When most people get a bad bottle of wine, they send it back. When billionaire collector William Koch concluded the vintage wines he bought at auction were counterfeit, he made a federal case out of it.
Koch purchased what he thought were French wines from the Bordeaux and Burgundy regions, some dating to Napoleonic times and the Belle Epoque, he alleged in a 2007 complaint filed in federal court in New York. He claimed that Eric Greenberg, the founder and chairman emeritus of Scient Corp., who’d consigned the wines, defrauded him.
Koch initially said 36 bottles that he bought at New York- based Zachys Wine and Liquor Inc. in 2004 and 2005 for about $500,000 were counterfeit. Last week, he pared back his claims to 24 bottles for which he spent about $350,000.
While the founder of Oxbow Carbon & Minerals has filed other lawsuits over alleged counterfeit wine sales, the case against Greenberg is the first to go to trial, with opening arguments scheduled for today in Manhattan before a jury of six men and two women.
U.S. District Judge Paul Oetken said yesterday he would allow Greenberg to present evidence that he offered to reimburse Koch for the full cost of the suspect bottles. Koch’s lawyer, John Hueston, then proposed that evidence about the refund be presented during a second phase of the trial when the jury would decide whether to impose punitive damages.
Punitive Damages
Hueston told Oetken that if the judge rejected the idea, his client was also willing to drop the punitive damages claim.
“If punitive damages are out, doesn’t that make the case moot?” Oetken said. He said he understood the premise of Koch’s lawsuit was to seek punitive damages to address that “something egregious happened here.”
“So I’m a little surprised by the offer to drop the punitive damages claim because that, I thought, is what this case is about,” Oetken said. “I’m not going to say it’s a waste of time, but I thought the point was this conduct was so bad it should be punished.”
The judge then asked: “Are you saying Mr. Koch is simply seeking an apology?”