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WATA Finally Getting Sued?


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I'm totally shocked at not finding any posts or topics on this already, as I tend not to focus on video game/hobby news and have basically been "offline" for the past couple of days outside of a handful of things I've looked at on my phone.  With that being said, take a look at this, posted on Reddit approximately 19 hours ago as of the time of this post being written.

Just looking through the post, it seems like some actual lawyers are working up an actual lawsuit against WATA (and what is now their parent company) due to most if not all of the shenanigans that they've gotten up to in the last couple of years or so.  I'm no legal expert, but to me, the mention of RICO within the post seems to indicate that the poster might just know more than they're letting on there, since those cases are almost always criminal versus civil, although some quick Googling indicates that in the rare case that a civil RICO case is won, triple damages can be awarded.  There's a statement in a comment that Karl Jobst and Seth Abramson are not directly involved, although "the work those gentleman did absolutely convinced the attorneys and staff here, especially the non-collectors, to take this matter on."  It's hard to tell for certain from that statement whether that means that the two approached the lawyers and laid everything in their laps, or if the lawyers just happened to take notice and see a fish-in-a-barrel situation as a result.  The fact that the lawyer making this post speaks so highly of the details laid out by both men flies directly in the face of all the statements some folks made on here (and elsewhere) regarding how crazy those guys were for reaching those conclusions, how there was nothing illegal going on, etc.

While this is apparently just beginning, as the legal team on this is currently working to define the class properly before actually filing the lawsuit, anyone too deeply in bed with WATA (collection-wise, investment-wise, etc.) might want to take this as a sign and look toward getting out, or at least diversifying.  I have a feeling that once this gets going, it'll pick up speed quite fast, and the bottom will likely start to drop out from under that whole arena just as quickly, if not faster.

 

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Hot take from all that but IMHO WATA is a bit of a patsy.  The real "big fish" needs to be Jim Halperin.  Now to be clear, I'm not saying WATA hasn't done shady work.  They have.  But Heritage Auctions likely mentored them knowing Jim's past and I'd like to see Jim and HA go down from this if half of what Jobst video outlined is even true.

Edited by RH
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8 minutes ago, RH said:

Hot take from all that WATA is a bit of a patsy.  The real "big fish" needs to be Jim Halperin.  Now to be clear, I'm not saying WATA hasn't done shady work.  They have.  But Heritage Auctions likely mentored them knowing Jim's past and I'd like to see Jim and HA go down from this if half of what Jobst video outlined is even true.

Agreed, Halperin is most likely the brains behind that whole situation, which I want to say is the conclusion that the majority of posters on the originally explosive WATA thread collectively reached quite a while ago now.  However, as was postulated even then, they're still holding the bag, and at the very least, knowing accomplices to what he was perpetrating.  I'm guessing that in order for them to get Halperin, they'll have to have somewhere to start (either to establish precedent or just to get access to the relevant private documentation via the discovery process), so I'll wager that while Halperin/HA aren't currently officially part of this (or perhaps any) case, it's very possible that they will be in the future, after this thing gets filed and gets some more legs.

Edited by darkchylde28
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I am skeptical that one of his comments is "Jobst and Abramson already laid out the case really well" when the majority of their complaints were vague "this is shady" claims and not specific or provable illegal practices. What is the claim? They manipulated an unregulated market? I mean, maybe they have a valid FTC complaint from something that lawyer lady talked about, but I don't know how many people can claim to be specifically damaged by something Wata did.

Also a cornerstone of their case really that their turnaround time estimates are BS? Cause then there should be a class action suit against every grading company right now.

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18 minutes ago, jonebone said:

What's the odds that the reddit post is even made by a lawyer.  50/50 at best? 

The guy makes the claim an awful lot in his posts in other subreddits, so I'd say it's a really solid shot at being legit.  Why immediately start casting doubt versus taking a "wait and see" approach?

22 minutes ago, DefaultGen said:

I am skeptical that one of his comments is "Jobst and Abramson already laid out the case really well" when the majority of their complaints were vague "this is shady" claims and not specific or provable illegal practices. What is the claim? They manipulated an unregulated market? I mean, maybe they have a valid FTC complaint from something that lawyer lady talked about, but I don't know how many people can claim to be specifically damaged by something Wata did.

I'd say that neither Jobst nor Abramson laid everything they had or knew out on the table.  It's been a while since I watched any of the videos or read any of the articles, but I want to say that somewhere, Jobst at the very least made some mention of not divulging everything he knew, both in order to protect himself from litigation for having talked about it, but also to keep WATA/HA/etc. from being able to immediately do some sort of coverup to muddy the waters for litigation against them.

As for the claims, they're literally spelled out in the original post on Reddit:  "The claims intended include Unfair Business Practices, RICO violations and fraud claims. Specifically, the Complaint addresses the statements on the company's website involving false "estimated" turnaround times, the fact that paying increased fees does not actually result in different service level and the market manipulation allegations that were more fully addressed in the Karl Jobst YouTube video and the Seth Abramson articles."

28 minutes ago, DefaultGen said:

Also a cornerstone of their case really that their turnaround time estimates are BS? Cause then there should be a class action suit against every grading company right now.

I'd say the damning bit about that is the fact that paying additional fees for faster processing and/or preferential treatment doesn't actually result in any demonstrable return on that investment.  Whether that sort of thing is illegal everywhere isn't necessarily important, as it's stated up front that the case is being filed in California, which tends to have a lot stricter laws on the books regarding consumer rights, protections, etc., so I can absolutely see this holding some water.

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I don’t collect graded games, I don’t really have any desire to do so, and I don’t really care for WATA. I’ll be surprised if this goes anywhere though.

1 hour ago, darkchylde28 said:

I'd say the damning bit about that is the fact that paying additional fees for faster processing and/or preferential treatment doesn't actually result in any demonstrable return on that investment.  Whether that sort of thing is illegal everywhere isn't necessarily important, as it's stated up front that the case is being filed in California, which tends to have a lot stricter laws on the books regarding consumer rights, protections, etc., so I can absolutely see this holding some water.

I could see this being something of substance. But I don’t think this alone yields the slam dunk “expose WATA and destroy them for their corruption” outcome people are hoping for.

I mean hey, I could be wrong. I don’t have a personal stake one way or the other. I’m just an observer. Maybe this is the thing that people are hoping will “save game collecting,” whatever that means.

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31 minutes ago, Strange said:

I mean hey, I could be wrong. I don’t have a personal stake one way or the other. I’m just an observer. Maybe this is the thing that people are hoping will “save game collecting,” whatever that means.

Maybe the judge will rule that video game prices have to go back to 2012 prices.

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32 minutes ago, Strange said:

I could see this being something of substance. But I don’t think this alone yields the slam dunk “expose WATA and destroy them for their corruption” outcome people are hoping for.

I mean hey, I could be wrong. I don’t have a personal stake one way or the other. I’m just an observer. Maybe this is the thing that people are hoping will “save game collecting,” whatever that means.

I guess we'll have to see what they put together.  I'd say they've got awfully firm ground on the issues with advertised/promised versus actual turnarounds, so I can absolutely see this going forward on that at the very least, with the possibility for more to come of it after discovery begins and the lawyers pursing the case get access to various materials.  Some quick Googling from this not-lawyers seems to show that class action suits can be modified after they've been filed, but mostly only to update who the class is.  As such, anything new dug up via discovery for this case would likely have to be filed as a new/separate case to have any action taken on it, and, to be about anything more than purely money (as civil cases more or less solely are), a branch of the local/state/federal government would need to file such a case for any sort of criminal proceedings.

I don't have a dog in the fight myself, but am awfully curious to see how this shakes out, especially given how blatant what they were doing was, and the serious likelihood that a bunch of it crossed the legal line.  As for "saving game collecting," I'd say people are hoping for the majority of people involved in the hobby to once again be actual gamers and collectors, versus investor types just hoping to pump and dump for profit with something they just see as another commodity.

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I wonder if the suit includes

  • being behind current est. tat because dvd slab out of stock, etc.
  • cutting corners to save $$
  • quality control issues; like finding human hair inside the slabs, swapped out games not from original customer, games gone missing while in wata possession, etc.
  • labeling dept issues, like: missing letter grade.
Edited by AnimalHouse
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  • 2 weeks later...

Late to this thread, but - @darkchylde28, the problem I see with the claims cited is, they didn't cost anyone much. If anything. A civil suit isn't a crusade of good against evil; it's a fight over money. If you "win" it, you get awarded some money to compensate you for what you lost. So let's say these lawyers show that WATA gave a turnaround time of X days for $100 but didn't honor it. Okay. What did that cost somebody?

Seems to me it'd be pretty hard to show that it cost anyone more than $100. So, okay, you win your lawsuit. This means you will be awarded...$100. After you pay your lawyers you have about negative $10,000 left.

If the lawyers could get a bunch of people to join a class action and win it, maybe there'd be enough bread in that for the lawyers to make out. But the class members would get, you know, a coffee each. Maybe.

The only way I can see someone trying to show a substantial loss would be to argue that if their game had come back at just the right time they could've sold it for lots more money, but that seems highly speculative in such a frothy market. I wouldn't want to bet any judge would buy that line of thinking.

If you want to see WATA punished by the righteous sword of justice, a civil claim by some ambulance-chasing two-bit Reddit lawyer is not going to do the job. The body that enforces FTC regulations, for instance, is...the FTC. If the FTC announces it's investigating or sanctioning WATA, that'd maybe be a big deal. This doesn't look much like one.

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10 hours ago, AdamW said:

Late to this thread, but - @darkchylde28, the problem I see with the claims cited is, they didn't cost anyone much. If anything. A civil suit isn't a crusade of good against evil; it's a fight over money. If you "win" it, you get awarded some money to compensate you for what you lost. So let's say these lawyers show that WATA gave a turnaround time of X days for $100 but didn't honor it. Okay. What did that cost somebody?

Potentially a lot of money, or the ability to sell a title at all, given the volatility of the market for the items that WATA is ultimately producing.  The difference between getting your stuff back on-time and sitting on it, then being able to post it for auction just after something like the record breaking Mario 64 or Zelda auctions and finally getting it a year or two later can be demonstrated as the difference in perceived value of tens, if not hundreds of thousands of dollars.

10 hours ago, AdamW said:

Seems to me it'd be pretty hard to show that it cost anyone more than $100. So, okay, you win your lawsuit. This means you will be awarded...$100. After you pay your lawyers you have about negative $10,000 left.

I don't think that's the case, but you're right, in most cases where things within this realm happen (company gets paid to do something for customer, totally doesn't do it or doesn't do it properly, etc.), customers typically only get compensated for what they actually spent with the company.  As I understand it (and any/all lawyers in the audience, feel free to leap in and correct me if I'm wrong), when awarded, these are typically compensatory damages, and are generally in line with expenses occurred, money shelled out, etc., by the plaintiff.  However, given WATA's perceived role in all of this, I don't think that it's at all outside of the realm of possibility for this case to have punitive damages awarded (damages beyond simple compensation, intended to punish the defendant), and those can get crazy very quickly, especially if the person being sued is shown to have been acting in bad faith, and even crazier if it can be shown that was deliberate.

10 hours ago, AdamW said:

The only way I can see someone trying to show a substantial loss would be to argue that if their game had come back at just the right time they could've sold it for lots more money, but that seems highly speculative in such a frothy market. I wouldn't want to bet any judge would buy that line of thinking.

Actually, I don't think it's that highly speculative at all, nor hard to demonstrate.  You'd just need records of every WATA game that came up for sale on HA for the last couple of years or so (including the grade of each title you'd be using as evidence), then the receipts from the class members/plaintiffs showing when their stuff was sent, received, and what the expected turnaround time was.  During the time period in question for the case being brought, I don't think there was a single WATA game that didn't sell on HA, nor one that didn't sell for what many considered "ridiculous" money compared to what it had been seen or understood to be valued at previously.  Introduce some evidence about pricing data from HA for those same titles in comparable grades from the past 6 months or so (especially for class members/defendants who still haven't received their games back) and it's not exactly rocket science to show the potential that was lost.  And just the right time is a pretty wide window for a lot of games--it's not like it was a particular day or week in many (most?) cases, it was months, if not a year or more.

10 hours ago, AdamW said:

If you want to see WATA punished by the righteous sword of justice, a civil claim by some ambulance-chasing two-bit Reddit lawyer is not going to do the job. The body that enforces FTC regulations, for instance, is...the FTC. If the FTC announces it's investigating or sanctioning WATA, that'd maybe be a big deal. This doesn't look much like one.

I look forward to potentially reading about such a case as that as well.  Yes, the FTC would lay down legal punishments in such matters, but one thing they will also do is affect how such laws work and are enforced going forward via the precedent that's set by it (both during the case via arguments used, as well as afterward with a verdict one way or the other).  There have been hints (from Jobst, I believe, but Abramson might have sone so as well) that proper government officials were looking at this, and it would hardly be the first time that the government sat on its thumbs while a civil case proceeded before bringing about formal charges, in order to see whether they would be able to or how to make such a case stick.

At this point, only time will tell, and I look forward to seeing how this all shakes out.  Even if it turns out that WATA wins the day and clears their name, I still hope that this goes through the courts in one fashion or another versus dying on the vine, just so that a lot of these perceived injustices and the questions that surround them can be answered and settled, both legally, and in the court of public opinion.

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On 4/13/2022 at 12:16 PM, MrWunderful said:

Whoever “mikecheeseburgess” is he is mad about Nintendo Age. What a salty, whining bitch LOL. 

 

Bet that dude’s life is miserable. 

This is a textbook example of the pot calling the kettle black. Seems like you just MIGHT be projecting a little bit there lol

 

 

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18 hours ago, AdamW said:

some ambulance-chasing two-bit Reddit lawyer

You're not a lawyer and don't know what you're talking about; you forgot about punitive damages, which are primarily what this suit will seek rather than compensatory damages; litigants can receive compensation from punitive damages as well as compensatory damages; and this is a licensed attorney in California who is a sealed and graded game collector just like most of us here (including me). So it is BS for you to call him an "ambulance chaser" and a "two-bit" attorney and a "Reddit lawyer" just because he posted a notice on Reddit—which is candidly exactly what he should have done, as Reddit is one of several places any smart attorney would look for potential litigants in a suit in this arena.

I have already written publicly that as an attorney I do not think this suit will amount to much, but your personal attacks against this licensed professional discredit you—not him. He is just doing his job and pursuing an issue he legitimately cares about because it has affected him personally, as you well know from reading his public statements on the matter.

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Punitive damages require actual malice. Given the problem has largely been supply chain related and waits are in line with very many other companies (both in their field and out) during covid, the most likely scenario seems to be this lawyer ends up paying the exorbitant legal fees Collector’s Universe will be incurring. 

Given a founder of Reddit has now publicly come out stating he’s purchased numerous high end games on Heritage AND has posted an IG pic of him holding a 9.8/A++ Mario 64, I’m trying to imagine the hilarity that could ensue if he, a founder of Reddit of all places, has been purchasing some of these higher end games people have cited in their theories. 

Edited by ExplodedHamster
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6 minutes ago, ExplodedHamster said:

Punitive damages require actual malice. Given the problem has largely been supply chain related and waits are in line with very many other companies (both in their field and out) during covid, the most likely scenario seems to be this lawyer ends up paying the exorbitant legal fees Collector’s Universe will be 

It's not a supply chain issue when you accept work beyond your capacity.

Edited by Californication
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27 minutes ago, Californication said:

It's not a supply chain issue when you accept work beyond your capacity.

Tough to judge capacity when supply chain issues keep the uncertainty going, and mire importantly demand in collectibles spiked exponentially in a short time across the board during covid. Every company got flooded with demand beyond capacity and got way behind. You either shut down business or keep working and accept customers will be pissed off and try to work through it. I’ve had late service after late service because of supply chain issues the past two years. My windows were 6 months late as an example. PSA has been a year late, VGA many months, CGC months behind, windows, lumber, copper, cars, it goes on and on and on. 
 

Seems more like a “stop using the business if the service does not meet your standards” than a class action lawsuit type thing.  A successful suit here would open Pandora’s Box, and I think a judge would recognize that. 


 

 

Edited by ExplodedHamster
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