Distributor Accuses Upper Deck of Fraud

     SAN DIEGO (CN) – Upper Deck defrauded a distributor by granting it exclusive rights to distribute trading cards, then setting up competitors that it controlled, the distributor claims in court.
     J&T Hobby and its principal, Joseph Pirozzi, sued Carlsbad-based Upper Deck and its CEO Richard McWilliam, in Superior Court.
     Pirozzi claims that Upper Deck “intermingled assets” and created competing distributors after J&T Hobby entered into a 1994 agreement as exclusive distributor of Upper Deck’s sports and entertainment trading cards.
     “Starting sometime around 2005, rumors materialized that defendants, and each of them, became closely connected, involved, associated with and/or acquired and/or purchased and/or controlled distributing entities including, but not limited to, Edgeman and Vintage (hereinafter ‘distributing entities’),” the complaint states. “These distributing entities became competitors of plaintiffs as they performed the same functions, duties, work, operations, as plaintiffs and as described under the contract between plaintiffs and defendants.”
     Neither Edgeman nor Vintage are parties to the lawsuit.
     When Pirozzi asked Upper Deck if it controlled the other distributors, it told him, falsely, that it did not, Pirozzi says: “The true facts were that defendants, and each of them, owned, controlled, 20 dominated, used, and managed the distributing entities.”
     While continuing to deny that it controlled the competing distributors, Upper Deck dumped unprofitable trading cards onto J&T Hobby, and promised “to ‘make up’ the monetary difference later on,” Pirozzi says in the complaint.
     “However, defendants, and each of them, had no real intention to ‘make up’ the monetary difference to plaintiffs. Instead, defendants, and each of them, plotted to unload on plaintiffs unprofitable and unfavorable products which were difficult, if not impossible, to redistribute and then collect against plaintiffs’ personal guaranty,” the complaint states.
     Pirozzi claims Upper Deck has held him liable for more than $1 million, and sued him to enforce a contract he says is void.
     Upper Deck, best known for selling baseball cards, has been at the center of numerous legal wrangles.
     In August, Upper Deck claimed that a competitor had falsely accused it of violating copyrights on trading cards of U.S. politicians. In March, the NFL sued Upper Deck for $1.4 million in a dispute over licensing agreements for football cards.
     Pirozzi is represented by John Gaule, with Oddenino & Gaule, of Arcadia. He seeks punitive damages for fraud, concealment, conspiracy, breach of good faith and fair dealing, unfair and deceptive business practices, and cancellation of written instrument.

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