December 2012 - Wine Time

by Richard W. Millar, Jr.

F. Scott Fitzgerald wrote that the rich are different from you and me. Hemingway, according to legend, but not apparently truth, rejoined “Yes because they have more money.” Whatever else, the rich are able to indulge in acquiring rare wine. To some of us, “rare wine” means everything other than Thunderbird or Two-Buck Chuck, but this case is about really, really rare wine: Thomas Jefferson’s wine.
Or maybe not.
First an aside. (Actually it is a digression, but I digress.) I have been to a number of the homes of our earlier presidents, but none was more fascinating than Monticello, Jefferson’s manse in Charlottesville, Virginia. He was one inventive fellow. On his desk he had a gadget he designed that held a number of pens so that when he wrote something all of the other pens also wrote the same thing; he could create multiple copies at the same time—a precursor to carbon paper or, more recently, Xerox. My favorite, which probably says more about me than about the late president, is his small bottle-sized dumbwaiter hidden behind a narrow panel in his dining room fireplace which enabled him to haul up wine from his wine cellar in the basement below.
Jefferson was a book collector with an extensive library and a wine connoisseur who was able to bring back European wines from his travels abroad, unhampered by TSA.
In any event, this story starts with “a well-known wine connoisseur” named Hardy Rodenstock who “claimed to have discovered a cache of wine in a bricked-up wine cellar in Paris,” which bore the initials “Th.J.” He attributed the wine to Jefferson, who had served as Special Minister to France in the late 1700s. Mr. Rodenstock had “a longstanding and symbiotic relationship” with a Mr. Broadbent, a wine consultant for Christie’s, the famed auction house. Christie’s 1985 catalogue “publicized and marketed” a bottle of “1787 Th.J Lafitte” which was later sold in auction for around $156,000. In 1986, Christies sold another bottle for about $56,000, still well above my price range.
In November of 1988, William I. Koch bought a bottle of “1787 Branne Mouton Th.J” from Rodenstock, through intermediaries, for $100,000. He claimed to have based his purchase “on the glowing endorsements of the wines and Rodenstock made by Christie’s.” In December, he bought three more bottles for another $211,000 and change.
Well, of course, you know where this is going. Sure enough, it was later described as “the wine world’s biggest scandal,” as the wine was counterfeit. Apparently things don’t happen quickly in the wine world and the debate over the authenticity of the Rodenstock wine raged, in a very subdued fashion no doubt, for a decade.
In 2000, Mr. Koch did something I never would have thought of: he sent samples to the Woods Hole Oceanographic Institute for radiocarbon testing to determine their age. Somehow Woods Hole doesn’t come to mind as a place for wine testing, but I guess there is a first time for everything.
The Woods Hole Report indicated that there was a 26.5% probability the wine was from between 1680 and 1740 and a 68.9% chance it was from between 1800 and—are you ready?—1960. It estimated that the radiocarbon age was 90 years with “a standard deviation” of 35 years, helpfully qualifying that by stating that age “does not convert directly to a calendar, or chronological, age” and that “the past 350–400 year period is a very difficult one for determining calendar ages.” Mr. Koch interpreted the test results as “neutral,” which is certainly one way of putting it. I think with that kind of waffling, Woods Hole ought to have gone into the presidential polling business, but again I digress.
Mr. Koch sued Rodenstock in 2006 and obtained a default judgment. After he finally tracked down the German engravers who purportedly engraved the “Th.J” initials, he sued Christie’s—you knew this was coming—on March 30, 2010 for, among other claims, RICO violations.
A year later, the district court dismissed his claims based on the running of the statute of limitations. He appealed.
The court of appeals applied a “storm warning” test of accrual and found, like the district court, that Mr. Koch’s claims were time-barred as he should have known that something was amiss when he received the Woods Hole Report; he was then aware that there were also numerous articles questioning the wine’s authenticity or, as they say in the rarified air of the wine business, its provenance.
This case brings to mind the old Paul Masson commercial with Orson Welles profoundly proclaiming that they “would sell no wine before its time.” There may be a time to sell, but the flip side is there is also a time to sue, or as the court of appeals put it:           
“For wine, timing is critical. The same is true of causes of action.”

Richard W. Millar, Jr. is a member of the firm of Millar, Hodges & Bemis in Newport Beach. He can be reached at millar@mhblaw.net.



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