What began as the discovery of fake bottles of wine supposedly owned by Thomas Jefferson turned into a series of successful lawsuits against fraudsters around the world, the creation of new consumer protection law, and the successful criminal conviction of Rudy Kurniawan for perpetrating the largest wine fraud in history.
We represented Bill Koch in pursuing his quest to uncover fraud and hold the fraudsters accountable. We brought suits against Hardy Rodenstock, Rudy Kurniawan, Eric Greenberg, and the auctioneers who facilitated the sales of these counterfeits. We prevailed in each case. We obtained one of the first judgments against Rodenstock, successfully referred Kurniawan to the U.S. Attorney’s Office in the Southern District of New York, and prevailed after a nearly monthlong trial against Greenberg in New York. We also prevailed on numerous appeals, eventually establishing that consumer laws in New York are more robust than previously recognized.
The true challenge came in our New York trial against internet entrepreneur Eric Greenberg, whom Koch sued for fraud, deceptive business practices, and false advertising. Proving fraud in New York requires “clear and convincing evidence” rather than the normal civil standard of “preponderance of the evidence.” And goods bought at auction almost always include an “as is” seller’s disclaimer: a warning that can only be overcome by proving that the seller had some “peculiar knowledge” about the products that it withheld from the purchaser. On top of the legal hurdles, Greenberg’s legal team attempted to trivialize Koch as an “imperious billionaire” who was “above the law” when it comes to disclaimers intended to shield vendors from liability when they unknowingly resell bad goods.
The key to victory was to create a trial theme not about a “billionaire’s hobby” but about fundamental fairness that would appeal to the common consumer: small-print disclaimers should not shield sellers engaged in fraud or aware of issues with their merchandise. We narrowed the case before trial to our strongest core themes, focusing on a series of events that directly involved the defendant. At trial, we comprehensively investigated every witness to add surprise to our cross-examinations; for instance, we proved that a key defense witness had misrepresented his credentials as a college professor, and that a blog post he had written prior to the case directly contradicted his paid expert testimony that authenticity could only be tested by actually tasting wines. We found opportunities to involve the jurors in our investigative narrative, handing jurors bottles of counterfeit wine and a blacklight to recreate the efforts that uncovered the fraud.
When the case began, jurors during voir dire openly expressed skepticism about the Koch brothers. At the end of the trial, they awarded Bill Koch an eight-figure punitive damages verdict, with several jurors physically embracing him.
“[Koch] said the verdict ‘compares favorably’ with his win in the 1992 America’s Cup yacht race.” —New York Post
“Out of sight. Over the moon. We got $12m. Unbelievable.” —The Guardian
“These sour grapes are now worth millions” —New York Daily News
“Billionaire William Koch awarded $12M for phony wine case,” NY Daily News, April 13, 2013.
“Billionaire Bill Koch wins $12 million from wine maven who sold him bogus Bordeaux,” NY Post, April 13, 2013.
“Billionaire Koch Wins $12 Million Verdict in Wine Trial,” Bloomberg, April 12, 2013.
“Billionaire awarded $12 million after buying phony vintage wine,” The Mercury News, April 12, 2013.
“Billionaire William Koch wins $12m in courtroom wine fraud battle,” The Guardian, April 13, 2013.
“2nd Circ. Affirms Koch Win In Fake Wine Case,” Law360, September 30, 2015.
“Billionaire Koch defeats appeal in fake wine case,” Reuters, September 30, 2015.