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What are the chances that PCGS will win their lawsuit against the coin doctors?
PerryHall
Posts: 45,444 ✭✭✭✭✭
I'm not a lawyer but my gut feeling tells me that PCGS will have an uphill battle convincing a judge or a bunch of jurors without a coin collecting background that it's wrong to repair or "improve" a coin. The defense lawyers will point out that it's common with other collectibles to repair and enhance those collectibles such as antique cars which are commonly repaired and repainted. Don't most non-collectors think this is no big deal? Don't many people think it's a good idea to polish an old silver coin to make it new looking? Don't forget that the jury will not consist of experienced coin collectors and professional coin experts. I'm curious what the lawyers and lawyer wannabes here think about PCGS chances of winning this lawsuit?
Worry is the interest you pay on a debt you may not owe.
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respond favorably to the evidence presented by PCGS.
Camelot
WS
<< <i>Americans are tired of being fleeced, I believe that a jury will
respond favorably to the evidence presented by PCGS. >>
The jury will be swiftly instructed by the judge not to allow emotion but rather evidence to guide them.
On the other hand, unlike a criminal trial where you less than reasonable doubt to succeed and all twelve must agree on verdict, a civil trial needs only a preponderance of the evidence (slightly more vs less than) for a victory.
peacockcoins
<< <i> The defense lawyers will point out that it's common with other collectibles to repair and enhance those collectibles such as antique cars which are commonly repaired and repainted. Don't most non-collectors think this is no big deal? Don't many people think it's a good idea to polish an old silver coin to make it new looking? Don't forget that the jury will not consist of experienced coin collectors and professional coin experts. >>
They aren't going after people who clean coins. The defense argument may be as you said, but keep in mind that PCGS can get a boatload of experts to say that within the hobby, that's not acceptable. I dare say that if you put a new engine into a car and said it was the original and just happens to have no mileage, that, too, would be considered wrong.
But as Mark said, they're not going to have to argue what is/isn't accepted in the practice. They're going to argue that these dealers signed a contract that said they would not send in altered coins, and while on occasion someone may send in something that has a problem, in these cases, they've surely tied the named dealers to specific alterations that must have been their doing. If they did it, they know the coins were altered, and thus they breached their contract with PCGS, causing PCGS financial harm when they have to buy back the coins.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
<< <i>I don't think PCGS has to prove "that it's wrong to repair or "improve" a coin". I think they need to prove that a written contract was breached, resulting in damages. And in theory, at least, that should be much easier to prove. >>
1. Does PCGS have a real person that has admitted to doctoring said coins?
2. Will said person testify in open court that they did in fact alter or doctor these coins?
3. Who paid for the services of said doctor?
Regards, Larry
that coin doctoring is not directly the reason for the Civil suit .
Fraud is the issue ...............right ?
This is just my opinion.
Experience the World through Numismatics...it's more than you can imagine.
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TRUTH
<< <i>I don't think PCGS has to prove "that it's wrong to repair or "improve" a coin". I think they need to prove that a written contract was breached, resulting in damages. And in theory, at least, that should be much easier to prove. >>
I agree with Mark that their breach of contract claims will be their strongest and at least the ones on which they will likely prevail. But in any event, it will take a few years for PCGS to get there, particularly since the Central District Court is one of the busiest federal courts in the country - and I'm sure the defendants, after pooling their vast assets, will give them a heck of a costly fight.
I also completely believe that PCGS would never have filed this lawsuit had they and their lawyers not felt like they had enough facts and evidence to back up all their claims.
However, even right now, I think it is really going to put a huge damper on coin doctoring (however that is defined), which in and of itself is a BIG win for PCGS - and for the coin world.
https://thepennylady.com/
"Keep your malarkey filter in good operating order" -Walter Breen
<< <i>PCGS has already won. The court of public opinion is alive and wants the bad guys shut down. >>
Exactly.
That leaves them in a tough place. They also have to prove under their contract that the Defendants "knowingly" sent them doctored coins. Without a witness that worked for the defendants, PCGS can't get inside their minds. They will then have to show a pattern of submissions that leads to the conclusion that doctored coins were "knowingly" submitted. If that were happening, and PCGS were returning the coins ungraded, it is not likely the pattern would continue. If the coins were being graded and the doctoring missed by PCGS, then how do you prove that they were "knowingly" submitted when even the best in the world missed the doctoring. I don't know what facts PCGS has and I am sure they considered all this prior to filing suit. It'll be interesting to see what happens in discovery when the facts do come out.
I would think the defendants are going to hammer on pcgs for taking there money and slabbing the coins when they did not have to.
From reading the other threads and over the years most dealers KNOW who the doctors are but were always to afraid to speak up. Like that was good for the hobby.
Is manofcoins worried about being added to the lawsuit?
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
Never mind, I found it. I thought it got nuked
<< <i> It looks like to me that PCGS KNOWS WHO the doctors are so why did they grade the coins in the first place. After a few submissions why not just do a 100 percent body bag on them. It would not take long to figure out if they sent them from another source either. >>
They'll just submit the coins some other way. Let's suppose Dealer A gets blacklisted. Why can't he submit through Dealers B-E?
<< <i>Is manofcoins worried about being added to the lawsuit? >>
Don't know, brother, but if it interests you so much, why not ask him yourself?
"Seu cabra da peste,
"Sou Mangueira......."
Worry is the interest you pay on a debt you may not owe.
<< <i>
<< <i>Is manofcoins worried about being added to the lawsuit? >>
Don't know, brother, but if it interests you so much, why not ask him yourself? >>
Let me see those events occurred 5 years ago, a few low end ugly Morgans, that he bought back. I suspect
no evidence left i.e. all coins have been cracked out and dipped. Plus he owned up to it and apologized. Plus
PCGS has known about this for 5 years, I suspect he has already discussed this with them in detail several years ago.
Worry is the interest you pay on a debt you may not owe.
<< <i>Will the defendants put PCGS on trial? How hard would it be to find someone that had an MS65 coin that he cracked out and then resubmitted it only to get it back in a body bag and then to resubmit it for a third time to get it back in a MS66 slab? Hasn't PCGS cleaned coins in the past for prefered customers? Don't assume that the defendants won't fight back using all the sleazy lawyerly tricks in the book. Don't get me wrong here---I'm only playing devil's advocate and I hope PCGS prevails since they are the definitely good guys here. >>
Good point Yes the innocent party is always put on the defense, kinda like the rape victims are.
It's bound to scare off some in the future.
<< <i>I applaud PCGS for their bold stance. Taking on the fight is half the battle. As for the outcome of the litigation, there are many potential problems that PGCS must overcome. First, they have in their pleadings set themselves up as the leading coin authentication and grading service in the world. In order to prevail, PCGS must prove, among other things, damages. To do this they will have to show that they have been fooled, have certified coins, only to have a common collector discover the "doctoring" and return the coin to PCGS for a refund. PCGS will have to admit that doctored coins can slip by even the "leading coin authentication and grading service in the world".
That leaves them in a tough place. They also have to prove under their contract that the Defendants "knowingly" sent them doctored coins. Without a witness that worked for the defendants, PCGS can't get inside their minds. They will then have to show a pattern of submissions that leads to the conclusion that doctored coins were "knowingly" submitted. If that were happening, and PCGS were returning the coins ungraded, it is not likely the pattern would continue. If the coins were being graded and the doctoring missed by PCGS, then how do you prove that they were "knowingly" submitted when even the best in the world missed the doctoring. I don't know what facts PCGS has and I am sure they considered all this prior to filing suit. It'll be interesting to see what happens in discovery when the facts do come out. >>
Some types of doctoring might not be apparent at the time the coins are encapsulated, but later become blatantly obvious. As just one example, some coins which have been puttied are easy to spot after the putty's appearance changes.
Also, the complaint contains reference to at least one coin which had metal added, but which broke down over time. So, it is understandable that the doctoring could be missed at the time of encapsulation (even by experts), but at the same time, become obvious (even to a novice) later.
In the examples I have given, there is clear evidence of doctoring, even though it might not have been evident initially. At this point, it becomes a matter of showing that an alleged coin doctor is either the one who did it, or knowingly acted on behalf of someone else.
<< <i>This is not a cut-n-dried issue. This whole ordeal could end up blowing up in PCGS's face.
Agree. I can see a counter suit for libel, slander, loss of business, restraint of trade, etc. It's going to get ugly. I can see these dealers running full page ads in coin publications giving their side of the story. These guys aren't going down without a fight and they have the financial resources to put up a good fight. I hope PCGS wins because they are the good guys here but we need to be realistic---the good guys don't always win in the real world.
Worry is the interest you pay on a debt you may not owe.
<< <i>In the examples I have given, there is clear evidence of doctoring, even though it might not have been evident initially. At this point, it becomes a matter of showing that an alleged coin doctor is either the one who did it, or knowingly acted on behalf of someone else. >>
The problem is dealers frequently buy raw coins and them submit them for grading soon after they are purchased---sometimes at the same show that they bought the coin. They could claim to be a victim of the coin doctor that puttied the coin.
Worry is the interest you pay on a debt you may not owe.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
<< <i>Experts in the field of Numismatics will be brought forward in the court room and will swear under oath that the information they are are about to give is true and factual. >>
Do any of those experts have a past/present business interest in one of the parties?
Put before a jury made up of a cross-section of the population, I don't think that it would be hard for a lawyer to turn the case into one that portrays coin doctors as doing something that has been accepted by collectors/dealers in the hobby from the beginning against a company that has come up with a new idea that they would use to ensure that they would have control of the coin market, i.e., promotion of the thought that coins are not acceptable unless given the blessing by them. In this, I don't think that the opinion of the average guy on the street is going to lie with a company that wants to have a hand (and profit) in every coin sale...especially when you consider that another highly accepted TPG "conserves" coins before they holder them for collectors. In the end, unless the coin was actually fake and manufactured by someone other than the mint, I would think that the obligation to be sure that it was not repaired or changed in some other way ultimately lies with the company that puts it into a holder and verifies it as such. JMHO.
<< <i>
<< <i>Experts in the field of Numismatics will be brought forward in the court room and will swear under oath that the information they are are about to give is true and factual. >>
Do any of those experts have a past/present business interest in one of the parties?
Put before a jury made up of a cross-section of the population, I don't think that it would be hard for a lawyer to turn the case into one that portrays coin doctors as doing something that has been accepted by collectors/dealers in the hobby from the beginning against a company that has come up with a new idea that they would use to ensure that they would have control of the coin market, i.e., promotion of the thought that coins are not acceptable unless given the blessing by them. In this, I don't think that the opinion of the average guy on the street is going to lie with a company that wants to have a hand (and profit) in every coin sale...especially when you consider that another highly accepted TPG "conserves" coins before they holder them for collectors. In the end, unless the coin was actually fake and manufactured by someone other than the mint, I would think that the obligation to be sure that it was not repaired or changed in some other way ultimately lies with the company that puts it into a holder and verifies it as such. JMHO. >>
The jurors will be pointed to written agreements which the defendants have been accused of breaching. What other people or companies have done to coins is not the issue at hand. And not that it really matters, but how many collectors/dealers in the hobby do you think accept lasering of coins and adding metal to coins in an effort to deceive and profit?
<< <i>but how many collectors/dealers in the hobby do you think accept lasering of coins and adding metal to coins in an effort to deceive and profit? >>
I don't know about the current situation, but in the past there were ads in the back of numismatic magazines advertising businesses that plugged holes and repaired problems with coins...I'm sure that a lot of this was done with the intention of making the coin marketable, and I'm sure that profits were made - all accepted by most in the hobby. The deceit issue is another thing, but I don't think that most people are too sympathetic for the expert when someone "fools the experts".
Serving on a jury recently, I can attest that what might make sense to you might not mean much to them...and presenting them with a contract that seems cut and dried might not mean much if the other side is able to somehow raise the subject of past practice into the argument.
Note that names are named. How many times have we read posts here asking to name names? Here you go.
A few things in this filing--
* PCGS has refused to return two suspect coins to submitters. Presumably this was done only after a pattern of repeated activity - but I'd hate to be Joe Schmo who bought the one-off bad coin and then had it retained by PCGS.
* The crux of the case appears to be that (1) submitters agreed not to submit messed with coins, and then did, and (2) the coins were fraudulently altered contrary to US law (which law was clearly aimed at counterfeiters and not coin doctors). (2) almost sounds like it could apply to coin dipping if read strictly - I'd like to hear what the attorneys think on this point. You dip a silver coin, you remove silver - it's that simple - this "lightens" the coin, which is illegal if done "fraudulently."
* As for (1), the wording is that the submitter will not "knowlingly" submit a doctored coin. So, PCGS has to prove the doctors knew their coins were messed with. Somehow I doubt they wrote memos to each other describing the doctoring, so this may be tough. Probably the point they would make is that they have thousands of submitters, and that the doctored coins were mostly coming from this particular set of defendants - too coincidental.
Hats off to PCGS to raising the heat on this issue - this suit took a lot of guts to file and may expose them to litigation from the other direction.
Taken to the extreme, a ruling in the plaintiffs favor might bring more than they bargained for if "surface alteration" ends up being defined in a certain way. If dipped coins fit the acceptable market standard, then the question needs to be asked, who set the standard? - and since the standard seems to be ever-changing, who deems the new standard and when?
This is a tough case.
<< <i>Where does dipping fit into the equation? will all the bright white and obviously dipped coins, even the big-money pieces being held in "strong hands" now be rendered ruined and their owners brought before the court if they were the person that submitted the coin? How about the 200 year old red copper?
Taken to the extreme, a ruling in the plaintiffs favor might bring more than they bargained for if "surface alteration" ends up being defined in a certain way. If dipped coins fit the acceptable market standard, then the question needs to be asked, who set the standard? - and since the standard seems to be ever-changing, who deems the new standard and when?
This is a tough case. >>
You continue to bring up points and questions that, while interesting, are apart from this specific lawsuit. I believe that it boils down to whether there was a breach of contract and whether damages were suffered by the plaintiff. It is not about dipping coins or things done by other individuals, which were not in violation of a signed agreement. I believe you and a few others are putting a burden which does/will not exist, on the plaintiff.
Only three of the twelve on the jury read the instruction and guidance from the judge that was taken into the deliberation room, two talked between themselves during deliberation after announcing that they didn't care either way and would go along with the majority, many used their cell phones during deliberation after being told not to have them on, two people on the jury changed their vote when it became apparent that we'd be going into the evening because they had dinner dates, one woman didn't want to miss the last day of school and announced that we'd better get going, one elderly juror sat and pouted, and one guy was a recovering alkie that based all his opinions on that, etc., etc.
What sounds good to you as someone in the business conversing with other like-minded people means little when you have a cross-section of society as jurors that care less about how limited the scope of their decision is when they can interject personal opinion and feelings into the verdict. I'm not trying to rain on anyone's parade here, just telling it as it is - If the defense can raise a few points with the jury, even if the judge later tells the jury to disregard the statements, it does make a difference and will be placed on the balance of justice by the jury when they're making their decision.
Seriously, though, after reading the amended complaint, my initial impression is "why these defendants?" and "why now, after 20+ years of fairly obvious widespread coin doctoring?" Is there any importance under California and federal law if - and that's a huge "if" - PCGS tolerated this behavior for decades? Maybe it didn't. I don't know. But I guess since it's been a common topic of discussion on this public forum for years, you'd figure it was pretty much tolerated. It's not like this was all some big surprise. I mean, I was under the impression that some doctored coins get submitted and resubmitted dozens and dozens of times to the point that those coins are notorious in the grading rooms. Yet, apparently little if anything is done to prevent those dealers and former graders from participating in this farce, so eventully, after the 110th submission, the BB'd $2K piece of crap turns into an MS68 $400K "monster." Why is it OK for those dealers to continue to be allowed to submit coins, but the defendants get sued?
I guess what I feel is missing in the complaint is an allegation that the named defendants are *all* of the suspected coin doctors that PCGS knows about. In other words, that there aren't a bunch of other guys out there who are thought to have done the same kind of thing, but who are aren't being sued for whatever reason. I'm sure that isn't an element of any claim, but it would make a more persuasive argument to me.
But what do I know? Like most things in life, I don't understand it all.
<< <i>Considering that plaintiff relies on the federal law prohibiting alteration of coins (taken wildly out of context, imho), it's funny that plaintiff's second request for relief is for the defendants to hand over other coins that were doctored for "destruction."
Seriously, though, after reading the amended complaint, my initial impression is "why these defendants?" and "why now, after 20+ years of fairly obvious widespread coin doctoring?" Is there any importance under California and federal law if - and that's a huge "if" - PCGS tolerated this behavior for decades? Maybe it didn't. I don't know. But I guess since it's been a common topic of discussion on this public forum for years, you'd figure it was pretty much tolerated. It's not like this was all some big surprise. I mean, I was under the impression that some doctored coins get submitted and resubmitted dozens and dozens of times to the point that those coins are notorious in the grading rooms. Yet, apparently little if anything is done to prevent those dealers and former graders from participating in this farce, so eventully, after the 110th submission, the BB'd $2K piece of crap turns into an MS68 $400K "monster." Why is it OK for those dealers to continue to be allowed to submit coins, but the defendants get sued?
I guess what I feel is missing in the complaint is an allegation that the named defendants are *all* of the suspected coin doctors that PCGS knows about. In other words, that there aren't a bunch of other guys out there who are thought to have done the same kind of thing, but who are aren't being sued for whatever reason. I'm sure that isn't an element of any claim, but it would make a more persuasive argument to me.
But what do I know? Like most things in life, I don't understand it all.
It's one thing to suspect someone of doing something. It's another to be able to prove it. It probably wouldn't make any sense for a grading company to sue a large number of suspected coin doctors, without proof.
<< <i>Considering that plaintiff relies on the federal law prohibiting alteration of coins (taken wildly out of context, imho), it's funny that plaintiff's second request for relief is for the defendants to hand over other coins that were doctored for "destruction."
Uh huh...