Friday, October 9, 2015
Ninth Circuit Rejects Coin Expert’s Suit Over Rare Doubloon
By KENNETH OFGANG, Staff Writer
The former owners of a Revolutionary-era coin worth millions of dollars owe nothing to a coin expert who claims they agreed to pay him for information that could prove its value to be far greater than the amount they paid, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
The panel affirmed a summary judgment in favor of rare coin dealers Steven Contursi of Dana Point and Donald Kagin of Tiburon. They agreed with District Judge Cormac Carney of the Central District of California that information provided by William Swoger, who claimed that the “Punch on Breast” Brasher Doubloon was the first coin minted under an act of the U.S. Congress, was worthless because the act he cited didn’t apply to the coin.
Ephraim Brasher, a New York City gold- and silversmith said to have lived next door to George Washington minted several gold coins, apparently beginning in 1787 when the American republic was being formed.
A handful of the coins remain today. All of them display an eagle on one side, and all have value. But the coin that spawned the litigation was unique in that Brasher—for reasons lost to history—countermarked his initials on the breast of the eagle rather than on its wing.
‘Act of Congress’
Swoger, whom the defendants acknowledged to be an expert in the field, informed the plaintiffs that he had proof that their coin was “the first United States Coin issued for circulation, and was issued…under authority of [a]n Act of Congress.”
That act was “An Act Regulating Foreign Coins, and For Other Purposes,” ch.5, 1 Stat. 300 (1793.) Others had suggested that the particular coin was minted earlier.
In his complaint, Swoger said he contacted Kagin in early 2009 and told him he could prove the coin was minted and circulated under the act. Kagin, he said, suggested the information was worth $250,000, to which he responded that the true figure was double that.
Two months later, during a meeting at a trade show, Kagin insisted that Swoger provide proof.
Swoger provided the proof, he claimed, by showing that the coin was fractionally heavier than the others and made to conform to the act, which provided for Spanish and Spanish colonial coins to pass at 27.4 grains per dollar. The Brasher Doubloon was a $15 coin, and thus should weigh 411 grains, and the plaintiffs’ coin weighed 410.5 grains, so it must have been struck “pursuant to the Act,” Swoger declared.
The defendants refused to pay, and Swoger sued.
While the suit was pending in district court, Contursi told a reporter by email that the suit was “utterly frivolous” and that he and Kagin “never sought anything from Mr. Swoger regarding the Brasher Doubloon and never benefited in any way from any information he volunteered to us. “
Swoger pled causes of action for quantum meruit, fraud, breach of contract, constructive trust, and misappropriation of trade secrets. In granting summary judgment, Carney concluded that each of the claims required proof that the coin was actually struck pursuant to the act, and that Swoger couldn’t prove that because the act only applied to foreign coins, not to the Brasher Doubloon minted in New York.
He also said the information Swoger provided was already known to the defendants or publicly available.
Judge Milan D. Smith Jr., writing for the Ninth Circuit, said the district judge was correct about the 1793 act, noting that “did not mention domestic goldsmiths like Brasher, let alone authorize them to mint gold coins,” so the doubloon could not have been legal tender under the act.
He also rejected a theory advanced by the plaintiff for the first time in response to the summary judgment motion, that coin could be used in commerce as long as it was struck to conform to the weight specified in the act. “That a coin was used as a medium of exchange does not make it legal tender,” the judge wrote.
Judge N. Randy Smith and visiting Senior District Judge Joan H. Lefkow of the Northern District of Illinois concurred in the opinion.
The case is Swoger v. Rare Coin Wholesalers, 13-56501.
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