The Class Action Against PSA: What the Three-Billion-Dollar Complaint Actually Says.

The Class Action Against PSA: What the Three-Billion-Dollar Complaint Actually Says.

By Alberto Agostini, co-founder of Studio Agostini & Kasapoğlu, an international boutique law firm with offices in Bologna and Ankara, specialising in the law of collectibles, memorabilia and trading card games.

In brief

On 28 July 2026, a 188-page class action complaint was filed in the United States District Court for the District of Maryland against Collectors Universe, Inc., the company operating as Professional Sports Authenticator (PSA), and its parent Collectors Holdings, Inc. (Funk v. Collectors Universe, Inc., No. 1:26-cv-02933-JKB, D. Md.).

The plaintiff, a Baltimore collector, seeks to represent a nationwide class of consumers who paid PSA grading fees. The complaint pleads ten claims for relief, including two under RICO, the federal statute against racketeering organisations, and alleges that the "fraudulent" fees collected over the relevant period exceed one billion dollars, a figure which, through RICO's trebling of damages, could in theory exceed three billion.

One premise must be stated at the outset and held throughout: what has been filed is a pleading. The accusations that follow are the plaintiff's allegations, not established facts; PSA has not yet answered, and no court has ruled on anything. The document nonetheless deserves attention, since it challenges, with an ambitious legal construction, the very architecture on which the grading market rests.

Contents

1. What happened: the complaint, the parties, the figures

2. Certificate number 00000001: where the accusation begins

3. The grading allegations: subjectivity, graders, populations

4. The fee model and vertical integration

5. The legal architecture: arbitration, RICO and the ten claims

6. What this case is not, and what to expect

7. What it means for collectors in Europe

What happened: the complaint, the parties, the figures

The complaint was filed on 28 July 2026 before the United States District Court for the District of Maryland, Northern Division, in Baltimore, with a jury trial demanded. The plaintiff is Nicholas Funk, a Maryland collector; the defendants are Collectors Universe, which runs the PSA brand, and the holding company Collectors Holdings, to which the complaint attributes control of an ecosystem extending well beyond grading.

The class claim is twofold: a nationwide class for the federal claims, with a four-year class period, and a Maryland subclass for violations of the state consumer protection statute, with a three-year period.

The plaintiff's individual story is, in itself, minute: roughly three hundred dollars paid to have approximately seven cards graded, including Cal Ripken Jr. rookie cards, delivered in March 2025 not through a PSA account, which the plaintiff says he never had, but through an intermediary card shop in Maryland. That apparently marginal detail is in fact one of the keys to the entire complaint, as will be seen.

For completeness, this is not the only case pending against the group: in April 2026 another collector filed an antitrust action in California under the Clayton Act, seeking the forced divestiture of competitors SGC and Beckett, both acquired by Collectors, on the premise that the group now controls the overwhelming share of the grading market. The two proceedings are distinct, but together they amount to unprecedented judicial pressure on the sector.

Certificate number 00000001: where the accusation begins

The complaint opens with a deliberate narrative choice: the first card PSA ever graded, in 1991.

It is the T206 Honus Wagner, the most famous baseball card in the world, to which PSA assigned certificate number 00000001 with a grade of Near Mint-Mint 8. The complaint recalls that the specimen had been "trimmed", that is, cut down at the edges to improve its appearance, years earlier, a circumstance later admitted in a 2013 federal plea agreement by the person who performed the alteration, and alleges, citing public statements, that the grader knew of the alteration at the time of the evaluation. PSA's published standards excluded, then as now, the grading of altered cards. And yet, the complaint alleges, that certification has never been revoked: the card, later sold for as much as 2.8 million dollars, remains encapsulated today in its PSA 8 holder.

The function of this story, within the economy of the pleading, is declared: to argue that the defect was not an isolated accident but the original "blueprint" of a system which, according to the plaintiff, turned a number printed on a plastic holder into a market exceeding fifteen billion dollars, built on trust in an evaluation presented as neutral, expert and standardised.

Note well: that the Wagner was "trimmed" is a historically documented fact; that this demonstrates a fraudulent design sustained for thirty-five years is, instead, the plaintiff's thesis, and it remains to be proven.

The grading allegations: subjectivity, graders, populations

The first block of allegations strikes at the heart of the service: the promise of an objective, impartial and standardised evaluation.

The complaint contends that behind that promise operates a subjective and opaque system, hinging on unmeasurable "eye appeal" assessments, on criteria which would shift over time without notice, and on a workforce of graders whom PSA would describe as "expert" while requiring, for hiring, no prior professional grading experience, no specialist training and no certification, relying on internal instruction and imposing, according to the pleading, output rates incompatible with the careful review promised.

The second block concerns the population reports, the registers through which PSA publishes how many copies of each card exist at every grade level. The complaint observes that those reports are the market's principal scarcity signal, and alleges that PSA's terms and conditions, §§ 12(f) and 12(k), reserve to it near-unfettered control over grades, including the power to change them and to deactivate certifications already issued. On that basis the pleading makes its heaviest accusation: that PSA would manage the population of Gem Mint 10s, the most valuable grade it issues, containing their number to preserve scarcity and value, and thereby feeding demand for new submissions, resubmissions and crossovers. Inconsistency, on this reading, would not be a defect but a revenue model: unstable grading generates repeat demand, stable grading would reduce it.

These are, it bears repeating, allegations. But it is evident why they resonate: they strike precisely at the fiduciary function grading performs in the market.

The fee model and vertical integration

The second pillar of the complaint is economic, and it unfolds on two levels.

The first is the fee model. The pleading describes a fee architecture presented as a menu of discrete choices, price, insured value, speed, but governed, in substance, by PSA on every variable: turnaround times which would be advertised and then negated by hidden qualifications, the Maximum Insured Value mechanism, and above all the post-grading upcharges, that is, demands for additional fees based on the valuation PSA itself attributes to the card after examining it, a valuation the customer cannot independently verify. All of this, the complaint alleges, under a regime of "possession-based lock-in": the card does not come back until every amount is paid.

The second level is vertical integration, and this is where the holding company enters the stage. The complaint sets a recurring public statement by PSA, that it has "no financial stake" in the sale of the cards it evaluates, against the structure of the Collectors group, which according to the pleading monetises downstream precisely the values and scarcity signals that PSA grades help create: the pricing platform Card Ladder, custody and resale through the PSA Vault, the instant-purchase programme PSA Partner Offers, down to lending secured by graded cards through Collectors Financial Services. The group, in the pleading's synthesis, would stand "on both sides" of the market: on one side it assigns grades and publishes population data, on the other it participates in the pricing, custody, resale, liquidity and financing of the very same cards. A conflict which, the complaint alleges, is not adequately disclosed to the consumer.

The legal architecture: arbitration, RICO and the ten claims

This is the most technically interesting part of the pleading, and it explains choices that may escape the non-lawyer.

The first two claims do not concern grading at all. They concern the contract. Anyone who has read PSA's terms of service knows they contain an arbitration clause, a class-action waiver, forum-selection and choice-of-law provisions, and limitations of liability. If those clauses apply, the class action dies in its cradle, because each customer would have to proceed alone, in arbitration. And here the card-shop detail returns: the plaintiff contends that he never accepted those terms, having never had a PSA account, and that the intermediary through which he shipped his cards was PSA's agent for collecting submissions, but not his agent for waiving procedural rights. He therefore asks the Court to declare that those clauses do not bind him and, in the alternative, that they are unconscionable and unenforceable. On this knot, before any question of merits, the first real battle of the case will be fought.

Then come the two RICO claims: the first for conducting an enterprise through an alleged scheme of mail and wire fraud, the second, more aggressive still, for the investment of the proceeds of that scheme, which the pleading identifies also in the acquisitions of SGC and Beckett. RICO is the reason for the figure that travelled around the world: it allows the trebling of damages, so that the billion dollars in contested fees becomes, on the plaintiff's projection, a potential exposure above three billion.

The picture is completed by the common-law and state claims: fraud, fraudulent concealment, negligent misrepresentation, professional negligence by one who holds himself out to the public as an expert grader, violation of the Maryland Consumer Protection Act, unjust enrichment. And the relief sought goes beyond money: injunctions including the preservation of the status quo on the announced acquisition of BGS and, where the evidence supports it, the divestiture of SGC and BGS.

What this case is not, and what to expect

Here the lawyer's coolness is required, because the media echo tends to skip the steps.

This is an initial pleading, not a judgment. The allegations have been tested by no judge, PSA has not yet filed its defences, and recent history counsels caution: an earlier RICO action against the group, brought in 2020 over altered cards, was resisted by the defendants as unsupported and never resulted in any finding of liability.

The foreseeable path is long. First will come, in all likelihood, the defendants' motions to compel arbitration and to dismiss; then, only if the complaint survives, the battle over class certification; finally, perhaps, the merits. Each of these stages can take years, and most class actions of this kind end in settlements or in rulings that drastically reduce the initial claims. The three-billion figure, in short, is today a party's projection, not an established stake.

That said, it would be a mistake to dismiss the pleading as folklore. It is a carefully built document, attacking at once the contract, the service and the corporate structure, and it arrives at a moment when the group is already under a parallel antitrust action. Whatever its outcome, it has already achieved one result: bringing before a federal judge the question the market has been asking for years, namely who grades the grader.

What it means for collectors in Europe

In the immediate term, nothing changes: PSA grades remain valid, services operational, the market open. Those who own graded cards need do nothing.

On the level of awareness, however, much changes, and three points are worth fixing.

First. The clauses now under attack in Maryland, mandatory arbitration, class waiver, liability capped at declared value, are the same ones we examined on this site when discussing damage to cards during grading: for the European collector they remain the true perimeter of the relationship with grading houses, and their resilience, now contested by an American plaintiff, is a matter we will follow closely.

Second. The complaint, whatever its merits, photographs a real transformation: the financialisation of collecting, where grading, population data, custody, resale and credit live under one roof. Understanding who earns, and from what, at every step of the chain is by now part of the minimum diligence of anyone investing in cards.

Third, on method. Between a pleading and a judgment runs the same distance that separates accusation from conviction. Whoever presents the allegations as established facts these days is spreading misinformation; whoever dismisses them as irrelevant underestimates a case that could redraw the rules of the sector. The correct reading lies in between, and it is the one this article has sought to offer.

This article is current as at the date of publication and is based on the text of the complaint and on public sources. Statements attributed to the complaint are a party's allegations, not established facts. If you are a market operator, a dealer or a collector and wish to understand how this case bears on your contractual relationships with grading houses, you can write to me through the site for a review of your position.

By Alberto Agostini, lawyer admitted to the Bologna Bar, Studio Agostini & Kasapoğlu, lawyer for collectible cards and TCG law.

About the author

Alberto Agostini is the co-founder of Studio Agostini & Kasapoğlu, an international boutique law firm with offices in Bologna and Ankara, and is admitted to the Bologna Bar Association. His practice is primarily devoted to commercial and contract advisory, with particular focus on Italy-Turkey cross-border operations and the collectibles and memorabilia market.

In the collectibles, memorabilia and trading-card market, he advises industry operators, online platforms and marketplaces, auction houses, grading services, professional dealers, specialist retailers and high-end collectors operating across Pokémon, Magic: The Gathering, Yu-Gi-Oh! and One Piece Card Game. His work includes the drafting and negotiation of terms of service, auction rules, consignment, deposit and custody agreements, as well as the resolution of disputes concerning authenticity, grading outcomes and the professional liability of market operators.

He is the author of published work on civil liability in grading services for collectibles and on the ecosystem of Italian legal data for artificial intelligence.

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