Latest development in Shanus v. REA

[Runscott]

Perhaps I'm being lazy, but I really enjoy just sitting around flipping through all the great auction catalogs, browsing the auction house websites, getting drunk off my ass and spending way too much money. It's so much fun and I never get sued.

But I do realize that there are a lot of collectors who, behind the scenes, are spending a lot of energy keeping this 'Babes in Toyland' world relatively safe for innocent idiots like myself.

There are a lot of different types of players in our hobby - someone should create a board game.

[tbob]

IMHO, if REA can truly prove that it did indeed lose money because of this quote on the Net 54 Board, one would have to think it could have a chilling effect on poster commentary. I don't have a dog in this fight but the outcome is going to be very interesting.

[SetBuilder]

What's this case all about? Why did Corey sue REA in the first place?

[birdman42]

Originally Posted by SetBuilder

What's this case all about? Why did Corey sue REA in the first place?

Manny,

Here's a link to a thread from last year. The link in the first post is dead, so here's a good link to the original article in the *New York Daily News*.

The thread: http://www.net54baseball.com/showthread.php?t=135307
The DN article: http://www.nydailynews.com/sports/i-...ticle-1.108694

Bill

[nolemmings]

Dan, I believe the premise of the trade libel claim is 1) Corey knew that the reason the price had fallen on the sheetmusic was not because of any market forces or because of limited demand, but because the prior REA auction price was artificially high, made artificial by Corey's alleged shill bidding and 2) knowing the "real" reason the price had dropped substantially was because of his own (alleged) wrongdoing, Corey nonetheless intentionally suggested that the low price was attributed to REA's failure to set an adequate reserve. That is how I read it.

Although I too wonder about the damages elements of the claim and both the surrounding circumstances and litigation strategy, I find the other count of the counterclaim, which alleges that Corey engaged in shilling, to be interesting, shall we say.

[Peter_Spaeth]

Originally Posted by nolemmings

Dan, I believe the premise of the trade libel claim is 1) Corey knew that the reason the price had fallen on the sheetmusic was not because of any market forces or because of limited demand, but because the prior REA auction price was artificially high, made artificial by Corey's alleged shill bidding and 2) knowing the "real" reason the price had dropped substantially was because of his own (alleged) wrongdoing, Corey nonetheless intentionally suggested that the low price was attributed to REA's failure to set an adequate reserve. That is how I read it.

Although I too wonder about the damages elements of the claim and both the surrounding circumstances and litigation strategy, I find the other count of the counterclaim, which alleges that Corey engaged in shilling, to be interesting, shall we say.

Take a look at the prior REA auction that was allegedly artificially high as a result of Corey's shill bidding.

http://www.robertedwardauctions.com/auction/2004/1.html

In that 2004 auction, REA refers to a prior sale of the item for $25k. "We are aware of fewer than five known examples of The Live Oak Polka. This example was once one of the signature nineteenth-century pieces of the Halper Collection. It appeared in the famous 1999 Halper auction as Lot #3. It sold at that time for $25,300, and has been consigned to this sale directly from the purchaser at that landmark sale."

So Corey's observation that the 2010 sale price was low relative to past sales appears to me to be true even without reference to the 2004 price allegedly inflated by his own shill bidding, on the basis of statements made by REA itself.

[nolemmings]

Peter, I don't disagree. I was just trying to explain the gravamen (how long has it been since you used that word?) of the trade libel count as I understood it. As I said, I find the other count more interesting, although it has its own challenges IMO.

[Leon]

Originally Posted by tbob

IMHO, if REA can truly prove that it did indeed lose money because of this quote on the Net 54 Board, one would have to think it could have a chilling effect on poster commentary. I don't have a dog in this fight but the outcome is going to be very interesting.

Hey Bob
I am no lawyer, obviously, but is this board any different than any other very popular (for a hobby) public venue? If someone told a news reporter something it would be no different. I always say to be careful of what you say on our board. Everyone is liable for what they say AND with virtually no anonymity everyone is accountable. I am sure you would agree that is the best way to operate a message board? So, I am not sure this venue is different than other public ones from a liability standpoint?

[Peter_Spaeth]

Originally Posted by tbob

IMHO, if REA can truly prove that it did indeed lose money because of this quote on the Net 54 Board, one would have to think it could have a chilling effect on poster commentary. I don't have a dog in this fight but the outcome is going to be very interesting.

REA has to establish both liability and damages. In my personal opinion, just based on the language of the post, it will be very difficult to establish that a comment about the potential pitfalls of consigning 19th century memorabilia to auction houses was libelous.

[tbob]

Originally Posted by Peter_Spaeth

REA has to establish both liability and damages. In my personal opinion, just based on the language of the post, it will be very difficult to establish that a comment about the potential pitfalls of consigning 19th century memorabilia to auction houses was libelous.

Peter- I agree absolutely. My comment was that IF REA were able to prevail on its counterclaim, that posters would really be gun-shy about what they posted on the board. I did not mean to imply that I felt they WOULD prevail, only that IF they did it would have a chiiling effect on comments in the future. There are may different reasons to file a counterclaim in ANY case, not only the honest belief that the party being sued is actually the aggrieved party but also occasionally an attempt to derail the opposition's claim or try and muddy the water by obfuscation.
As mentioned previously the issue of an exact determination of damages appears to me to be very speculative, IF the counterclaimant managed to get over the hurdle of liability in the first place.
Leon- I agree with you also and it has long been your policy to patiently but firmly caution posters to realize the possible ramifications of what they might post on this board.

[WhenItWasAHobby]

Originally Posted by tbob

IMHO, if REA can truly prove that it did indeed lose money because of this quote on the Net 54 Board, one would have to think it could have a chilling effect on poster commentary. I don't have a dog in this fight but the outcome is going to be very interesting.

Mr. Shanus' quote, in my opinion, did not attribute the later price drop in 19th century sheet music to anything that would be considered wrongdoing by REA, but rather attributed that significant price drop due to the very limited demand of deep-pocketed investors for that type of collectible.

To take that type of thinking to its logical conclusion, this could mean that a price guide like VCP, could also be found liable for documenting that one item by a consignment seller on Ebay sold that item for X and then also documenting a year later an identical item by the same consignment seller sold on Ebay for 0.4X would mean VCP would be libeling both the consignment seller and Ebay since both could claim that information would discourage future consigments of that item and therefore reduce profits, etc. In my opinion a lawsuit like that would be manifestly absurd.

Peter brings up a good point too. REA has a steep mountain to climb proving damages due to Mr Shanus' posting such as finding 19th century sheet music consignees who read that post and decided not to submit items to REA based on that comment alone. Even if they do produce witnesses who will claim that they were discouraged from consigning items to REA based on that post, it still comes down to Mr. Shanus rendering a factual observation that was not a poor reflection upon REA's actions.

Finally, I've since learned by reading REA's counterclaim that this was not just libel, but business libel. That does carry a 2 year statute of limitations, but with it REA also has to prove malice, which should be extremely difficult unless they uncover some evidence that Mr. Shanus knew he intentionally made a false statement. Assuming the statement was substantially true to begin with, and the counterclaim appears to acknowledge the price drop, I don't see this counterclaim going anywhere at all.