Sotheby's Scores Win In Fake Willie Mays Jersey Suit

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Sotheby's Scores Win In Fake Willie Mays Jersey Suit


By Joyce Hanson
Law360, New York (July 27, 2016, 2:39 PM ET) -- A Pennsylvania federal judge has granted Sotheby's Inc.'s bid for summary judgment in a fraud suit brought by a buyer of autographed 1950s Willie Mays sports paraphernalia that was later found to be inauthentic, ruling that the buyer couldn't present evidence that Sotheby's had intended to be deceptive.

U.S. District Judge Wendy J. Beetlestone ruled on Monday that the famed auction house did not act with reckless indifference in regards to the paraphernalia’s authenticity when managing the 1999 auction of baseball memorabilia owned by prominent collector Barry Halper, despite assertions to the contrary by a collectibles expert, Joshua Evans.

“For purposes of plaintiff’s fraud claim ... what Sotheby’s could have done or what Evans might have done instead had he been in charge are irrelevant,” Judge Beetlestone said in a memo accompanying her order. “The only relevant inquiry here is whether Sotheby’s acted with a mental state approximating actual intent to deceive when it represented that the items in the Halper sale were authenticated and authentic.”

Judge Beetlestone in July 2015 partially dismissed buyer Michael Jacobs’ suit against Sotheby’s related to his December 1999 purchase from the auction house of a 1951 Willie Mays New York Giants signed rookie road jersey and a 1950s Willie Mays New York Giants travel bag from a Sotheby’s auction. The judge found the statute of limitations had expired on Jacobs’ negligence claims, but the fraud claims could remain.

Jacobs in his November 2014 complaint said he believed the Willie Mays paraphernalia was legitimate because the auctioneer’s catalog stated that the memorabilia had been authenticated by Grey Flannel Collectibles Inc. On Sept. 29, 1999, he placed the winning bid on the items, paying $63,000 for the jersey and $8,625 for the travel bag, the complaint said.

In 2012, Jacobs asked Evans, chairman and founder of collectibles authenticator Lelands.com, to appraise the jersey for insurance purposes, the complaint said. According to Judge Beetlestone’s summary judgment order, Lelands, a competitor of Grey Flannel, was established in 1985 by partners Evans and Mike Heffner.

In June 2013, Evans prepared a handwritten agreement on behalf of Lelands to Jacobs in which Lelands agreed to purchase the Mays jersey from Jacobs for $675,000 in order to resell it to a third-party client of Lelands for $750,000, Judge Beetlestone said.

“Because the offer price was significantly higher than the original purchase price in 1999, Lelands sent the jersey to Dave Grob at an authentication company called Mears for additional authentication,” the judge said. “Grob examined the Mays jersey using online research and film references created after 1999 and concluded that the Mays jersey was inauthentic. Lelands thereafter rescinded its sales agreement with plaintiff.”

Leland’s also advised Jacobs that the travel bag was inauthentic, the complaint said.

Upon learning that the items were inauthentic, Jacobs hit Sotheby’s, Grey’s Flannel and Halper with his 2014 suit claiming negligent misrepresentation, unjust enrichment, violations of New York and Pennsylvania business practices and fraud.

In her partial dismissal in July 2015, Judge Beetlestone granted Grey Flannel’s motion to dismiss on the grounds that her court did not have jurisdiction over a company whose principal place of business was in New York and whose only contact with Pennsylvania was through a website that was not significantly engaged in commerce targeted to Pennsylvania consumers.

The judge also faced hurdles applying state statute of limitation laws against Sotheby’s and Barry Halper given the amount of time that passed between Jacob’s purchases and the discovery of their inauthenticity.

Judge Beetlestone axed claims of New York General Business law and Pennsylvania Unfair Trade Practices and Consumer Protection law violations as well as the unjust enrichment claim, saying the statute of limitations had long since expired, since it began running at the time of the 1999 purchase, and was not subject to tolling under either state’s law.

The judge also granted Sotheby’s motion to dismiss the negligent misrepresentation claim under New York state’s economic loss doctrine, which denies the purchaser of a defective product a tort action against a seller for purely economic losses sustained as a result of the defective product.

But Judge Beetlestone could find no reason to toss Jacob’s claim of fraud against Sotheby’s and Halper. Under both New York and Pennsylvania state laws, fraud claims are tolled until the discovery of injury, which in this case was 2012.

Representatives for Jacobs and Sotheby’s did not respond Wednesday to requests for comment.

Jacobs is represented by Alex J. Murland, Robert H. Nemeroff, Ronald L. Woodman and Michael Yanoff of Friedman Schuman PC.

Sotheby’s is represented by Seth L. Laver, Michael P. Luongo and Jonathan S. Ziss of Goldberg Segalla LLP.

The case is Michael Jacobs v. Barry and Sharon Halper Inc., Sotheby’s Inc., Sotheby Parke Bernet Inc., Sotheby Holdings, Sotheby’s and Grey Flannel Collectibles Inc., case number 2:14-cv-06515, in the U.S. District Court for the Eastern District of Pennsylvania.

--Additional reporting by Steven Trader. Editing by Kelly Duncan.