Billionaire William Koch's $12 million damages award in a lawsuit accusing a fellow wine collector of selling counterfeit Bordeaux was reduced by a U.S. judge to a little less than $1 million.
The punitive damages a jury awarded Koch against Eric Greenberg over the sale of 24 bottles of wine were "excessive," U.S. District Judge J. Paul Oetken said in a ruling today in Manhattan federal court.
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"While the flagrancy of Greenberg's fraud merits some award of punitive damages, the harm he caused is less compelling," Oetken said in the decision, which otherwise upheld the jury's findings. "This harm was economic in nature and none of its targets -- neither Koch nor other potential buyers at auction -- were financially vulnerable."
Koch was awarded about $379,000 in compensatory damages plus punitive damages by a jury in April 2013 over allegations that consignor Greenberg misled auction house Zachys Wine Auctions Inc. and buyers about the authenticity of purported rare vintages, including one allegedly dating to 1864.
The judge cut the total damages to a little less than $1 million, plus interest. He denied Koch's request for more than $7.8 million in attorneys fees, saying that they "bore no relationship to the amount of actual damages at issue."
A total of 36 attorneys were involved in a case that was litigated over a period of six years, the judge said, referencing the court docket.
Brad Goldstein, a spokesman for Koch, said his client is pleased with the ruling.
"Our goal from the start was never about the money, it was always to shine a bright light on the fraud that has gone undetected," he said in a phone interview.
The court found "Eric Greenberg's conduct was reprehensible, that he was a fraudster," Goldstein said "Whether it'a dollar or whether it's over a million dollars, that's going to follow him for the rest of his life."
David C. Frederick, a lawyer for Greenberg, said in an e- mail that "we're gratified by the court's ruling" to reduce damages and reject the claim for attorney's fees.
Koch filed suit in 2007 alleging Greenberg, founder and chairman emeritus of Scient Corp., defrauded him when he falsely promoted his wine collection as "the Best of the Best," claiming that some bottles dated to the Belle Epoque, a era that preceded World War I.
The brother of conservative Tea Party founders David Koch and Charles Koch, Koch is the founder of West Palm Beach, Florida-based Oxbow Carbon & Minerals LLC.
The suit was one of several filed by Koch against wine consignors and auction houses that he said sold counterfeit wine.
Wines at issue in the Greenberg case included a purported 1864 Chateau Latour bottle, which Koch bought for $14,160, and two 1950 Chateau Petrus magnums he bought for $20,060 each.
The case is Koch v. Greenberg, 07-cv-09600, U.S. District Court, Southern District of New York (Manhattan).