Koch v. Christie's International PLC
2012 U.S. App. LEXIS 20758
| 2d Cir. | 2012Background
- Koch sues Christie’s for civil RICO conspiracy, aiding and abetting fraud, and New York fraud claims over allegedly counterfeit Jefferson wines promoted by Christie’s starting in 1985.
- Plaintiff purchased several Jefferson wines in 1988, relying on Christie’s representations of authenticity.
- Woods Hole radiocarbon testing in 2000 suggested high probability the wines were not from the claimed era, triggering inquiry notice.
- Koch did not pursue investigation for four years after 2000, and tolling was requested unsuccessfully; the district court held claims time-barred.
- District court dismissed claims as untimely under RICO four-year accrual and NY two-year discovery rules, with no tolling due to lack of reasonable diligence; this court reviews de novo.
- Court affirms dismissal, holding Koch’s RICO and state-law fraud claims were time-barred by October 2000 or by 2005 at latest, and tolling was improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does RICO accrual begin in this case? | Koch argues Rotella or Merck modified accrual timing. | Christie’s argues discovery of injury governs accrual; MPs rely on Rotella. | RICO accrues at injury discovery; not delayed by later facts. |
| Did Merck overrule Rotella for RICO accrual? | Merck requires discovery of scienter to accrue. | Merck does not apply to RICO; Merck governs securities cases only. | Merck does not alter RICO accrual; injury-discovery rule remains intact. |
| Were Koch’s common-law fraud claims timely under NY law? | Knowledge could be inferred from facts; inquiry notice timelines apply. | Discovery rule or inquiry notice triggers bar; Koch failed to investigate. | Common-law fraud claims time-barred by inquiry notice by Oct. 2000 or by 2005; untimely. |
| Can tolling defeat the statute of limitations here? | Fraudulent concealment tolled limitations. | Koch did not exercise reasonable diligence; tolling unwarranted. | Equitable tolling denied; tolling period insufficient to save claims. |
Key Cases Cited
- Rotella v. Wood, 528 U.S. 549 (U.S. 2000) (establishes discovery accrual rule for silent statutes like RICO)
- Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143 (U.S. 1987) (discusses accrual and limitations in complex actions)
- Pearl v. City of Long Beach, 296 F.3d 76 (2d Cir. 2002) (discusses accrual principles in complex claims)
- McLaughlin v. American Tobacco Co., 522 F.3d 215 (2d Cir. 2008) (RICO accrual governed by discovery of injury)
- Dodds v. Cigna Secs., Inc., 12 F.3d 346 (2d Cir. 1993) (storm warnings and inquiry notice framework)
- Lentell v. Merrill Lynch & Co., Inc., 396 F.3d 161 (2d Cir. 2005) (applies inquiry notice in RICO contexts; two-step imputation rule)
- Armstrong v. McAlpin, 699 F.2d 79 (2d Cir. 1983) (early inquiry-notice approach informing NY and RICO standards)
- Erbe v. Lincoln Rochester Trust Co., 144 N.E.2d 78 (N.Y. 1957) (discusses knowledge from which fraud can be inferred; CP law foundations)