Collectors Universe, the parent company of PSA, has filed a motion to dismiss a class action lawsuit brought by a Southern California collector earlier this year over altered cards.
Eric Savoy had originally filed his suit in state court in February but CU moved it to U.S. District Court.
Savoy had also named two major online dealers, alleging a conspiracy existed in which trimmed or otherwise altered cards were authenticated, graded and sold. Savoy’s suit claimed unnamed buyers were defrauded when the altered cards were sold to collectors who didn’t realize it. He also claimed his own collection has been “damaged by the presence of highly rated altered cards which distorted the market to make it more difficult to obtain value for lower graded unaltered cards.”
On Thursday, lawyers for Collectors Universe responded in a 24-page brief that argued Savoy didn’t provide any evidence to show he actually owned an altered card that had been graded by PSA nor any evidence of an intent to deceive by PSA.
The strongly-worded response by Collectors Universe called it “a trumped up RICO lawsuit” that was “nothing more than a shot in the dark.” They say the complaint offered no specifics and that Savoy never stated which cards he was referencing in the suit and why he believed they had been altered. In legal terms, they’re asking a judge to dismiss the case because Savoy and his attorney failed to state a claim upon which relief can be granted.
“Which allegedly doctored PSA-graded card did Savoy buy? For how much? Why does he believe it is doctored?” wrote CU attorneys Keith Attlesey and John P. Ward wrote. “Which of Savoy’s cards lost value? How does he know they lost value? Has he been monitoring auctions? Has he tried to sell his cards? What was their value before the card doctoring allegations? What was their value after? How was the value determined?”
The attorneys claim that when PSA grades a card found to have been “doctored” they are actually the victim because of the company’s policy to compensate those who buy back such cards. CU says because of its guarantee, Savoy and other collectors have a method available to be compensated for any losses.
CU’s lawyers stated it doesn’t make sense for PSA to destroy its reputation in the hobby by giving grades to cards known to have been altered. “Not only would Collectors suffer immense reputational harm if it knowingly graded doctored cards, it would be subject to staggering liability through its guarantee,” they stated.
“The obvious alternate explanation to the card trimming allegations is the only plausible one: to the extent that any doctored cards were graded by PSA, it was done by mistake. First, Collectors has never claimed infallibility, as evidenced by the guarantee. Second, this lawsuit concerns a grand total of three specifically-identified doctored cards that Collectors allegedly graded.”
CU also stated Savoy’s claims that PSA gave better grades to collectors paying higher service fees and that identities of certain customers play into grading decisions were false.
“Collectors pays its customers if Collectors damages a card. When Collectors grades a $10 card, it takes $10 of risk in its handling and shipping of the card. When it grades a $1,000,000 card it takes on $1,000,000 in risk. The slightest damage, such as the minor bending of a corner, can cause significant monetary damage to the card. The differential pricing structure exists due to risk and insurance considerations, not a bribery scheme.”
To this point, there has been no record of other collectors joining in the class action suit.
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Notes: Musial Auction Generates $1.2 Million; Collector’s Universe Among Top Small Companies on Forbes List
