Once-iconic NYC wine seller Sherry-Lehmann loses lawsuit over alleged smear campaign

By Jonathan Stempel

NEW YORK, Sept 29 (Reuters) – A federal judge on Tuesday dismissed a lawsuit by Sherry-Lehmann, once among the elite wine sellers in the United States, accusing New York Times reporter James Stewart and former Chief Executive Michael Aaron of orchestrating a smear campaign over its 2023 demise.

US District Judge Andrew Carter in Manhattan said Sherry-Lehmann could not pursue a racketeering claim because it did not allege that Stewart and Aaron shared a common purpose in trying to create “popular clickbait stories” by disparaging its business.

Sherry-Lehmann said Aaron was trying to avoid his guarantee of its rent obligations, while Stewart hoped to win a Pulitzer Prize by presenting a false “manifesto of purported wrongdoing” to federal and state investigators, wholesalers, customers and readers.

Carter granted a request by Sherry-Lehmann’s lawyers, who claimed they had not been paid, to withdraw from the case. He also dismissed a state law-based claim that Aaron breached his separation agreement.

The former Sherry-Lehmann lawyers did not immediately respond to requests for comment. Lawyers for Stewart did not immediately respond to similar requests.

Michael Fischman, a lawyer for Aaron, in an email said his client was pleased. Aaron “spent decades helping build the company and is deeply saddened by what has happened to a business that meant so much to his family, its employees, and generations of customers,” Fischman said.

FINE WINE, UNPAID RENT 

Sherry-Lehmann became synonymous with fine wine in New York, comparable to Tiffany’s for jewelry and FAO Schwarz for toys, after being co-founded in 1934 by Aaron’s father, who was a former bootlegger, and uncle.

It introduced Americans to Dom Perignon champagne in 1947, and decades later supported Georges Duboeuf’s Beaujolais Nouveau for less well-heeled drinkers. Sherry-Lehmann also had a large business in wine futures, where customers wishing to drink or invest in wine pay for bottles to be delivered a few years later.

According to published reports in the Times, Wine Spectator and other media, many customers complained that Sherry-Lehmann failed to deliver wine they had paid for, including futures, or retrieve wine they had stored.

The Times also said Sherry-Lehmann often did not pay distributors, sold wine held in storage to other customers, and resisted offering refunds to waiting customers.

New York state’s liquor authority closed Sherry-Lehmann’s store on Manhattan’s Park Avenue in March 2023 after its liquor license expired.

The landlord later filed an eviction lawsuit for unpaid rent and won a $5.8 million default judgment. It is suing Aaron and his successor Chris Adams, who stepped down as CEOs in 2009 and 2020, respectively to honor their alleged rent guarantees.

(Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot)