PSA FOUND LIABLE FOR LOSING RARE T206 MAGIE ERROR CARD

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Posted By: warshawlaw

A California court has ruled that Professional Sports Authenticator (“PSA”), the largest third party card grading and authentication service, lost a rare T206 Piedmont Sherry Magie error card submitted to it for authentication by veteran dealer Dan McKee of Reisterstown, Maryland, and awarded Mr. McKee damages of $4,852.00 (Orange County Superior Court case number 04CS000423).

Mr. McKee acquired the card in early 2003 for $4,000.00 and presold it to a collector for $4,800.00, contingent on the card being authenticated by PSA. Mr. McKee then sent the card to PSA for certification in May 2003. PSA admittedly received the intact and undamaged package from Mr. McKee, which included the Magie card and another order, but claimed it never received the Magie card and refused to compensate Mr. McKee for the missing card.

This is a victory for card collectors who choose to submit their materials to authentication and grading services because it proves that these services can and will be held liable in court when they lose or damage the cards entrusted to them for safekeeping.

Perhaps the most interesting element of the testimony at trial by Joe Orlando, President of PSA, was that PSA does not take any steps to independently monitor its receivers when they open the packages submitted to PSA. PSA makes extensive claims about its security and trustworthiness in its promotional materials, yet despite receiving what Mr. Orlando stated were hundreds of thousands of submissions worth millions of dollars every year, PSA admitted that it has no independent means of guarding against employee theft or mistake in the receiving area. I think PSA’S lack of safeguards routinely used at banks, casinos and other establishments where small, high value items are handled is shocking and was a persuasive piece of evidence in Mr. McKee’s case. We were able to prove definitively that Mr. McKee sent the card to PSA and that PSA received the package in question intact and in good shape, but PSA had no credible evidence of what happened to Mr. McKee’s package after it came in.

PSA, which has an “unsatisfactory” record according to the Better Business Bureau of the Southland (315 N. La Cadena, Colton, California; 909-825-7280) for “a pattern of unanswered and unresolved customer complaints”, lost the case initially in small claims court and appealed to the Superior Court, resulting in a new trial and the $4,852.00 judgment against it.

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Posted By: Paul

Congratulations Dan and Adam! I still sympathize with Dan for not being able to recover his attorneys' fees from PSA. Perhaps it's time for another ballot initiative here in California.

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Posted By: Julie

And everyone was looking, too.



Too bad about your partially lost money--I hope they lost a lot more!

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Posted By: Todd Schultz

Could go on for hours on this one (have in other threads), but instead I'll just give my very best ATTTTTTTTTTTTABOY!!!!!!

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Posted By: Peter

Maybe it was just the wording, and I guess it's all a moot point now that the case is over, but I'm not getting how PSA admitting it received the package with the card in it, but then not finding it in the package later is a rational defense.

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Posted By: John

Way to go Adam! Dan I couldn’t be happier for you as I told you once in an email Your Dad was one of the few people who inspired me to collect. When I left the hobby and returned to hear all the stories that had plagued you and your family I was heartbroken. Glad to see things looking up! Congrats Dan! And Adam way to kick ass and take names!

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Posted By: mark_evans

Congrats to Adam and Dan on your successful lawsuit. Look forward to seeing you in Chicago. Mark

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Posted By: david

is it possible for you guys to post a truncated transcript of what psa had to say. i think it would be really interesting to see how they tried to deny culpability for what happened

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Posted By: Brian H

the card at issue (the RARE Magie)??? Does anyone (ie Dan) know if it ever resurfaced. This would be hard to legally prove I realize I just wonder whether anyone had seen anything suspicious. These cards obviously don't appear too often.

I also want to add my voice to the chorus of those congratulating Dan and Adam.

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Posted By: Joe P.

Way to go Big Team!

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Posted By: dan mckee

The card has yet to resurface, I posted a blown up scan on this board. Anyone trying to sell it or caught with it would face litigation I believe since I filed a police report that it was stolen. On the other hand, if it was thrown out with the box, then obviously it will never surface.

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Posted By: Jay Miller

Adam/Dan--How did you guys prove that Dan included the card in the original package? That seems to be central to the case. I would have thought that PSA would have claimed that the card was not in the box and that the box contained only one submission.

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Posted By: Jason

Yes I never understood that part... I would assume there would have been an order sheet enclosed mentioning that card for grading.

Now if PSA was smart they would have camera's recording the opening of boxes. (Especially ones with valuable cards inside) At that point if the box was opened and you saw an order sheet for a card not in the box you could call the customer and say. "Dan you say there is a Magee in the box but there isn't."

That aside I do like that the courts have basically said that these guys are liable if they damage or lose a card.

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Posted By: warshawlaw

Dan testified he put the card in the box with the other order and shipped it to PSA. We showed the judge the card image and the receipt the seller gae Dan for the card. PSA admitted they received the box in good shape and undamaged. The crux of the case was their lack of security cameras, etc., to create a record of what happened to the box after they received it. Combine that with their lack of any credible evidence from the receiver (who could not remember squat about the box or how she handled it but was still sure it was empied regardless), and the evidence showed delivery of the card to PSA its loss there. As a company taking charge of your cards to perform a service for compensation then return them, PSA is a bailee for hire and has a duty to care for and not lose or damage your stuff.

I do not believe it was stolen, BTW; I believe she missed the second order and the Magie is sadly buried in a landfill somewhere.

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Posted By: dan mckee

I agree with Adam. It was probably thrown out. PSA had her testify that she didn't collect cards, How stupid was this? She collects money doesn't she??? People steal for reward, you do not have to collect cards to steal a card. Many people who steal art do not collect art. Anyway, I believe it was missed and chucked with the box and this would have never happened if PSA would have recognized a problem the minute I called, my box was still on the premises. They blew me off for a week than started looking for it.

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Posted By: Jay Miller

Adam--You did a great job for Dan. Dan, congratulations on getting the issue resolved.

Now Adam, let me ask you a theoretical question. Dan is an honest guy. Suppose there was a guy who wasn't honest. Suppose that guy sent one submission to PSA but claimed he had sent two and the "missing one" contained a valuable card that he had legitimately purchased in the past (he still had that card hidden away). Since the basic facts would have been the same as this case--submitter claims he sent two submissions and one, containing a valuable card, was lost---PSA claims it got only one submission in the box--would the court have reached the same decision which, in this hypothetical case, would have been wrong. I guess what I am asking is isn't this really just a he said, she said case.

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Posted By: dan mckee

Jay you devil's advocat you, I love it! Anyway, no one with half a brain would have went through the major pain in the ass I had with this case. A scammer would have had to front several thousand dollars trying to steal $5K. The work and gamble far out weighed the reward. My second trip out there was fueled by principle. It was hard to pay more travel and to pay Adam knowing I may still lose. Take care, Dan.

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Posted By: runscott

the hypothetical scammer would not have known in advance that PSA did not have a reasonable system in place to ensure the safety of cards once the package arrives at their door.

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Posted By: dan mckee

Good point Scott, neither did the non-scammer - me.

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Posted By: Jay Miller

Scott--Good point. Dan, again, congratulations. Now what can we do when grading companies crease otherwise uncreased cards?

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Posted By: steve k

Congratulations to Dan. Good to see "David" win one against "Goliath."

One way to "prove" that a card (or any item) was placed in a package, would be to bring the unsealed package to a Notary Public, have them witness you inserting the card in the package, seal up the package with tape in their presence, and have them mail it. If wanting to use PSA with a valuable submission, until they get a camera system, doing this probably wouldn't be a bad idea.

For that cost of paying Dan for the card, plus their attorney fees, I'm sure this total was over ten thousand dollars. PSA could have already been on their way to installing a surveillance camera system. The benefits to them of having a camera system, far outweigh the costs. I would have to think that their insurance premiums would be lowered. It's amazing how companies can sometimes be so stupid or cheap. Especially a company such as PSA that is highly profitable.

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Posted By: Marc S.

<<It's amazing how companies can sometimes be so stupid or cheap. Especially a company such as PSA that is highly profitable. >>

Perhaps you haven't looked at CLCT's Edgar filings. Although CU, in general, has been profitable over the last 12-18 months, before that they essentially had negative operating results quarter over quarter for a few years, with only one or two outlier profitable quarters. They have returned to profitably, as said - but I think many here could freely speculate at least from the PSA side of things how some of those profit figures have been engaged. (e.g. re-insitution of membership fees, less grading review, etc.)

~ms

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Posted By: Tex

...they had no checks and balances set up to prevent something like this. That's disgraceful.

Figures that they would try to cover it up and screw over a collector or a dealer. That seems to be the company motto.

From now on if I send them any expensive cards I'll treat them like I treat buyers on ebay - I'll have witnesses when I package the box and I'll have them sign and date the box too along with the delivery confirmation slip. (I usually do this for fear that someone will say I sent them the wrong card).

At what point does Joe Orlando get fired? There have been a lot of scandals under his watch.

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Posted By: JDWeller

Nice to hear the "little" guy win won. Excellent job Adam and hats off to Dan for having the fortitude to fight the battle. PSA may have their hands full now and should waste no time putting resources into implementing proper safeguards. Neither side should ever have to be plagued with a fight of this nature.

JDW

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Posted By: runscott

I always make super-high quality scans of cards before shipping.

I realize that some of you don't want to deal with another large piece of machinery in your home, but scanners are extremely useful - you can scan and print documents rather than go to Kinko's, scan your tax forms for documentation, scan your slides and 35mm negative film. Lots of uses, so go get one. I think you can also use them as tanning beds for your small pets?

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Posted By: CCRussell

I sent a T206 Plank card and it was returned in worse condition than it was sent and a letter saying they couldn't rate it. How's that one?

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Posted By: Julie

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Posted By: Wesley

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=31719&item=5129176792&rd=1&ssPageName=WDVW


Did PSA cause the burn-marks on your Plank card? In any event, good luck to you. I hope you get your $19,000 asking price.

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Posted By: Julie Vognar

We had a contest a while back--that Plank (how do you know it was poster's?) would easily have won it.

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Posted By: Brian Weisner

Hi CC,
Great description, too bad there are at least 3 members of this board that own REAL Planks. Be well Brian

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Posted By: Ray

...a bodybag?!?!?!