PSA, Collectors Face Growing Legal Challenges Over Card Grading Power
PSA and parent company Collectors Holdings are facing a growing legal challenge to the grading system that helps determine value across the trading card market.
A proposed class action accuses PSA of misleading consumers about the reliability of its grading through opaque practices, pricing and turnaround estimates. A separate lawsuit from high-end collector Steve Lichtman alleges PSA undergraded or refused to cross valuable cards to protect competing cards owned by Collectors insiders.
At the same time, an existing antitrust case is set to expand with new plaintiffs and allegations that Collectors weakened SGC, raised prices across its grading businesses and reduced access to lower-cost PSA services.
Baltimore collector Nicholas Funk filed the broadest of the new cases July 28 in Maryland federal court, seeking to represent card owners who paid PSA grading charges after submitting through dealers, card shops and other intermediaries without using their own PSA accounts.
He submitted about seven cards, including Cal Ripken Jr. rookies, through a Maryland intermediary in March 2025 and paid about $300. Funk argues consumers like him never accepted PSA’s arbitration and class action waiver provisions.
His 188-page complaint accuses PSA and Collectors of marketing grading as neutral, expert and reliable while allegedly operating a subjective system shaped by production pressure, changing criteria and financial incentives.
The lawsuit opens with PSA’s first certified card, the T206 Honus Wagner carrying certification number 00000001.
PSA’s published standards say cards showing evidence of trimming, recoloring, restoration or other tampering will not receive a numerical grade. Funk alleges PSA knew the Wagner had been trimmed but still assigned it an NM-MT 8, failed to disclose the alteration and never withdrew the certification.
“The number printed on that holder is now worth millions, but that value was born from a lie,” the complaint says.
Funk also challenges PSA’s use of “eye appeal,” including the question: “What will the market accept for this particular issue?”
The complaint alleges grading outcomes are affected by production quotas, short review windows and undisclosed changes in criteria. It also claims PSA manages Gem Mint populations through ratio-based practices and heightened scrutiny of premium players or characters.
Funk’s larger argument is that inconsistency itself becomes profitable when collectors pay for reviews, crossovers and repeat submissions seeking a better result.
The case also targets PSA upcharges when a card’s post-grading value exceeds the maximum insured value selected by the customer. Funk argues the higher value does not increase PSA’s grading cost and describes the charge as another grading fee rather than an insurance expense.
His claims include federal civil RICO violations based on alleged mail and wire fraud, along with Maryland consumer protection and common law claims. He seeks recovery of grading-related charges, restitution, treble damages where available and an injunction against the challenged practices.
The complaint places those allegations in the context of Collectors’ wider business.
Collectors owns PSA, SGC, Beckett and Card Ladder. It also operates the PSA Vault, PSA Partner Offers and Collectors Financial Services.
Funk argues that structure puts Collectors on several sides of a grading-dependent transaction. PSA assigns the grade and publishes population data, while other Collectors businesses are involved in valuation, storage, lending, acquisition and resale.
Lichtman’s case is narrower and more personal.
Filed July 21 in Orange County Superior Court and removed to federal court nine days later, the lawsuit alleges PSA undergraded some of Lichtman’s cards, refused to cross cards graded by competitors and applied stricter standards to recent submissions while preserving older grades he says were inflated.
His collection includes high-grade Honus Wagner, Mickey Mantle and Wilt Chamberlain cards.
Lichtman alleges some grading decisions were influenced by the financial interests of Collectors executives, investors or shareholders who owned competing cards.
The complaint describes this as “population control,” alleging PSA limits the number of prominent cards receiving high grades to support the value of existing examples.
It singles out Collectors CEO Nat Turner, whose personal collection reportedly includes between 15,000 and 20,000 PSA-graded cards.
Lichtman claims PSA treated him unfairly after he questioned whether Turner’s ownership of a highly graded 1952 Bowman Mickey Mantle influenced PSA’s refusal to cross Lichtman’s competing card. The complaint says Turner reacted “in a hostile and antagonistic manner” and formed a lasting grudge.
Lichtman also disputes PSA’s defense that grading is subjective, arguing the company markets the service as consistent and objective when asking consumers to pay for it.
His allegations extend to Collectors’ handling of SGC after acquiring the grader in February 2024.
Collectors said SGC would continue operating independently. Lichtman claims the company instead curtailed its operations, controlled pricing to keep SGC from taking business from PSA and damaged the value of SGC-graded cards.
He says his losses exceed $5 million and seeks compensatory and punitive damages, restitution and an injunction requiring grading practices insulated from insider conflicts.
While Collectors has not yet filed a response in court, it told The Athletic that Lichtman’s claims are “without merit” and said PSA would “never compromise our grading independence.”
“A grade is an expert opinion. Its value to the hobby rests on the fact that specific grades cannot be bought, pressured, or litigated into existence,” the company said, characterizing the case as a dispute with a collector unhappy that PSA would not assign the grades he requested.
The allegations about SGC and Collectors’ expanding control of grading also run through the antitrust case Michael Rasmussen filed in April.
Liz Morton
Rasmussen and Collectors filed a joint stipulation August 3 asking the court to allow an amended complaint adding California collector Erick Azarian and Pennsylvania collector Andrew Fedynyshyn as plaintiffs, along with two new claims and additional factual allegations. The attached proposed order had not yet been signed.
The proposed amended complaint adds detail to the claim that Collectors weakened SGC after acquiring it. The filing says SGC had been gaining ground by offering grading for as little as $15 per card with turnaround estimates of five to ten business days.
After the acquisition, the suit says SGC’s lowest price increased to $18, expedited service rose from $40 to $150 and turnaround estimates eventually reached 40 to 50 business days.
Collectors later moved staff and office space from SGC to PSA while turning SGC into a smaller boutique operation focused on vintage cards. The complaint says SGC’s monthly grading volume fell from about 150,000 cards in July 2025 to 50,000 by October, even as other major graders were growing.
The proposed amendment adds more recent Beckett allegations as well.
It says Beckett more than doubled in-person grading prices at certain card shows from about $25 to $60 shortly after the acquisition. At the National Sports Collectors Convention, the proposed complaint says Beckett charged a minimum of $124.99 per card while PSA charged $229.99.
The plaintiffs also point to repeated PSA price and turnaround increases following both acquisitions, along with the June suspension of Value Bulk, Value, Value Plus and Value Max submissions.
PSA said the temporary pause was needed after a surge in demand added 1.6 million cards to a backlog the company said was approaching 10 million in May.
The backlog reached 12.4 million by July 28, up from 11 million two weeks earlier. PSA attributed the increase to higher-tier submissions, convention-season volume and shipments arriving within the 45-day eligibility window following its initial service-tier shutdown. The company said its newly opened grading facility in Plano, Texas would add capacity as it works toward reopening the suspended services.
The proposed amended complaint argues that keeping higher-priced tiers open reduced access to lower-cost grading and temporarily made $74.99 the minimum price for a new PSA submission.
Collectors previously called the original case “long on rhetoric but devoid of substance” and said the acquisitions were a procompetitive response to demand.
“In this environment, acquiring smaller companies to increase capacity is a textbook example of a procompetitive response, not an antitrust violation,” the company argued.
The proposed amendment directly challenges that defense by alleging Collectors reduced capacity at SGC and later restricted access to PSA’s least expensive services.
The allegations have not been proven, and all three cases remain ongoing. Their legal theories differ, but each centers on the same source of power: PSA assigns the number that helps determine a card’s value while Collectors increasingly controls the businesses that price, store, finance and resell it.
Funk v. Collectors Universe Inc. et al.
Case No. 1:26-cv-02933, U.S. District Court for the District of Maryland
Lichtman v. Collectors Universe Inc. et al.
Case No. 8:26-cv-02048, U.S. District Court for the Central District of California
Rasmussen v. Collectors Holdings Inc. et al.
Case No. 8:26-cv-00897, U.S. District Court for the Central District of California
