Crossover grading

[benjulmag]

IMO it is in the hobby's best interests to have multiple TPGs that are in active competition with each other. There have been multiple threads about alterations going undetected, inconsistent grading, poor customer service, as well as discussion about the entire concept behind "grading" and the information a flip should convey. The more competition among TPGs, the more likely these concerns will be addressed, to the benefit of the hobby.

So it should be of concern to the hobby if a TPG is engaging in unfair practices in order to crush its competition. In my view, the most blatant and effective way to do that is to refuse to cross over a card graded by a competitor regardless if the card is clearly worthy of crossover. I am concerned we are seeing that very thing taking place on a regular basis, and the purpose of this thread is to discuss if others agree and what can be done to prevent it.

A legal obstacle to establishing the existence of such a practice is how does one establish the state of mind of a grader when refusing to cross over? Grading is an opinion, and a TPG in refusing to cross a card over will simply say that in its good faith opinion, the card does not merit being crossed over, either because the card is altered or because its condition does not merit such a grade. Just recently I heard a particularly egregious story. 50 vintage cards graded by company A were sent to company B. None were crossed over, though I am unclear whether the reason was because they were altered or simply not deserving of the same grade. The person who submitted the cards then removed them from their slabs and resubmitted them to company B. All 50 cards came back crossed over at the same or higher grade.

Now this is only a story I heard and I cannot vouch for its accuracy, so I want to be careful not to state that it actually occurred. But whether it did or did not, it would seem to me to give such a company A worried about being crushed out of existence by unfair trading practices a means to fight back. This company A could engage in a pattern of anonymously submitting its slabbed cards to company B, and then if/when the cards come back not crossed over, take evidentiary note of the cards being removed from their slabs and resubmitted. If they come back crossed over, and this pattern is continually repeated, it would seem to me to establish proof that company B is engaging in illegal methods to silence its competition. And if company B is a publicly traded company, the legal consequences could be even more severe.

For me personally, if I was the person running company A and seeing my profitability going down by such actions by company B, I sure would engage counsel and have a serious discussion about what legal methods I could take to protect my company.

[glchen]

Originally Posted by benjulmag

A legal obstacle to establishing the existence of such a practice is how does one establish the state of mind of a grader when refusing to cross over? Grading is an opinion, and a TPG in refusing to cross a card over will simply say that in its good faith opinion, the card does not merit being crossed over, either because the card is altered or because its condition does not merit such a grade. Just recently I heard a particularly egregious story. 50 vintage cards graded by company A were sent to company B. None were crossed over, though I am unclear whether the reason was because they were altered or simply not deserving of the same grade. The person who submitted the cards then removed them from their slabs and resubmitted them to company B. All 50 cards came back crossed over at the same or higher grade.

There's an easy excuse that TPG's can make for the story above, true or untrue. For a crossover in the slab, the TPG obviously cannot crack open the slab, and therefore there may be some parts of the card they cannot observe very easily. (e.g., thickness of the card on whether it is pressed.) Therefore for these reasons, the TPG may refuse to crossover the cards at a high grade due to this reason (or excuse).

[benjulmag]

Originally Posted by glchen

There's an easy excuse that TPG's can make for the story above, true or untrue. For a crossover in the slab, the TPG obviously cannot crack open the slab, and therefore there may be some parts of the card they cannot observe very easily. (e.g., thickness of the card on whether it is pressed.) Therefore for these reasons, the TPG may refuse to crossover the cards at a high grade due to this reason (or excuse).

That's a fair point, but inasmuch as some cards do get crossed over (thereby establishing examples for comparison), I would think that with enough submissions one can establish such an explanation by the TPG to be legally incredulous.

[wondo]

If Company A refuses to cross from Company B is it illegal or is it the charging for the phantom service that is the problem? A bias would be extremely difficult to prove. I am skeptical of the 0/50 then 50/50 story.

[benjulmag]

Originally Posted by wondo

If Company A refuses to cross from Company B is it illegal or is it the charging for the phantom service that is the problem? A bias would be extremely difficult to prove. I am skeptical of the 0/50 then 50/50 story.

I am not an antitrust lawyer but I would think it is an unfair trading practice and violates the Sherman Antirust Act. A refusal to crossover expresses the opinion that company A got it wrong. By constantly doing that company B would be besmirching company A's reputation, causing it to lose substantial business and maybe go into bankruptcy. I would think that is actionable.

[Peter_Spaeth]

Originally Posted by benjulmag

I am not an antitrust lawyer but I would think it is an unfair trading practice and violates the Sherman Antirust Act. A refusal to crossover expresses the opinion that company A got it wrong. By constantly doing that company B would be besmirching company A's reputation, causing it to lose substantial business and maybe go into bankruptcy. I would think that is actionable.

Suppose B just announces a policy that it will not cross over cards in other holders, period. With some narrow exceptions, which I won't bore you with, refusals to deal (which that would be akin to) even by a monopolist are not antitrust violations. A company generally can deal or not deal with whom it pleases at least insofar as the Sherman Act is concerned. Also, as to your hypothetical, I don't buy the premise that refusing to cross over a card is somehow tantamount to libel. And even if it were, there are some pretty onerous requirements before you can convert a business tort into an antitrust violation.

PS I am only responding to your antitrust point. I would have to think about other possible claims, and who would have standing to bring them.

[barrysloate]

I get the impression that grading company A will not crossover grading company B's cards because they are trying to run their competition out of business. They want customers to believe that only their grades are valid, and the competition is either overgrading or slipping bad cards through.

TPG's are given submissions to grade cards objectively, based solely on the characteristics of the card. If they are playing politics to drive out their competitors that is outrageous.