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.