Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Koch v. Greenberg

United States District Court, S.D. New York

March 31, 2014

WILLIAM I. KOCH, Plaintiff,

Page 248

[Copyrighted Material Omitted]

Page 249

[Copyrighted Material Omitted]

Page 250

[Copyrighted Material Omitted]

Page 251

[Copyrighted Material Omitted]

Page 252

For William I. Koch, an individual, Plaintiff: Bruce A. Wessel, LEAD ATTORNEY, PRO HAC VICE, Irell & Manella LLP, Los Angeles, CA; Layn R. Phillips, Melissa Rush McCormick, Regine Rutherfurd, LEAD ATTORNEYS, Irell & Manella LLP, Newport Beach, CA; Robert Darby, LEAD ATTORNEY, Bradley James Leimkuhler, Jared Ronald Gale, John Charles Hueston, PRO HAC VICE, Irell & Manella LLP, Newport Beach, CA; Adam Lewis Pollock, Edward M. Spiro, Elkan Abramowitz, Morvillo, Abramowitz, Grand, Iason, & Anello P.C., New York, NY; Marshall Alan Camp, Moez M. Kaba, Steven Nathaniel Feldman, Irell & Manella LLP (Los Angeles), Los Angeles, CA.

For Eric Greenberg, an individual, Defendant: Anthony Paul Coles, LEAD ATTORNEY, Patterson, Belknap, Webb & Tyler LLP, New York, NY; Arthur Joel Shartsis, LEAD ATTORNEY, Amy L. Hespenheide, Frank Albert Cialone, Roey Ze'Ev Rahmil, Tracy Salisbury, PRO HAC VICE, Felicia A. Draper, Shartsis Friese LLP, San Francisco, CA; Daniel G Bird, David Charles Frederick, PRO HAC VICE, Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC (DC), Washington, DC.

For Rudy Kurniawan, Interested Party: Lennette W. Lee, Robyn C. Crowther, Tina Wong, PRO HAC VICE, Caldwell Leslie & Proctor, P.C., Los Angeles, CA; Lennette W. Lee, Baker Botts L.L.P., Houston, TX; Nina Minard Beattie, Theresa Marie Trzaskoma, Brune & Richard LLP, New York, NY.

For Mr. John Kapon, Mr. Justin Christoph, Intervenors: Alyssa N. Koerner, Withers Bergman, LLP, New York, NY.


Page 253


J. PAUL OETKEN, United States District Judge.

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 Greenberg'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

Page 254

Koch's prior settlement with Zachys, and (b) the $12 million punitive damages award is remitted to $711,622; (2) Koch's request for attorney's fees is denied; (3) Koch's request for injunctive relief is denied; and (4) Koch's request for pre- and post-judgment interest is granted.

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), 2012 WL 7997484 (S.D.N.Y. Sept. 30, 2012). On October 24, 2012, this case was reassigned to the undersigned.

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.)[1] The Court reserved on the motion, subject to later briefing. ( Id.)

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.) Plaintiff's 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

Page 255

9, 2013 (Dkt. No. 504), and Plaintiff replied on September 10, 2013 (Dkt. No. 507).

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. City Transit Auth.., 417 F.3d 241, 247 (2d Cir. 2005) (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) (citations omitted)). The movant's burden on a Rule 50 motion will be " particularly heavy after the jury has deliberated in the case and actually returned its verdict." Id. at 248. Thus, in order to grant such a motion, " there must be '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 . . . such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded men could not arrive at a verdict against him.'" Song v. Ives Laboratories, Inc., 957 F.2d 1041, 1046 (2d Cir. 1992) (quoting Mattivi v. South African Marine Corp., 618 F.2d 163, 168 (2d Cir.1980) (citation omitted)).

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), 2012 WL 5506121, at *1 (S.D.N.Y. Nov. 7, 2012). As one such Founder " colorfully noted, trial by jury is a key 'indemnification against being ridden like horses, fleeced like sheep, worked like cattle, and fed and clothed like swine and hounds.'" Id. (quoting The Revolutionary Writings of John Adams 55 (C. Bradley Thompson ed., 2000)).

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., 691 F.3d 119, 128 (2d Cir. 2012) (quotations and citation omitted).

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 party . . . ." 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, 957 F.2d at 1047 (quoting Smith v. Lightning Bolt Productions, Inc., 861 F.2d 363, 370 (2d Cir. 1988) (citations omitted)). Rule 59 motions differ from motions for a new trial pursuant to Rule 50 in two significant respects. First, " [u]nlike judgment as a matter of law, a new trial may be granted even if there is substantial evidence supporting the jury's verdict." DLC Mgmt. Corp. v. Town of Hyde Park, 163 F.3d 124, 134 (2d Cir. 1998). And second, in considering a Rule 59 motion, " a trial judge is free to weigh the evidence himself, and need not view it in the light most favorable to the verdict

Page 256

winner." Id. " A new trial may be granted, therefore, when the jury's verdict is against the weight of the evidence." Id. at 133 (citations omitted). Despite this, however, a court will grant a Rule 59 motion only when the jury's verdict proves " egregious" in light of the evidence presented at trial. Id. at 134 (quotations and citations omitted).

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 Greenberg'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), 2008 WL 4778813, at *6 (S.D.N.Y. Oct. 31, 2008). The jury was properly instructed as to each of these elements (Court Ex. 7), which were reiterated in the verdict form. (Dkt. #451.)

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., 9 F.Supp.2d 405, 409 (S.D.N.Y. 1998) (" However, even an expression of opinion may be actionable if it is not sincerely held." ). Additionally, the jury was instructed, at Greenberg's request, on the non-actionable nature of so-called " puffery" or " trade-talk." See Bareham & McFarland, Inc. v. Kane, 228 A.D. 396, 398, 240 N.Y.S. 123 (4th Dep't 1930) (" Neither can the statements complained of be made the basis of an action in fraud, if they are nothing more than a recommendation of the plaintiff's wares. It is common knowledge that dealers are wont to put the best side out, and extol their goods. The public is so familiar with 'dealer's talk' that it is generally regarded as a mere expression of opinion, and, where the parties deal on equal terms, is not relied upon to any great extent." (citation omitted)); accord Serrano v. Cablevision Sys. Corp., 863 F.Supp.2d 157, 167-69 (E.D.N.Y. 2012) (" Statements will not form the basis of a fraud claim when they are mere 'puffery' or are opinions as to future events." (citations omitted)).

It is axiomatic that " juries are presumed to follow their instructions." Zafiro v. United States, 506 U.S. 534, 540, 113 S.Ct. 933, 122 L.Ed.2d 317 (1993) (quotations and citations omitted). Accordingly, it is nothing more than conjecture for Greenberg to assume that the jury's finding of fraud by affirmative misrepresentation was based on vague statements in the auction catalogue such as one that Greenberg's 17,000-bottle collection was the " best-of-the-best." The jury was explicitly instructed that general statements of puffery concerning the status of a vendor's wares are insufficient, as a matter of law, to give rise to actionable fraud. ( See, e.g., Court Ex. 7, at 7 (" Examples of such [non-actionable] statements are vague claims of superiority over comparable products or exaggerated and boasting statements upon which no reasonable buyer would be justified in relying." ).) Citing the charge conference, Greenberg contends that Koch suggested at trial that such statements were not puffery, but rather, were actionable,

Page 257

insincerely held statements of opinion. (Tr. 2024.) Again, in accordance with Greenberg's request, the jury was instructed on the difference between the two, and is presumed to have followed that law. ( Id. at 2118:8-22; see also id. at 2165:19-2166:16.)[2] Moreover, aside from such vague superlatives, the record contains several additional potential statements of fact, or potentially insincerely held opinions, that the jury could have reasonably construed as actionable misstatements. ( See Plaintiff's Opposition, Dkt. No. 503 (" Pl.'s Opp." ), at 4-6.)

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] Zacharia 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., 60 Misc. 189, 193, 111 N.Y.S. 802 (N.Y. S.Ct. 1908); accord Ostano Commerzanstalt v. Telewide Systems, Inc., 794 F.2d 763, 766 (2d Cir. 1986) (" [F]raudulent misrepresentation made with 'notice in the circumstances of its making' that the person to whom it was made would communicate it to third parties subjects the person making the misrepresentation to liability to the third party." (citation omitted)). Accordingly, even if Greenberg's statements were made to Zachys or its owner, rather than to Koch himself, so long as Greenberg reasonably expected auction attendees to rely on those statements--a conclusion the jury was free to reach in light of the record--they may be actionable representations under New

Page 258

York law. Greenberg also asserts that Zachys, rather than Greenberg, drafted the entire catalogue, developing its own representations concerning the wine that were separate from any representations made by Greenberg. ( See Def.'s Mem. at 5 (" Indeed, Zachys' control over the catalogue extended to every representation therein . . . ." ).) However, given the testimony at trial, it was reasonable for the jury to find that Greenberg was a driving force behind the catalogue's representations. ( See Pl.'s Opp. at 7-8.) The jury was free to accept the testimony of Greenberg and his witnesses that the catalogue's representations were those of Zachys and Zachys alone; however, it appears to have rejected this interpretation of the evidence. ( See, e.g., Dkt. No. 451 at 13 (apportioning blame for Koch's GBL claims at 100% for Greenberg and 0% for Zachys with respect to the § 349 claim and at 75% for Greenberg and 25% for Zachys with respect to the § 350 claim).)

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., 987 F.2d 142, 150 (2d. Cir. 1993) (citation omitted). Either theory can give rise to liability for fraudulent concealment, and it was reasonable and permissible for the jury to conclude that Greenberg had superior knowledge not readily available to Koch concerning the bottles at issue in the case. Throughout the trial, Greenberg's counsel emphasized that Koch had the opportunity to inspect the bottles at issue, and, had he done so, he would have seen the indicia of inauthenticity that served as readily apparent indicators of their counterfeit status. The jury was free to credit that argument and chose not to do so--a determination that was within the province of the jury. While the record did indicate surface-level problems with the bottles of wine--aberrational labels or irregular cork striations, for example--the record also included numerous references to information that Greenberg knew about the wine bottles, but chose not to share with Zachys or consumers. The jury chose to agree with Koch's position that " [n]o amount of inspection would have revealed what Greenberg knew" (Pl.'s Opp. at 10), and the Court concludes that that choice was sufficiently supported by the evidence at trial. Greenberg's arguments about the reasonableness of inspection in these circumstances are unavailing. The jury was instructed on the meaning of facts that are " readily available," namely, that they are those facts " discovered through the exercise of ordinary intelligence by the plaintiffs." (Court Ex. 7 at 11.) The jury was well aware that buyers, especially sophisticated buyers, are required by law to " protect themselves" in business transactions by obtaining relevant information. ( Id.) Nevertheless, all parties agreed that, for example, " a buyer is not required to conduct investigations to unearth facts and defects that are present, but not obvious," meaning that " a buyer is not expected to discover that a house is infested with termites." ( Id.; see Tr. at 2046:15-2047:12 (neither party objecting to this aspect of the jury charge).)

Closely akin to the issue of Greenberg's duty to disclose is the reasonableness of Koch's reliance--another required element

Page 259

of a common law fraud claim. Greenberg contends that " [i]n all events, Koch's reliance on the alleged statements or omissions was unreasonable as a matter of law." (Def.'s Mem. at 14.) At Greenberg's request, the Court instructed the jury that given the most logical interpretation of the " As-Is" clause in the auction catalog, authenticity, provenance, and merchantability of the wine were disclaimed. (Trial Ex. 7 at 9.) Additionally, in accordance with New York law, the jury was instructed that specific disclaimers ordinarily " preclude a finding of justifiable reliance," as required for a fraud claim. ( Id.) However, in special circumstances, where the material facts upon which a plaintiff relies are " peculiarly within the [defendant's] knowledge," and not discoverable by the plaintiff through " the exercise of ordinary intelligence," such an " As-Is" clause will not act as a bar to a fraud claim. Danam Realty Corp. v. Harris, 5 N.Y.2d 317, 157 N.E.2d 597, 184 N.Y.S.2d 599, 600 (Ct. App. 1959) (quotations and citation omitted). The jury was also instructed that in determining whether Greenberg possessed the requisite " peculiar knowledge," they were to examine " (1) the sophistication of the buyer and (2) the accessibility of the underlying information." See Koch, 2008 WL 4778813, at *3; (Trial Ex. 7 at 9.)

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 plaintiff's 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,[3] " found that New York's peculiar knowledge exception applies . . . ." (Pl.'s Opp. at 13.) Greenberg argues that a sophisticated buyer with access to inspection cannot, as a matter of law, be deemed to have reasonably relied where there is a specific disclaimer. (Defendant Eric Greenberg's Reply Memorandum of Law, Dkt. No. 505 (" Def.'s Rep." ), at 8.) This argument simply rehashes Greenberg's argument at trial: namely, that within the meaning of the peculiar knowledge exception, given the catalogue's right to inspection, the material facts known to Greenberg were " readily available" to Koch. However, it was reasonable

Page 260

for the jury to conclude that, in light of all the circumstances, and despite Koch's sophistication and his right to inspect the bottles, it was unreasonably difficult or impossible for him to have discovered " what Greenberg knew." (Pl.'s Opp. at 10.) For example, while the jury determined that the indicia of inauthenticity from the bottles reflected the reality that they were counterfeit, this fact does not compel the conclusion that Koch, under the circumstances of the 2005 auction, could have reasonably been expected (1) to recognize those signs for what they were or (2) to employ an expert to spend 25 minutes per bottle on inspection at the time of purchase.[4] Accordingly, it was reasonable for the jury to conclude that material facts upon which Koch relied were peculiarly within Greenberg's knowledge, thus permitting a finding of fraud notwithstanding the presence of an explicit disclaimer.

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 (Zachariah 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 (Zachariah stating that he would have liked to have known of Greenberg's belief " that vertical branding in Petrus magnums from before 1966 was not appropriate to the time" ); id. at 1722:6-1724:19 (Zachariah 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 potential

Page 261

bias or credibility of witnesses whose testimony was relevant to Greenberg's scienter are misplaced, as the Court is required to " 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." Brady v. Wal-Mart Stores, Inc., 531 F.3d 127, 133-34 (2d Cir. 2008) (quotations and citations omitted). Thus, the jury could reasonably have concluded that Koch satisfied his burden with regard to scienter.

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., 94 N.Y.2d 330, 343-44, 725 N.E.2d 598, 704 N.Y.S.2d 177 (Ct. App. 1999) (quotations and citations omitted). In contrast to " private contract disputes, unique to the parties," consumer-oriented conduct within the meaning of the statute requires acts or practices that " have a broader impact on consumers at large." Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 25, 647 N.E.2d 741, 623 N.Y.S.2d 529 (Ct. App. 1995) (citations omitted). Importantly, however, " [c]onsumer-oriented conduct does not require a repetition or pattern of deceptive behavior." Id. Accordingly, so long as conduct was aimed at the public at large, it is immaterial that the defendant may not have " committed the complained-of acts repeatedly--either to the same plaintiff or to other consumers." Id. Where the " acts complained of 'potentially affect similarly situated consumers,'" the consumer-oriented prong will be met. Koch, 2008 WL 4778813, at *7 (quoting Oswego, 85 N.Y.2d at 27). GBL § 350 prohibits false advertising and has the same elements as § 349, except for the requirement that the Defendant's advertisement " (1) had an impact on consumers at large, (2) was deceptive or misleading in a material way, and (3) resulted in injury." Andre Strishak & Associates, P.C. v. Hewlett Packard Co., 300 A.D.2d 608, 609, 752 N.Y.S.2d 400 (2d Dep't 2002) (citations omitted).

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 Plaintiff's 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, 2008 WL 4778813, at*7 (footnote omitted).

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. ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.