this point I have no idea what Royal paid Mr. Koch to get out of the lawsuit, but I hope that it covered 100% of his attorney's fees and a lot more. it is absolutely amazing that Royal Wine Merchants just agreed to exit the Fine and Rare Wine business. Thank you Mr. Koch! I wonder if John Kapon is hearing drumbeats?......
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#6433 Post by Matt Neel » April 9th, 2014, 2:47 pm

Don Cornwell wrote:(a) Neither Royal Wine Merchants, Ltd. nor Jeffrey Sokolin will ever, directly or indirectly, sell, cause to be sold, offer for sale, consign, or distribute “Certain Fine and Rare Wine,” meaning any bottle, magnum, imperial, or other format of wine that (1) is or purports to be of a 1975 or earlier vintage[.]
Having dug through their inventory a fair bit at the South William Street shop, I find it hard to imagine them agreeing to this -- they knew the spoliation sanctions hammer was going to come down, and hard... What have they done with all their old, old Vogüé Musignys and the like? Their website, at least, is in compliance with the order.
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#6434 Post by gene keenan » April 9th, 2014, 3:48 pm

Don Cornwell wrote:NEWS FLASH --- BILL KOCH AND ROYAL WINE MERCHANTS SETTLE LAWSUIT ON COURTHOUSE STEPS

While I have been waiting to hear about the rescheduled trial date, and the Judge's final take on appropriate evidentiary sanctions against Royal Wine Merchants, I was amazed to learn today that the parties have settled the case and it has been dismissed.

Here is the text of an Order signed by the Judge earlier today:


UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 11-81197-CV-HURLEY/HOPKINS

WILLIAM I. KOCH,
Plaintiff,
v.
ROYAL WINE MERCHANTS, LTD.,
Defendant.
_________________________________________/
FINAL JUDGMENT OF DISMISSAL

THIS CAUSE comes before the Court upon the parties’ Stipulated Motion for Dismissal With Prejudice and Entry of Stipulated Injunction [ECF No. 220]. The parties have informed the Court that they have entered into a settlement agreement providing for the complete disposition of this case. In addition to the terms of their settlement agreement, the parties have agreed to the following conditions:

(a) Neither Royal Wine Merchants, Ltd. nor Jeffrey Sokolin will ever, directly or indirectly, sell, cause to be sold, offer for sale, consign, or distribute “Certain Fine and Rare Wine,” meaning any bottle, magnum, imperial, or other format of wine that (1) is or purports to be of a 1975 or earlier vintage, or (2) is priced for sale (a) above $2,500 for any bottle, (b) above $5,000 for any magnum, (c) above $10,000 for any double-magnum, or (d) above a proportionate price limit for any format larger than double-magnum;

(b) Should Royal Wine Merchants, Ltd. be dissolved and discontinue operations for any reason, Jeffrey Sokolin may, consistent with this order, subsequently become employed by a company the business of which includes the sale or consignment of Certain Fine and Rare Wine, provided that, in connection with such employment, Mr. Sokolin may not acquire (a) any controlling interest in such company, or (b) any profit participation, equity or other interest in such company exceeding 15%.

The parties now move, pursuant to Federal Rule of Civil Procedure 41(a), for a court order dismissing Plaintiff’s claims with prejudice. Because their motion is “on terms that the [C]ourt considers proper,” Fed. R. Civ. P. 41(a)(2),

It is hereby
ORDERED and ADJUDGED that:
1. The parties’ Stipulated Motion for Dismissal With Prejudice and Entry of Stipulated Injunction [ECF No. 220] is GRANTED.
2. All Plaintiff’s claims against Defendant are DISMISSED WITH PREJUDICE.
3. The Court SHALL RETAIN JURISDICTION to enforce any and all of the conditions of this order, as well as the terms of the parties’ settlement agreement.
4. The Clerk is directed to mark this case CLOSED.

DONE and SIGNED in Chambers at West Palm Beach, Florida this 9th day of April, 2014.
Daniel T. K. Hurley United States District Judge

______________________________________
Now, is that an unexpeected ending or what? At this point I have no idea what Royal paid Mr. Koch to get out of the lawsuit, but I hope that it covered 100% of his attorney's fees and a lot more. it is absolutely amazing that Royal Wine Merchants just agreed to exit the Fine and Rare Wine business. Thank you Mr. Koch! I wonder if John Kapon is hearing drumbeats?......
I am not a lawyer but to me that reads they won't sell wines made before 1975. That does not mean an exit from the fine wine business IMO. Plenty of "fine wines" to be sold in the years following 1975.
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#6435 Post by C 0 R E Y M. » April 9th, 2014, 3:55 pm

Matt Neel wrote:What have they done with all their old, old Vogüé Musignys and the like?
Maybe they changed the vintage labels back to post-1975?
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#6436 Post by Andrew Kaufman » April 10th, 2014, 1:14 pm

Peter Kleban wrote:

IANAL but this makes perfect sense to me, and agrees with the Judge's words quoted by Don. What he's saying is that the amount Koch was asking for is out of line with the damage and type of damage done to him, and the fact that he refused to settle for a refund. If you want to spend $7 million to litigate a far lesser monetary harm, that's your business, but why should you be recompensed for that? Not that I like Greenberg, mind you, but these decisions should be made objectively and that seems to be the case here.
On the other hand punitive damages are designed to deter further misadventures by the wrongdoer. If Greenberg is that wealthy then it is debatable that it would tend to deter such further potential misconduct.

The Judge really should not looking at litigation costs as that really does not play into the punitive damage formula.

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#6437 Post by Mark Golodetz » April 18th, 2014, 8:45 pm

Andrew Kaufman wrote:
Peter Kleban wrote:

IANAL but this makes perfect sense to me, and agrees with the Judge's words quoted by Don. What he's saying is that the amount Koch was asking for is out of line with the damage and type of damage done to him, and the fact that he refused to settle for a refund. If you want to spend $7 million to litigate a far lesser monetary harm, that's your business, but why should you be recompensed for that? Not that I like Greenberg, mind you, but these decisions should be made objectively and that seems to be the case here.
On the other hand punitive damages are designed to deter further misadventures by the wrongdoer. If Greenberg is that wealthy then it is debatable that it would tend to deter such further potential misconduct.

The Judge really should not looking at litigation costs as that really does not play into the punitive damage formula.
The hit to Greenberg's reputation has been every bit as significant as the hit to his pocket. While the appeal has lessened the monetary damage, his reputation now for a certain type of dishonesty has remained unchanged. I think it is unlikely he will play games again; perhaps Don can answer, but I suspect if he played more games, it becomes a pattern and might it be subject to criminal charges?
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#6438 Post by Don Cornwell » April 21st, 2014, 7:41 pm

ANTIQUE WINE COMPANY AND ITS OWNER SUED FOR SELLING COUNTERFEIT WINES

Georgia wine collector Julian LeCraw has filed a lawsuit against Antique Wine Company, and its related entities, and its owner Stephen Williams, in Federal District Court in Atlanta. Mr. LeCraw alleges multiple claims including RICO violations against Antique Wine Company and the other defendants stemming from the sale of counterfeit wine and the alleged failure to pay Mr. LeCraw for more than $3 million worth of wine he consigned to the defendants for sale.

LeCraw alleges that in 2006 and 2007 he purchased 13 bottles of rare wine from Antique Wine Company, including a bottle of 1787 Chateau Y'Quem which sold for over $100,000 a bottle, allegedly making it the most expensive bottle of white wine ever sold. According to Mr. LeCraw all of the bottles he purchased were counterfeit and the defendants have refused to refund his money as well as refusing to pay him for the wines he consigned to defendants.

Mr. LeCraw's counterfeiting expert is Maureen Downey.

I'll have more to say once I have a chance to examine the complaint in greater detail. In the meantime, here is a link to a news release on the lawsuit from Courthouse News.
http://www.courthousenews.com/2014/04/21/67197.htm
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#6439 Post by billnanson » April 22nd, 2014, 12:56 am

Long time in the works I think...
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#6440 Post by John O' » April 22nd, 2014, 2:36 am

gene keenan wrote:
Don Cornwell wrote:NEWS FLASH --- BILL KOCH AND ROYAL WINE MERCHANTS SETTLE LAWSUIT ON COURTHOUSE STEPS

While I have been waiting to hear about the rescheduled trial date, and the Judge's final take on appropriate evidentiary sanctions against Royal Wine Merchants, I was amazed to learn today that the parties have settled the case and it has been dismissed.

Here is the text of an Order signed by the Judge earlier today:


UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 11-81197-CV-HURLEY/HOPKINS

WILLIAM I. KOCH,
Plaintiff,
v.
ROYAL WINE MERCHANTS, LTD.,
Defendant.
_________________________________________/
FINAL JUDGMENT OF DISMISSAL

THIS CAUSE comes before the Court upon the parties’ Stipulated Motion for Dismissal With Prejudice and Entry of Stipulated Injunction [ECF No. 220]. The parties have informed the Court that they have entered into a settlement agreement providing for the complete disposition of this case. In addition to the terms of their settlement agreement, the parties have agreed to the following conditions:

(a) Neither Royal Wine Merchants, Ltd. nor Jeffrey Sokolin will ever, directly or indirectly, sell, cause to be sold, offer for sale, consign, or distribute “Certain Fine and Rare Wine,” meaning any bottle, magnum, imperial, or other format of wine that (1) is or purports to be of a 1975 or earlier vintage, or (2) is priced for sale (a) above $2,500 for any bottle, (b) above $5,000 for any magnum, (c) above $10,000 for any double-magnum, or (d) above a proportionate price limit for any format larger than double-magnum;

(b) Should Royal Wine Merchants, Ltd. be dissolved and discontinue operations for any reason, Jeffrey Sokolin may, consistent with this order, subsequently become employed by a company the business of which includes the sale or consignment of Certain Fine and Rare Wine, provided that, in connection with such employment, Mr. Sokolin may not acquire (a) any controlling interest in such company, or (b) any profit participation, equity or other interest in such company exceeding 15%.

The parties now move, pursuant to Federal Rule of Civil Procedure 41(a), for a court order dismissing Plaintiff’s claims with prejudice. Because their motion is “on terms that the [C]ourt considers proper,” Fed. R. Civ. P. 41(a)(2),

It is hereby
ORDERED and ADJUDGED that:
1. The parties’ Stipulated Motion for Dismissal With Prejudice and Entry of Stipulated Injunction [ECF No. 220] is GRANTED.
2. All Plaintiff’s claims against Defendant are DISMISSED WITH PREJUDICE.
3. The Court SHALL RETAIN JURISDICTION to enforce any and all of the conditions of this order, as well as the terms of the parties’ settlement agreement.
4. The Clerk is directed to mark this case CLOSED.

DONE and SIGNED in Chambers at West Palm Beach, Florida this 9th day of April, 2014.
Daniel T. K. Hurley United States District Judge

______________________________________
Now, is that an unexpeected ending or what? At this point I have no idea what Royal paid Mr. Koch to get out of the lawsuit, but I hope that it covered 100% of his attorney's fees and a lot more. it is absolutely amazing that Royal Wine Merchants just agreed to exit the Fine and Rare Wine business. Thank you Mr. Koch! I wonder if John Kapon is hearing drumbeats?......
I am not a lawyer but to me that reads they won't sell wines made before 1975. That does not mean an exit from the fine wine business IMO. Plenty of "fine wines" to be sold in the years following 1975.
Gene
They used the word "or", not the word "and", so it's both. Nothing before 1975 and nothing over the prices indicated.
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#6441 Post by cjsavino » April 22nd, 2014, 8:59 am

Atlanta Wine Collector Accuses London Merchant of Selling Fakes; Sues for $25 Million

http://www.winespectator.com/webfeature/show/id/49872

Another collector with money that is quite upset.
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#6442 Post by Art K u o » April 23rd, 2014, 6:23 am

cjsavino wrote:Atlanta Wine Collector Accuses London Merchant of Selling Fakes; Sues for $25 Million

http://www.winespectator.com/webfeature/show/id/49872

Another collector with money that is quite upset.
well... just my two cents but: 1. how many people can afford to sue? and 2. would media really pick up if someone tried to sue over one fake $500 bottle?

whatever their intentions, i'm glad we have these folks bringing publicity to this issue.
the line separating being obnoxious and sarcatic is not as thick as you think... especially on the internet.

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#6443 Post by Bruce Leiser_owitz » April 23rd, 2014, 8:25 am

cjsavino wrote:Atlanta Wine Collector Accuses London Merchant of Selling Fakes; Sues for $25 Million

http://www.winespectator.com/webfeature/show/id/49872

Another collector with money that is quite upset.
As you can see from the comments, one of the questions is due diligence by buyers of extremely rare/old/expensive wines. Most of us don't play in this world, but assuming you have the $$ to buy these bottles, what sort of due diligence would/should you do? Esp. now that it's clear that this segment of the wine market has a systemic issue with fake or questionable bottles......

Bruce
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#6444 Post by Glenn Gallup » April 23rd, 2014, 9:44 am

I wonder how many more potential lawsuits there are lurking in the bushes.
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#6445 Post by Don Cornwell » April 23rd, 2014, 1:15 pm

Glenn Gallup wrote:I wonder how many more potential lawsuits there are lurking in the bushes.
Glenn:

Frankly, I've been absolutely amazed that there haven't been more lawsuits filed. Selling counterfeits isn't limited to Rudy Kurniawan, Hardy Rodenstock, Eric Greenberg or the frequently mentioned resellers.

I suspect part of the reason we don't hear about more lawsuits is that the sellers offer to refund the money rather than be suied and pay far more in attorney's fees, etc. For example, its well known that Acker refunded a lot of people's money when they claimed they were sold counterfeits even well after the "Acker guarantee" expired.

But one of the things I learned from dealing with the Rudy Kurniawan case is that a lot of the victims are quite concerned about having their names disclosed as victims of a counterfeiter. They don't want people to know that they bought in big time on offers of old and rare wine that they should have known in the first instance were too good to be true. I know of some victims who have refused to cooperate with the government in terms of the Kurniawan prosecution and sentencing. That's a bit of a concern for me at the moment given the delay in Rudy's sentencing.
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#6446 Post by KeithKW » April 23rd, 2014, 1:55 pm

For those who are interested, Jancis Robinson has posted the entire 50+page complaint:
http://www.jancisrobinson.com/files/pdf ... _17_14.pdf
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#6447 Post by KeithKW » April 23rd, 2014, 2:34 pm

The filing is quite a read, and beyond damning, in its allegatoins of deliberate fraud on the part of AWC as well as their refusal to acknowledge Chai Consulting's determination that these were in fact counterfeit bottles, resulting in flying the bottles to Bordeaux for authentication by the Chateaus. Not to mention teh filing's allegations that AWC took the customer's wine on consignment and refuses ot provide an accounting, nor to provide funds from the sales. WOW
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#6448 Post by Glenn Gallup » April 23rd, 2014, 7:23 pm

Thanks Don. I guess if I was a guy who was smart enough to make a couple of billion instead of a dumb ol hump who made his living making wooden boxes I might not want people to find out I paid big bucks for fake wine from some suede shoe hustler.
I have taken more out of alcohol than alcohol has taken out of me.

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#6449 Post by Cole Kendall » April 24th, 2014, 3:34 am

KeithKW wrote:The filing is quite a read, and beyond damning, in its allegatoins of deliberate fraud on the part of AWC as well as their refusal to acknowledge Chai Consulting's determination that these were in fact counterfeit bottles, resulting in flying the bottles to Bordeaux for authentication by the Chateaus. Not to mention teh filing's allegations that AWC took the customer's wine on consignment and refuses ot provide an accounting, nor to provide funds from the sales. WOW

The complaint is pretty good:

The Directeur des Domaines of Chateau Lafite Rothschild declared all of
the Lafites to be “FAUX, FAUX, FAUX.”

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#6450 Post by Greg Powell » April 24th, 2014, 4:54 am


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