EBay Victorious in Courtroom Battle
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Auction giant eBay had double good fortune yesterday, with victories on Wall Street as well as in a San Diego courtroom.
On the heels of declaring fourth-quarter revenues that beat Wall Street estimates, a $100 million class-action lawsuit against the company was thrown out of court.
The plaintiffs charged the company with selling bogus sports merchandise and held eBay liable for the vendor's dishonesty. The plaintiffs claimed they lost at least $10 million buying baseball bats, trading cards and jerseys with forged signatures of professional athletes.
Judge Linda B. Quinn ruled that eBay did not guarantee the authenticity of the merchandise and therefore was not liable for the sale of phony memorabilia.
The plaintiffs contended that by creating general categories such as "Sports: Autographs," eBay indicated the items were authentic.
According to the judge, "A category label is not a description of a specific collectible...it is the Web site user who decides which category he or she will assign her item."
James Krause, legal counsel representing the eBay buyers, told the New York Times he would appeal the decision.
EBay contends that it discourages fraud but cannot be held liable for other people's dishonesty. This is second time the company has been successful in fighting charges that it is responsible for faulty merchandise that is sold through its site.