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warshawlawA California court has ruled that Professional Sports Authenticator (“PSA”), the largest third party card grading and authentication service, lost a rare T206 Piedmont Sherry Magie error card submitted to it for authentication by veteran dealer Dan McKee of Reisterstown, Maryland, and awarded Mr. McKee damages of $4,852.00 (Orange County Superior Court case number 04CS000423).
Mr. McKee acquired the card in early 2003 for $4,000.00 and presold it to a collector for $4,800.00, contingent on the card being authenticated by PSA. Mr. McKee then sent the card to PSA for certification in May 2003. PSA admittedly received the intact and undamaged package from Mr. McKee, which included the Magie card and another order, but claimed it never received the Magie card and refused to compensate Mr. McKee for the missing card.
This is a victory for card collectors who choose to submit their materials to authentication and grading services because it proves that these services can and will be held liable in court when they lose or damage the cards entrusted to them for safekeeping.
Perhaps the most interesting element of the testimony at trial by Joe Orlando, President of PSA, was that PSA does not take any steps to independently monitor its receivers when they open the packages submitted to PSA. PSA makes extensive claims about its security and trustworthiness in its promotional materials, yet despite receiving what Mr. Orlando stated were hundreds of thousands of submissions worth millions of dollars every year, PSA admitted that it has no independent means of guarding against employee theft or mistake in the receiving area. I think PSA’S lack of safeguards routinely used at banks, casinos and other establishments where small, high value items are handled is shocking and was a persuasive piece of evidence in Mr. McKee’s case. We were able to prove definitively that Mr. McKee sent the card to PSA and that PSA received the package in question intact and in good shape, but PSA had no credible evidence of what happened to Mr. McKee’s package after it came in.
PSA, which has an “unsatisfactory” record according to the Better Business Bureau of the Southland (315 N. La Cadena, Colton, California; 909-825-7280) for “a pattern of unanswered and unresolved customer complaints”, lost the case initially in small claims court and appealed to the Superior Court, resulting in a new trial and the $4,852.00 judgment against it.