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11-1522-cv 

Koch v. Cristie’s Int’l PLC 

1 UNITED STATES COURT OF APPEALS 

2 

3 FOR THE SECOND CIRCUIT

4 ____________________________________ 

5 

6 August Term, 2011 

7 

8 Argued: May 2, 2012 Decided: October 4, 2012 

9 

10 Docket No. 11-1522-cv 

11 ____________________________________ 

12 

13 WILLIAM I. KOCH, 

14 

15 Plaintiff-Appellant, 

16 

17 —v.— 

18 

19 CHRISTIE’S INTERNATIONAL PLC, A U.K. PUBLIC LIMITED COMPANY,

20 CHRISTIE, MASON & WOODS, LIMITED, A U.K. PRIVATE LIMITED 

21 COMPANY, CHRISTIE’S INCORPORATED, A NEW YORK CORPORATION

22 

23 Defendants-Appellees. 

24 ___________________________________ 

25 

26 Before: SACK and RAGGI, Circuit Judges, and KOELTL, District 

Judge.* 27 

28 

29 This is an appeal from the judgment of the United States 

30 District Court for the Southern District of New York (Jones, 

31 J.) dismissing the civil RICO conspiracy and common law fraud 

32 claims of plaintiff-appellant William I. Koch against the 

33 defendants after determining that the statute of limitations 

 

* The Honorable John G. Koeltl, of the United States District 

Court for the Southern District of New York, sitting by 

designation. 
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1 for those claims had expired. The claims relate to alleged 

2 fraud in falsely attributing bottles of wine to Thomas 

3 Jefferson’s collection. Because we find that Koch’s claims 

4 were time-barred, we affirm the judgment of the District 

5 Court. 

6 ______________ 

7 

8 Edward M. Spiro, Barbara L. Trencher, Adam L. Pollock, 

9 Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C., New 

10 York, NY, and Irell & Manella LLP, Newport Beach, CA, for 

11 Plaintiff-Appellant William I. Koch. 

12 

13 Jonathan J. Lerner, Maura Barry Grinalds, Robert A. Fumerton, 

14 Patrick G. Rideout, Skadden, Arps, Slate, Meagher & Flom, LLP, 

15 New York, NY, for Defendants-Appellees Christie’s 

16 International PLC, Christie, Mason & Woods, Ltd., and 

17 Christie’s Inc.. 

18 

19 ______________ 

20 

21 JOHN G. KOELTL, DISTRICT JUDGE:

22 For wine, timing is critical. The same is true for 

23 causes of action. 

24 This case requires us to clarify the operation of 

25 “inquiry notice” in the context of a civil action pursuant to 

26 the Racketeer Influenced and Corrupt Organizations Act 

27 (“RICO”), 18 U.S.C. § 1961 et seq., and common law fraud 

28 claims under New York law. This analysis is necessary to 

29 determine whether the wine-related causes of action in this 

30 case were stale when brought. The claims relate to alleged 
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1 fraud in inflating the value of bottles of wine by falsely 

2 attributing them to Thomas Jefferson’s wine collection. 

3 Plaintiff-appellant William I. Koch appeals from the 

4 judgment of the United States District Court for the Southern 

5 District of New York (Jones, J.) that dismissed his claims 

6 against Christie’s International PLC; Christie, Mason & Woods, 

7 Ltd.; and Christie’s Inc. (collectively, “Christie’s”) because 

8 they were time-barred. The District Court dismissed the 

9 claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil 

10 Procedure. Koch v. Christie's International PLC, 785 F. Supp. 

11 2d 105 (S.D.N.Y. 2011). 

12 The essence of Koch’s allegations against Christie’s is 

13 that Christie’s promoted as authentic a cache of wine that was 

14 ostensibly bottled in the late eighteenth century and was 

15 linked to Thomas Jefferson. Koch alleges that these 

16 “Jefferson wines” were in fact counterfeit, and that 

17 Christie’s knew or was reckless in not knowing of the wines’ 

18 dubious authenticity. Koch purchased four bottles of the now19 discredited Jefferson wines from third-party dealers in 

20 November and December of 1988, allegedly relying on 

21 promotional representations made by Christie’s. In January of 

22 2008, Koch and Christie’s agreed to toll the statute of 

23 limitations with respect to any claims against Christie’s 
-4- 

1 arising out of the Jefferson wine sales. Koch then filed this 

2 lawsuit in March 2010. 

3 Koch argues that the District Court erred in describing 

4 and applying the legal standard with respect to the doctrine 

5 of inquiry notice, under which, in some circumstances, a court 

6 imputes to a plaintiff knowledge of facts sufficient to 

7 trigger the running of the statute of limitations where the 

8 plaintiff could have discovered those facts by a reasonably 

9 diligent investigation. Koch further argues that, in any 

10 event, the Supreme Court’s decision in Merck & Co. v. 

11 Reynolds, 130 S. Ct. 1784 (2010), changed the law with respect 

12 to what knowledge is required to trigger accrual in cases 

13 arising under RICO. Koch also argues that the District Court 

14 erred in dismissing his New York state law claims as time15 barred because the standard for inquiry notice under New York 

16 law is different from the standard under federal law in RICO 

17 cases, and his claims should survive under the New York 

18 standard. 

19 Because we find no error in the District Court’s 

20 conclusion that Koch’s claims were time-barred, we AFFIRM the 

21 judgment of the District Court. 

22 

23 

24 
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1 BACKGROUND 

2 For the purpose of reviewing the grant of a motion to 

3 dismiss pursuant to Rule 12(b)(6) of the Federal Rules of 

4 Civil Procedure, we accept as true the facts alleged in the 

5 Complaint, drawing all reasonable inferences in favor of the 

6 plaintiff. See, e.g., Muto v. CBS Corp., 668 F.3d 53, 56 (2d 

7 Cir. 2012). We provide a summary of the relevant allegations 

8 here. 

9 The origins of this case lie with one Hardy Rodenstock, a 

10 “well-known wine connoisseur” and German national. In the 

11 mid-1980s, Rodenstock claimed to have discovered a cache of 

12 wine in a bricked-up wine cellar in Paris. The bottles bore 

13 the initials “Th.J.,” as well as various late eighteenth 

14 century vintages and the names of wineries from the period. 

15 Rodenstock pronounced the bottles authentic and linked them to 

16 Thomas Jefferson who had served as the United States Minister 

17 to France in the late 1700s prior to becoming the third 

18 President of the United States and whose zeal for wine is 

19 well-documented in the historical record. 

20 The Complaint alleges that Rodenstock had a longstanding 

21 and symbiotic relationship with Christie’s and specifically 

22 with J. Michael Broadbent, a wine consultant for Christie’s 

23 and the former head of its wine department. Christie’s, as 

24 alleged in the Complaint, is “one of the world’s largest 
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1 auction houses . . . . [and] describes itself as ‘firmly at 

2 the front of the international wine auction market.’” 

3 Broadbent was the head of the wine department at Christie’s in 

4 1985, when Christie’s first sold a bottle of “Th.J wine” from 

the Rodenstock cache, namely a bottle of “1787 Th.J Lafitte.”1 5 

6 In the run up to the first sale of Th.J. wine by 

7 Christie’s, Broadbent contacted the Thomas Jefferson 

8 Foundation at Monticello. In the course of Broadbent’s 

9 correspondence with Monticello historian Cinder Goodwin in 

10 November 1985, Broadbent noted at one point that there was “no 

11 actual proof” of the Th.J wine’s connection to Jefferson. 

12 Goodwin, for her part, said she was skeptical, but would 

13 reserve final judgment.

14 Despite this, the 1985 Christie’s Catalogue, in text 

15 allegedly written by Broadbent, discussed in detail 

16 Jefferson’s interest in wine in connection with the Th.J 

17 Lafitte. Christie’s publicized and marketed the bottle of 

18 Th.J. Lafitte in its 1985 Catalogue and publicly released a 

19 Sale Memorandum that also connected the wine to Jefferson and 

20 that represented that the Jefferson wine was in fact from the 

21 late eighteenth century. In December 1985, Christie’s sold 

 

1

 Christie’s has explained that “Lafitte” was the main 

spelling at the end of the eighteenth century for the winery 

now spelled “Lafite.” This opinion follows the spelling used 

at various points in the Complaint.
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1 the “1787 Th.J. Lafitte” at auction for approximately 

2 $156,000, reportedly the highest price ever paid for a bottle 

3 of wine. Christie’s then issued a December 9, 1985 press 

4 release that again tied the wine to Jefferson and again touted 

5 the wine’s authenticity.

6 Shortly after the December 1985 sale, Rodenstock began 

7 corresponding with Monticello about the status of the 

8 Jefferson wine and suggested holding a wine tasting from the 

9 Th.J. cache at Monticello. Monticello’s director declined, 

10 citing “doubts about the Jefferson connection.” The 

11 correspondence culminated in an April 1986 letter to 

12 Rodenstock that included a research report (the “Monticello 

13 Report”) prepared by historian Goodwin on December 12, 1985. 

14 The Monticello Report examined Jefferson’s financial records, 

15 including records of his wine purchases, correspondence, 

16 initialed personal property, and existing wine collection, and 

17 concluded that “no solid connecting evidence could be found” 

18 between Jefferson and the Th.J. wine. The Report did not 

19 become public at that time. However, in October 1985, The New 

20 York Times published an article discussing the Th.J. wine and 

21 airing the doubts of Monticello Jefferson scholars. Another 

22 Times article that ran the day after the auction noted the 

23 “scholarly doubt” as to the authenticity of the Th.J. wine. 
-8- 

1 In 1986, Christie’s placed another bottle from the Th.J. 

2 cache up for auction. Again, the Th.J. bottle was featured in 

3 the 1986 Christie’s Catalogue. The description of the bottle 

4 in the Catalogue noted that “it is assumed that the wine . . . 

5 was once the property of Thomas Jefferson,” and that “there is 

6 a very strong case to be made for the authenticity of the 

7 engraving and provenance.” The bottle ultimately sold on 

8 December 4, 1986, for approximately $56,000. In 1987, 

9 Christie’s sold another half-bottle from the Th.J. cache at an 

10 annual trade show in Bordeaux, France. 

11 In November 1988, Koch purchased a bottle marked “1787 

12 Branne Mouton Th.J.” for $100,000. Koch allegedly purchased 

13 the bottle from Rodenstock who used the Chicago Wine Company 

14 and Farr Vintners as intermediaries. Koch alleges that he 

15 purchased the bottle in reliance on “glowing endorsements of 

16 the wines and Rodenstock,” made by Christie’s “with the intent 

17 to influence wine collectors like [Koch] to purchase 

18 Rodenstock’s wines” and that “reasonably led [Koch] to believe 

19 that the wine offered by Rodenstock was authentic.” The next 

20 month, Koch purchased three more bottles of Th.J. wine for 

21 $211,804.40. Koch purchased these bottles from Farr Vintners 

22 acting as Rodenstock’s agent. The bottles were marked, 

23 respectively, as: “1787 Lafite Th.J.,” “1784 Lafite Th.J.,” 

24 and “1784 Branne Mouton Th.J.”
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1 In deposition testimony in a related case in Illinois 

state court,2 2 Koch admitted that, in the early 1990s, he read 

3 several articles detailing the “real doubts” that existed with 

4 respect to the authenticity of the Th.J. wine. One news 

5 report from the period described the Th.J. wine issue as “the 

6 wine world’s biggest scandal.” During this period, Koch also 

7 learned of a lawsuit by a German wine collector against 

8 Rodenstock. The lawsuit alleged that the Th.J. wine was 

9 counterfeit. Koch hired attorneys in 1993 to investigate and 

10 assess the provenance of the Th.J. wine. These attorneys sent 

11 him several of the articles relating to testing of the Th.J. 

12 wine that had been conducted for the purpose of the German 

13 lawsuit, some of which had confirmed the wine as authentic and 

14 some of which had indicated that it was counterfeit. Koch 

15 received legal advice concerning a potential action against 

16 Rodenstock in 1993 and sought the advice of counsel again in 

17 1995. However, Koch took no legal action over the course of 

 

2

 The District Court in this case took judicial notice of the 

press coverage of the controversy and litigation surrounding 

the Th.J. wines, as well as the court documents and documents 

in the public record that were “integral to the complaint.” 

Koch, 785 F. Supp. 2d at 111-12 (citing Staehr v. Hartford 

Fin. Servs. Grp., Inc., 547 F.3d 406, 425 (2d Cir. 2008) and 

Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d 

Cir. 1991)). Koch raised no specific objection to the 

consideration of these documents at the motion to dismiss 

stage, id. at 112, and does not raise the issue in this 

appeal. 
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1 the 1990s, as the debate over the authenticity of the Th.J. 

2 wine continued.

3 In October 2000, Koch sent samples of the Th.J. wine to 

4 the Woods Hole Oceanographic Institution (“Woods Hole”) for 

5 radiocarbon testing to determine their age. In his deposition 

6 testimony in the Illinois litigation, he testified that he 

7 sent the samples for testing to see if he had been “hoaxed.” 

8 The October 16, 2000 Report from Woods Hole (the “Woods Hole 

9 Report”) indicated that there was a 26.5% probability that the 

10 wine was from the time period between the year 1680 and 1740 

11 and a 68.9% probability that the wine was from between 1800 

12 and 1960. The Report appears to indicate only a 4.6% 

13 probability that the wine was from the period between 1740 and 

14 1800, the only period that would have been consistent with the 

15 engraving on each of the bottles that Koch bought. Woods Hole 

16 estimated the wine’s radiocarbon age as 90 years, with a 

17 standard deviation of 35 years, although the Woods Hole Report 

18 notes that this age “does not convert directly to a calendar, 

19 or chronological, age,” and that, more broadly, “the past 350-

20 400 year period is a very difficult one for determining 

21 calendar ages.” Koch apparently viewed these results as 

22 “neutral,” and he took no further action to investigate the 

23 authenticity of the Th.J. wine in response to the Woods Hole 

24 testing. 
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1 In 2005, Koch was asked to include a photograph of his 

2 bottles of Th.J. wine in a museum catalog. Koch alleges that, 

3 as part of the preparation of the catalog materials, his staff 

4 contacted Monticello “to confirm the provenance of the Th.J. 

5 wine.” This communication ultimately led to obtaining the 

6 1985 Monticello Report, which became public shortly 

7 thereafter. Koch alleges that, in response to the “credible 

8 and serious questions” concerning the wine’s authenticity 

9 raised by the Monticello Report, he then conducted an 

10 investigation that revealed that the Th.J. wine was 

11 counterfeit. By 2009, Koch had allegedly tracked down German 

12 engravers who claimed to have engraved the bottles with the 

13 “Th.J.” initials.

14 On August 31, 2006, less than 18 months after he had 

15 obtained a copy of the Monticello Report, Koch sued Rodenstock 

16 in the Southern District of New York for fraud in connection 

17 with the Th.J. wine. Rodenstock never appeared and the 

18 District Court entered a default judgment against him in 2010. 

19 See Complaint, Koch v. Rodenstock, No. 06 Civ. 6586 (S.D.N.Y. 

20 Aug. 31, 2006), ECF No. 1; Koch v. Rodenstock, No. 06 Civ. 

21 6586, 2010 WL 2010900 (S.D.N.Y. May 18, 2010), ECF No. 82 

22 (Order Entering Judgment of Default). 

23 Koch filed this lawsuit on March 30, 2010, asserting 

24 claims against Christie’s for a civil RICO violation of 18 
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1 U.S.C. § 1962(c) and civil conspiracy to defraud and aiding 

2 and abetting fraud in violation of New York Law. Koch alleged 

3 that Christie’s conducted an enterprise and participated in 

4 the conduct of an enterprise through a pattern of racketeering 

5 activity in violation of 18 U.S.C. § 1962(c). Koch sought 

6 treble damages under 18 U.S.C. § 1964(c) and an injunction 

7 under 18 U.S.C. § 1964(a). Koch also asserted a claim for 

8 violation of New York’s General Business Law § 349. 

9 On March 18, 2011, the District Court dismissed all 

10 claims against Christie’s as time-barred. The District Court 

11 held that Koch “was on inquiry notice of his injuries no later 

12 than October 16, 2000, when he submitted the Th.J bottle for 

13 testing,” and that the four-year statute of limitations for a 

14 RICO cause of action and the two-year statute of limitations, 

15 which applies to Koch’s state law claims, began to run on that 

16 date. Koch, 785 F. Supp. 2d at 115-16, 118. The District 

17 Court also held that the doctrine of equitable tolling did not 

18 apply to Koch’s causes of action. Id. at 116-19. The Court 

19 also dismissed the claim under New York’s General Business Law 

20 § 349, a ruling Koch does not appeal. 

21 This appeal followed. Our review of the District Court’s 

22 grant of a motion to dismiss pursuant to Rule 12(b)(6) of the 

23 Federal Rules of Civil Procedure and of the District Court’s 
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1 “interpretation and application of a statute of limitations,” 

2 is de novo. See Muto, 668 F.3d at 56. 

3 

4 DISCUSSION 

5 I. 

6 RICO claims are subject to a four-year statute of 

7 limitations. See Rotella v. Wood, 528 U.S. 549, 552 (2000); 

8 Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 

9 143, 156 (1987); Pearl v. City of Long Beach, 296 F.3d 76, 79 

10 n.1 (2d Cir. 2002). “Federal courts . . . generally apply a 

11 discovery accrual rule when a statute is silent on the issue, 

12 as civil RICO is here.” Rotella, 528 U.S. at 555; In re 

13 Merrill Lynch Ltd. P’ships Litig., 154 F.3d 56, 60 (2d Cir. 

14 1998). The District Court held that “[t]he clock begins to 

15 run when the plaintiff has ‘inquiry notice’ of his injury, 

16 namely when he discovers or reasonably should have discovered 

17 the RICO injury.” Koch, 785 F. Supp. 2d at 114 (citing 

18 Bankers Trust Co. v. Rhoades, 859 F.2d 1096, 1102 (2d Cir. 

19 1988)). 

20 Koch contends that the District Court incorrectly applied 

21 the law with respect to what facts must be discovered for a 

22 RICO claim to accrue. Koch argues that the District Court 

23 misinterpreted the Supreme Court’s decision in Rotella as 

24 supporting a “discovery of the injury standard,” and that, in 
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1 any event, the Supreme Court’s recent decision in Merck, 130 S. 

2 Ct. 1784, requires that a plaintiff have knowledge of a 

3 defendant’s scienter, as well as the alleged injury, for the 

4 plaintiff’s claim to accrue. This threshold question is one 

5 of first impression for this Court. 

6 Koch argues that the Court in Rotella declined to “settle 

7 upon a final rule” with respect to RICO claim accrual. 528 

8 U.S. at 554 n.2. That argument fails to appreciate the impact 

9 of Rotella. In Rotella, the Supreme Court resolved a conflict 

10 among the Courts of Appeals between “some form of the injury 

11 discovery rule (preferred by a majority of Circuits to have 

12 considered it), and the injury and pattern discovery rule.” 

13 Id. at 554. The Court definitively “eliminate[d] the latter.” 

14 Id. The Court left open the possibility of “a straight injury 

15 occurrence rule” unsoftened by an extension to allow for 

16 reasonable discovery, id. at 554 n.2, but such a rule would be 

17 even less favorable to plaintiffs like Koch who assert RICO 

18 claims decades after the alleged injury occurred. However, 

19 the Court made plain that, to the extent that “a discovery 

20 accrual rule” applies, “discovery of the injury, not discovery 

21 of the other elements of a claim, is what starts the clock.” 

22 Id. at 555. 

23 This Court’s decisions in RICO cases have followed 

24 Rotella’s plain language on this point. See, e.g., World 
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1 Wrestling Entm’t, Inc. v. Jakks Pac., Inc., 328 F. App’x 695, 

2 697 (2d Cir. 2009) (summary order); Frankel v. Cole, 313 F. 

3 App’x 418, 419-20 (2d Cir. 2009) (summary order); McLaughlin v. 

4 Am. Tobacco Co., 522 F.3d 215, 233 (2d Cir. 2008) (RICO’s 

5 four-year statute of limitations “begins to run when the 

6 plaintiff discovers-or should reasonably have discovered-the 

7 alleged injury”), abrogated in part on other grounds by, 

8 Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008); see 

9 also Merrill Lynch P’ships, 154 F.3d at 60 (“[T]his Circuit 

10 has adopted an ‘injury discovery’ rule in RICO cases which 

11 holds that ‘a plaintiff’s action accrues against a defendant 

12 for a specific injury on the date that plaintiff discovers or 

13 should have discovered that injury.’” (quoting Bankers Trust, 

14 859 F.2d at 1103)). 

15 Koch argues that the Supreme Court’s recent decision in 

16 Merck overruled Rotella and that, after Merck, a RICO 

17 plaintiff must have discovered the facts showing the fraud, 

18 including scienter. This argument is without merit.

19 Merck arose out of an alleged violation of § 10(b) of the 

20 Securities Exchange Act of 1934, 15 U.S.C. § 78j(b). 

21 See 130 S. Ct. at 1790. Because it was a securities fraud 

22 action, 28 U.S.C. § 1658(b) governed the accrual rule in Merck. 

23 That section provides: 
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1 [A] private right of action that involves a claim of 

2 fraud, deceit, manipulation, or contrivance in 

3 contravention of a regulatory requirement concerning 

4 the securities laws . . . may be brought not later 

5 than the earlier of—(1) 2 years after the discovery 

6 of the facts constituting the violation; or (2) 5 

7 years after such violation. 

8 28 U.S.C. § 1658(b); see Merck, 130 S. Ct. at 1790. 

9 At issue in Merck was the meaning of the statutory terms “the 

10 facts constituting the violation.” Id. at 1796. The Court 

11 held that “facts showing scienter are among those that 

12 ‘constitut[e] the violation.’” Id. (quoting 28 U.S.C. § 

13 1658(b)) (alterations in original). This Court has followed 

14 that holding in subsequent securities fraud cases. See City 

15 of Pontiac Gen. Emps.’ Ret. Sys. v. MBIA, Inc., 637 F.3d 169, 

16 173 (2d Cir. 2011) (Merck “changed the securities fraud law of 

17 this Circuit with respect to the onset of the applicable two18 year statute of limitations.”). 

19 But § 1658(b) does not apply to RICO actions. With 

20 respect to accrual, the civil RICO statute is “silent on the 

21 issue.” Rotella, 528 U.S. at 555. In such circumstances, 

22 “[f]ederal courts . . . generally apply a discovery accrual 

23 rule.” Id. “[I]n applying a discovery accrual rule, . . . 

24 discovery of the injury, not discovery of the other elements 

25 of a claim, is what starts the clock.” Id. Nothing in 
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1 Merck’s discussion of § 1658(b) purports to alter this well2 established rule or even to apply it outside the context of 

3 the statute at issue in that case. At bottom, Merck involved 

4 a situation where the statute was not silent, but rather 

5 stated that discovery of the facts constituting the 

6 “violation” lead to accrual. Merck, in other words, involved 

7 a statutory exception to the common law rule discussed in 

8 Rotella. See Jay E. Hayden Found. v. First Neighbor Bank, 

9 N.A., 610 F.3d 382, 387 (7th Cir. 2010) (“For remember that 

10 it’s the discovery of the injury (and injurer) . . . that 

11 starts the limitations period running . . . . That at least 

12 is the general rule, though there are exceptions; the 

13 limitations period in the Securities Exchange Act of 1934, for 

14 example, doesn't begin to run until the plaintiff discovers 

15 ‘the facts constituting the violation.’ But RICO requires 

16 discovery only of the injury and the injurer.” (citing Merck 

17 130 S. Ct. at 1796-97)) (citation omitted). 

18 There is a presumption that the Supreme Court does not 

19 overrule itself sub silentio. See, e.g., Hohn v. United 

20 States, 524 U.S. 236, 252-53 (1998) (“Our decisions remain 

21 binding precedent until we see fit to reconsider them, 

22 regardless of whether subsequent cases have raised doubts 

23 about their continuing vitality.”). Merck never mentioned 

24 Rotella and did not discuss the rationale for the discovery of 
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1 the injury rule that Rotella adopted. The underlying 

2 rationale of the Court’s decisions in both Rotella and Klehr v. 

3 A.O. Smith Corp., 521 U.S. 179 (1997), upon which Rotella 

4 relied, was concerned with the lengthy limitations period that 

5 would flow from a “last predicate act” discovery rule, Klehr, 

6 521 U.S. at 186, or an “injury and pattern discovery rule,” 

7 Rotella, 528 U.S. at 554. The Supreme Court rejected these 

8 because they “would allow proof of a defendant’s acts even 

9 more remote from time of trial and, hence, litigation even 

10 more at odds with the basic policies of all limitations 

11 provisions: repose, elimination of stale claims, and certainty 

12 about a plaintiff’s opportunity for recovery and a defendant’s 

13 potential liabilities.” Id. at 555. 

14 In Rotella, the appellant proposed an “accrual rule 

15 softened by a pattern discovery feature.” Id. at 558. Koch 

16 proposes an accrual rule softened by a scienter discovery 

17 feature. Here, as in Rotella, such a softening feature “would 

18 undercut every single policy” served by limitations provisions. 

19 Id. at 558-59 (“A limitations period that would have begun to 

20 run only eight years after a claim became ripe would bar 

21 repose, prove a godsend to stale claims, and doom any hope of 

22 certainty in identifying potential liability.”). It would 

23 also dilute the incentive of private attorneys general 

24 diligently to investigate, prosecute, and bring unlawful 
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1 activity to light. See Klehr, 521 U.S. at 195 (“[P]rivate 

2 civil [antitrust and RICO] actions seek not only to compensate 

3 victims but also to encourage those victims themselves 

4 diligently to investigate and thereby to uncover unlawful 

5 activity.”); see also Rotella, 528 U.S. at 559 (noting 

6 Congress’s intent to create “a civil enforcement scheme 

7 parallel to the Clayton Act regime, aimed at rewarding the 

8 swift who undertake litigation in the public good.”). 

9 The injury discovery rule serves those policies by 

10 holding plaintiffs to a high standard. The Court in Rotella 

11 considered and rejected the argument that RICO fraud claims 

12 demand a more “lenient” rule of accrual, id. at 557, and noted 

13 specifically that the requirement to plead RICO fraud claims 

14 with particularity pursuant to Rule 9(b) of the Federal Rules 

15 of Civil Procedure was not a basis for rejecting the discovery 

16 of the injury rule for accrual. Id. at 560-61. 

17 The rule of accrual for securities fraud cases pursuant 

18 to § 1658(b) is a statutory exception to the injury discovery 

19 rule. In the securities fraud context, discovery of facts 

20 constituting the violation, including scienter, is necessary 

21 for the claim to accrue because the statute of limitations 

22 requires it. Pontiac, 637 F.3d at 174 (citing Merck, 130 S. 

23 Ct. at 1798). But Merck’s scienter discovery requirement does 

24 not apply outside the realm of the statute that it interpreted. 
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1 It remains the law in this Circuit that a RICO claim accrues 

2 upon the discovery of the injury alone. 

3 

4 II. 

5 The next issue is when Koch’s claim accrued. 

6 In a RICO case, the first step in the statute of 

7 limitations analysis is to determine when the plaintiff 

8 sustained the alleged injury for which the plaintiff seeks 

9 redress. The court then determines when the plaintiff 

10 “discovered or should have discovered the injury and begin[s] 

11 the four-year statute of limitations period at that point.” 

12 Merrill Lynch P’Ships, 154 F.3d at 59. As a general matter, 

13 “the limitations period does not begin to run until [a 

14 plaintiff] ha[s] actual or inquiry notice of the injury.” Id. 

15 at 60. 

16 The District Court in this case held that “[t]he RICO 

17 statute of limitations . . . runs even where the full extent 

18 of the RICO scheme is not discovered until a later date, so 

19 long as there were ‘storm warnings’ that should have prompted 

20 an inquiry.” Koch, 785 F. Supp. 2d at 114 (quoting Jakks, 328 

21 F. App’x at 697). Such storm warnings, the District Court 

22 explained, “need not detail every aspect of the alleged 

23 fraudulent scheme.” Id. (quoting Staehr v. Hartford Fin. 

24 Servs. Grp., Inc., 547 F.3d 406, 427 (2d Cir. 2008)). Rather, 
-21- 

1 such storm warnings are sufficient where, “a person of 

2 ordinary intelligence would consider it ‘probable’ that fraud 

3 had occurred.” Id. (quoting Dodds v. Cigna Secs., Inc., 12 

F.3d 346, 350 (2d Cir. 1993)).3 4 We agree that the statute of 

5 limitations began to run at least by October 2000, by which 

6 time Koch was on inquiry notice with respect to his RICO 

7 injury, and therefore the RICO claim was time-barred before 

8 January 2008, when Koch and Christie’s agreed to toll the 

9 statute of limitations. 

 

3

 Koch argues that the District Court erred in holding that he 

was “on inquiry notice of his injuries no later than October 

16, 2000,” because “[b]y this date, a reasonable person should 

have been alerted to ‘storm warnings’ that the Th.J wine was 

possibly counterfeit.” Koch, 785 F. Supp. 2d at 116 (emphasis 

added). However, the District Court correctly stated, in the 

section of its opinion laying out the legal standard, that the 

standard for triggering inquiry notice is whether “a person of 

ordinary intelligence would consider it ‘probable’ that fraud 

had occurred.” Koch, 785 F. Supp. 2d at 114 (citing Dodds, 12 

F.3d at 350). Moreover, while the District Court’s language 

may have been incorrect inasmuch as it used the term 

“possible” rather than “probable,” the District Court’s 

holding was plainly that there was “ample evidence showing 

Plaintiff was aware of his injuries no later than October 16, 

2000.” Id. at 116. In any event, our review of the District 

Court’s decision with respect to inquiry notice is de novo, 

and, as explained in greater detail below, the District Court 

reached the correct conclusion because the Woods Hole Report, 

which indicated a greater than 90% chance that the Th.J. wine 

was not from the date that it purported to be, would suggest 

to a plaintiff of reasonable intelligence that his injury was 

probable, not simply possible. 
-22- 

1 In Lentell v. Merrill Lynch & Co., Inc., 396 F.3d 161 (2d. 

2 Cir. 2005), this Court set out a detailed description of when 

3 inquiry notice occurs: 

4 Inquiry notice-often called “storm warnings” in the 

5 securities context-gives rise to a duty of inquiry 

6 “when the circumstances would suggest to an investor 

7 of ordinary intelligence the probability that she 

8 has been defrauded.” In such circumstances, the 

9 imputation of knowledge will be timed in one of two 

10 ways: (i) “[i]f the investor makes no inquiry once 

11 the duty arises, knowledge will be imputed as of the 

12 date the duty arose”; and (ii) if some inquiry is 

13 made, “we will impute knowledge of what an investor 

14 in the exercise of reasonable diligence[ ] should 

15 have discovered concerning the fraud, and in such 

16 cases the limitations period begins to run from the 

17 date such inquiry should have revealed the fraud.” 

18 Id. at 168 (citations omitted). 

19 While inquiry notice as described in Lentell was 

20 developed in the context of securities fraud cases, it applies 

21 equally in RICO cases. See, e.g., Jakks, 328 F. App’x at 697; 

22 Merrill Lynch P’Ships, 154 F.3d at 60. In the securities 

23 fraud context, this Court has recently explained that “Merck 

24 overruled this analysis.” Pontiac, 637 F.3d at 174 (quoting 

25 Merck, 130 S. Ct. at 1798). Merck held that, in securities 

26 fraud actions, “the limitations period begins to run only 

27 after ‘a reasonably diligent plaintiff would have discovered 
-23- 

1 the facts constituting the violation, including scienter—

2 irrespective of whether the actual plaintiff undertook a 

3 reasonably diligent investigation.’” Id. (quoting Merck, 130 

4 S. Ct. at 1798). However, as discussed above, the Court’s 

5 holding in Merck on this point was grounded explicitly on the 

6 securities-related statute at issue in that case, which tied 

7 the statute of limitations to the “discovery of the facts 

8 constituting the violation.” Merck, 130 S. Ct. at 1796. The 

9 Court acknowledged that the common law rule, which imputes 

10 knowledge as of the date of inquiry notice to a plaintiff who 

11 makes no inquiry for the entire statutory period after the 

12 duty to inquire arose, might be unaffected. Id. at 1797 

13 (“[T]he court-created ‘discovery rule’ exception to ordinary 

14 statutes of limitations is not generally available to 

15 plaintiffs who fail to pursue their claims with reasonable 

16 diligence. But we are dealing here with a statute, not a 

17 court-created exception to a statute.”). 

18 This Court’s pre-Merck securities fraud cases grounded 

19 inquiry notice doctrine upon common law principles that are 

20 applicable to RICO actions. See, e.g., Armstrong v. McAlpin, 

21 699 F.2d 79, 88 (2d Cir. 1983) (“[W]here the circumstances are 

22 such as to suggest to a person of ordinary intelligence the 

23 probability that he has been defrauded, a duty of inquiry 

24 arises, and if he omits that inquiry when it would have 
-24- 

1 developed the truth, and shuts his eyes to the facts which 

2 call for investigation, knowledge of the fraud will be imputed 

3 to him.” (quoting Higgins v. Crouse, 42 N.E. 6, 7 (N.Y. 

4 1895))). Compare Dodds, 12 F.3d at 350 (“[W]hen the 

5 circumstances would suggest to an investor of ordinary 

6 intelligence the probability that she has been defrauded, a 

7 duty of inquiry arises, and knowledge will be imputed to the 

8 investor who does not make such an inquiry.” (citing 

Armstrong, 699 F.2d at 88)).4 9 And this Court has previously 

10 drawn on the pre-Merck securities fraud cases in explaining 

11 the nature of inquiry notice and accrual in RICO actions. See, 

12 e.g., Merrill Lynch P’ships, 154 F.3d at 60 (citing Dodds, 12 

 

4

 That the Lentell analysis treats differently plaintiffs who 

act differently comports with the discovery rule’s animating 

common law principle: parties have a duty to pursue potential 

claims with reasonable diligence. Compare Holmberg v. 

Armbrecht, 327 U.S. 392, 397 (1946) (“[T]his Court long ago 

adopted as its own the old chancery rule that where a 

plaintiff has been injured by fraud and ‘remains in ignorance 

of it without any fault or want of diligence or care on his 

part, the bar of the statute does not begin to run until the 

fraud is discovered.’” (quoting Bailey v. Glover, 88 U.S. 342, 

348 (1874))) (emphasis added), with Higgins, 42 N.E. at 6-7 

(“When . . . facts are known from which the inference of fraud 

follows, there is a discovery of the facts constituting the 

fraud . . . . That the defrauded party did not actually draw 

the inference, but shut his eyes to it, does not stop the 

running of the statute. He ought to have known, and so is 

presumed to have known, the fraud perpetrated.”). 
-25- 

1 F.3d at 350). Because Merck was interpreting the meaning of 

2 the term “discovery” in the accrual statute for securities 

fraud actions,5 3 it did not alter the accrual rules for RICO 

4 actions. Therefore, the Lentell articulation of inquiry 

5 notice continues to apply in RICO actions. 

6 Koch argues that, notwithstanding Lentell, inquiry notice 

7 can never trigger the running of the statute of limitations. 

8 Rather, he argues, the statute does not begin to run until a 

9 plaintiff “in the exercise of reasonable diligence, should 

10 have discovered” the injury. See Rothman v. Gregor, 220 F.3d 

11 81, 97 (2d Cir. 2000) (quoting Sterlin v. Biomune Sys., 154 

12 F.3d 1191, 1201 (10th Cir. 1998)). However, in Rothman, which 

13 preceded Lentell, the plaintiffs “actually inquired further 

14 after” a duty of inquiry arose. Id. at 97. Rothman, a 

15 securities fraud case, is illustrative of Lentell’s second 

16 prong; in that case, it would have been improper to begin the 

17 running of the statute at the time that the duty to inquire 

18 arose. Where a RICO plaintiff does begin or has begun to 

19 inquire once the duty arises, the Court must determine when a 

20 reasonably diligent investigation would have revealed the 

 

5

 Indeed, the Court in Merck rejected altogether the 

application of inquiry notice in 28 U.S.C. § 1658(b), finding 

that “[w]e cannot reconcile it with the statute, which simply 

provides that ‘discovery’ is the event that triggers the 2–

year limitations period.” 130 S. Ct. at 1798. 
-26- 

1 injury to a person of reasonable intelligence, and the statute 

2 of limitations begins to run on that date. Cf. Lentell, 396 

3 F.3d at 168. The existence of “storm warnings” sufficient to 

4 trigger inquiry notice does not begin the clock when the 

5 plaintiff actually pursues an investigation. 

6 Nevertheless, when a RICO plaintiff “makes no inquiry 

7 once the duty arises, knowledge will be imputed as of the date 

8 the duty arose.” Id. Thus, once there are sufficient “storm 

9 warnings” to trigger the duty to inquire, and the duty arises, 

10 if a plaintiff does not inquire within the limitations period, 

11 the claim will be time-barred. In such a case, knowledge of 

12 facts that would suggest to a reasonably intelligent person 

13 the probability that the person has been injured is 

14 dispositive. See Jakks, 328 F. App’x at 697 (“The RICO 

15 statute of limitations . . . runs even where the full extent 

16 of the RICO scheme is not discovered until a later date, so 

17 long as there were ‘storm warnings’ that should have prompted 

18 an inquiry.”). 

19 The District Court correctly determined that this is such 

20 a case. At least by October 16, 2000, when the Woods Hole 

21 Report was issued, inquiry notice had been triggered. By 

22 then, Koch was aware of numerous articles noting that the 

23 provenance of the Th.J wine could not be proved and noting 

24 comments by Monticello experts on Thomas Jefferson that cast 
-27- 

1 serious doubt on Jefferson’s ownership or relationship to the 

2 wine. Attorneys retained to investigate the authenticity of 

3 the Th.J. wine brought these articles to Koch’s attention. 

4 Around that same time, the plaintiff became aware of a lawsuit 

5 in a German court accusing the man who supposedly found the 

6 Th.J wine and from whom the plaintiff had bought the wine, of 

7 forging the bottles, based on testing that dated the wine to 

8 1960. The Woods Hole Report indicated that the wine was 

9 likely not from the period that the defendants had claimed it 

10 to be. Indeed, the Woods Hole Report indicated a greater than 

11 90% probability that the Th.J. wine was not from the years 

12 listed on their bottles. All of these facts, but particularly 

13 the Woods Hole testing, which related directly to the 

14 authenticity of the age of the wine and not merely to its 

15 relationship to Thomas Jefferson, would suggest to a 

16 reasonably intelligent person that the wine was not authentic. 

17 The circumstances suggested far more than the “mere 

18 possibility” that Koch had bought counterfeit wine. Thus, by 

19 October 16, 2000, Koch had a duty to conduct a reasonably 

20 diligent investigation into the Th.J. wine. 

21 It is not disputed that Koch did not begin any such 

22 investigation until 2005. Because the duty to inquire had 

23 arisen and been unmet for more than four years, the District 
-28- 

1 Court correctly imputed to Koch knowledge of the injury as of 

2 the date the duty arose. His claim is therefore time-barred. 

3 

4 III. 

5 Koch also argues that the District Court erred in 

6 dismissing his common law fraudulent conspiracy and aiding and 

7 abetting claims. Under New York law, the time within which an 

8 action based upon fraud must be commenced is “the greater of 

9 six years from the date the cause of action accrued or two 

10 years from the time the plaintiff . . . discovered the fraud, 

11 or could with reasonable diligence have discovered it.” N.Y. 

12 C.P.L.R. 213(8) (MCKINNEY 2004); see Sargiss v. Magarelli, 909 

13 N.E. 2d 573, 576 (N.Y. 2009). Because the alleged fraud was 

14 completed in 1988, when Koch purchased the Th.J. wine, his 

15 common law claims are timely only if they were brought within 

16 two years of the date the fraud was discovered or could have 

17 been discovered with reasonable diligence. 

18 Koch relies on Erbe v. Lincoln Rochester Trust Co., 144 

19 N.E.2d 78 (N.Y. 1957), for the proposition that whether a 

20 plaintiff is “possessed of knowledge of facts from which 

21 [fraud] could be reasonably inferred,” such that the statute 

22 of limitations begins to run, “[o]rdinarily . . . presents a 

23 mixed question of law and fact and, where it does not 

24 conclusively appear that the plaintiffs had knowledge of facts 
-29- 

1 of that nature a complaint should not be dismissed on motion.” 

2 Id. at 80-81. He argues that New York law provides a higher 

3 threshold for inquiry notice than the standard under RICO law, 

4 and that this precludes dismissal of a fraud claim on a motion 

5 to dismiss. This argument is without merit. 

6 Erbe arose from a bank’s sale of stock in a closely-held 

7 corporation. Id. at 79. The bank was an executor and 

8 creditor of an estate, a major portion of which consisted of 

9 stock. Id. In 1943, the bank sold the stock to itself at a 

10 public auction. Id. The plaintiffs, who were interested in 

11 the estate, sued ten years later for fraud, and the action was 

12 dismissed on the grounds that it was barred by the six year 

statute of limitations that then existed.6 13 Id. at 79-80. 

 

6

 At the time Erbe was decided, “[t]he New York Civil Practice 

Act, § 48, subd. 5, provide[d] a six-year period of 

limitations as to actions for fraud, a period which [began] to 

run only from the discovery of the fraud.” Rieser v. Balt. & 

Ohio R.R. Co., 228 F.2d 563, 566 (2d Cir. 1955); see Civil 

Practice Act § 48, subd. 5, compiled in, 8 Gilbert-Bliss Civil 

Practice of the State of New York 13 (1956) (“The cause of 

action in [a fraud] case is not deemed to have accrued until 

the discovery by the plaintiff . . . of the facts constituting 

the fraud”); see also Erbe, 144 N.E.2d at 80 (citing Civil 

Practice Act, § 48, subd. 5). 

In 1965, New York enacted the predecessor of what is now 

N.Y. C.P.L.R § 203(g). See 1965 N.Y. Laws 56. That section 

now provides, with certain exceptions, that “where the time 

within which an action must be commenced is computed from the 

time when facts were discovered or from the time when facts 

could with reasonable diligence have been discovered, . . . 

the action must be commenced within two years after such 

actual or imputed discovery or within the period otherwise 
-30- 

1 The New York Court of Appeals reversed the dismissal, 

2 because the record did not “disclose a sufficient basis for 

3 imputing a knowledge of the fraud alleged to the plaintiffs at 

4 a date greater than six years prior to the commencement of 

5 this action.” Id. at 80. The Court characterized the facts 

6 in the record as merely “facts which aroused plaintiffs' 

7 suspicions as to the defendant bank's good faith in the prior 

8 Surrogate's proceedings,” and “not necessarily knowledge of 

9 facts from which the alleged fraudulent conspiracy might be 

10 reasonably inferred.” Id. at 81. However, the Court 

 

provided, computed from the time the cause of action accrued, 

whichever is longer.” N.Y. C.P.L.R. 203(g) (MCKINNEY 2001). 

The section was enacted at the suggestion of the joint 

legislative committee tasked with overhauling New York’s 

system of civil practice in the early 1960s. See 7B 

McKinney’s Consolidated Laws of N.Y. Ann. § 203, at 213 

(2003). The joint committee recommended the shorter discovery 

rule because “where the facts are not discovered, and the 

period consequently would not begin to run until long after 

the event, there seems no reason why the plaintiff should not 

be required to proceed expeditiously after such discovery.” 

Sixth Report to the Legislature by the Senate Finance 

Committee Relative to the Revision of the Civil Practice Act 

74 (1962). The joint committee acknowledged that, at the 

time, the proposed two-year discovery provision “ha[d] no 

counterpart in present practice.” Id.; see also 1 Weinstein, 

Korn & Miller, New York Civil Practice: CPLR ¶ 203.App.03 (2d 

Ed.) (noting that the two-year discovery provision had “no 

precedent either in New York statutory or case law.”). In 

2004, N.Y. C.P.L.R. § 213(8), the limitations provision for 

fraud-based actions, was amended to include explicitly the two 

year discovery limitation of § 203(g), although New York 

courts had applied the two-year discovery provision to fraud 

actions since the provision’s enactment. Id. at ¶¶ 203.35, 

213App.01, 213App.03. 
-31- 

1 acknowledged the longstanding rule in New York that 

2 “plaintiffs will be held to have discovered the fraud when it 

3 is established that they were possessed of knowledge of facts 

4 from which it could be reasonably inferred, that is, inferred 

5 from facts which indicate the alleged fraud.” Id. at 80. 

6 The statement of New York law in Erbe remains accurate. 

7 See Sargiss, 909 N.E.2d at 576 (“The inquiry as to whether a 

8 plaintiff could, with reasonable diligence, have discovered 

9 the fraud turns on whether the plaintiff was ‘possessed of 

10 knowledge of facts from which [the fraud] could be reasonably 

11 inferred.’ ‘Generally, knowledge of the fraudulent act is 

12 required and mere suspicion will not constitute a sufficient 

13 substitute.’ ‘Where it does not conclusively appear that a 

14 plaintiff had knowledge of facts from which the fraud could 

15 reasonably be inferred, a complaint should not be dismissed on 

16 motion and the question should be left to the trier of the 

17 facts.’” (quoting Erbe, 144 N.E.2d at 80-81)) (internal 

18 citations omitted). However, New York law does not support a 

19 contrary result in this case. 

20 Unlike in Erbe, there is no factual dispute about what 

21 knowledge Koch had in this case; rather, the question is 

22 whether he could reasonably have inferred the fraud from that 

23 knowledge. For the reasons already explained, Koch could have 

24 inferred the fraud based on the facts he had in October 2000, 
-32- 

1 when he learned that there was a high probability that the 

2 wine that he alleges he bought in reliance on the 

3 representations of authenticity made by Christie’s was in fact 

4 counterfeit, and certainly by 2005, when he came into 

5 possession of the Monticello Report. Even beginning to run 

6 the limitations period at the latter date would render Koch’s 

7 common law claims time-barred under New York’s two-year 

8 statute of limitations. 

9 Moreover, New York law recognizes, as RICO law does, that 

10 a plaintiff may be put on inquiry notice, which can trigger 

11 the running of the statute of limitations if the plaintiff 

12 does not pursue a reasonable investigation. See Gutkin v 

13 Siegal, 926 N.Y.S.2d 485, 486 (App. Div. 2011) (“‘[W]here the 

14 circumstances are such as to suggest to a person of ordinary 

15 intelligence the probability that he has been defrauded, a 

16 duty of inquiry arises, and if he omits that inquiry when it 

17 would have developed the truth, and shuts his eyes to the 

18 facts which call for investigation, knowledge of the fraud 

19 will be imputed to him’” (quoting Higgins, 42 N.E. at 7)). 

20 Thus, while it is true that New York courts will not grant a 

21 motion to dismiss a fraud claim where the plaintiff’s 

22 knowledge is disputed, it is proper under New York law to 

23 dismiss a fraud claim on a motion to dismiss pursuant to the 

24 two-year discovery rule when the alleged facts do establish 
-33- 

1 that a duty of inquiry existed and that an inquiry was not 

pursued.7 2 See Sielcken-Schwarz v. Am. Factors, 192 N.E. 307, 

3 310 (N.Y. 1934) (citing Higgins, 42 N.E. at 7); see, e.g, 

4 Shalik v. Hewlett Assocs., L.P., 940 N.Y.S.2d 304, 305-

5 06 (App. Div. 2012) (“The two-year period begins to run when 

6 the circumstances reasonably would suggest to the plaintiff 

7 that he or she may have been defrauded, so as to trigger a 

8 duty to inquire on his or her part”) (citation omitted) 

9 (affirming dismissal because “the defendants established, 

10 prima facie, that the plaintiffs possessed information 

11 regarding the questionable authenticity of the decedent’s 

12 signature on the Amendment more than two years before they 

13 filed the complaint”); Gutkin, 926 N.Y.S.2d at 486; Waters of 

14 Saratoga Springs, Inc. v. New York, 498 N.Y.S.2d 196, 

15 199 (App. Div. 1986), aff’d, 498 N.E.2d 146 (N.Y. 1986). 

 

7

 New York Courts also grant summary judgment based on the 

same clear principle that if a plaintiff is on inquiry notice 

and fails to make any investigation for two years, the 

plaintiff’s action will be time-barred under the two-year 

discovery rule. See, e.g., Marasa v. Andrews, 892 N.Y.S.2d 

494, 495 (App. Div. 2010); TMG-II v. Price Waterhouse & 

Co., 572 N.Y.S.2d 6, 7 (App. Div. 1991) (holding that, based 

on published news reports detailing a lawsuit filed against 

the defendant, “the underlying facts of the fraud claim 

against [the defendant], to the extent that they were not 

already known, could have been discovered with the exercise of 

due diligence more than two years before the action was 

commenced”), leave to appeal denied, 588 N.E.2d 97 (N.Y. 

1992). 
-34- 

1 Indeed, the standard applied in this Circuit with respect 

2 to inquiry notice in RICO and pre-Merck securities fraud cases 

3 shares its origin with the standard for inquiry notice under 

4 New York law. In Armstrong v. McAlpin, this Court adopted the 

5 language of Higgins v. Crouse, a seminal case with respect to 

6 the common law of inquiry notice in New York, finding Higgins 

7 “fully applicable in cases such as the instant one, which 

8 involve claims of securities fraud.” 699 F.2d at 88. Koch 

9 presents no argument why the rule under New York law is 

10 different from the RICO rule: where the facts would suggest 

11 the probability of fraud to a reasonably intelligent person, 

12 failure to investigate will prove fatal to the plaintiff’s 

13 claim if such a claim is not brought within the statutory 

14 limitations period beginning from the time of such inquiry 

15 notice. 

16 The District Court in this case concluded that “[i]t is 

17 clear that as of the testing of the wine in 2000, Plaintiff 

18 ‘had knowledge of facts from which the alleged fraud might 

19 reasonably be inferred.’” Koch, 785 F. Supp. 2d at 118 

20 (quoting Jeffrey BB. v. Cardinal McCloskey Sch., & Home for 

21 Children, 689 N.Y.S.2d 721, 724 (App. Div. 1999)). This 

22 conclusion was correct. At the very least, the Woods Hole 

23 Report prompted a duty to inquire under New York law, and, 

24 because Koch made no such inquiry over the course of the next 
-35- 

two years, knowledge of the fraud can be imputed to him.8 1 

2 See, e.g., Shalik, 940 N.Y.S.2d at 305. The District Court 

3 properly dismissed Koch’s common law fraud claims. 

4 

5 IV. 

6 Finally, Koch argues that the District Court erred in 

7 refusing to toll the statute of limitations in this case due 

8 to alleged fraudulent concealment by Christie’s. This 

9 argument is without merit. 

10 “Under federal common law, a statute of limitations may 

11 be tolled due to the defendant's fraudulent concealment if the 

12 plaintiff establishes that: (1) the defendant wrongfully 

13 concealed material facts relating to defendant’s wrongdoing; 

14 (2) the concealment prevented plaintiff’s ‘discovery of the 

15 nature of the claim within the limitations period’; and (3) 

16 plaintiff exercised due diligence in pursuing the discovery of 

17 the claim during the period plaintiff seeks to have tolled.” 

18 Corcoran v. N.Y. Power Auth., 202 F.3d 530, 543 (2d Cir. 1999) 

19 (internal citation omitted); see also Abbas v. Dixon, 480 F.3d 

 

8

 Koch does not appear to press the argument that, under New 

York law, all of the elements of the fraud, including 

scienter, must be known for the claim to accrue. Even if he 

did we would not need to reach the question. Koch failed to 

make any investigation after he was on inquiry notice of the 

fraud in October 2000 until at least 2005, by which time the 

two-year statute of limitations had expired. 
-36- 

1 636, 642 (2d Cir. 2007) (“Under New York law, the doctrines of 

2 equitable tolling or equitable estoppel may be invoked to 

3 defeat a statute of limitations defense when the plaintiff was 

4 induced by fraud, misrepresentations or deception to refrain 

5 from filing a timely action”) (internal quotation marks and 

6 citation omitted). “We review a district court's decision to 

7 deny equitable tolling for abuse of discretion.” Zerilli–

8 Edelglass v. N.Y.C. Transit Auth., 333 F.3d 74, 81 (2d Cir. 

9 2003). 

10 Reasonable diligence is a prerequisite to the 

11 applicability of equitable tolling. See, e.g., Klehr, 521 

12 U.S. at 194 (“[A RICO] plaintiff who is not reasonably 

13 diligent may not assert fraudulent concealment”) (internal 

14 quotation marks omitted); Abbas, 480 F.3d at 642 (noting with 

15 respect to equitable tolling under New York law that diligence 

16 is an “essential element of equitable relief”) (citation 

17 omitted). Based on the undisputed fact that Koch did not 

18 pursue any investigation for over four years after receiving 

19 the Woods Hole Report, Koch did not act with reasonable 

20 diligence during that period. While Koch makes specific 

21 allegations with respect to the 2006 efforts of Christie’s and 

22 Broadbent to hinder his investigation, the District Court 

23 correctly found that those allegations were irrelevant because 

24 the statute of limitations had already run by that time. As 
-37- 

1 the District Court explained with respect to those 

2 allegations, the “tolling period cannot delay the expiration 

3 of a deadline when that deadline has already expired.” Koch, 

4 785 F. Supp. 2d at 117 (quoting Nichols v. Prudential Ins. Co. 

5 of Am., 406 F.3d 98, 108 (2d Cir. 2005)). 

6 Koch’s allegations with respect to the period before the 

7 Woods Hole Report, such as the somewhat generalized allegation 

8 that Christie’s intentionally failed to disclose the details 

9 of the Monticello Report, do not indicate how Christie’s 

10 prevented Koch from discovering his claim. Koch alleges that 

11 he was able to obtain the Monticello Report by simply making a 

12 phone call and that within two years he had uncovered the 

13 fraud. There is no allegation that any defendant took any 

14 action that prevented Koch from making the same phone call 

15 immediately after he had seen the Woods Hole Report in October 

16 2000. The ineluctable conclusion is that Koch failed to file 

17 his claim within the statute of limitations not due to the 

18 defendants’ fraudulent concealment, but due to his own failure 

19 to exercise reasonable diligence. The District Court’s 

20 refusal to apply an equitable toll to any of Koch’s causes of 

21 action was not an abuse of discretion. 

22 
-38- 

1 CONCLUSION

2 We have considered all of the arguments of the parties. 

3 To the extent not specifically addressed above, they are 

4 either moot or without merit. For the reasons explained 

5 above, we AFFIRM the judgment of the District Court. 

6