Koch v. Christie's International PLC, No. 11-1522 (2d Cir. 2012)
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Plaintiff filed suit against Christie's under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq., and common law fraud claims under New York law. The claims related to alleged fraud in inflating the value of bottles of wine by falsely attributing them to Thomas Jefferson's wine collection. Because the court found no error in the district court's conclusion that plaintiff's claims were time-barred, the court affirmed the judgment.
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11-1522-cv Koch v. Cristie s Int l PLC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ____________________________________ August Term, 2011 Argued: May 2, 2012 Decided: October 4, 2012 Docket No. 11-1522-cv ____________________________________ WILLIAM I. KOCH, Plaintiff-Appellant, v. CHRISTIE S INTERNATIONAL PLC, A U.K. PUBLIC LIMITED COMPANY, CHRISTIE, MASON & WOODS, LIMITED, A U.K. PRIVATE LIMITED COMPANY, CHRISTIE S INCORPORATED, A NEW YORK CORPORATION Defendants-Appellees. ___________________________________ Before: SACK and RAGGI, Circuit Judges, and KOELTL, District Judge.* 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. -1- 1 for those claims had expired. 2 fraud in falsely attributing bottles of wine to Thomas 3 Jefferson s collection. 4 were time-barred, we affirm the judgment of the District 5 Court. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 The claims relate to alleged Because we find that Koch s claims ______________ Edward M. Spiro, Barbara L. Trencher, Adam L. Pollock, Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C., New York, NY, and Irell & Manella LLP, Newport Beach, CA, for Plaintiff-Appellant William I. Koch. Jonathan J. Lerner, Maura Barry Grinalds, Robert A. Fumerton, Patrick G. Rideout, Skadden, Arps, Slate, Meagher & Flom, LLP, New York, NY, for Defendants-Appellees Christie s International PLC, Christie, Mason & Woods, Ltd., and Christie s Inc.. ______________ JOHN G. KOELTL, DISTRICT JUDGE: For wine, timing is critical. The same is true for causes of action. 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. 29 determine whether the wine-related causes of action in this 30 case were stale when brought. This analysis is necessary to -2- The claims relate to alleged 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. 9 claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil The District Court dismissed the 10 Procedure. 11 2d 105 (S.D.N.Y. 2011). 12 Koch v. Christie's International PLC, 785 F. Supp. 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. 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. 19 discredited Jefferson wines from third-party dealers in 20 November and December of 1988, allegedly relying on 21 promotional representations made by Christie s. 22 2008, Koch and Christie s agreed to toll the statute of 23 limitations with respect to any claims against Christie s Koch alleges that these Koch purchased four bottles of the now- -3- In January of 1 arising out of the Jefferson wine sales. 2 Koch then filed this 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. 14 erred in dismissing his New York state law claims as time- 15 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 Koch also argues that the District Court 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 -4- 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. 11 mid-1980s, Rodenstock claimed to have discovered a cache of 12 wine in a bricked-up wine cellar in Paris. 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 In the The bottles bore 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. 24 alleged in the Complaint, is one of the world s largest -5- Christie s, as 1 auction houses 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 5 the Rodenstock cache, namely a bottle of 1787 Th.J Lafitte. 1 6 . . . . [and] describes itself as firmly at 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. 9 correspondence with Monticello historian Cinder Goodwin in In the course of Broadbent s 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. 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. Christie s publicized and marketed the bottle of 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. -6- 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. 4 release that again tied the wine to Jefferson and again touted 5 the wine s authenticity. 6 Christie s then issued a December 9, 1985 press 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. 19 become public at that time. 20 York Times published an article discussing the Th.J. wine and 21 airing the doubts of Monticello Jefferson scholars. 22 Times article that ran the day after the auction noted the 23 scholarly doubt as to the authenticity of the Th.J. wine. The Report did not However, in October 1985, The New -7- Another 1 In 1986, Christie s placed another bottle from the Th.J. 2 cache up for auction. 3 the 1986 Christie s Catalogue. 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. 8 December 4, 1986, for approximately $56,000. 9 Christie s sold another half-bottle from the Th.J. cache at an 10 11 Again, the Th.J. bottle was featured in The description of the bottle The bottle ultimately sold on In 1987, annual trade show in Bordeaux, France. 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. 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. 20 month, Koch purchased three more bottles of Th.J. wine for 21 $211,804.40. 22 acting as Rodenstock s agent. 23 respectively, as: 1787 Lafite Th.J., 1784 Lafite Th.J., 24 and 1784 Branne Mouton Th.J. Koch alleges that he The next Koch purchased these bottles from Farr Vintners -8- The bottles were marked, 1 In deposition testimony in a related case in Illinois 2 state court,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. 5 report from the period described the Th.J. wine issue as the 6 wine world s biggest scandal. 7 learned of a lawsuit by a German wine collector against 8 Rodenstock. 9 counterfeit. One news During this period, Koch also The lawsuit alleged that the Th.J. wine was 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. 15 received legal advice concerning a potential action against 16 Rodenstock in 1993 and sought the advice of counsel again in 17 1995. Koch 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. -9- 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. 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 In his deposition 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. 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. 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. 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. The Report appears to indicate only a 4.6% Woods Hole Koch apparently viewed these results as -10- 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. 6 1985 Monticello Report, which became public shortly 7 thereafter. 8 and serious questions concerning the wine s authenticity 9 raised by the Monticello Report, he then conducted an This communication ultimately led to obtaining the Koch alleges that, in response to the credible 10 investigation that revealed that the Th.J. wine was 11 counterfeit. 12 engravers who claimed to have engraved the bottles with the 13 Th.J. initials. By 2009, Koch had allegedly tracked down German 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. 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 24 Rodenstock never appeared and the Koch filed this lawsuit on March 30, 2010, asserting claims against Christie s for a civil RICO violation of 18 -11- 1 U.S.C. § 1962(c) and civil conspiracy to defraud and aiding 2 and abetting fraud in violation of New York Law. 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). 6 treble damages under 18 U.S.C. § 1964(c) and an injunction 7 under 18 U.S.C. § 1964(a). 8 violation of New York s General Business Law § 349. 9 Koch alleged Koch sought Koch also asserted a claim for On March 18, 2011, the District Court dismissed all 10 claims against Christie s as time-barred. 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. 17 Court also held that the doctrine of equitable tolling did not 18 apply to Koch s causes of action. 19 also dismissed the claim under New York s General Business Law 20 § 349, a ruling Koch does not appeal. 21 The District Court Koch, 785 F. Supp. 2d at 115-16, 118. This appeal followed. The District Id. at 116-19. The Court 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 -12- 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. 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 See Rotella v. Wood, 528 U.S. 549, 552 (2000); 10 n.1 (2d Cir. 2002). 11 discovery accrual rule when a statute is silent on the issue, 12 as civil RICO is here. 13 Merrill Lynch Ltd. P ships Litig., 154 F.3d 56, 60 (2d Cir. 14 1998). 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. 18 Bankers Trust Co. v. Rhoades, 859 F.2d 1096, 1102 (2d Cir. 19 1988)). 20 Federal courts . . . generally apply a Rotella, 528 U.S. at 555; In re The District Court held that [t]he clock begins to Koch, 785 F. Supp. 2d at 114 (citing 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. 23 misinterpreted the Supreme Court s decision in Rotella as 24 supporting a discovery of the injury standard, and that, in Koch argues that the District Court -13- 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. 5 of first impression for this Court. 6 This threshold question is one Koch argues that the Court in Rotella declined to settle 7 upon a final rule with respect to RICO claim accrual. 8 U.S. at 554 n.2. 9 of Rotella. 528 That argument fails to appreciate the impact 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. 14 Id. 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. 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 24 The Court definitively eliminate[d] the latter. The Court left open the possibility of a straight injury However, This Court s decisions in RICO cases have followed Rotella s plain language on this point. -14- See, e.g., World 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. 19 This argument is without merit. 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. 22 action, 28 U.S.C. § 1658(b) governed the accrual rule in Merck. 23 That section provides: Because it was a securities fraud -15- 1 [A] private right of action that involves a claim of 2 fraud, 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. deceit, manipulation, or contrivance in 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. 11 held that facts showing scienter are among those that 12 constitut[e] the violation. 13 1658(b)) (alterations in original). 14 that holding in subsequent securities fraud cases. 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 two- 18 year statute of limitations. ). 19 Id. at 1796. The Court Id. (quoting 28 U.S.C. § This Court has followed But § 1658(b) does not apply to RICO actions. See City With 20 respect to accrual, the civil RICO statute is silent on the 21 issue. 22 [f]ederal courts . . . generally apply a discovery accrual 23 rule. 24 discovery of the injury, not discovery of the other elements 25 of a claim, is what starts the clock. Rotella, 528 U.S. at 555. Id. In such circumstances, [I]n applying a discovery accrual rule, . . . -16- Id. Nothing in 1 Merck s discussion of § 1658(b) purports to alter this well- 2 established rule or even to apply it outside the context of 3 the statute at issue in that case. 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. 7 a statutory exception to the common law rule discussed in 8 Rotella. 9 N.A., 610 F.3d 382, 387 (7th Cir. 2010) ( For remember that At bottom, Merck involved Merck, in other words, involved See Jay E. Hayden Found. v. First Neighbor Bank, 10 it s the discovery of the injury (and injurer) . . . that 11 starts the limitations period running . . . . 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. 16 discovery only of the injury and the injurer. (citing Merck 17 130 S. Ct. at 1796-97)) (citation omitted). 18 That at least But RICO requires There is a presumption that the Supreme Court does not 19 overrule itself sub silentio. 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. ). 24 Rotella and did not discuss the rationale for the discovery of -17- See, e.g., Hohn v. United Merck never mentioned 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. 8 because they would allow proof of a defendant s acts even 9 more remote from time of trial and, hence, litigation even The Supreme Court rejected these 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. 14 Id. at 555. In Rotella, the appellant proposed an accrual rule 15 softened by a pattern discovery feature. 16 proposes an accrual rule softened by a scienter discovery 17 feature. 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. ). 23 also dilute the incentive of private attorneys general 24 diligently to investigate, prosecute, and bring unlawful Id. at 558. Koch Here, as in Rotella, such a softening feature would -18- It would 1 activity to light. 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 See Klehr, 521 U.S. at 195 ( [P]rivate The injury discovery rule serves those policies by 10 holding plaintiffs to a high standard. 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. 17 The Court in Rotella Id. at 560-61. The rule of accrual for securities fraud cases pursuant 18 to § 1658(b) is a statutory exception to the injury discovery 19 rule. 20 constituting the violation, including scienter, is necessary 21 for the claim to accrue because the statute of limitations 22 requires it. 23 Ct. at 1798). 24 not apply outside the realm of the statute that it interpreted. In the securities fraud context, discovery of facts Pontiac, 637 F.3d at 174 (citing Merck, 130 S. But Merck s scienter discovery requirement does -19- 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. 13 the limitations period does not begin to run until [a 14 plaintiff] ha[s] actual or inquiry notice of the injury. 15 at 60. 16 As a general matter, Id. 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. 21 F. App x at 697). 22 explained, need not detail every aspect of the alleged 23 fraudulent scheme. 24 Servs. Grp., Inc., 547 F.3d 406, 427 (2d Cir. 2008)). Koch, 785 F. Supp. 2d at 114 (quoting Jakks, 328 Such storm warnings, the District Court Id. (quoting Staehr v. Hartford Fin. -20- Rather, 1 such storm warnings are sufficient where, a person of 2 ordinary intelligence would consider it probable that fraud 3 had occurred. 4 F.3d 346, 350 (2d Cir. 1993)).3 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. Id. (quoting Dodds v. Cigna Secs., Inc., 12 3 We agree that the statute of 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. -21- 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. 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 19 In such circumstances, the Id. at 168 (citations omitted). While inquiry notice as described in Lentell was 20 developed in the context of securities fraud cases, it applies 21 equally in RICO cases. 22 Merrill Lynch P Ships, 154 F.3d at 60. 23 fraud context, this Court has recently explained that Merck 24 overruled this analysis. 25 Merck, 130 S. Ct. at 1798). 26 fraud actions, the limitations period begins to run only 27 after a reasonably diligent plaintiff would have discovered See, e.g., Jakks, 328 F. App x at 697; In the securities Pontiac, 637 F.3d at 174 (quoting Merck held that, in securities -22- 1 the facts constituting the violation, including scienter 2 irrespective of whether the actual plaintiff undertook a 3 reasonably diligent investigation. 4 S. Ct. at 1798). 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. 9 Court acknowledged that the common law rule, which imputes Id. (quoting Merck, 130 However, as discussed above, the Court s Merck, 130 S. Ct. at 1796. The 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. 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. 17 court-created exception to a statute. ). Id. at 1797 But we are dealing here with a statute, not a 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. 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 See, e.g., Armstrong v. McAlpin, -23- 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))). 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 9 Armstrong, 699 F.2d at 88)).4 Compare Dodds, 12 F.3d at 350 ( [W]hen the 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. 12 e.g., Merrill Lynch P ships, 154 F.3d at 60 (citing Dodds, 12 4 See, 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. ). -24- 1 F.3d at 350). 2 the term discovery in the accrual statute for securities 3 fraud actions,5 it did not alter the accrual rules for RICO 4 actions. 5 notice continues to apply in RICO actions. 6 Because Merck was interpreting the meaning of Therefore, the Lentell articulation of inquiry 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)). 13 preceded Lentell, the plaintiffs actually inquired further 14 after a duty of inquiry arose. 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. 19 inquire once the duty arises, the Court must determine when a 20 reasonably diligent investigation would have revealed the However, in Rothman, which Id. at 97. Rothman, a Where a RICO plaintiff does begin or has begun to 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. -25- 1 injury to a person of reasonable intelligence, and the statute 2 of limitations begins to run on that date. 3 F.3d at 168. 4 trigger inquiry notice does not begin the clock when the 5 plaintiff actually pursues an investigation. Cf. Lentell, 396 The existence of storm warnings sufficient to 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. 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. 12 facts that would suggest to a reasonably intelligent person 13 the probability that the person has been injured is 14 dispositive. 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 Id. Thus, once there are sufficient storm In such a case, knowledge of See Jakks, 328 F. App x at 697 ( The RICO 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. 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 -26- By 1 serious doubt on Jefferson s ownership or relationship to the 2 wine. 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. 9 likely not from the period that the defendants had claimed it Attorneys retained to investigate the authenticity of The Woods Hole Report indicated that the wine was 10 to be. 11 90% probability that the Th.J. wine was not from the years 12 listed on their bottles. 13 the Woods Hole testing, which related directly to the 14 authenticity of the 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. 19 October 16, 2000, Koch had a duty to conduct a reasonably 20 diligent investigation into the Th.J. wine. 21 Indeed, the Woods Hole Report indicated a greater than All of these facts, but particularly age of the wine and not merely to its Thus, by 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 -27- 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 5 III. Koch also argues that the District Court erred in 6 dismissing his common law fraudulent conspiracy and aiding and 7 abetting claims. 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 Under New York law, the time within which an 10 years from the time the plaintiff . . . discovered the fraud, 11 or could with reasonable diligence have discovered it. 12 C.P.L.R. 213(8) (MCKINNEY 2004); see Sargiss v. Magarelli, 909 13 N.E. 2d 573, 576 (N.Y. 2009). 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 N.Y. Because the alleged fraud was 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 -28- 1 of that nature a complaint should not be dismissed on motion. 2 Id. at 80-81. 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. 6 He argues that New York law provides a higher This argument is without merit. Erbe arose from a bank s sale of stock in a closely-held 7 corporation. 8 creditor of an estate, a major portion of which consisted of 9 stock. Id. Id. at 79. The bank was an executor and 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 13 statute of limitations that then existed.6 6 Id. at 79-80. 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 -29- 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. 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 Id. at 80. reasonably inferred. The Court characterized the facts 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. -30- 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. 12 required and mere suspicion will not constitute a sufficient 13 substitute. 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). 19 contrary result in this case. 20 Generally, knowledge of the fraudulent act is Where it does not conclusively appear that a However, New York law does not support a 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. 24 inferred the fraud based on the facts he had in October 2000, For the reasons already explained, Koch could have -31- 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. 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 Even beginning to run 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. 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 -32- See Gutkin v 1 that a duty of inquiry existed and that an inquiry was not 2 pursued.7 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, See Sielcken-Schwarz v. Am. Factors, 192 N.E. 307, 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). -33- 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. 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. 9 presents no argument why the rule under New York law is In Armstrong v. McAlpin, this Court adopted the 699 F.2d at 88. Koch 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. 20 (quoting Jeffrey BB. v. Cardinal McCloskey Sch., & Home for 21 Children, 689 N.Y.S.2d 721, 724 (App. Div. 1999)). 22 conclusion was correct. 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 Koch, 785 F. Supp. 2d at 118 This At the very least, the Woods Hole -34- 1 two years, knowledge of the fraud can be imputed to him.8 2 See, e.g., Shalik, 940 N.Y.S.2d at 305. 3 properly dismissed Koch s common law fraud claims. The District Court 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. 9 argument is without merit. 10 This 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. -35- 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). 7 deny equitable tolling for abuse of discretion. 8 Edelglass v. N.Y.C. Transit Auth., 333 F.3d 74, 81 (2d Cir. 9 2003). 10 We review a district court's decision to Zerilli 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). 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. 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. Based on the undisputed fact that Koch did not -36- While Koch makes specific As 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. 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, 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. 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. 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. 20 refusal to apply an equitable toll to any of Koch s causes of 21 action was not an abuse of discretion. There is no allegation that any defendant took any The ineluctable conclusion is that Koch failed to file 22 -37- The District Court s 1 2 CONCLUSION 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. 5 above, we AFFIRM the judgment of the District Court. 6 -38- For the reasons explained
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