Autograph Authentication Cos. Hit With Antitrust Class Actions

Last week, two class action lawsuits were filed against a group of autograph authenticating companies alleging that the group has entered into a shady deal to control the authenticating market and push out competition.

Lead plaintiffs, two dealers Nelson Deedle and Todd Mueller, allege in their class action lawsuits that a group of autograph authenticators has been unfairly cutting themselves and other dealers out of the market. The defendants named in the class action lawsuits include Collectors Universe Inc., PSA/DNA, James Spence Authentication LLC, R&R Auction Co. LLC, Roger Epperson Authentication Ltd. and Steve Cyrkin.

“In the autographed memorabilia industry, the authenticity of an item is the value of an item,” allege the plaintiffs in their autograph authentication class action lawsuits. “Defendants have joined together as a complex association of autograph dealers, auction houses, authenticators, and public personalities to act as the only authority on authenticating items that dealers are attempting to sell to their customers. Through this association and combination, Defendants are now targeting their competition, such as Deedle, by failing the authenticity of the items that their competition sells to increase their own market presence. Such activity is per se illegal according to federal anti-trust laws, and Deedle now comes to hold Defendants responsible and break up Defendant’s cartel.”

The plaintiffs allege in their class action lawsuits that the authenticating companies label items sold by outside dealers as forgeries, when they are actually real, to ensure their market domination. “The defendants make up this inner-circle, and are using their conjoined market power in an effort to stifle legitimate competition in the industry by agreeing to disparage Mueller and his items for sale as forgeries, not based on the items themselves, but on the singular fact that Mueller is selling the item,” one of the plaintiff says in his class action lawsuit.

According to both autograph authentication class action lawsuits, there are a number of examples of items that were designated as fakes even though the plaintiffs allege they knew them to be authentic, either by witnessing the signatures first hand or through other trustworthy sources. According to the class action lawsuits, once the items are deemed to be inauthentic, the dealers must provide a full refund to the buyers at their own cost.

The class action lawsuits accuse the defendants of violations of the Sherman and Clayton acts as well as the California business and professional code. “It is within this cartel of companies that the major, self-interested, third-party authenticators can drive out the competitors of certain auctioneers and dealers to ensure that their preferred auction houses and dealers thrive,” the plaintiffs argue in their class action lawsuits. The plaintiffs both seek damages of $4 million.

“The value of an item is based in its authenticity,” argue the plaintiffs in the autograph authentication class action lawsuits. “Items that are branded inauthentic are basically worthless,” they continue. The plaintiffs accuse the companies of working together to ensure that certifications of authenticity only go to other deals in their group.

Mueller and Deedle are both represented by Matthew M. Clarke, Dugan P. Kelley and Matthew N. Mong of Christman, Kelley & Clarke PC.

The Autograph Authentication Class Action Lawsuits are Todd Mueller, et al. v. Collectors Universe Inc., et al., Case No. 8:15-cv-01116, and Nelson Deedle, et al. v. Collectors Universe Inc., et al., Case No. 2:15-cv-05288, both in the U.S. District Court for the Central District of California.