Crossover grading

[Peter_Spaeth]

Originally Posted by benjulmag

Again, we are going to have to agree to disagree. If such a suit were brought and it should come out that B has an unstated company policy that it does not crossover from A, but that the explanation it is to give to the submitter is that the card possess defects B knows it does not possess, I'm not sure I share your view that such a suit would be beneficial to B. Such a suit could give A a forum to submit voluminous forensic evidence of grading errors by B, which could be an eye opener for a number of potential dealers/collectors. In the world we are in high-grade vintage cards routinely sell for five and six figures. Some potentially seven figures. And I suspect that a number of the purchasers would find it material if they were to learn that the cardboard within the slab is in fact not what the flip represents, and that if revealed would be worth a small fraction of what it sold for.

But Corey, why would A want to publicize in a complaint then trial that so many people were trying to switch so many cards out of its holders? That just strikes me as incredibly counterproductive, even in the fantasy world that there is some viable legal claim here.

[benjulmag]

Originally Posted by Peter_Spaeth

But Corey, why would A want to publicize in a complaint then trial that so many people were trying to switch so many cards out of its holders? That just strikes me as incredibly counterproductive, even in the fantasy world that there is some viable legal claim here.

Peter, if within the hobby it is generally believed that B's cards sell for more than comparably graded A cards, and the reason has nothing to do with grading quality but instead B's set registry, A could rationally take the view that there is no improvement it could make to its product that could increase its market share. And therefore the most prudent business strategy would be to expose the great percentage of high-grade B vintage cards that in fact are altered, along with the blatant misrepresentations B is making by telling submitters how accurate its grading is and the ethical standards under which it operates. Maybe in the end such a suit would bring no benefit to A. But the upside of bringing it to me seems to outweigh the downside.

[Peter_Spaeth]

Originally Posted by benjulmag

Peter, if within the hobby it is generally believed that B's cards sell for more than comparably graded A cards, and the reason has nothing to do with grading quality but instead B's set registry, A could rationally take the view that there is no improvement it could make to its product that could increase its market share. And therefore the most prudent business strategy would be to expose the great percentage of high-grade B vintage cards that in fact are altered, along with the blatant misrepresentations B is making by telling submitters how accurate its grading is and the ethical standards under which it operates. Maybe in the end such a suit would bring no benefit to A. But the upside of bringing it to me seems to outweigh the downside.

How would altered cards be relevant to the suit you are proposing? Your suit concerns already-graded A cards and B's treatment of them, not B's grading practices in general. By the way even if somehow relevant, what admissible evidence is A going to provide to show that B slabs a high percentage of altered cards?

[benjulmag]

Originally Posted by Peter_Spaeth

How would altered cards be relevant to the suit you are proposing? Your suit concerns already-graded A cards and B's treatment of them, not B's grading practices in general. By the way even if somehow relevant, what admissible evidence is A going to provide to show that B slabs a high percentage of altered cards?

The suit would focus on A cards that B did not cross over and show those cards to possess the attributes of B cards that do have the desired crossover grade. The purpose would be to persuade the trier of fact that the real reason they did not cross over was not because of some objective assessment by B that they did not meet B's criteria, but instead due to an unstated policy of not crossing over. It would seem to me that by showing voluminous numbers of altered B cards that did have the desired crossover grade, B grading practices would come into view.

[Peter_Spaeth]

Originally Posted by benjulmag

The suit would focus on A cards that B did not cross over and show those cards to possess the attributes of B cards that do have the desired crossover grade. The purpose would be to persuade the trier of fact that the real reason they did not cross over was not because of some objective assessment by B that they did not meet B's criteria, but instead due to an unstated policy of not crossing over. It would seem to me that by showing voluminous numbers of altered B cards that did have the desired crossover grade, B grading practices would come into view.

How would you propose to show those and prove they were altered, consistent with the rules of evidence, Daubert, etc. It might be quite difficult as a practical matter to establish an adequate foundation for expert testimony.

[Dpeck100]

I have played the cross over game both in the holder and out of the holder. I do tend to think you have a better shot out of the holder but that is where all of the risk is. Whether it is position bias or not being able to see the card it is impossible to know. There is absolutely no case here that can be brought against grading companies and I am quite surprised it is even being discussed in a serious matter as if one would ever have a legit chance of moving forward with any level of success.

Under no circumstances can anyone prove the motives of a grading company when it comes to analyzing cards in other companies holders. PSA has such a dominate position that they couldn't care less what SGC does. They have no need to beat them further into submission. The market has.

This notion that all grades are equal in third party holders is laughable. I have seen numerous examples where cards can go up or down from company to company. I have had BGS 9's turn into PSA 10's and BGS 9's turn into PSA 7's. Even worse BGS 9'5's turn into PSA 8's.

Years ago I tried crossing over several BGS 8.5's and a BGS 9 1982 Wrestling All Stars Series A Andre The Giant. No luck. Cracked them out along with several others and had a BGS 8 go to a PSA 6, two 8.5's go to 8's, a BGS 9 that went to a PSA 7 the first time and then an 8, and another BGS 9 go to a PSA 8. This example is why a PSA 9 will out sell a BGS 9.5 for this card.

The registry is not the only driving force that differentiates prices. Those with large SGC and BGS positions tell themselves this to make themselves feel better but the collective market is smarter than this and has created quite the divide in prices. No grading company is perfect but in my view on the margin PSA is definitely the toughest. I have submitted to all three by the way.

The only SGC 98 1982 Wrestling All Stars Series A Hulk Hogan was a PSA 9 that had been subbed time and time again raw and for review at PSA with no luck of landing the first PSA 10. It was cracked and sent to SGC to get the Gem Mint grade. When it sold it went for just over $100 more than the PSA 9. Why? Because it is a PSA 9 sitting in an SGC 98 case. Examples like this destroy your case.

There are numerous comments over the years about SGC being more lenient on centering than PSA. BGS having the four sub graded scoring system where a 9 corner subgrade with three 9.5's has no chance to cross over in or out of the holder to PSA. Once again there is wayyyy too many examples that show that third party grading isn't perfect and that one companies grade may be different than another.

One of the primary reasons that many cards sell for a big spread is dealers in so many cases will pay a one grade discount on SGC graded cards. Why? Because the market has built the expectation that they are over graded vs. PSA. Is this true? In some cases yes and in other cases no but enough times that the risk reward analysis points to not paying an equal value.

If cards were graded by computers and we could prove that there was virtually no variance in grading and then they didn't cross over perhaps you might be on to something but with all of these scenarios I have laid out there is absolutely without question no case here.

[benjulmag]

Originally Posted by Dpeck100

There is absolutely no case here that can be brought against grading companies and I am quite surprised it is even being discussed in a serious matter as if one would ever have a legit chance of moving forward with any level of success.

Under no circumstances can anyone prove the motives of a grading company when it comes to analyzing cards in other companies holders.

I respectfully disagree with this view. To be clear, I am not saying that if A were to go after B in this instance, A could satisfy its burden of proof. But I can think of a way A could go about trying to do so that if successful could shift the burden of proof to B to establish that it did not have improper motives in its refusal to cross over.

Suppose A were to take 10,000 good candidates of A-slabbed cards for crossover, and only 8 cross over. A then takes the 9,992 that did not cross over out of the slab and submit them raw. 8,895 come back crossed over, and 4,583 of those at higher grades. I believe that if A was to submit such evidence, B would then have the burden to come up with a explanation to explain this. A far-fetched fact pattern, perhaps. But the story I recounted about the 50 out of 50 non-crossed cards being crossed over when resubmitted raw was told to me by a source I regard as credible. And I have heard other stories, though not as egregious. So while perhaps A has an uphill climb, for me at least I do not regard it as insurmountable.

My ire at this situation arises because B says that it objectively evaluates all crossover submissions, and that submitting it raw will make no difference. And when they refuse the crossover, they might tell you something untrue about your card. If B wants to have a blanket policy of refusing to cross over A's cards, then go ahead and announce it. That would be perfectly lawful and I would have no cause to complain. But don't go about saying you are doing one thing, when in reality you are doing something else.