The opinion of the court was delivered by: ROBERT P. PATTERSON, JR.
ROBERT P. PATTERSON, JR., U.S.D.J.
Plaintiff moves to file an amended complaint based on evidence discovered since the filing of the original complaint. For the reasons set forth below, Plaintiff's motion is granted in part and denied in part.
Plaintiff William Barrett is a Canadian citizen and president of William Barrett Numismatics Limited ("Barrett Numismatics"), a corporation organized and existing under Canadian law. Defendant United States Banknote ("USBN") is a New York corporation and parent of American Bank Note Company ("ABN"), which is engaged in the business of printing currency, stocks, bonds, food stamps, and postage stamps. Defendant Christie, Manson & Woods International ("Christie's") is a New York corporation that conducts public auctions of works of art.
Central to Plaintiff's claim is an auction held at Christie's on November 28 and 29, 1990 ("November auction"), at which items from ABN's archives -- including old and rare bank notes, stamps, and specimen stocks and bonds -- were sold. According to Plaintiff, the Defendants represented that they possessed no other banknotes that were similar to or duplicates of the banknotes offered for sale. At the November auction, Plaintiff submitted successful bids which Christie's accepted as agent for USBN. On June 5, 1991, Christie's held another auction ("June auction"), which involved the sale by USBN of additional items from the ABN archives. Plaintiff claims that the items sold at the June auction were similar to or duplicates of his purchases.
On October 1, 1991, Plaintiff filed a complaint alleging breach of contract and breach of warranty against USBN and alleging intentional misrepresentation against Christie's. Plaintiff based his claims upon alleged misrepresentations made by Defendants concerning the nature and uniqueness of the notes he purchased in the November auction. Specifically, Plaintiff claimed that Defendants knew or should have known "that substantial duplication existed between banknotes from the ABN archives to be auctioned in the November sale and banknotes from the ABN archives to be auctioned in the future sale. . . ." Compl. P 40. Defendants filed answers on December 20, 1991.
The Allegations of the RICO Complaint
On February 28, 1990, USBN and Christie's, through Stanley Kreitman, president of USBN, and Elizabeth Pope, an employee of Christie's, reached agreement to auction the ABN archives. In the contract USBN warranted that USBN owned the ABN archives to be consigned to the auction. Christie's, through Pope and James Lamb, another employee at Christie's, advertised the auction in articles and press releases mailed or wired to prospective collectors and bidders. As part of this advertising campaign, an interview with Lamb appeared in June 1990 in the Banknote Reporter, a widely circulated newspaper for collectors and dealers in paper currency. In the interview Lamb stated that "all the issues of one bank will be put in together, not necessarily in one lot, but in a small number of lots. . . . We're not going to play the game of cutting up sheets or leaking things out over 20 years or selling parts off privately." Am. Compl. P 57.
In August 1990, Kreitman, to limit speculation about the future availability of the banknotes to be auctioned at the November auction, represented that printing plates possessed by USBN which might be used to print further banknotes would not be used in the future. The representation stated that USBN could "assure prospective buyers that the lots in this sale represent all the existing archival material and that those printing plates which still exist will remain the property of [USBN]. No further impressions will be made from these plates for commercial purposes." Id. P 63. In September 1990, Lamb mailed Kreitman's representation to Barrett in response to questions Barrett had asked regarding the banknotes to be sold at the November auction. Christie's also printed the representation in its catalogue for the November auction ("November catalogue") and mailed the catalogue to collectors, dealers and other prospective bidders. The proposed RICO complaint further alleges that Lamb and Pope published falsely low price estimates of the USBN banknotes in the November catalogue in order to induce prospective purchasers to attend the auction.
On November 15, 1990, two weeks prior to the November auction, Christie's and USBN were informed by attorneys for the Bank of Canada that numerous lots of Canadian materials included in the November catalogue were not in fact owned by USBN, but rather were owned by the Canadian government. As a result, Christie's and USBN "agreed to withdraw 21 lots in their entirety, and portions of 22 other lots, and return the withdrawn materials to the Bank of Canada." Id. P 74. Christie's and USBN subsequently published an addendum to the November auction catalogue which stated that "Christie's . . . agreed to a private sale arrangement between [USBN] and the Bank of Canada affecting a small number of lots in this sale." Id. P 75. The addendum was mailed to Plaintiff and other prospective bidders at the November auction, and the information contained in the addendum was also relayed to bidders by phone. Plaintiff attended the November auction and submitted successful bids totalling $ 1,582,405.
The RICO allegations go on to state that, in September 1991, USBN, without Christie's as its agent or intermediary, sold a further part of its ABN archives to Nemco, a brokerage firm. The archives sold to Nemco included proofs and specimens of banknotes, as well as proofs and specimens owned by the governments of Canada and Israel. Plaintiff alleges that some of the banknotes sold by ...