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The Wine Trials

2013 March 26
by Mike

Forget the vineyard; when it comes to wine, all the action this spring is in the courtroom. It began today at a federal courthouse in Manhattan, with opening arguments in the case of Koch v. Greenberg (the trial was supposed to start yesterday but was postponed; I assume it was on account of the weather). This is the case that billionaire collector Bill Koch filed six years ago against fellow collector and onetime billionaire Eric Greenberg. Koch alleges that Greenberg knowingly sold him a number of counterfeit wines at a Zachys auction in 2005.  I did a long investigative piece for Slate in 2010 looking at the Koch/Greenberg saga and focusing on one bottle in particular, a magnum of 1921 Château Pétrus that Koch bought at the Zachys auction. The 21 Pétrus is a bottle that connects not only Greenberg and Koch, it also links New York’s Royal Wine Merchants, from which Greenberg procured many of his wines, to the infamous Hardy Rodenstock. The Wine Spectator published an excellent rundown of the case yesterday.

Rudy Kurniawan’s name is sure to factor prominently in the Koch v. Greenberg proceedings. Greenberg bought wine from Kurniawan and had frequent dealings with the alleged counterfeiter. It appears the criminal case against Kurniawan is headed for trial, too, presumably sometime in the next few months. Unless Kurniawan, who is being held at the Metropolitan Detention Center in Brooklyn (and, no, he wasn’t given a weekend furlough to attend this year’s La Paulée), has something juicy to offer federal prosecutors—incriminating evidence against, say, an auction house—the government has no incentive to cut a deal with him, and so far as we know, no deal has been cut.

Last week brought more wine-related litigation: The Wine Advocate filed a lawsuit against Antonio Galloni alleging breach of contract and fraud. Galloni, Robert Parker’s onetime heir-apparent, quit The Wine Advocate in February to start his own publication and walked out the door without delivering several reports that he’d been contracted to write on behalf of The Wine Advocate and for which he had been paid, according to the complaint. Instead, he apparently intends to publish the disputed material, which includes tasting notes from Sonoma, Burgundy, Piedmont, and Tuscany, on his site. The lawsuit alleges that Galloni knew when he traveled to these places that he was planning to leave The Wine Advocate and to keep the tasting notes for his own use; yet, he allowed The Wine Advocate to fund his trips (the complaint indicates that he was reimbursed for everything except the Sonoma visit, which took place in January; it doesn’t say whether or not he ever submitted those expenses) and claimed to be representing The Wine Advocate when he was really representing himself.

Over on Wineberserkers, a number of lawyers have been scrutinizing the details of the lawsuit to see if there are loopholes that might allow Galloni to prevail. The complaint includes evidence of shoddy recordkeeping by Parker (in the form of some unexecuted contracts), and it also makes at least one preposterous assertion: it suggests that The Wine Advocate has a proprietary claim to the 100-point scale. Nonetheless, the sharpest corporate lawyer I know says that based on the available information, Galloni has little chance of winning if the case ever goes to trial. It surely won’t go to trial: unless Galloni has a very fat bank account and doesn’t mind being sidetracked for months by litigation, he is going to have to settle, and quickly.

That said, I’d love to hear his side of the story, because maybe it would help me understand why he has acted in such a seemingly self-sabotaging way. He was under contract to do these reports for The Wine Advocate, and even though he quit, it appears he was still obligated to turn them in. Perhaps there’s something in the fine print that might allow him to wiggle out of his responsibility to hand over the tasting notes, but even then, why risk a lawsuit, why court Parker’s wrath? It just makes no sense.

Galloni is almost certainly on the losing end legally, and from a PR standpoint, he has done himself no favors, either. However chagrined he might have been about the sale of The Wine Advocate, which cost him his status as Parker’s designated successor, it seems he was treated exceedingly well by Parker. According to the lawsuit, Parker paid him $300,000 each of the last two years, and also gave him a monthly budget of nearly $6000.  That’s Condé Nast money (I’m surprised there wasn’t a Town Car included) and was surely far in excess of what Parker needed to pay to retain Galloni’s services. Galloni claims he quit The Wine Advocate because he didn’t want to be an employee. Fair enough, but his decision to stiff The Wine Advocate on the reports that he was contracted to write was foolish, and when you factor in the generosity that Parker showed him, his behavior looks pretty shabby.  Indeed, Galloni has managed to achieve something that didn’t seem possible: he’s cast Parker in a sympathetic light (and yes, that’s a pig hovering over your house). I watch a lot of soccer, and I’d have to say that this is one of the more bizarre own goals I’ve ever seen.

17 Responses leave one →
  1. April 7, 2013

    Thanks for the update, Jack. Not surprising that Galloni has apparently backed down. I assume the lawsuit will be dropped shortly, unless Parker and the new owners decide to press ahead with their other claims. I doubt that they will do that (not least because some of the other claims were rather dubious), but we’ll know soon enough.

  2. Jack Bulkin permalink
    April 6, 2013

    Parker has issued a video about the contnet of his next issue #206 due at the end of April. In the video he stated “”Thankfully Antonio is giving us his Sonoma report which is a huge report that he worked on, and that will be in the issue as well.”

    Ken as expected, I guess we will never hear Antonio’s side of the story about the Sonoma review.. If he ever relates it to you then please by all means fill us in.

  3. March 27, 2013

    Ken, I remember well our phone conversation, so that ‘s why I was a little surprised at your comment yesterday (not that there’s anything insulting about being called a blogger!). Thanks for the clarification.

    We know that Galloni quit his job with The Wine Advocate because he told us so. We also know that he didn’t give The Wine Advocate his Sonoma report because he has acknowledged that he didn’t turn it in. I also know, because I asked, that when Galloni went to Sonoma in January, he said that he was there representing The Wine Advocate. Per Bill’s comment, I think we can all agree that Galloni wouldn’t have said he was there representing The Wine Advocate if he wasn’t being paid by The Wine Advocate–and if The Wine Advocate was paying him to be in Sonoma, I think one can reasonably assume that Galloni was being paid to produce a Sonoma report for The Wine Advocate. I suppose it is possible that he had a compelling, legally persuasive reason for not giving The Wine Advocate the Sonoma report, as well as the tasting notes from Burgundy, Tuscany, and Piedmont, but I very much doubt that–and as you can see from the comments here and on Berserkers, so do most of the lawyers.

    I am indeed treating part of the lawsuit as factual. The Wine Advocate is represented by a reputable law firm, and I seriously doubt that they would claim that Galloni was reimbursed for his Burgundy trip and cashed the check, just to cite one example, if that wasn’t true. Obviously, lawyers often engage in creative interpretation, and you can certainly see that in The Wine Advocate’s complaint–not just the claim about the 100-point scale, but also the way they try to spin Galloni’s comments to The New York Times. But when it comes to the most basic, easily verifiable claims–about Galloni’s income, about whether or not he was reimbursed for his travels, etc.–I very much doubt that the information contained in the complaint is false or inaccurate.

  4. Bill Klapp permalink
    March 27, 2013

    Ken, let me say hat I am in a good position to appreciate your longstanding friendship with Antonio, and I respect that. I also do not have time at the moment to get too deep into the woods on the facts and issues here. However, Antonio has not been completely silent in all of this. He has done interviews and posted on his own website. Also, as you have seen, a bunch of highly perfumed lawyers (and at least one aromatic ex-lawyer), and Jay Hack and Andrew Kaufman, whose analyses just smell, have picked apart the complaint and, in particular, the IC agreements attached. Legally, it is hard to see where an unexecuted agreement, if the case, would benefit either party, unless perhaps Parker had stopped paying Antonio, but the course of dealing between the parties is crystal clear. Antonio has not been working for nothing, and while we may disagree on this, I submit that he was vastly overpaid for someone of his rather limited experience. (And indeed, running around the globe like a chicken with your head cut off is not meaningful experience for Galloni, any more than it was for Parker, Suckling or the doubtable Richard Jennings.) There is enough evidence to conclude that Galloni was working on the Sonoma report for WA before he failed to reach agreement on a new employment contract, and it is more than reasonable to conclude that he would have stopped (or continued on his own dime) were he not being paid. Mike may be taking what is out there and working it into a hard, wicked slider for your taste, but it is fair comment. Galloni publicly played a stupid legal card with the “subscribers can watch it on my channel” schtick. He should have expected the reception that he received from all quarters…

  5. Dan McCallum permalink
    March 27, 2013

    Mike,
    Didn’t mean to implicate that the WA’s claim to some review material was crap; rather that their expression toward such claim was crap. Whatever exists of those reviews is now useless to both parties. And, if AG might be compelled to complete them, well, brings to mind a certain Rolling Stones recording, compelled to compete a contract. A certain Blues; are you familiar?
    Best, good to have you back here!

  6. March 27, 2013

    Thanks, Daniel, for the kind words. Yes, the Koch v. Greenberg business is not exactly a crowning moment for Royal.

    Dan McCallum, having written extensively about those two major counterfeiting cases, I don’t have much to add at this point, and the Galloni business is new–hence the imbalance. I agree, though–the counterfeiting story is a much more important one. I’m not so sure that the complaint filed by The Wine Advocate is crap; sure, it includes some dubious assertions, and it underscores something we all already knew–that Parker is not much of a businessman. But I very much doubt that the Wine Advocate’s lawyers are lying when they claim that Galloni was contracted to do these reports, was reimbursed by the Wine Advocate for his travels, and failed to deliver the tasting notes (and we certainly know the last part is true). I’m sure that Galloni has some “counter-crap”, as you so put it, but my point–and the point I’ve been trying to make to Ken–is that even if Galloni thought he had a legitimate claim to this material, asserting that claim was not worth the trouble that it has now caused him. If Galloni has a lawyer, and that lawyer is minimally competent, he has surely been advised not to publish the disputed tasting notes until this matter is resolved. That could be months from now, at which point the tasting notes are going to be largely irrelevant. So what exactly is the upside here for Galloni? Ken? Anyone?

    Lastly, Dan–loved your comment this morning over on Berserkers re Parker and his point about the correlation between his initial scores and his final scores. This material almost writes itself–the guy doesn’t taste blind, and he boasts about the close correlation between his initial and final scores? That he would make such a statement, and not anticipate the obvious response, really does have me scratching my head. As I recall, the logic portion of the LSAT is not that easy…just sayin’.

  7. Ken V permalink
    March 27, 2013

    Daniel, I want to make clear that I am not privy to any private information about this situation. My opinion is surely colored by my long friendship with Antonio and my confidence that he is a person of integrity. But as I hopefully made more clear in my last post, my complaint about Mike’s blog post is that I think it is his opinion, but he wrote it as though it was fact.

    Remember that this lawsuit was filed by people none of us knows. It was filed by the new owners of the WA and explicitly states that Robert Parker is not a party to it. While people have guessed at who are the new owners, I am not aware that anyone knows for certain who they are. So yes, until I see real facts or some agreement between the parties, I will continue to believe that there is a very large other side to this argument that we have not yet seen.

    Ken

  8. Ken V permalink
    March 27, 2013

    Mike, you are still stating things you do not know are true. If you just started your post with “Assuming everything in the suit is true…” and repeated that, then I would have no problem with it. But you don’t. You are treating a lawsuit as though it has in any way been proven factual, which it has not. It doesn’t even have the current contract attached, so how could you know that “He quit his job and walked out the door without delivering tasting notes that he was under contract to deliver and for which he had apparently been paid.”?

    As for the blogger vs. journalist thing, I apologize. That was not what I meant to say (long day at work, followed by long Seder). I know you are a journalist. (I even spent an hour on the phone with you once helping you check your facts.) I meant to ask if you use a different standard for your journalism than for your blog, because your blog this time seems much more like an opinion piece based on the opinion that the suit filed by the WA attorney is substantially accurate. My opinion is that it is not. That is all I meant.

    I also could have used the word “target” instead of “victim” in my previous post.

    Ken

  9. March 27, 2013

    Mike

    As usual, I enjoy your opinion on these matters. Whether we agree or disagree.

    Thank you for the link to the WS story on Koch vs. Greenberg. What a trainwreck. Royal may take the worst of that publicity.

    As for Parker vs. Galloni, the bottom line appears to be that if Galloni had handed in the Sonoma report, then all else would have been forgotten. Sounds kind of foolish on Galloni’s part as he now gets dragged through the mud. Perhaps, Ken is privy to other information, but if all Galloni had to do was hand over Sonoma, he should have, in my opinion.

  10. Dan McCallum permalink
    March 27, 2013

    That a disputed IC agreement would draw more attention than the two major league counterfeiting cases seems less than fully rational. But then again, the world from which it emerged is less than fully rational. Any case, now is a good time to remember that a civil proceeding is not about guilt or innocence, let alone about guilty vs innocent. It is about consequential liability, and liability is a condition not a crime. What has been filed so far is just crap. I’m not so sure there is even a valid IC agreement there since it is based on an annual stipend for loosely defined activity. AG may well have some equally or more compelling counter-crap. I doubt that we’ll ever see it.
    As turned off 20th Century teenagers said…. whatever!

  11. Jack Bulkin permalink
    March 26, 2013

    Ken, Mike is a big boy and doesn’t need me to defend him. That said although your friendship and loyalty of Antonio is always an impressive and redeemable quality, you have previously used that loyalty to misquote me on a statement that I made unrelated to wine to attempt to embarrass my ethics as an Attorney on EBOB and on Facebook when I challanged Antonio’s ethics and now you challange Mike Steinberger on his own Blog as to his journalistic standards in a similar fashion. The problem that I see with Antonio is always the same His acts speak of the “appearance” of impropriety. Whether or not they were improper may be resolved in this case. AG is entitled to defend himself in this Civil Action to restore his good name and retain any chance at a rewarding career in Wine Criticism. I am certain that neither Mike nor I wish to deprive him of that. Intelligent people may differ from your view that I believe is clouded by your intense loyalty and only need to look at the “appearance” of his acts to be turned off and feel the right to pass judgment. Feel free to continue to adore and respect Mr. Galloni, but please offer those who do not agree with you the right to a different point of view.

  12. March 26, 2013

    Ken, how exactly is Galloni a “victim” here? He quit his job and walked out the door without delivering tasting notes that he was under contract to deliver and for which he had apparently been paid. He is the defendant, but a victim? Please. He made a choice, and that choice, not surprisingly, has resulted in a lawsuit. And I am perplexed as to why you find my comment “astonishing”. Even if Galloni felt he had a legitimate claim to those tasting notes, why risk a lawsuit for the sake of publishing them on his own site? The smart move would have been just to turn in some half-assed tasting notes and be done with it. At the very least, he should have reimbursed The Wine Advocate for his travel expenses. Do you seriously want to argue that he handled this in a way that best served his own interests?

    As for the blogger vs. journalist thing, two comments. One, I personally don’t draw a distinction between bloggers and journalists; I hold bloggers to the same standard that I hold journalists. Two, I am actually a journalist–I occasionally even make some money at it. If you Google “Michael Steinberger” and “Vanity Fair” or “Michael Steinberger” and “The New York Times Magazine” or “Michael Steinberger” and “Slate,” you can perhaps find some examples of my work.

  13. Ken V permalink
    March 26, 2013

    Mike,

    I find your response even more astonishing than your original post.

    “I’m sure that he has his side of the story, but whatever may have transpired between him and Parker or him and the new owners surely wasn’t worth getting sued over, …”

    So the victim of a law suit is to blame for the law suit?

    There is not a single statement in your first paragraph for which you have proof. I realize you are a blogger and not a journalist, but don’t you feel a need to have some evidence other than the claims made by one party in a law suit?

    Ken

  14. March 26, 2013

    Hi Ken, thanks for stopping by. I’m dismayed that Galloni chose to go this route, which has the potential to cost him significant time and money. He traveled on their dime, was under contract to deliver these reports, and then decided to use the tasting notes for his own site and evidently didn’t even bother to reimburse them for the travel (I assume that if he had reimbursed them, he would have said so, and it would have been acknowledged it in the complaint). It’s no surprise to me that he got sued. I’m sure that he has his side of the story, but whatever may have transpired between him and Parker or him and the new owners surely wasn’t worth getting sued over, particularly as he is busy trying to launch his own site. He was paid for those tasting notes; simply as a matter of enlightened self-interest, he should have turned them over or, at the very least, reimbursed them for the travel.

    Jack, I agree. He’s made Parker a sympathetic figure here. It appears that Parker treated him incredibly well, paying far above the “market rate” for his services. Galloni had every right to leave after the sale, and perhaps he was justified in leaving. But he seems to be acting in a pretty spiteful manner now, which doesn’t look very good juxtaposed against Parker’s generosity.

  15. Jack Bulkin permalink
    March 26, 2013

    Ken, I am not Mike, although I stayed in a Holiday Inn Express last night. We agree, that there are two sides to this story but both sides are deserving of the other. I know that you dig the guy but really? I can’t wait to see his answer to the complaint if he files one. He grabbed over $360,000.00 a year to spit, swirll and pontificate, or should we call it POINTIFICATE since it is WA over wine and he did not finish what he was contracted and well paid to do. Please post his responsive pleadings as soon as he files them for our curious review. I will be the first to agree with you if he has any real defense for his actions.

  16. Jack Bulkin permalink
    March 26, 2013

    Mike, I now call Mr. Galloni Tony Houdini. Tony is the only person in the World who has been able to make Robert Parker’s real self grandiosity personna disappear and replaced it if even ever so briefly, with an imaginary person who acts in this matter in a palatable and sympathetic fashion in comparison. Well done Tony, I gift you 97+ points on your miraculous resurrection effort of the Big Palate Shot Point gifter.

  17. Ken V permalink
    March 26, 2013

    I’m very surprised you would write such a strong condemnation of Galloni based on only reading one side of the story.

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