BALTIMORE — A Baltimore man is taking one of the country's leading trading card graders to court seeking a class-action lawsuit alleging federal RICO violations.
Nicholas Funk accuses Professional Sports Authenticator, better known as PSA, of building a billion dollar empire by deceiving card hobbyists.
According to newly filed court papers, Funk claims PSA essentially runs a sports card monopoly, dictating what a particular trading card is worth and how much money it can fetch on the open market.
As proof, Funk cites PSA's parent company's buyout of their competitors, Beckett and SGC.
PSA's primary function is grading, the process of assessing a card's overall condition on a low to high scale of 1-10.
The higher the grade, the more valuable the card. Some can be worth millions with PSA's stamp of approval.
As noted in Funk's case, the practice of card grading is supposed to be conducted by an expert, although in reality grades are based off the opinion of one or multiple people simply inspecting a card's physical characteristics such as creasing and centering.
Per Funk, PSA accepts so many grading requests, that the company has resorted to using trainees and contractors, some with little to no grading experience to do the job, often times well beyond their initial estimated completion date.
“If an unchanged card can receive a different grade depending on the grader, the day, or an undisclosed standard, that is not reliability—it’s like pulling a slot-machine handle,” said Jeremy Eldridge of Zealous Advocates. “Grading shouldn’t be a gamble. Cards are valuable assets in a multi-billion-dollar market.”
Funk believes PSA has shifted its grading standards resulting in "undisclosed error rates, inconsistent grades, and distorted population reports."
Because PSA is a so called authority in the hobby, certain cards with certain grades could be rather rare.
In Funk's view that could allow the company to further manipulate the trading card market, being that a branch of PSA also sells cards while tracking the number available with specific grades.
"On the one hand, PSA authenticates cards, assigns grades, issues certification numbers, and publishes population data," the lawsuit reads. "On the other hand, [PSA] participates in the pricing, custody, resale, offers, lending, insurance, financing, liquidity, and marketplace pathways tied to those same cards."
PSA has yet to reply to the allegations.
The 188 page lawsuit was filed in the Federal District Court of Maryland. Funk is being represented in court by the law firm Eldridge Crandell LLC, and Thomas R. Bundy III, of Zealous Advocates.
