Mastro and FBI

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Posted By: Kenny Cole

Peter,

As an abstract legal theory, I suppose that disclosure should occur in every case. That's not going to happen though. I understand that. If there is a failure to disclose on a $30 card, it seems different to me. I'm not comfortable with fraud, at least not actual fraud, in a circumstance like that. I might argue constructive fraud, but don't think I'd argue actual fraud. I don't think I could get there on the intent issue because in that context your point is absolutely valid -- on a $30 card, I don't think a jury will hold the seller to the same disclosure standard as it would were the card worth six figures. Moreover, that sort of thing probably wouldn't involve a lawyer in any event. While the issue might pose an interesting law school exam question, it wouldn't really be something that I could tell a client to pursue. Anticipating a question, I don't know where the line is or where it should be drawn.

It seems to me that the issue shifts somewhat when you are talking about what are undisputedly high-dollar cards, or other memorabilia for that matter, which is really what I was discussing. In that circumstance, I absolutely think that there is a duty to disclose adverse information. In that regard, like Corey, I'm not talking about whether a card that was previously a 7 was cracked out and got an 8. What I'm talking about is a card that was previously rejected as trimmed, bleached, recolored, etc., which subsequently received a grade from a different grader. Granted, it may be argued that the difference is one of degree, but failure to disclose that a card used to be a 7 and is now an 8 doesn't give me too much heartburn. On the other hand, knowingly failing to disclose that the card being represented as a wonderful 8 was previously deemed to be altered by a reputable third party is an entirely different situation IMO. I can't precisely articulate why it is so different in a manner that will withstand attack, but I know that it is. I suspect that you do too.