Steve Case, the co-founder and former chief executive officer of America Online Inc., yesterday began defending against claims he used insider information to buy a Hawai'i-based land company in 2000.

A group of former shareholders claims in a federal civil suit that Case and a company he controlled improperly used information from Kaua'i-based Grove Farm Co.'s former chief executive officer and from Case's father, a Honolulu lawyer who had represented Grove Farm, to purchase it for $26 million.

The former shareholders are seeking to undo the 2000 sale and are asking for unspecified money damages. Case, 49, claims there was no fraud and that the plaintiffs filed their complaint too late, in 2005, almost five years after the sale.

"There were storm warnings that plaintiffs didn't investigate" before November 2003, Case's lawyer, Paul Alston, told U.S. District Judge Robert Jones in opening arguments in Honolulu.

Yesterday's arguments were limited to whether the suit was filed on time. Jones will first consider whether the shareholders properly lodged a complaint within two years of discovering the facts underlying their claims. If the judge finds the filing was timely, he will then try the merits of the case and determine whether to rescind the sale or award damages.

Matthew Simmons, the shareholders' lawyer, called Alston's claim "wishful thinking" and said his clients weren't aware they'd been defrauded until 2004.

"The glue that holds our case together was not available by November 2003," Simmons argued.

The shareholders are all related by marriage or blood to George Wilcox, who founded Grove Farm in 1864. They claim that information Case received before the sale gave him an illegal advantage in the negotiations.

Case's lawyers, in a pretrial brief filed last week, said the suit is "based purely on sellers' remorse" by a minority of Grove Farm's former shareholders. In December 2000, 98.9 percent of the shareholders, including all the plaintiffs in the suit, voted to approve the sale to Case, his lawyers argued.

Both sides said they expect Steve Case and his father, Daniel Case, to testify. The parties told the court the trial may last four weeks or more.

In 2006, a state court jury on Kaua'i returned a verdict for the defense in a separate suit by former Grove Farm shareholders against the property development company.

Steve Case's grandfather lived on Grove Farm and worked as its treasurer until 1959. Daniel Case was raised on Grove Farm, which was a sugar plantation until 1974.

Steve Case stepped down as chairman of AOL Time Warner Inc. in May 2003. In April 2005, Case launched Revolution LLC, which invests in companies including luxury resorts and healthcare information providers. In September, Revolution introduced a credit card service that routes transactions over the Internet and charges merchants less.