OPINION AND ORDER
Plaintiff William I. Koch brought this diversity action against Defendant Eric Greenberg, asserting claims of fraud and violations of New York’s General Business Law (“N.Y. GBL” or “GBL”). Koch’s claims derive from his purchase of rare French wine consigned by Greenberg through an auction house in October 2005. Koch purchased over 2,600 bottles of wine from Greenberg at the auction, and he subsequently claimed that 24 of those bottles were counterfeit. In March and April 2013, this Court held a three-week jury trial on Koch’s claims. The trial was bifurcated between an initial phase — covering liability and non-punitive damages— and a punitive damages phase. On April 11, 2013, the jury returned a verdict for Koch on all three claims, awarding compensatory damages of $355,811 (the purchase price for the 24 bottles) and an additional $24,000 in statutory damages on one of Koch’s GBL claims ($1000 per bottle). (Dkt. No. 451.) The next day, April 12, 2013, the jury returned a verdict in Koch’s favor in the second phase of the trial, awarding Koch $12 million in punitive damages. (Dkt. No. 452.)
Presently before the Court are Green-berg’s motion for judgment as a matter of law, or, in the alternative, for a new trial (Dkt. No. 495), and Koch’s motion for attorney’s fees, injunctive relief, and interest (Dkt. No. 497.) For the reasons that follow, the motions are granted in part and denied in part: (1) Greenberg’s motion for judgment or for a new trial is denied, except to the extent that (a) the $355,811 compensatory damages award is reduced to $212,699, pursuant to New York General Obligations Law § 15-108, as a result of
I. Background
Familiarity with the background of this case is presumed, and the Court addresses only those aspects of its factual and procedural background that are relevant to the instant motions.
A. Factual Background
This case concerns the sale of 24 bottles of wine by Zachys Wine Auctions, Inc. (“Zachys”). These 24 bottles of wine, which were among a larger set of bottles consigned by Greenberg and purchased by Koch, bore certain indicia of inauthenticity, suggesting that the wine was counterfeit, or not what it was purported to be. After discovery of this fact, Koch brought suit against Greenberg, alleging common law fraud and claims under N.Y. GBL §§ 349 and 350, which address deceptive business practices. The trial was bifurcated into two phases, with the first encompassing liability and the second addressing Koch’s claim for punitive damages associated with his fraud allegations. On April 11, 2013, the jury found in favor of Koch on all claims, specifically finding that Greenberg had committed fraud under two theories— affirmative misrepresentation and fraudulent concealment — and that he had engaged in materially deceptive business practices in violation of GBL §§ 349 and 350. The jury awarded compensatory damages of $355,811 — representing the purchase price for the 24 bottles — and an additional $24,000 in statutory damages under GBL § 349, which authorizes “treble damages” up to $1000 per violation. On April 12, 2013, the jury awarded Koch $12 million in punitive damages.
B. Procedural Background
In an opinion and order dated September 30, 2012, the Honorable Barbara S. Jones, to whom this case was previously assigned, denied Greenberg’s motion for summary judgment, holding that there were genuine disputes of material fact with respect to the claims at issue here. Koch v. Greenberg, No. 07 Civ. 9600(BSJ),
Jury selection for trial began and was completed on March 26, 2013. The first phase of the trial took place from March 27, 2013 through April 11, 2013. The punitive damages phase of the trial lasted one day, beginning and ending on April 12, 2013. At the close of evidence, Defendant’s counsel asked the Court that his motion for judgment as a matter of law be “deemed made now with briefing to be filed in due course.” (Tr. 2109.)
Defendant’s motion for judgment as a matter of law, or, in the alternative, for a new trial, was filed on June 21, 2013. (Dkt. No. 495.) Plaintiffs opposition was filed on August 2, 2013 (Dkt. No. 503), and Defendant replied on August 23, 2013 (Dkt. No. 505.) Plaintiff filed his motion for attorney’s fees, injunctive relief, and interest on June 24, 2013. (Dkt. No. 497.) Defendant’s opposition was filed on August
II. Legal Standards
A. Motion for Judgment as a Matter of Law Pursuant to Rule 50
Federal Rule of Civil Procedure 50 provides that a motion for judgment as a matter of law may be made at any time before the case is submitted to the jury, and, in the event of denial, the movant may renew the motion no later than 28 days after trial. Fed.R.Civ.P. 50(a)(2), (b). “In reviewing a Rule 50 motion, a court may consider all the record evidence, but in doing so it ‘must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence.’” Cross v. N.Y.C. Trans. Auth.,
As this Court has cautioned before, “whenever a court contemplates encroaching on the role of the jury, it should recall that the jury trial is central to the democratic system envisioned by our Founding Fathers.” Psihoyos v. John Wiley & Sons, Inc., No. 11 Civ. 1416(JPO),
Accordingly, with both the role of the jury and Rule 50’s “stern standard” in mind, the Court must “give deference to all credibility determinations and reasonable inferences of the jury, and may not weigh the credibility of witnesses or otherwise consider the weight of the evidence.” Bucalo v. Shelter Island Union Free Sch. Dist.,
B. Motion for a New Trial Pursuant to Rule 59
After a jury trial and upon motion, a court may “grant a new trial on all or some of the issues — and to any par-ty_” Fed. R. Civ. Pr. 59(a)(1). “A motion for a new trial should be granted when, in the opinion of the district court, ‘the jury has reached a seriously erroneous result or ... the verdict is a miscarriage of justice.’ ” Song,
III. Defendant’s Motion for Judgment as a Matter of Law
A. Fraud Claim
Greenberg contends that Koch “failed to present clear and convincing evidence of fraud.” (Defendant Eric Green-berg’s Memorandum of Law, Dkt. No. 496 (“Def.’s Mem.”), at 2.) Fraud requires the following elements: (1) representation of material fact; (2) falsity; (3) scienter; (4) reasonable reliance; and (5) injury. Koch v. Greenberg, No. 07 Civ. 9600(BSJ),
As to the first two elements, Greenberg argues that the trial record was devoid of any actionable misstatement made by Greenberg, contending instead that (1) most of the statements in the auction catalogue were non-actionable statements of opinion; and (2) Zachys, rather than Greenberg, made the statements at issue. First, the jury was instructed that statements of opinion are non-actionable except in the limited circumstance where such a statement of opinion is not sincerely held. See, e.g., Union Carbide Corp. v. Montell N.V.,
It is axiomatic that “juries are presumed to follow their instructions.” Zafiro v. United States,
Greenberg also argues that none of the possible misstatements alleged as the bases for fraud were “made by Greenberg at all,” but rather, “were made by [Jeff] Zaeharia in the Zachys auction catalogue.” (Def.’s Mem. at 4.) First, under New York law, while a plaintiff may not generally claim reliance on statements made by third parties, so long as plaintiff is among the “class of persons” intended to rely on the statement, Rest. (Second) of Torts § 533 (1976), it is unnecessary that such “representations should be made to the plaintiff directly.” Greene v. Mercantile Trust Co.,
As noted above, the jury also found Greenberg liable for fraud on an alternative ground: namely, pursuant to the theory of fraudulent concealment. The jury was properly instructed that, under New York law, silence or omission with respect to a material fact can serve as the equivalent of an affirmative misrepresentation where either: (1) “one party possesses superior knowledge, not readily available to the other,” or (2) “the party has made a partial or ambiguous statement, on the theory that once a party has undertaken to mention a relevant fact to the other party it cannot give only half of the truth.” Brass v. Am. Film Tech, Inc.,
Closely akin to the issue of Greenberg’s duty to disclose is the reasonableness of Koch’s reliance — another required element
Both at trial and in his post-trial motion, Greenberg argued that Koch was a sophisticated buyer who had a full and fair opportunity to inspect the wine he purchased. (See, e.g., Def.’s Mem. at 14-15.) According to Greenberg, the difficulty of inspecting over two thousand bottles of wine “cannot trump Koch’s undisputed inspection right because it is a problem entirely of Koch’s own making.” (Id. at 15-16.) It is Greenberg’s position that a finding for Koch on this element of fraud represents a reversal of “the traditional understanding that a plaintiffs wealth and sophistication is a factor that weighs against a finding of peculiar knowledge.” (Id. at 16.) In contrast, Koch notes that the jury, despite hearing Greenberg’s position that Koch was a sophisticated buyer who should have inspected his purchases,
Greenberg also contends that Koch did not adequately prove scienter and causation. (Def.’s Mem. at 10-14.) With respect to causation, Greenberg argues that there was no evidence that Zachys would have behaved differently had Greenberg disclosed what he knew about the wine at issue. (Id. at 10.) This characterization of the evidence, however, overlooks aspects of the record from which the jury could have reasonably concluded that Koch had established causation through clear and convincing evidence. (See, e.g., Tr. at 1707:12-1709:6 (Zachariah testifying that he would have liked to have known that Bill Edgerton, an expert, had determined that some of Greenberg’s bottles were counterfeit); id. at 1712:1-12 (Zaehariah stating that he would have liked to have known that Chateau Lafleur did not use vertically branded corks until 1966); id. at 1714:24-1715:4 (Zaehariah stating that he would have liked to have known of Greenberg’s belief “that vertical branding in Pe-trus magnums from before 1966 was not appropriate to the time”); id. at 1722:6-1724:19 (Zaehariah testifying at his prior deposition that he would have liked to have known if Greenberg had consigned wines to Zachys that Greenberg had previously claimed were counterfeit).) Additionally, at trial, Koch stated that if he himself had known some of this information, he would not have purchased the wine at issue. (See, e.g., id. at 971:24-974:8.) The jury was within its rights to credit that testimony and was accordingly reasonable in concluding that the element of causation was met.
With regard to scienter, which may be satisfied by either knowledge or recklessness — the latter of which was defined to the jury as a representation “made without knowledge of or a genuine belief in [its] accuracy” (Trial Ex. 7 at 8) — Greenberg contends that his segregation of suspect wines and firm belief in Zachys’ vetting process undercuts any claim of a knowing or reckless violation. (Id. at 12.) However, there is sufficient evidence from which the jury could conclude that Greenberg possessed the requisite state of mind. (See, e.g., Pl.’s Opp. at 12-13.) Moreover, Greenberg’s arguments concerning the po
Accordingly, the jury’s finding of fraud was not unreasonable and was permissible based on the evidence at trial.
B. GBL Claims
A successful GBL § 349 claim requires that a plaintiff prove, by a preponderance of the evidence, that (1) “the defendant has engaged in an act or practice that is deceptive or misleading in a material way”; (2) the “plaintiff has been injured by reason thereof’; and (3) the deceptive act or practice is “consumer oriented.” Gaidon v. Guardian Life Ins. Co. of Am.,
Here, Greenberg argues that given Zachys’ role as intermediary, and Koch’s sophistication as a buyer, the auction and auction catalogue cannot be considered “consumer-oriented.” (Def.’s Mem. at 17.) The Court disagrees. As the Court has already noted in the course of this litigation:
Given the large number of bottles Greenberg consigned for the October 2005 auction, and the fact that Plaintiffs purchase of a small percentage of those bottles contained counterfeits, it seems possible that other consumers at the auction were impacted by Greenberg’s alleged misconduct. Thus, assuming the allegations of the complaint to be true, it is reasonable to conclude that the conduct complained of affected other similarly situated consumers — other purchasers at the October 2005 auction— and, therefore, had a broad impact on consumers at large.
Koch,
Additionally, the New York Court of Appeals has held that an “as-is” clause does not bar a claim under the GBL. See Koch v. Acker, Merrall & Condit
For the reasons discussed above, it was permissible for the jury to conclude that Greenberg’s representations or the cata-logue’s advertisements were materially misleading. Again, given the apportionment aspect of the verdict form, as well as the evidence at trial showing Greenberg’s involvement with the Zachys auction and catalog, Greenberg’s argument that Zach-ys is to blame is unavailing.
Greenberg also argues that Koch failed to establish entitlement to additional statutory damages under § 349, which allows for treble damages up to $1,000 per violation in the event that a defendant willfully or knowingly violated the provision. GBL § 349(h). As discussed, there was sufficient evidence at trial from which the jury could infer that Greenberg made misrepresentations knowingly. (See, e.g., Tr. at Tr. at 175:22-23.) Accordingly, the jury’s award of additional statutory damages of $24,000 under § 349 was permissible in light of the record.
In sum, Greenberg has not met his heavy burden of demonstrating that “there is such a complete absence of evidence supporting the verdict that the jury’s findings could only have been the result of sheer surmise and conjecture, or there is such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded [jurors] could not arrive at a verdict against him.” Bucalo,
Accordingly, the Court declines to set aside the jury’s verdict under Rule 50.
IV. Defendant’s Motion for a New Trial on Liability
Alternatively, Greenberg moves for a new trial pursuant to Federal Rule 59(a)(1)(A), arguing that (1) Koch presented insufficient evidence to take the case to a jury and (2) given the evidence, the jury erred in deciding in favor of Koch.
A. Sufficiency of the Evidence; Clear Weight of the Evidence
Where the jury reaches’a “seriously erroneous result” or the verdict constitutes a “miscarriage of justice,” it is appropriate for the Court to grant a motion for a new trial. Mallis v. Bankers Trust Co.,
B. Alleged Evidentiary Errors
Greenberg also cites three purported “evidentiary errors” as grounds for a new trial. (Def.’s Mem. at 21.) While “substantial errors in the admission or rejection of evidence” can render a new trial appropriate, 11 Charles Alan Wright et al., Fed. Prac. & Proc. 2805 (3d ed.1998), the Court’s evidentiary determinations were well within its discretion and not so prejudicial to Greenberg as to warrant a new trial.
First, Greenberg cites the exclusion of Greenberg’s refund offers during the liability phase as erroneous and highly prejudicial. (Def.’s Mem. at 21.) The fact that, on two occasions, Greenberg had offered Koch a full refund for the price of the wine that Koch contended was counterfeit was a hotly contested topic and the subject of multiple motions and applications, both before and during this trial. While Greenberg contended that these offers were directly relevant to his scienter, Koch’s position was that they were settlement offers, falling squarely within the strictures of Federal Rule of Evidence 408, which excludes compromise offers and negotiations from admission at trial.
On November 27, 2007, Greenberg sent Koch a letter, together with a check for $272,555.72, offering to buy back eleven bottles of wine that Koch had originally claimed were counterfeit. (Trial Ex. 1036.) In this letter, Greenberg stated as follows: “I am perfectly happy to repay your money and take all the bottles back. Your lawsuit requests rescission and I agree.” Greenberg also included his desire to bring the matter to a conclusion in a “gentlemanly way.” (Id.) On November 29, 2010, Greenberg offered to pay Koch $688,238.47 to compensate Koch for each of the bottles cited in Koch’s Amended
In the wake of the ruling granting Koch’s third motion in limine, which had requested exclusion of the offers, the Court reviewed detailed correspondence from the parties, with Greenberg requesting reconsideration in light of the Court’s decision not to bifurcate the trial as he had requested, in his own motions in limine, into a liability and punitive damages phase. On March 20, 2013, the Court received a letter from Greenberg’s counsel outlining the reasoning behind Greenberg’s position on the refund issue, explaining that in light of the Court’s decision not to bifurcate the proceedings, “Greenberg’s refund offers [had become] relevant to a single phase trial that includes punitive damages.” (Dkt. No. 429.) The letter noted that given that the reprehensibility of the conduct is relevant to a jury’s punitive damages calculation, the exclusion of the refunds would prejudicially force Greenberg to remain mute when lambasted about the moral culpability of his actions. Greenberg’s counsel explained, “Greenberg did the right thing. As soon as he learned that there was a problem with any items he had sold, he tried to make it right. He has fully honored his contract, and now he is being denied the right to point out his honorable conduct.” (Id.) Plaintiffs counsel responded, reiterating Koch’s position that the refund offers were offers to compromise the claim, and properly excluded under Rule 408, adding that “Greenberg’s ‘after-the-fact’ compromise offer does not tell us anything about the reprehensibility of his underlying misconduct.” (Id.)
Later, prior to jury selection, and after carefully considering these arguments, the Court determined that while the refund offers were not relevant to Greenberg’s mental state at the time of the alleged fraud, they were indeed indicative of the overall reprehensibility of his conduct, which is part of the necessary calculus a
The Court’s ruling on the refund offers is in accordance with Rule 403 and was not unduly prejudicial to Greenberg. Green-berg’s argument that the refunds are relevant to his state of mind, as required for fraud, is untenable. The fact that an individual shows remorse or is willing to “do the right thing” in accordance with business or societal practice after a wrong is discovered does not vitiate that individual’s state of mind — whatever it may have been — at the time of the relevant acts. That fact, coupled with the prejudice to Koch from evidence that could have painted him as unreasonable in pursuing the lawsuit, underscores the appropriateness of the Court’s ultimate conclusion. As for the relevance of the refunds to the GBL claims, the cases cited by Greenberg are distinguishable.
In any event, Greenberg was not prejudiced by the exclusion of the refund offers during the liability phase, and there is strong evidence of that fact in the form of the jury’s verdict following the punitive damages phase, during which the refund offers were admitted. Greenberg would have a stronger case for prejudice had the jury returned a verdict of $0 in punitive damages. As noted, however, the jury returned a verdict of $12 million in punitive damages, in spite of Greenberg’s counsel’s emphasis on the refunds and Koch’s subsequent refusal to accept them during the punitive damages phase. Put another way, despite the refund offers, the jury found that Greenberg’s conduct warranted millions of dollars in punitive damages; had the jury believed that the refunds reflected positively on Greenberg’s state of mind, its verdict would have reflected that fact. Accordingly, the bifurcation of trial and admission of the refunds solely during the punitive damages phase represented an appropriate solution in light of the relevant law and the balancing required by Rule 403.
Second, Greenberg objects to the testimony of Maureen Downey and Jaime Cortes, arguing- that the two witnesses provided improper character evidence that should not have been heard by the jury. (Def.’s Mem. at 22.) As for Downey’s testimony, it was properly admitted, and Greenberg had a full and fair opportunity to cross-examine her at trial, with Green-berg’s counsel eliciting (and not moving to strike) the testimony Greenberg now cites as objectionable. (Pl.’s Opp. at 21.) Second, with regard to Cortes’s testimony, on cross-examination, Greenberg’s counsel questioned Cortes as to why he had previously called Greenberg an “asshole,” highlighting potential bias and inconsistency between Cortes’ statement at trial that he bore no ill-will towards Greenberg (Tr. 810:15-21; see also id. at 767:3-768:23.) With respect to this inquiry, Greenberg’s counsel also introduced evidence in the form of an email exchange in which Cortes stated to Koch’s personal aide Brad Goldstein (referring to Greenberg): “My info will help you guys bring this asshole down.” (See id. at 768:24-771:22; Trial Ex. 1048.) Later, on redirect, and in accordance with Federal Rule of Evidence 613(b),
Finally, Greenberg objects to the testimony of Jamie Ritchie and Michael Egan, claiming that they provided undisclosed expert opinions in violation of Federal Rule of Civil Procedure 87(c). Green-berg’s contention is belied by the record. Lay testimony may encompass those areas with which the witness has familiarity without subjecting that witness to the strictures of Federal Rule of Evidence 702, so long as that testimony is not based on “scientific, technical, or otherwise specialized knowledge.” Fed.R.Evid. 702(c). Ritchie’s testimony concerning the authenticity of Greenberg’s wine was a reflection of his work at Sotheby’s and familiarity with the wine auction business and thus was properly within the scope of Rule 701. See Fed.R.Evid. 701, Advisory Committee Notes on Rules — 2000 Amendment (“For example, most courts have permitted the owner or officer of a business to testify to the value or projected profits of the business, without the necessity of qualifying the witness as an accountant, appraiser, or similar expert.... Similarly, courts have permitted lay witnesses to testify that a substance appeared to be a narcotic, so long as a foundation of familiarity with the substance is established_Such testimony is not based on specialized knowledge within the scope of Rule 702, but rather is based upon a layperson’s personal knowledge. If, however, that witness were to describe how a narcotic was manufactured, or to describe the intricate workings of a narcotic distribution network, then the witness would have to qualify as an expert under Rule 702.”).
As for one of Koch’s experts, Michael Egan, Greenberg objects to Egan’s testimony at trial about vertical branding on the corks of 17 of the 24 bottles of wine at issue, arguing that this testimony contradicted his expert report and deposition testimony. As Koch notes, however, it is not as if Egan originally concluded the wine was authentic and later changed his mind on the eve of trial. (Pl.’s Opp. at 22.) Instead, Egan stated that he had completed additional research since the advent of the trial, which bolstered his prior conclusions that the wine was inauthentic. (Id.) It is well established that experts may “supplement, elaborate upon, explain and subject [themselves] to cross-examination upon [their] report[s].” In re Methyl Tertiary Butyl Ether (MTBE) Products Liab. Litig.,
Now, Mr. Egan. I will tell you, I took his deposition in New England. Thought he was a pretty straightforward guy. I thought that until he gave this testimony. I thought he was a decent, straightforward man, a competent but not brilliant expert. Real worklike guy. Not a Gil Schwarz, not in that class, but all right. And so what happens? Egan says: Oh, the trial started, I changed my opinion. Vertical corks are all wrong. I said: Well, gosh, you know, we’re back there in Cape Cod, you said they were all correct. He didn’t say&emdash; and this is really important. He didn’t say: I was mistaken. ‘Cause if he’d been mistaken’, he could have said that. It was embarrassing. He said, “You know, I didn’t focus on the cork.” Remember that? “I didn’t focus on the cork.” And I really went after him. “I didn’t focus on the cork.”
(Tr. 2185:24-2186:12.) In sum, Green-berg’s counsel utilized any inconsistency between Egan’s report and his trial testimony as an opportunity for both vigorous cross-examination and argument in summation. The admission of this testimony does not warrant a new trial.
V. Damages
Greenberg also argues that if the liability verdict is not set aside, then (1) the award of compensatory damages award should be reduced from $355,811 to $105,811 under § 15-108(a) of the New York General Obligations Law (“N.Y. GOL” or “GOL”), and (2) the punitive damages award must be eliminated or reduced to either $24,000, to match the exemplary damages awarded under the GBL, or one-half of the compensatory damages award. Each argument is addressed in turn.
A. N.Y. General Obligations Law Offset
Greenberg argues that without an offset of $250,000&emdash;the amount that Zachys paid to Koch in a previous settlement&emdash;Koch will receive an “impermissible double recovery.” (Def.’s Mem. at 23.) Section 15-108(a) of the N.Y. GOL provides that where a plaintiff enters into a release or covenant not to sue with “one of two or more persons liable or claimed to be liable in tort for the same injury,” the settlement “reduces the claim of the releasor against the other tortfeasors to the extent of any amount stipulated by the release or the covenant, or in the amount of the consideration paid for it, or in the amount of the released tortfeasor’s equitable share of the damages under article fourteen of the civil practice law and rules, whichever is the greatest.”
As an initial matter, Koch argues that N.Y. GOL § 15-108(a) cannot be applied to reduce his fraud claim, because there was no fraud claim pending against Zachys when it settled (that claim had
The Court also concludes that N.Y. GOL § 15-108 is potentially applicable to statutory GBL claims (and not just common law tort claims) notwithstanding its references to “tort” and “tortfeasor.” See Mathis v. United Homes, LLC,
The question, then, is whether Koch’s settlement with Zachys involved “the same injury” as the claims on which Koch was awarded $355,811 at trial. If the answer is yes, then Koch’s claim against Greenberg is “reduce[d]” by the greatest of the following: (1) “any amount stipulated by the release”; (2) “the amount of the consideration paid for it”; or (3) “the released tortfeasor’s equitable share of the damages.”
The “same injury” issue is complicated by the fact that the number and identity of the bottles of wine at issue have changed more than once throughout the course of this case. This is important: Greenberg insisted throughout trial that Koch prove his case “bottle by bottle”
Koch’s original complaint in this case, filed in October 2007 against both Green-berg and Zachys, claimed that 19 bottles of wine were counterfeit: eight bottles purchased at a Zachys auction in October 2004 (which were not from Greenberg’s cellar), and eleven bottles purchased at a Zachys
Zachys and Koch reached their settlement in January 2011. At that time, the operative complaint — filed in October 2010 and consistent with Magistrate Judge Freeman’s order — challenged 36 bottles of wine (which Koch had purchased for a total of $621,559 at the December 2004 and October 2005 auctions). Under the settlement agreement, Koch gave Zachys a general release of all claims — including all claims in this case — in exchange for Zach-ys’ payment of $250,000. However, the agreement recited that that payment “represent[ed]” the cost of the 10 bottles purchased at the October 200í auction ($143,-459), plus interest and certain expenses. The agreement also stated that the settlement would not affect Koch’s claims against Greenberg.
Koch argues that the settlement with Zachys involved an entirely different injury because it involved different bottles than those that were the subject of the Greenberg trial. However, the agreement’s stipulation to that effect is not dis-positive:
Settling parties may not structure the apportionment to avoid a later setoff by a nonsettling defendant; to hold otherwise would permit them to circumvent the policy underlying section 15-108_ [T]he New York cases establish that the parties’ settlement agreement, even when confirmed by a court order, does not bind a trial court in determining the proper allocation of settlement proceeds for purposes of setoff. That allocation must follow from a comparison by the trial court of the injuries of the settling plaintiffs.
Andrulonis v. United States,
It is utterly implausible that the settlement with Zachys did not involve, at least in part, the same claims and same injury as those arising from the 24 bottles at issue in the Greenberg trial. The release that Koch gave to Zachys covered all claims, not just those relating to the 10 bottles referenced in the agreement. Moreover, all claims as to those 10 bottles had been dismissed by the Court (the fraud claims for failure to state a claim, the GBL claims for untimeliness). It would ignore reality to conclude that the $250,000 that Zachys paid for the release was actually for the 10 bottles that had been dismissed, rather than for the 36 bottles as to which Koch had live claims pending against Zachys. See Casey v. State of New York,
It does not automatically follow, however, that a 100-percent reduction of the Zachys settlement amount is required by § 15-108. Under New York law, the trial court must “make an independent
Faced with analogous circumstances— ie., where a prior settlement covered overlapping but broader injuries — Judge Kiyo Matsumoto of the Eastern District of New York has applied a proportional reduction to the setoff amount under § 15-108. See Barkley v. United Homes, LLC,
The purchase price of the 36 bottles of wine at issue at the time of the Zachys settlement was $621,559. The purchase price of the 24 bottles at issue in the trial was $355,811. The latter is 57.245% of the former. When that same percentage is applied to the $250,000 paid by Zachys in the settlement, the result is $143,112. That number provides the best measure under § 15-108 of “the amount of the consideration paid for” the release of Zachys for the “same injury” as the claims that went to trial.
Accordingly, pursuant to N.Y. GOL § 15-108(a), Koch’s compensatory damages award of $355,811 is reduced by $143,112, resulting in a modified compensatory damages award of $212,699.
B. Punitive Damages
Greenberg contends that his conduct does not merit an award of punitive damages, arguing that Koch, as a “sophisticated businessman and collector” declined to exercise his pre-sale inspection rights and declined multiple refund offers. (Def.’s Rep. at 15.) Greenberg also contends that the fact that his sale was only a single act, rather than behavior constituting repetitive, ongoing violations underscores the in
“It is not essential that the plaintiff allege a pattern of conduct directed at the public in general to assert a claim for punitive damages.” Pure Power Boot Camp v. Warrior Fitness Boot Camp,
Here, it was permissible for the jury to find, based on all the evidence at trial, that Greenberg’s conduct warranted an award of punitive damages. See, e.g., Koch v. Rodenstock, No. 06 Civ. 6586(BSJ)(DF),
First, the jury was properly instructed on the egregiousness required for punitive damages, with the Court emphasizing that punitive damages were permitted only if the jury found by “clear, unequivocal, and convincing evidence that Mr. Greenberg’s fraud was gross, involved high moral culpability, and was aimed at the general public,” or “rose to such a level of wanton dishonesty as to imply a criminal indifference to his civil obligations.” (Court Ex. 8 at 1.) Moreover, the Court repeatedly underscored the fact that punitive damages are not designed to compensate plaintiffs, but rather, constitute an “extraordinary penalty similar to criminal fines.” (Id. at 2.) Here, it was within the range of reasonableness for the jury to find that punitive damages were warranted, as there was sufficient evidence from which it could conclude that Greenberg acted with wanton disregard for potential buyers’ rights. Moreover, even if a single incident is ordinarily insufficient to warrant punitive damages — a principle that the parties dispute — there was evidence from which the jury could find that this auction was not the first time Greenberg had sold counterfeit wine.
If the punitive damages award is not set aside, Greenberg requests a remittitur on the ground that $12 million in punitive damages is grossly excessive under the Due Process Clause of the United States Constitution. Greenberg proposes a re-mittitur of $24,000 (the amount of exem
It is axiomatic that excessive punitive damages awards implicate the due process rights of defendants. See BMW of N. Am., Inc. v. Gore,
“Awards of punitive damages are by nature speculative, arbitrary approximations. No objective standard exists that justifies the award of one amount, as opposed to another, to punish a tortfeasor appropriately for his misconduct. Nor is there any formula to determine the dollar amount needed to effectuate deterrence.” Payne,
To determine the constitutionality of a jury’s punitive damages award, courts consider three “guideposts” described by the Supreme Court in Gore, and reiterated in State Farm Mut. Auto. Ins. Co. v. Campbell,
In ? this case, the Gore guideposts indicate that the $12 million punitive damages award is excessive and cannot stand. The Court need not reach the question whether the jury’s award violates the Due Process Clause; the award is excessive under New York law, and the Court holds that an award of punitive damages greater than two times compensatory damages is so exorbitant that it is motivated by passion rather than reason.
First, the Court considers the reprehensibility of the conduct at issue, examining whether:
the harm caused was physical as opposed to economic; the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others; the target of the conduct had financial vulnerability; the conduct involved repeated actions or was an isolated incident; and the harm was the result of intentional malice, trickery, or deceit, or mere accident.
State Farm,
It is also true that Greenberg’s conduct in this case can be characterized as flagrant. With its verdict, the jury found that Greenberg had brazenly committed 24 acts of fraud — that is, that he had made false statements or misleading omissions with respect to each of the 24 bottles at issue in the case, which he sold for up to tens of thousands of dollars each. Moreover, there was evidence from which a reasonable jury could infer that Greenberg had engaged in this sort of behavior before. (See, e.g., Tr. at 747:23-24 (“What they did to me, I’ll do to them; what they did to me, I’ll do to someone else.”); Ex. 476 (“The good news is that there is no garbage. That has been sold.”).)
Greenberg again emphasizes the refund offers as indicia of his upstanding approach to business and lack of reprehensibility. (See Def.’s Mem. at 31 “Green-berg’s immediate refund offer to Koch is a further ‘mitigating factor[]’ that removes his conduct from the reprehensible type that courts seek to punish severely.” (citations omitted).) It is true that Green-berg’s refund offers can be regarded as mitigating the reprehensibility of his overall conduct, and for that reason the Court admitted evidence of those offers in the punitive damages phase of the trial. However, the jury heard this argument and nevertheless awarded punitive damages, indicating that it viewed the refund offers otherwise. While Greenberg is correct that the refund offers could be seen as his above-board attempt to “stand behind his
While the flagrancy of Greenberg’s fraud merits some award of punitive damages, the harm he caused is less compelling. This harm was economic in nature and none of its targets — neither Koch nor other potential buyers at auction — were financially vulnerable. Moreover, the tor-tious conduct did not evince an indifference to, or reckless disregard for, the health or safety of others, as Koch himself characterized the wine at issue as collectible artifacts rather than something that he would actually imbibe. Compare Silivanch v. Celebrity Cruises, Inc.,
Turning to the second guidepost — “the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award” — Greenberg contends that the “33-to-l ratio of the jury’s punitive damages to its compensatory damages is patently unconstitutional.” (Def.’s Mem. at 32.) As noted, due process concerns figure prominently in determining the permissible amount of punitive damages, and the Supreme Court has indicated that “the relevant ratio [is] not more than 10 to 1.” Gore,
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 State Farm,
The final guidepost requires the Court to examine comparable civil penalties and similar cases. As Greenberg notes, the maximum civil penalty for willful deceptiveness under the GBL is $1,000 per violation, which here was $24,000. Moreover, in a similar case, Rodenstock, Judge Jones, in adopting Magistrate Judge Freeman’s recommendation, awarded punitive damages in an amount equal to compensatory damages, or a 1:1 ratio. See
In this case, while a six-figure compensatory award is significant in the absolute sense, it is less so in the relative sense— particularly in the context of high-end wine auctions where a single bottle may sell for $20,000, and in light of the wealth of the inevitable participants in such auctions, including Greenberg. To deter individuals in this rarefied class, a punitive damages award less than or equal to the compensatory figure would likely have limited deterrent effect. And while the $l,000-per-violation cap of the GBL claims’ exemplary provision provides a comparative measure, it is clear that in New York the GBL’s
Having considered the Gore guideposts and relevant factors under New York law, the Court determines that punitive damages are appropriate, but that remittitur is legally required. 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 Greenberg 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).
VI. Plaintiffs Motion for Attorney’s Fees and Injunctive Relief
As a result of the jury’s liability finding, Koch has moved for the following post-trial relief: (1) attorney’s fees as a prevailing plaintiff under GBL §§ 349 and 350; (2) permanent injunctive relief against Green-berg; and (3) prejudgment interest on all compensatory damages; post-verdicVpre-judgment interest on all compensatory and punitive damages; and postjudgment interest on the entire award.
A. Attorney’s Fees
Koch seeks an award of $7,865,872 in attorney’s fees. (Plaintiffs Posh-Trial Motion for Injunctive Relief, Attorneys’ Fees, and Pre- and Post-Judgment Interest (“Pl.’s Mem.”), at 8.) In response, Green-berg contends that “Koch’s demand for nearly $8 million in attorneys’ fees under the GBL is plainly excessive in light of the jury’s compensatory damages award of only $355,811.” (Defendant’s Memorandum of Law in Opposition to Koch’s Post-Trial Motion, Dkt. No. 504 (“Pl.’s Opp.”) at 15.
After careful consideration, the Court declines to award attorney’s fees in this case. Although Koch is certainly a “prevailing plaintiff’ under GBL §§ 349(h) and 350-e, a fee award is not warranted here for a number of 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.
Second, this is not a case in which the compensatory damages fail to “capture the extent of the plaintiffs 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,
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 Green-berg’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.” Independent Living Aids, Inc. v. Maxi-Aids, Inc.,
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.
Accordingly, Koch’s motion for attorney’s fees under the GBL statute is denied.
B. Injunctive Relief
In addition to attorney’s fees, Koch seeks injunctive relief against Greenberg, permanently enjoining Greenberg from the following: (1) engaging in deceptive acts or practices in selling his wines; (2) selling, offering, or consigning inauthentic wine; (3) selling, offering, or consigning wine without disclosing to buyers that he is the consigner of the wine; (4) selling, offering, or consigning wine without disclosing to buyers, auction houses, or retailers questions, doubts, or concerns expressed by others in the wine industry concerning the authenticity of the wine; (5) selling, offering, or consigning wine without disclosing to buyers, auction houses, and retailers that another auction house has previously rejected that wine for sale; (6) selling, offering, or consigning wine without first disclosing to buyers, auction houses, or retailers the provenance of the bottle being sold; (7) selling, offering, or consigning wine of a value at or above $500 without hiring an expert to inspect and authenticate the wine first; (8) engaging in false, deceptive, or misleading advertising; and (9) permitting an advertisement involving the sale of his wine to be published without disclosing that he is the consigner, any questions, doubts, or concerns raised by others in the wine industry about the authenticity of the wine, and the provenance of the wine. (Pl.’s Mem. at 2.)
GBL §§ 349 and 350 allow private plaintiffs to bring actions to enjoin the unlawful practices proscribed by the statute. In his
1. Legal Standard
The parties disagree as to the proper legal standard for injunctive relief under the GBL. According to Koch, “[t]o obtain an injunction under G.B.L. § 349, plaintiffs need only show that the defendants engaged in ‘deceptive acts or practices,’ as defined under the statute.” Barkley v. United Homes, LLC,
To be sure, New York has clearly created a cause of action for citizens to act as private attorneys general in enforcing the consumer protection ideals embodied in the GBL. However, as seen with courts’ approach to the Lanham Act, a statutory cause of action for injunctive relief does not automatically release a plaintiff from the burdens of eBay, nor can it strip the Court of its obligations in equity. See, e.g., Del Monte,
Here, a private litigant seeks permanent injunctive relief pursuant to the GBL. While the GBL provides a statutory basis for him to do so, as discussed above, this statutory right of action does not vitiate the need to satisfy the factors outlined in eBay. Koch’s status as a private attorney general will not relieve him of the traditional burdens of a plaintiff in equity. See, e.g., Verzani v. Costco Wholesale Corp.,
2. Application of Law to Facts
The Court examines Koch’s proposed permanent injunction under the four factors delineated in eBay, finding that such an injunction is unwarranted in this case.
Second, the remedies available at law for the injury suffered here — monetary damages, both compensatory and exemplary— are adequate to make Koch whole. Here, Koch has received the value of the counterfeit wine consigned by Greenberg, as well as $24,000 in statutory damages under the GBL. Nor will Koch continuously suffer as a result of Greenberg’s violations, as he has been paid in full.
Third, in considering the balance of the hardships between Koch and Greenberg, it is clear that the terms of the injunction would require Greenberg to make disclosures not required of other consigners in the wine industry, due to his actions associated with the 2005 Zachys auction that was the sole subject of this case. That result is unwarranted. Koch has made efforts to change the auction practices in the industry that permit this type of deceit to occur. However, it does not follow from the jury’s finding that Greenberg engaged in GBL violations that he must now be the symbol for changed norms within the wine industry. An injunction permanently compelling Greenberg to speak about “questions, doubts, or concerns” regarding his wine, and indefinitely requiring him to hire his own expert to authenticate wine before consigning it, regardless of the auction house’s own requirements, is beyond the pale. Finally, the Court concludes that the overall public interest would not be served by the injunction sought by Koch.
While it is true that federal courts have “broad power to restrain acts which are of the same type or class as unlawful acts which [have been] found to have been committed or whose commission in the future unless enjoined, may fairly be anticipated from the defendant’s conduct in the past,” NLRB v. Express Pub. Co.,
Accordingly, Koch’s request for a permanent injunction is denied.
C. Interest
Finally, Koch seeks (1) prejudgment interest on his compensatory damages, pursuant to New York CPLR § 5001; (2) post-verdict and prejudgment interest on his compensatory damages and punitive damages pursuant to CPLR § 5002; and (3) post judgment interest pursuant to 28 U.S.C. § 1961.
1. Pre-Judgment Interest on Compensatory Damages
Section 5001 provides that mandatory prejudgment interest “shall be recovered upon a sum awarded because of a breach of performance of a contract, or because of an act or omission depriving or otherwise interfering with title to, or possession or enjoyment of, property....” CPLR § 5001(a). Prejudgment interest, which is fixed at the statutory rate of 9%, id. § 5004, accrues from the “earliest ascertainable date the cause of action existed,” id. at § 5001(b). Both parties agree that prejudgment interest should accrue from no later than February 15, 2006, the date on which Koch received shipment of the 24 wines at issue in this lawsuit. However, they disagree as to the endpoint of the interest accrual, with Koch contending that it should accrue until the date that judgment is entered by the Court and Green-berg asserting that his refund offers affect the accrual period’s length.
Under New York law, “one of the principal purposes of allowing prejudgment interest is to compensate the plaintiff for its inability to use the money.” Quintet Corp., N.V. v. Citibank, N.A.,
Here, Greenberg’s position throughout this litigation has been that the refund offers were not settlement offers in the traditional sense, as they were not explicitly conditioned on a release of the claims in the litigation. As discussed above, the Court eventually agreed with this view, and thus held that the offers did not fall within the traditional strictures of Federal Rule of Evidence 408. While Koch’s position has been that the offers were settlement offers, and thus conditional, Koch also argued (successfully) that a payment of compensatory damages would not moot this case, given the request for punitive damages. Accordingly, an acceptance of these refund tenders would neither have explicitly, nor implicitly, barred Koch’s ability to bring the claims central to this lawsuit; and as such, the refund offers cannot reasonably be construed as conditional. Therefore, with respect to seven of the bottles ultimately included in the jury’s verdict,
2. Post-Verdict, Pre-Judgment Interest on Award
Koch also seeks statutory prejudgment interest, pursuant to CPLR § 5002 on the entire award, from the date the jury entered the verdicts to the date of the final judgment of the Court. CPLR § 5002 provides that “[interest shall be recovered upon the total sum awarded, including interest to verdict, report or decision, in any action, from the date the verdict was rendered or the report or decision was made to the date of entry of final judgment.” Again, the interest rate is the statutory percentage of 9%, and includes prejudgment interest to date on the verdict amount. Del Monte,
3. Post-Judgment Interest on Award
Title 28 U.S.C. § 1961 entitles prevailing plaintiffs to post judgment interest “on any money judgment in a civil case recovered in a district court.” Id. at
VII. Conclusion
For the foregoing reasons, it is hereby ORDERED that:
1.Defendant’s motion for judgment as a matter of law, or, in the alternative, for a new trial, is GRANTED in part and DENIED in part, as follows:
(a)the compensatory damages award is reduced pursuant to New York General Obligations Law § 15-108 from $355,811 to $212,699 as a result of Plaintiff’s prior settlement with Zachys;
(b) the punitive damages award of $12 million is remitted to $711,622; if Plaintiff does not accept the remitted punitive damages amount, a new trial on punitive damages will be held;
(c) in all other respects, Defendant’s motion for judgment as a matter of law or for a new trial is DENIED;
2. Plaintiffs motion for attorney’s fees, injunctive relief, and interest is GRANTED in part and DENIED in part, as follows:
(a) Plaintiffs request for attorney’s fees is DENIED;
(b) Plaintiffs request for injunctive relief is DENIED;
(c) Plaintiff request for pre- and post judgment interest is GRANTED.
3. Plaintiff shall inform the Court by letter, on or before April 25, 2014, whether he accepts the remitted amount of punitive damages. If he does so, an appropriate order directing entry of final judgment will be issued.
The Clerk of Court is directed to close the motions at docket entry numbers 495 and 497.
SO ORDERED.
Notes
. The trial transcript appears on the docket at entry numbers 454, 456, 458, 460, 462, 464, 466, 468, 470, 472, 474, 476, 478. The pages are numbered continuously from 1-2516. Accordingly, citations to the trial record are as follows, with the corresponding page number: "Tr_”
. In closing argument, Greenberg’s counsel stated as follows with regard to puffery:
He says, look, the ad said terrific house, this house is only 2100 square feet. You know, a terrific house is 21,000 square feet. That’s a terrific house. I was misled. And it says spacious living room. This living room is only 20 feet by 20 feet. What are you talking about? A spacious living room is a hundred feet long and 50 feet wide. That’s a spacious living room. You defrauded me.
And wonderful yard, I got there, I walked out in the yard. No fountains. Where were the tennis courts, the Olympic size swimming pool? There was not even a swimming pool. Not even room to play polo or a putting green. That was a wonderful yard. You said wonderful yard. That was a fraud. My interpretation of wonderful yard is what I just described to you. And great location, this is just in New Rochelle. I thought it was Beverly Hills or Sutton place.
You don’t get to do that, and there is a reason you don’t get to do that. The judge will give you an instruction explaining why you can’t do that. He is going to read to you general assertions or expressions of a seller in praising the product being offered for sale, commonly called dealer’s talk, trade talk, or puffery, do not constitute a basis for a fraud claim. Examples of such statements are vague claims of superiority over comparable products or exaggerated and boasting statements upon which no reasonable buyer would be justified in relying.
How much testimony did we hear from Mr. Koch about having read Alexander the Great, the Alexander the Greats of the collecting world? After reading that, he then read all kinds of things. These wines had to be genuine because Alexander the Great only collected genuine wine. They had to be stored a certain way because Alexander the Great had a great wine fridge.
All of that is not a representation, and all of the things that Mr. Koch said he thought it meant is not actionable, as we call it in law. You can’t sue somebody over it, because it’s dealer's talk or trade talk or puf-fery. "Puffery” is a funny word. But it is sort of puffing. Great house, great lawn. People do that.
(Tr. 2165:4-2166:16 (emphasis added).)
. During closing argument, Greenberg’s counsel noted, of the "peculiar knowledge” exception, as follows:
I’m going to talk later about a thing called peculiar knowledge. Peculiar knowledge can cause there to be an exception to this in a certain way, and I’m going to discuss it. But I point it out to you because whether or not there is peculiar knowledge, what Mr. Koch knows is there are no representations being made. There are no guarantees being offered. There are no promises being made about the wine. It says that, and it also says, and we’re not guaranteeing, warranting. But there is nowhere you can read this catalog and imply, other than through Alexander the Great, that there is some kind of promise.
Inspection. Couldn’t inspect. First, the reason was, well, I just decided I wouldn’t inspect because of Alexander the Great. If his wines were that good, I didn’t have to inspect. Later in the trial it was, oh, no, actually the reason I didn’t inspect was I would have to inspect all 17,000 bottles and that would be really hard, it would be very expensive.
(Tr. 2170:2-19.)
. In closing, Koch’s counsel highlighted this difficulty, noting:
[Mr. Greenberg’s counsel] says: Oh, well, this isn’t that many bottles. I’m sorry. What do you have, some sort of bottle radar? You go into the warehouse and you just magically come to these 24 bottles and then you look at them? There were thousands of expensive bottles. Take a look at Exhibit 100. It’s the invoice. Mr. Koch buys expensive bottles of wine. They’re all expensive. Where do you start? There are hundreds of bottles in there that are over a thousand, over $2,000, over $3,000. Mr. Egan told you, it would have taken him 25 minutes a bottle to do the work to review.
(Tr. 2286:1-11.)
. (See Dkt. No. 361 (Pl.’s Third Motion in Limine, to exclude evidence regarding Green-berg's settlement offers); Dkt. No. 400 (Def.’s Opposition to Pl.’s Third Motion in Limine); Dkt. No. 429 (Def.'s letter requesting reconsideration of Court's exclusion of the refund offers); Dkt. No. 431 (Def.’s letter requesting reconsideration of the Court’s decision to permit the refund offers only during the punitive damages phase of the trial); Dkt. No. 447 (Pl.’s response to one of Def.’s request for reconsideration of the Court’s decision regarding the refund offers).)
. In ruling on this motion in limine, the Court stated:
But I think more convincing than [the refunds as within the scope of FRE 408] is the balance under Rule 403 mainly because I think there’s limited probative value and I think it’s substantially outweighed by the prejudicial effect of attempting to paint Mr. Koch as being unreasonable in not accepting the full refund amount.
You could look at it as prejudicing one side or the other. It's two sides of the same coin. But I think what's really at issue in the case is not the reasonable or unreasonable business practices relating to granting or not granting a refund, offering or not offering a refund, but when you look at the claims, specifically the GBL issues, the issue is the conduct, the statements relating to the offers of wine at the auction and not the subsequent refund. So I conclude that under Rule 403, this evidence will be excluded.
. Upon reconsideration of the motion in li-mine regarding the refund offers, the Court ruled as follows:
Upon further review of the law and evidence, I have decided to permit the evidence of Mr. Greenberg’s refund offers for certain limited purposes related to punitive damages.
First, I have concluded these refund offers are best characterized as outside the scope of Rule 408. Mr. Greenberg’s offers to refund the contract price did not affect the validity or amount that Mr. Koch’s fraud claim or GBL claims. The offers did not include any conditions of release of liability.
Moreover, one such offer was sent after the mootness argument had been rejected by the court. After considering all the circumstances, I have concluded that the offers were not fundamentally efforts to compromise a claim, but rather offers of a specific remedy provided for in the terms of the auction contract.
Second, with respect to the balance of the factors under Federal Rule 403, I have considered that it is Mr. Greenberg rather than Mr. Koch who faces the greater danger of unfair prejudice by the exclusion of the offers specifically with respect to punitive damages. If there were no punitive damages at issue in the case, I believe the analysis would be different, but punitive damages are veiy much involved in the case and implicate due process concerns, as the Supreme Court has held, and require consideration of factors such as the reprehensibility of defendant's behavior and degree of harm as well as other broad-based considerations, and requiring Mr. Greenberg to remain [mute] regarding his refund offers in the face of evidence and argument regarding his alleged wanton disregard for the law, moral reprehensibility, would unfairly prejudice and, therefore, I conclude that the probative value of such evidence on the limited issue of punitive damages is not substantially outweighed by the danger of unfair prejudice or other considerations under Rule 403.
That being said, defendant’s counsel may not attempt to utilize these refund offers as evidence going to liability, principal liability, or the overall validity of Mr. Koch’s claims or his right to be pursuing these claims in this Court. I will instruct the jury to disregard any such inference and I will also consider an appropriate limiting instruction delineating the purpose for which these refund offers may be used and I’ll consider any submissions on that front.
(Tr. at 3:24-5:20.)
. (See id. at 23:3-9 ("THE COURT: Okay. We’re going to pick the jury, and I’m going to think about bifurcation in the back of my mind. And I'm going to think about whether the case is possibly moot. But as far as the refund offers, I’ve concluded that they meet the requirements of Rule 403 but only for punitive [damages], so for that reason the issue of bifurcation becomes a possibly good solution.”).)
. In clarifying the ruling, the Court, prior to opening statements, noted as follows:
Just to remind the parties of my ruling yesterday, I did rule that the refund offers are excluded under Rule 403 for purposes of liability but not for purposes of punitive damages. I want to note that that ruling is subject to revisiting if the plaintiff opens the door during liability arguments or evidence to reconsideration of that ruling with respect to the relevance of refund offers. I have decided to bifurcate the trial assuming that door is not open, so the first phase of the trial will be on liability, compensatory damages, and the second phase on punitive damages.
(Tr. at 48:12-21.)
. In Faden Bayes Corp. v. Ford Motor Co.,
The other cases cited by Greenberg are similarly distinguishable. For example, in Baker v. Burlington Coat Factory Warehouse,
. Federal Rule of Evidence 613(b) provides, in pertinent part, that "[e]xtrinsic evidence of a witness’s prior inconsistent statement is admissible only if the witness is given an opportunity to explain or deny the statement and an adverse party is given an opportunity to examine the witness about it.... ”
. On cross-examination, Greenberg’s counsel questioned Egan about the vertically branded cork issue, with part of the colloquy reading as follows:
Q. You could see the branding on this cork, correct?
A. Yes.
Q. And you looked at it close enough to figure out that one of the digits on the vintage was missing, correct?
A. Yes.
Q. And you could see it was a vertical cork, correct?
A. Yes, I could.
Q. And when you saw it was a vertical cork, based upon the 20-plus years you have of looking at Chateau corks, particularly including Chateau Lafleur, it looked just fine to you; isn’t that true?
A. As I said before, I wasn’t focusing on Lafleur corks. On these particular corks and seeing that it was becoming an issue in the case, I did do subsequent research including reference to photographs of old Chateau Lafleur corks, and I can see that the branding was&emdash;should be horizontal for this period rather than vertical.
Q. And when did you decide to do the subsequent work after you told me you had finished your work?
A. Within the last few weeks.
Q. The last few weeks. And what is it&emdash; what is it, Mr. Egan, that all of a sudden that got into your head about this particular cork, which you had found to be just fine in the last few weeks? How did that happen?
. Koch's argument that Greenberg has forfeited his right to seek an offset under N.Y. GOL § 15-108 is unpersuasive. The cases cited by Koch recognize that, even if a party has waived his right to seek an "equitable share” offset under the third prong of the statute, and even if he has not pleaded the statute as an affirmative defense, he may still obtain an offset under the "amount of consideration paid” prong. See Schipani v. McLeod,
. (See, e.g., FPTC Tr. at 133:24-25 ("I think peculiar knowledge is bottle by bottle.”); Tr. at 2015:25-2016:3 ("We ought to be able to go through bottle by bottle ourselves. That’s my real concern here. The representation was a bottle-by-bottle representation.”); id. at 2152:9-10 ("This is a bottle-by-bottle case. This is not some global case about general conduct of people. You’re going to hear instructions, I’m going to read to you one in a minute, that it’s about 24 cases.”); see also Dkt. No. 451 (bottle-by-bottle jury verdict form).)
. Greenberg argues that § 15-108 requires a dollar-for-dollar reduction even if the settlement was for the 10 bottles that were different from those at issue in the trial: so long as the release also covered the bottles at issue in the trial, he contends, the total "amount of consideration paid” for the release is "greate[r]” and therefore must be offset against Koch's damages. This argument is unpersuasive because it reads § 15-108's reference to "release” in isolation from its reference to "the same injury.” The statute is implicated only insofar as the release is for "the same injury.” Accordingly, if the earlier release was for a broader set of injuries than those at trial, the "amount of consideration paid” for the release of claims for the same injury will ordinarily be a subset of the total consideration paid for the earlier release, as determined by a proportional reduction. See Barkley,
. (See, e.g., Tr. at 175:22-23 ("John Kapon [of Acker Merrall] would take anything.”); Tr. at 747:23-24 ("What they did to me, I’ll do to them; what they did to me, I’ll do to someone else.”); Ex. 476 ("The good news is that there is no garbage. That has been sold.”).)
. New York law requires trial courts to enter an order of remittitur or additur in actions requiring an itemized verdict if a jury’s award of money damages "deviates materially from what would be reasonable compensation.” N.Y. C.P.L.R. § 5501(c); see also Gasperini,
. The Court notes that it would reach the same decision under the due process analysis, requiring remittitur in the same amount.
. (See Tr. at 2401:14-18 ("At this point Mr. Greenberg offers Mr. Koch all of his money back and more, as you will see. You heard Mr. Greenberg testify it was his practice always to stand behind the wine and to offer refunds to anyone who complained. In fact, he does that in this letter.”).)
. Although the compensatory damages award is being reduced to $212,699 as a result of Koch's settlement with Zachys by operation of N.Y. GOL § 15-108, the Court still considers it appropriate to use the $355,811 figure as a measure of the harm for purposes of punitive damages. Punitive damages were awarded on the fraud claim, a claim that was pending only against Green-berg at the time of the Zachys settlement. It is also worth noting that the jury allocated 100% liability to Greenberg (and 0% to Zach-ys) on the GBL § 349 claim.
. The docket in this case reflects 507 docket entries and appearances filed by a total of 36 attorneys (many of whom have come and gone). As the docket shows, the parties have aggressively litigated this case, filing numerous discovery motions, sanctions motions, and dispositive motions. The parties filed 22 motions in limine prior to trial and numerous letter motions throughout the trial.
. On cross-examination, Koch engaged in the following colloquy with Greenberg’s counsel when discussing the refund offers:
A. I could have [accepted the refund offers], but I sensed in his letters that he didn’t accept any of the claims that we were claiming or any responsibility for selling fake wines.
Q. You felt that he didn’t confess to you? A. He didn't admit it.
(Tr. at 2429:15-19.)
. Koch emphasizes that neither his wealth nor his sophistication bars an award of attorney’s fees. (Reply Memorandum of Law in Support of Plaintiff William I. Koch's Post-Trial Motion, Dkt. No. 507 ("Pl.’s Rep.”), at 507.) The Court agrees. Moreover, the Court made clear over the course of this trial that any attempt by Greenberg to portray Koch as litigious would be foreclosed as inappropriate. Nor does the fact that Koch is a knowledgeable buyer diminish his status as a victim of fraud. Nevertheless, the Court finds it relevant to the attorney’s fee analysis — and to a broader perspective on the litigation— that Koch could have been compensated years earlier for his injury and chose to spare no expense in this litigation, where the amount in controversy was miniscule in comparison to the attorney’s fees involved.
. In the eBay case, the Supreme Court explained:
According to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
. See also People ex rel. Spitzer v. Applied Card Sys., Inc.,
. Independently, even if eBay were not the appropriate metric, under traditional principles of equity, the injunction sought by Koch could not stand, as it is overbroad and excessive in light of the litigation. For example, while Koch seeks to enjoin Greenberg from "permitting an advertisement involving the sale of his wine to be published without disclosing ... questions, doubts, or concerns raised by others in the wine industry about the authenticity of the wine,” there is no discussion of what might constitute such "doubts” or "concerns.” See Mgmt. Dynamics,
. The following bottles were the subject of Greenberg's initial refund offer: (1) the 1921 Chateau Lafleur (Trial Ex. 206); (2) the three 1945 Chateau Lafleur (Trial Exs. 207, 229, 230); (3) the 1928 Chateau Latour (Trial Ex. 200); (3) the 1921 Chateau Petrus (Trial Ex. 225); and (4) the 1928 Chateau Petrus (Trial Ex. 216).