Professional Sports Authenticator, better known as PSA, is facing a class-action lawsuit that challenges the foundation of its grading business. Filed on July 28, 2026 in the District Court of Maryland, the suit alleges false advertising, inconsistent standards, and conflicts of interest that have shaped the multi-billion-dollar trading card market for decades.
The complaint targets both PSA and its parent company, Collectors Holdings. Central claims include that PSA’s grading process is less objective than advertised and relies heavily on subjective "eye appeal." The lawsuit also questions the qualifications and anonymity of graders handling high-value cards, including those from Pokemon and other modern TCGs. Plaintiffs argue that PSA has deliberately limited the number of Gem Mint 10 grades awarded to certain cards in order to restrict supply and maintain elevated secondary-market prices.
One of the most striking historical details raised in the suit involves the very first card PSA ever graded: the legendary T206 Honus Wagner. In the early 1990s, PSA assigned a grade of 8 (Near Mint-Mint) to the copy that later became known as the Gretzky Wagner. Years afterward, former auction house owner Bill Mastro admitted in a federal plea agreement that he had trimmed the edges of that card in the mid-1980s to improve its appearance. The alteration was known or strongly suspected within the industry at the time of grading, yet the card received a high numerical grade and has remained one of the most valuable pieces of sports memorabilia in existence. The current owner, Arizona Diamondbacks owner Ken Kendrick, purchased it with awareness of the controversy and later became an investor in Collectors Holdings.
The lawsuit frames this origin story as evidence of long-standing issues with transparency and standards. It further alleges that Collectors Holdings’ ownership structure creates undisclosed conflicts. The parent company controls not only PSA but also competing grading services acquired in recent years, pricing data platforms such as CardLadder, and auction channels. Critics, including a December 2025 request for an FTC investigation by Congressman Pat Ryan, have argued that this vertical integration gives Collectors control over more than 80 percent of the grading market while also influencing pricing data and secondary sales.
PSA’s current operational challenges form part of the broader backdrop. In early June 2026 the company paused its lower-cost Value, Value Bulk, Value Plus, and Value Max submission tiers after the grading backlog approached 10 million cards. A 20 percent spike in submissions, driven largely by demand for Pokemon and One Piece cards, pushed the queue to levels the company said threatened grading consistency. PSA stated it would reopen the paused tiers only after the backlog falls below 5 million cards, a process it projected could take five to six months at the time of the announcement. A public backlog tracker was launched to provide greater visibility into the volume of cards in the system.
The combination of a massive operational backlog, historical questions about the first graded card, and allegations of population control and corporate conflicts has intensified scrutiny of the industry’s dominant grader. PSA’s numerical grades have long functioned as a trusted shorthand for condition and value. A PSA 10 can multiply the price of a raw card many times over, which is why collectors and investors submit millions of cards each year. When confidence in the consistency or independence of that grading process is challenged, the effects ripple across both sports cards and the booming TCG market.
Separate legal actions have also surfaced. One California suit attributed to collector Steve Lichtman focuses on alleged population control involving high-end Mickey Mantle cards, claiming superior examples were denied top grades while other cards received more lenient treatment. Together these cases reflect growing frustration among some collectors over fees, turnaround times, opacity around graders, and the concentration of market power under Collectors Holdings.
PSA has not yet issued a detailed public response to the Maryland class-action filing beyond its ongoing operational updates. The company continues to process higher-tier submissions and has emphasized that the Value-tier pause is temporary and tied strictly to reducing the backlog. Whether the lawsuit leads to changes in disclosure requirements, grader identification, population reporting, or corporate structure remains to be determined by the court.
For collectors, the case arrives at a moment when graded cards sit at the center of both hobby and investment activity. The same PSA slab that can authenticate and protect a card also carries the weight of the company’s reputation. The lawsuit asks whether that reputation has been maintained with the objectivity and independence the market has long assumed. The inclusion of the altered T206 Honus Wagner as a foundational example ensures that the debate reaches back to the earliest days of third-party grading itself.
The trading card industry has grown dramatically in the past decade, fueled by record sports card sales and the mainstream explosion of Pokemon, One Piece, and other TCGs. That growth has made the reliability of grading services more consequential than ever. The class-action suit against PSA and Collectors Holdings now puts those standards, and the corporate relationships surrounding them, under formal legal examination.
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