Sunday, February 08, 2009

Accugrade Lawsuite

This is an interesting development in the Third party coin grading world. Accugrade is suing the ANA and others the details of the suite follow below. It should be interesting to see what the outcome will be in my opinion some questions arise around peoples freedom of expression. To what degree are people allowed to express an opinion and at what point does that freedom stray into harm?

This case is also somewhat unique in it's the first one I know of where an online coin discussion board called REC.COLLECTING.COINS or RCC for short is named in a suite. This in my opinion strays into some unknown territory as the internet by it's very nature can be very free in how people chose to express their opinions and the question arises do they have a right to express those thoughts freely? or is there a limit? Let me know what you think?

UNITED STATES DISTRICT COURT
DISTRICT OF COLUMBIA

ASA ACCUGRADE, INC.,
a Florida Corporation
P.O. Box 915103
Longwood, Florida 32791

Plaintiff, CASE NO.: 1:04-cv-02213-RWR

v.

AMERICAN NUMISMATIC ASSOCIATION,
a Federally Chartered Non-Profit Association,
HERITAGE CAPITAL CORPORATION, a
foreign corporation, COLLECTOR’S UNIVERSE, INC.,
a foreign corporation d/b/a Professional Coin
Grading Service, PROFESSIONAL
NUMISMATISTS GUILD, INDUSTRY COUNCIL
FOR TANGIBLE ASSETS, BARRY STUPPLER & CO., INC.
a foreign corporation, NU GRADE, LLC, a foreign limited
liability company f/k/a TRU GRADE SERVICES,
and REC.COLLECTING.COINS a/k/a RCC,

Defendants.

____________________________________/
COMPLAINT

COMES NOW Plaintiff, ASA ACCUGRADE, INC., a Florida corporation, by and through its undersigned counsel, and sues Defendants, AMERICAN NUMISMATIC ASSOCIATION, a Federally Chartered Non-Profit Association, HERITAGE CAPITAL CORPORATION, a foreign corporation, COLLECTOR’S UNIVERSE, INC., a foreign corporation d/b/a Professional Coin Grading Service, PROFESSIONAL NUMISMATISTS GUILD, INDUSTRY COUNCIL FOR TANGIBLE ASSETS, BARRY STUPPLER & CO., INC., a foreign corporation, NU GRADE, LLC, a foreign limited liability company f/k/a TRU GRADE SERVICES, and REC.COLLECTING.COINS a/k/a RCC, and alleges as follows:
NATURE OF ACTION

1. This is an action for damages and injunctive relief brought pursuant to the provisions of the Clayton Act (15 U.S.C. §§ 15 and 26) based on Defendants’ violations of the Sherman Act (15 U.S.C. §§ 1 and 2) that have and continue to harm competition in the rare coin grading and authentication industry and to cause grave and irreparable injury to Plaintiff.
PARTIES, JURISDICTION, AND VENUE

2. Plaintiff, ASA ACCUGRADE, INC. (“ACG”) is a Florida corporation organized and operating under the laws of the State of Florida with its principal place of business located in Longwood, Florida. ACG has been incorporated and engaged in the rare coin grading and authentication business in the State of Florida since 1995 and before that in the State of Connecticut since 1984.

3. Defendant, AMERICAN NUMISMATIC ASSOCIATION (“ANA”) is a federally chartered not-for-profit Internal Revenue Code § 501(c)(3) entity that acts as a quasi-governmental body over numismatic collectors and dealers and wields great influence in the industry. In addition, the ANA provides a forum for resolving complaints against it members and disputes between its members. The President of ACG was a life member of the ANA in good standing until she resigned in April 2003 as a result of Defendants’ antitrust activities. The ANA is headquartered in Colorado Springs, Colorado but does business throughout the United States, including in the District of Columbia. The President of the ANA is Gary E. Lewis and its Executive Director is Christopher Cippoletti. During all times material hereto, Barry Stuppler and Michael S. Fey were members of the ANA’s Board of Governors and in March 2003 Stuppler was Chairman of the ANA’s Consumer Protection Committee.

4. Defendant, HERITAGE CAPITAL CORPORATION (“HERITAGE”) is a Texas corporation that does business throughout the United States, including in the District of Columbia, as a rare coin dealer and auctioneer. The founders and principals of HERITAGE are R. Steven Ivey and James L. Halperin. In March 2003, Gregory Rohan represented himself publicly as President of HERITAGE.

5. COLLECTOR’S UNIVERSE, INC. d/b/a Professional Coin Grading Service (“PCGS”) is a Delaware corporation with its headquarters located in the State of California that is in the business of grading rare domestic and international coins throughout the United States, including in the District of Columbia. PCGS is a competitor of ACG. David Hall is the founder and President of PCGS and the President of COLLECTOR’S UNIVERSE, INC. PCGS has hundreds of “featured dealers” and “authorized dealers” throughout the country, including HERITAGE and BARRY STUPPLER & CO. INC. which are both “featured” and “authorized”.

6. PROFESSIONAL NUMISMATISTS GUILD (“PNG”) is an Internal Revenue Code § 501(c)(3) organization of rare coin dealers that consists primarily of PCGS “featured and/or authorized dealers”. R. Steven Ivy, President of HERITAGE, is a member of the Board of Directors of PNG. The Executive Director of PNG is Robert Brueggeman. PNG operates throughout the United States, including in the District of Columbia.

7. INDUSTRY COUNCIL FOR TANGIBLE ASSETS (“ICTA”) is an Internal Revenue Code § 501(c)(3) organization that holds itself out as being the “National Trade Association” for the rare coin industry. R. Steven Ivey, President of HERITAGE, Christopher Cippoletti, Executive Director of the ANA, and Barry Stuppler of BARRY STUPPLER & CO., INC. are members of the Board of Directors of ICTA. The Executive Director of ICTA is Eloise Ullman. ITCA operates throughout the United States, including in the District of Columbia.

8. BARRY STUPPLER & CO., INC. (“STUPPLER & CO.”) is a California corporation that does business throughout the United States, including in the District of Columbia. STUPPLER is a competitor of ACG as it specializes in coin appraisal and grading services. Barry Stuppler is the owner and operator of STUPPLER and was one of the founders of PCGS.

9. NU GRADE, LLC (“NU GRADE”), is a Pennsylvania limited liability company formerly known as TRU GRADE SERVICES that does business throughout the United States, including in the District of Columbia. NU GRADE is a competitor of ACG as it specializes in coin grading and authentication services. John Callandrello is the owner and operator of NU GRADE.

10. REC.COLLECTING.COINS a/k/a RCC is an ANA sanctioned coin club and Internet users newsgroup consisting of coin dealers and collectors headed up by GARY E. LEWIS, MARK GREENE, BRUCE HICKMOTT, IRA STEIN and ERIC TILLERY. RCC is broadcast over the Internet internationally, including in the District of Columbia. The other documented members of RCC are JOHN BAUMGART, JOHN P. CARNEY, JASON S. CRATON, PETER T. DAVIS, TOM DeLOREY, PHILLIP DEMAYO, JR., MICHAEL S. FEY, ROBERT A. FLAMINIO, REID GOLDSBOROUGH, ALAN HERBERT, WILLIAM A. KRUMMEL, EDWARD KUSZMAR, BARRY KUTNER, HARVEY R. LASER, GREG MARGULIES, SAMUEL L. MORGAN, STUART J. MILLER, FRED A. MURPHY, DAVID W. PARRISH, DONN PEARLMAN, TOM REA, BYRON L. REED, PAUL J. ROBERTS, JONATHAN ROSENTHAL, WILL ROSSMAN, STUART SEGAN, JEFFREY SALTZMAN, SCOTT STEVENSON, JOHN STONE, BARRY STUPPLER, ALAN WILLIAMS, CHYRSTA WILSON, DOUGLAS A. WINTER, PETER ZIMMERMAN, and DAVID M. ZUTS.

FACTUAL ALLEGATIONS

11. Beginning in 1995, ACG incorporated in the State of Florida and has provided superior coin grading and authentication services to rare coin dealers and collectors throughout the United States and Canada, including in the District of Columbia. ACG has never had any major complaints since its inception.

12. From in or about 1999 until in or about 2001, ACG gradually increased its share in the marketplace of entities that provided rare coin grading and authentication services to rare coin dealers and collectors throughout North America. By in or about June 2001, ACG enjoyed an approximate eight (8%) percent share in the overall relevant market pertaining to rare coin grading and authentication services in the United States. The eight (8%) percent share was comprised of a twelve (12%) percent share of the E-Bay coin market and a fifty (50%) percent share of the major coin trade show market.

13. ACG’s gradual increase in market share and corresponding profitability came at the expense of PCGS, HERITAGE, PNG, ICTA, and STUPPLER inasmuch as its increase in market share was the result of its superior pricing and efficiency in providing rare coin grading and authentication services to dealers and collectors throughout the marketplace. This was particularly true in the major coin trade show market as ACG began to focus on that market in 2000 and ultimately obtained one-half of the market share pertaining to major coin trade shows.

14. Commencing in or about 2001, Defendants, ANA, PCGS, HERITAGE, PNG, ICTA, STUPPLER, and RCC, in an effort to drive ACG out of business for the primary purpose of destroying competition in the marketplace, entered into an agreement to defame ACG and tortiously interfere with its advantageous business relationships with its dealers and customers (hereinafter referred to as the antitrust conspiracy).

15. Subsequent to entering into the antitrust conspiracy, the Defendants committed a myriad of illicit and overt acts in an effort to further the primary purpose of the antitrust conspiracy (i.e., anti-competition) including, but not limited to:

* RCC and PCGS published Internet websites and engaged in various forms of Internet communications that contained false and disparaging statements about ACG, its President, and its head grader;
* RCC and STUPPLER proposed, organized, and carried out a group boycott of ACG products and services;
* RCC created a “legal defense fund’” to respond to correspondence from ACG’s attorney urging Defendants to cease and desist their anticompetitive conduct;

d. ANA attempted to disallow ACG from bringing its coin slabbing equipment to ANA coin shows, attempted to bar ACG’s head grader from attending trade shows, and located ACG’s table in the least advantageous locations at the trade shows;

o RCC and STUPPLER, with the assistance and complicity of DAVID KREAMER and ROBERT K. BRUCE, knowingly submitted counterfeit coin(s) to ACG for the purpose of attempting to deceive it into violating the law and causing an unwarranted complaint to be submitted to the ANA;
o ANA and STUPPLER made unwarranted complaints against ACG and its head grader to the ANA resulting in the ANA attempting to deny ACG “bourse” space at ANA coin shows;
o PNG, ITCA, PCGS, HERITAGE, ANA and STUPPLER concocted “bogus” PNG/ICTA coin grading surveys in 2002 and 2004 and publicized the illegitimate results of the “survey”;
o PNG, PCGS, HERITAGE, and STUPPLER formed a PNG “Internet Rules Committee” made up of R. Steven Ivy, Douglas A. Winter and Barry Stuppler, among others, in direct response to the immense popularity of the ACG sponsored coin grading Internet website and catalogue known as “I 2 Collect.Com” which fostered true competition among the various coin grading services;

i. RCC and ANA caused RCC to become an official ANA member coin club and ANA President Gary E. Lewis paid its ANA dues;

* RCC, STUPPLER, and PNG published ACG dealers’ network on the Internet and thereafter attacked ACG dealers systematically until they ceased doing business with ACG; and
* NU GRADE, through its principal, John Callandrello, made false and disparaging statements about ACG before the ANA.

16. Beginning in 2001 and continuing thereafter through the present date, in furtherance of the antitrust conspiracy, Defendants RCC and PCGS began a campaign of defamation against ACG, its President, Diane Hager, and its head grader, Alan Hager. The campaign consisted of the publication of false and disparaging statements made by RCC members, via its Internet user newsgroup, and PCGS, through its message board, about ACG and the Hagers that are far too numerous to list. However, such statements include, but are not limited to:

* IRA STEIN’S statement that ACG “knowingly grades ‘counterfeit’ coins, and ‘fakes’”;
* MARK GREENE’S statement that ALAN HAGER is a “blatant crook”;
* BYRON L. REED’S statement that DIANE HAGER is a “whore” and those who deal with ACG are her “johns”;
* IRA STEIN’S statement that ACG was sued for committing “fraud” against an elderly 80+ year old woman by selling her over-graded coins;
* BRUCE HICKMOTT’S and FRED MURPHY’S statement that DIANE HAGER is a “screaming fishwife”;
* BYRON L. REED’S statement that ALAN HAGER has been “found liable for misrepresenting coins”;
* ERIC TILLERY’S statement that ALAN HAGER was “proven to be a fraud -- once a fraud, always a fraud”;
* REID GOLDSBOROGH’S statement that “many people get cheated by ACG every day”;
* REID GOLDSBOROGH’S statement that there is a “huge repository of evidence…that [ACG’S] very business model is based on deception and cheating”;
* BRUCE HICKMOTT’S statement that “ACG is knowingly providing a tool that others are using with intent to defraud”;
* GREGORY ROHAN’S statement that ACG is “basically a fraud;”
* GREGORY ROHAN’S statement that “ I have lost track of the number of counterfeit coins I have seen in ACG holders”;
* BARRY STUPPLER’S statement that “ coins in ACG holders can be 2 to 6 grades lower” and “have no liquidity”;
* JOHN a/k/a dog_xx, Dog97, Dog (ME)’s statement that ACG’s President was arrested in Longwood, Florida for same-sex prostitution; and
* BARRY STUPPLER and MICHAEL S. FEY’S statement that ACG’s head grader is a convicted felon and has spent time in jail.

17. In or about 2004, ACG initiated legal action in Circuit Court for the Eighteenth Judicial Circuit of the State of Florida against several individual RCC members for defamation and tortious interference based on, among other things, statements published as part of the aforementioned internet users newsgroup. Once this action was commenced and as part of and in furtherance of the antitrust conspiracy, the ANA created an unprecedented legal defense fund for the individual defendants in order to obstruct ACG from vindicating its rights and restoring true competition to the rare coin grading industry.

18. Thereafter, Defendants ANA and STUPPLER agreed, as part of and in furtherance of the antitrust conspiracy, to publish a patently false and damaging “advertisement” in the July and August, 2004 issues of ANA’s monthly magazine, “The Numismatist” that further severely disparaged ACG and insured that it would continue to be unable to provide rare coin dealers and collectors with economical, fair, and competitive coin grading and authentication services or to restore its market share in the coin grading and authentication industry.

19. The natural and proximate effect of the illicit agreement and overt acts of the Defendants as set forth above was to diminish competition in the coin grading and authentication marketplace by removing ACG’s market share and allowing PCGS to increase its market share to the point where it exclusively controls prices in the market. Defendants, ANA, HERITAGE, PNG, ICTA, STUPPLER, and NU GRADE, have all benefited from the diminishment of ACG’s market share and the boycott of ACG that have resulted from the antitrust conspiracy and substantive antitrust violations engaged in by Defendants.

20. A secondary but equally devastating cause of the antitrust conspiracy and substantive antitrust violations is the grave economic injury suffered by ACG in that it has literally lost millions of dollars in revenue and profits as the result of Defendants’ anticompetitive conduct.

21. ACG has retained the undersigned attorneys and has agreed to pay them a reasonable fee for their services.



COUNT ONE-CIVIL CONSPIRACY TO COMMIT SHERMAN
ACT VIOLATIONS (ANTITRUST CONSPIRACY)
(ALL DEFENDANTS)

22. This is an action for civil conspiracy to commit violations of the Sherman Act on the part of the Defendants.

23. Plaintiff adopts and realleges paragraphs 1-21 above as though fully set forth herein.

24. Commencing in or about 2001, the Defendants combined, conspired, confederated, and agreed to engage in acts that constitute per se violations of the Sherman Act (15 U.S.C. §§ 1 and 2) as set forth in paragraphs 14-18, above. This conspiratorial agreement caused antitrust injury in that it harmed competition in the rare coin grading and authentication industry by destroying ACG’s measurable market share, particularly in the “trade show” portion of the industry.

25. ACG has suffered severe economic damage as a direct and proximate result of the antitrust conspiracy.

WHEREFORE Plaintiff, ASA ACCUGRADE, INC., respectfully requests that the Court enter a judgment in its favor and against the Defendants, jointly and severally, that:

a. prohibits the Defendants from carrying out any additional acts in furtherance of the antitrust conspiracy;

b. awards Plaintiff three times the amount of the pecuniary damages it has suffered;

c. awards Plaintiff the reasonable attorneys’ fees and costs it has incurred in initiating and prosecuting this action; and

d. provides such other and further relief as the Court deems just and proper.



COUNT TWO-SUBSTANTIVE SHERMAN ACT VIOLATIONS
(ALL DEFENDANTS)

26. This is an action for violations of the Sherman Act on the part of the Defendants.

27. Plaintiff adopts and realleges paragraph 1-20, above as though fully set forth herein.

28. Commencing in or about 2001, the Defendants engaged in various acts and conduct that constitutes violations of the Sherman Act (15 U.S.C. §§ 1 and 2).

29. The Defendants’ antitrust violations are set out in detail in paragraphs 14-18, above. These acts constitute per se antitrust violations and have resulted in the eradication of ACG’s market share thereby significantly harming competition in the rare coin grading and authentication industry.

30. ACG has suffered severe economic injury as a direct and proximate result of Defendants’ antitrust violations.

WHEREFORE Plaintiff, ASA ACCUGRADE, INC., respectfully requests that the Court enter a judgment in its favor and against the Defendants, jointly and severally, that:

* prohibits the Defendants from carrying out any additional antitrust acts;

b. awards Plaintiff three times the amount of the pecuniary damages it has suffered;

c. awards Plaintiff the reasonable attorneys’ fees and costs it has incurred in initiating and prosecuting this action; and

d. provides such other and further relief as the Court deems just and proper.

JURY TRIAL DEMAND

In accordance with Rule 38, Fed.R.Civ.P., Plaintiff, ASA ACCUGRADE, INC. hereby demands a trial by jury of all issues so triable.

DATED this day of December, 2004.

Respectfully Submitted,

HARRISON T. SLAUGHTER, ESQUIRE
Florida Bar No. 194822
Leventhal & Slaughter
111 N. Orange Ave., Ste. 700
Orlando, Florida 32801
Telephone: 407-849-6161
Facsimile: 407-843-03738



DANIEL N. BRODERSEN, ESQUIRE
Florida Bar No.: 0664197
BOGIN, MUNNS, & MUNNS
2601 Technology Drive
Orlando, Florida 32804
Telephone: (407) 578-1334
Facsimile: (407) 578-2801
Attorneys for Plaintiffs, ASA ACCUGRADE

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Friday, February 06, 2009

Odyssey Marine Finds More Coins


Odyssey Marine has found another wreck only time will tell if legal issues don't tie this one up as well. The Full article follows below. Let me know what you think should they be searching these wrecks? Also do you think this one will get tied up in the courts like some of the others?

Odyssey Marine, the southern Florida concern that has found more coin treasurers than any other salver, has a new discovery as of Feb. 2: the wreck of HMS Victory, which sank in the English Channel on Oct. 4, 1744 taking 1,150 sailors and four tons of Portuguese gold to the bottom of Davy Jones's locker.

About 200,000 gold coins are believed to be part of the treasure, whose sinking caused a major embarrassment to King George II in 1744, and whose recovery in 2009 could well become a cause celebre in international legal circles.

The wreckage of the HMS Victory, found below about 330 feet of water, may carry an even bigger jackpot than the $500 million in sunken treasure discovered two years ago off the coast of Spain.

Research indicates the HMS Victory was carrying 4 tons of gold coins when it sank in storm, said Greg Stemm, co-founder of Odyssey Marine Exploration, ahead of a Monday news conference in London.

So far, two brass cannons have been recovered from the wreck, Stemm said. The Florida-based company said it is negotiating with the British government over collaborating on the project.

"This is a big one, just because of the history,'' Stemm said. "Very rarely do you solve an age-old mystery like this.''

Thirty-one brass cannons and other evidence on the wreck allowed definitive identification of the HMS Victory, 175-foot (53-meter) sailing ship that was separated from its fleet and sank in the English Channel on Oct. 4, 1744, with at least 900 men aboard, the company said. The ship was the largest and, with 110 brass cannons, the most heavily armed vessel of its day. It was the inspiration for the HMS Victory, famously commanded by Adm. Horatio Nelson decades later.

Odyssey was searching for other valuable shipwrecks in the English Channel when it came across the Victory. Stemm wouldn't say exactly where the ship was found for fear of attracting plunderers, though he said it wasn't close to where it was expected.

"We found this more than 50 miles (80 kilometers) from where anybody would have thought it went down,'' Stemm said.

Federal court records filed by Odyssey in Tampa seeking the exclusive salvage rights said the site is 25 miles to 40 miles (40 kilometers to 64 kilometers) from the English coast, outside of its territorial waters. Odyssey Marine has previously discovered vessels with treasure that sailed under the flags of Spain, Peru, England and others.

In order to assert ownership, Odyssey Marine commenced an action in the U.S. District Court for the Middle District of Florida, located in Tampa. The technical term is to "arrest" the vessel, a principal whereby the salver recovers some portion of the ship or its cargo and brings it before the court. In this case, it was a brass cannon.

The Victory the same name was used for Lord Nelson's shop at Trafalgar generations later is only called an "Unidentified vessel" in the title of the complaint, the better to confuse those who might seek to take the treasure from under the noses of the competition other treasure salvers.

Odyssey's claims for salvage rights for other vessels were asserted under either international law of the sea or the law of salvage, which sometimes conflict. They are litigating against the Kingdom of Spain and Republic fo Peru over Spanish galleons found after a shipwreck in the 17th century.

English shipwrecks have a common law background, different from the civil law of Spanish countries, which reserve treasure to the sovereign and provide that it cannot be salvaged without the consent of Her Majesty's government. On another less important wreck, Odyssey got to keep 80 percent of the first $50 million in salvage value on a diminishing scale until above $500 million the profits would be split 50-50.

Under international maritime law and the law of the sea, going back to the time of Hugo Grotius in the year 1600, when an owner of a vessel abandons it, it may be claimed by anyone who finds it. When it is not abandoned, a wreck may be salvaged by anyone who claims it ("arrests" the wreck, in the arcane language of admiralty law).

They may not necessarily be able to keep the goods, but must be compensated for the salvage work that they have done the payment can be quite liberal if there is a right to work the vessel and its treasure in the first place.

In most instances, available technology at the time the ships surrendered to the depths limited the ability to salvage the ships, rescue persons or property. The situation with the Mercedes (another Odyssey litigation with Spain) is also similar to more than 600 other Spanish wrecks that are known to have populated the East Coast of the United States.

This very factor, and the wreck of other ships, prompted the U.S. Congress in 1987 to try and regulate control over the marine tragedies that took place inside the three-mile limit. Essentially, they were ruled to be owned by the United States, which in turn delegated the ownership to the individual states.

The Victory is located in the English Channel, about 60 miles from its last reported position which solved a historical mystery and Odyssey claims that no nation has the right to regulate who can salvage it. The British Foreign Office disagrees.

Regardless of the state or nation involved, the general principals of law are essentially the same. When sunken ships or their cargo are rescued from the bottom of the ocean by those other than the owners, courts generally favor applying the law of salvage over the law of finds.

"Finds" can be summed up by that childish taunt, "Finder's keepers".

Finds law is generally applied, however, where the previous owners are found to have abandoned their property. Abandonment must be proved to the Court's satisfaction by clear and convincing evidence, typically by an owner's express declaration abandoning title. (It can be proved indirectly through actions, too).

In some instances, a commercial shipments of gold may be insured, and the underwriters are usually asked to promptly pay the claims. The payment of the claims vests title to the gold in the underwriters, who can no more salvage the boat than the government can.

The position of the Department of State, as expressed in a Report of the House of Representatives in 1988 IS that "the U.S. only abandons its sovereignty over, and title to, sunken U.S. warships by affirmative act; mere passage of time or lack of positive assertions of right are insufficient to establish such abandonment".

A 1902 treaty of friendship and commerce with Spain provided the key that the Court will look to: "Spanish vessels can ... be abandoned only by express renunciation. Both Spain and the United States agree that this treaty provision requires that in our territorial waters Spanish ships are to be accorded the same immunity as United States.

So the shipwreck of the century is headed to Tampa and court where it will all be sorted out in the coming months. Meanwhile, the salvers will be looking for the coins that they know are on board, under 300 feet of the English channel and many pages of history.

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