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Been Wondering When This Would Happen - Lawsuit Over Grading

WinkHPD

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This just in from JCK on their on line website:

Short version, EGL graded the diamond G-VS2. A subsequent GIA report came in J-SI2. Hey, only a cumulative 5 grade difference...

Here is the article. You can see the article with clickable link at: http://www.jckonline.com/2014/07/23/tennessee-retailer-sued-over-grading-reports?utm_source=JCK+eNewsletters&utm_campaign=7fc4a4809d-2014_07_23_Diamond_Wednesday&utm_medium=email&utm_term=0_56301e74d4-7fc4a4809d-333944953

A new court case may test whether jewelers bear legal liability for the representations on their grading reports.

Genesis Diamonds, the Nashville, Tenn., retailer whose use of reports from EGL International made it the subject of a critical local newscast in May, has now been slapped with lawsuit over the way it uses those reports—and the plaintiff’s attorney says he expects more suits to follow.

The complaint, filed July 22 in circuit court for Davison County, Tenn., charges the store with fraud and violations of the Tennessee Consumer Protection Act for “misrepesent[ing] the quality and characteristics of the diamonds it sells.”

According to the suit, on March 10, plaintiff James Wells bought a diamond engagement ring at Genesis with a 2.06 ct. G VS2 center stone, as represented by its EGL International report. He paid $17,793, though a Genesis-supplied appraisal valued it at $27,500 based on its grading report, the suit says, adding, “Throughout the sales process [Wells] was assured that the diamond’s grading…was equivalent to GIA values.”

The suit says that the stone’s diamond grading report was from EGL International, the Israeli lab that the suit claims “is widely known to overstate the qualities, and consistently the value, of the diamonds it grades.” A month later, the diamond received a GIA report that said it was a J SI2, worth about $16,000 on the Rapaport list.

(EGL International did not respond to a request for comment on the lawsuit. However, in response to the initial newscast, CEO Guy Benhamou denied his lab had lower standards, noted that labs often differ on grades, and argued his lab’s grading is more “practical and realistic.” His full statement can be seen here.)

The suit also maintains that Genesis “is trafficking in what amounts to counterfeit certificates,” since EGL International reports are subject to a border ban requested by EGL USA. (The ban is 10 years old and is currently the subject of litigation.)

The suit seeks triple the difference between what the stone was represented as and what it is actually worth (about $30,000), plus attorney fees and other damages.

Genesis attorney Eli Richardson tells JCK that the suit is “factually and legally without merit” and “Genesis Diamonds looks forward to defending itself and vindicating its business practices, which have resulted in so many happy customers in middle Tennessee over the years.”

Richardson also told a local newcast that the GIA and EGL International reports agreed on the cut and carat weight, so the only differences were in color and clarity, which are “subjective,” he said.

As far as the border ban, “It would come as significant news to jewelers all over the country that somehow there is something wrong with them being in possession of EGL International certificates,” he said.

The suit was brought by attorney Brian Manookian, who has emerged as a persistent Genesis nemesis: He once sued the store himself over a stone he said was overgraded and subsequently represented a rival jeweler who Genesis sued for defamation. (That suit was later dropped after that jeweler, George Khoury, a former Genesis employee, agree to refrain from making further comments that could be termed defamatory.)

“I expect that there are thousands of cases against Genesis Diamonds by similarly situated plaintiffs,” Manookian says. “They can be brought by individual plaintiffs or in a class action.”

He expects to file another similar suit against Genesis in two weeks, he adds.

You can expect this to be the tip of the iceberg. Whoa unto those who have been making their living selling bogus certs as golden. Those eggs are going to break.

Wink
 

Candygrl

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

Ack! Shady shady shady :angryfire: :angryfire:
 

MelisendeDiamonds

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

Wink said:
This just in from JCK on their on line website:

Here is the article.

A new court case may test whether jewelers bear legal liability for the representations on their grading reports.

Unless that equivalent to GIA is in writing somewhere I have my doubts about how successful plaintiffs will be. Then again you yanks are a litigious society. Hopefully they won't just settle and there will be a judgement we can read somewhere.
 

baby monster

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

Wink|1406147250|3719298 said:
This just in from JCK on their on line website:

Short version, EGL graded the diamond G-VS2. A subsequent GIA report came in J-SI2. Hey, only a cumulative 5 grade difference...

Here is the article. You can see the article with clickable link at: http://www.jckonline.com/2014/07/23/tennessee-retailer-sued-over-grading-reports?utm_source=JCK+eNewsletters&utm_campaign=7fc4a4809d-2014_07_23_Diamond_Wednesday&utm_medium=email&utm_term=0_56301e74d4-7fc4a4809d-333944953

(EGL International did not respond to a request for comment on the lawsuit. However, in response to the initial newscast, CEO Guy Benhamou denied his lab had lower standards, noted that labs often differ on grades, and argued his lab’s grading is more “practical and realistic.” His full statement can be seen here.)

Richardson also told a local newcast that the GIA and EGL International reports agreed on the cut and carat weight, so the only differences were in color and clarity, which are “subjective,” he said.
Wink
There was a very informative post recently showing GIA standard colors. Does EGL use different standard when grading? It's hard to argue on the weight as that's an international standard. But is there an international standard for diamond colors? If not, I don't see how this lawsuit can be won unless the jeweler put EGL=GIA in writing.
 

WinkHPD

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

baby monster|1406149917|3719332 said:
Wink|1406147250|3719298 said:
This just in from JCK on their on line website:

Short version, EGL graded the diamond G-VS2. A subsequent GIA report came in J-SI2. Hey, only a cumulative 5 grade difference...

Here is the article. You can see the article with clickable link at: http://www.jckonline.com/2014/07/23/tennessee-retailer-sued-over-grading-reports?utm_source=JCK+eNewsletters&utm_campaign=7fc4a4809d-2014_07_23_Diamond_Wednesday&utm_medium=email&utm_term=0_56301e74d4-7fc4a4809d-333944953

(EGL International did not respond to a request for comment on the lawsuit. However, in response to the initial newscast, CEO Guy Benhamou denied his lab had lower standards, noted that labs often differ on grades, and argued his lab’s grading is more “practical and realistic.” His full statement can be seen here.)

Richardson also told a local newcast that the GIA and EGL International reports agreed on the cut and carat weight, so the only differences were in color and clarity, which are “subjective,” he said.
Wink
There was a very informative post recently showing GIA standard colors. Does EGL use different standard when grading? It's hard to argue on the weight as that's an international standard. But is there an international standard for diamond colors? If not, I don't see how this lawsuit can be won unless the jeweler put EGL=GIA in writing.

If I am recalling the video I watched some time ago correctly, this is exactly what the sales people at this store were telling their clientele. I do not know that it will be easy to win, but perchance it will get enough publicity that the public will not be flocking to be fleeced as often as they have been.

Once can only hope...

People have certainly lost big law suits with less cause than this store has given its clients.

Wink
 

kenny

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

I hope this lawsuit brings lots of publicity that results in all labs agreeing to (or better yet being forced to) use the same color and clarity grading standards.

Defending this shit by saying, "Oh, color and clarity grading is subjective", or "We use humans for grading," is a strawman argument.
GIA and AGS, while not infallible, manage to use humans but train them to closely follow standards.
All labs should grade to the same standards.
This IS possible via training and ethics.

This has been one of the diamond industry's shameful, embarrassing, and filthy scams. :nono:
Everyone I explain this disaster to just about vomits.
 

distracts

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

kenny|1406158108|3719422 said:
I hope this lawsuit brings lots of publicity that results in all labs agreeing to (or better yet being forced to) use the same color and clarity grading standards.

Defending this shit by saying, "Oh, color and clarity grading is subjective", or "We use humans for grading," is a strawman argument.
GIA and AGS, while not infallible, manage to use humans but train them to closely follow standards.
All labs should grade to the same standards.
This IS possible via training and ethics.

This has been one of the diamond industry's shameful, embarrassing, and filthy scams. :nono:
Everyone I explain this disaster to just about vomits.

Yeah, I'll believe the "subjective" and "only human" for a one grade difference... but G to J? VS2 to SI2? NOPE. That's not a little slip or a subjective disagreement. That is evidence of totally different standards.
 

thecat

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

Wink, according to the article, a similar sized diamond with GIA J SI2 is $16k according to rap. The client paid close to that, slightly more. Will the case be invalid since the client is paying price according to GIA specs anyway? But the positive is that many people will now learn the difference in strictness between the different labs.
 

Karl_K

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

I hate lawsuits but in this case bravo it is about time.
 

elle_chris

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

Karl_K|1406213905|3719786 said:
I hate lawsuits but in this case bravo it is about time.

Exactly- it's about time.

Five grades apart is huge- I consider that misrepresentation.
Even if grading isn't an exact science, there are still grading standards. A G will never be a J unless you're a color blind gemologist/jeweler.
The fact that the price reflects it's true grading, just proves that the grades they're assigning are false.
 

thecat

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

elle_chris|1406215686|3719802 said:
The fact that the price reflects it's true grading, just proves that the grades they're assigning are false.

I think you answered my question. Why didn't I think of that? Thank you. :))
 

msop04

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

MelisendeDiamonds|1406148293|3719310 said:
Wink said:
This just in from JCK on their on line website:

Here is the article.

A new court case may test whether jewelers bear legal liability for the representations on their grading reports.

Unless that equivalent to GIA is in writing somewhere I have my doubts about how successful plaintiffs will be. Then again you yanks are a litigious society. Hopefully they won't just settle and there will be a judgement we can read somewhere.

I'm afraid of this as well... Since it's no secret (to us anyway) that EGL Int'l is very loose on grading when compared to GIA or another more reputable lab, it could easily be argued that the retailer uses EGL and sells with these certs... and any discrepancy (like GIA or AGS) is just that, as they are different labs. Like MD mentioned above, unless the retailer actually presented some form of documentation stating that GIA and EGL were equivalent, then the plaintiff may have a very difficult time winning this case.

Should he even win this case?? :think: :think:
I want to scream, "YES!! Of course!!! EGL is crap!", however... I don't doubt the SA told the guy they were equivalent, but the jeweler isn't covering up the fact that they sell diamonds with EGL certs (from my understanding anyway)... Lots of sellers do... even PS trusted vendors sell diamonds graded by EGL. Even though WE know the difference, the average dude off the street wouldn't have a clue. He'd just think he was getting one hell of a deal because it's very likely he didn't price a GIA G/VS2 from any other sellers/websites or a red flag would be raised! It's very shady to lie to the guy, but COME ON! A simple google search "EGL Interntional vs GIA" would give page after page of information that would make anyone leery of EGL Int'l. When spending thousands on a rock, shouldn't you at least make an attempt to research -- even if just a little bit?? Most guys buying a car can tell you a ton of specs they want, and what each one has... :|

Don't get me wrong, I'm not blaming the buyer by any means, and I totally hope he wins... if anything in hopes that this case would pave the way for stricter, more universal grading! But we live in a time where you just can't assume you've been told the truth by someone's word or a handshake. Just as I feel EGL should have to grade by the same standards as GIA, I also believe that consumers should also take some responsibility rather than "buying blind" -- especially when with this kind of money. ::)
 

msop04

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

Thanks for sharing this, Wink! :wavey:
 

denverappraiser

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

One of the tricky areas here is deciding on the damages. Let us assume that the jeweler knowingly misrepresented grades. Obviously that would be wrongdoing and a violation of a fair number of laws, but what are the appropriate damages?

A refund?
A better diamond that actually matches the specs represented?
The difference in ‘value’ between what they got and what was represented?
Something else?

This third one is what they’re asking for but that gets tricky. Value according to whom? GIA? They don’t assign values at all. Rapaport? Why them? They don’t use the GIA grading scale either by the way, and they’re nearly as opaque as EGLI about their methodology. Comparative prices to other stores in Tennessee or Internet sellers? That’s better than Rap, but it’s neither illegal or even unethical to charge more than your competitors so it’s still not there. Comparative prices to what THEY charge for accurately graded goods? If such comps exist, that would be good, but somehow I doubt that their business model includes a lot of this. In any case, that’s not what the suit is asking for.
 

oldminer

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

It really would be good to clear the air and get resolution to this long standing problem faced by consumers and tolerated by most members of the diamond trade, even the most honest members. When a gem laboratory uses the identical grading nomenclature fostered and taught by GIA, it ought to be compulsory to be use the same grading structure, not some purposeful variant that serves to confuse consumers and gives greedy sellers a better opportunity to make a sale than a honest merchants. Such abuse of the system has allowed the less honest to make easy money on naïve consumers and is costing the entire trade credibility issues. This particular EGL International problem, and others of similar type, have cost legitimate retailers millions of dollars in lost sales opportunities. They have cost consumers millions of dollars in loss of their perceived "bargain" purchase. They have cost legitimate small laboratory operators millions in lost revenue if they don't compete by lowering their own standards to meet these bottom feeders. Any legitimate lab can offer grading very equivalent to actual GIA grading. Notable good examples of professionalism such as GCAL, PGS, GSI and likely several more do exist. It really is not rocket science to grade diamonds using correct GIA standards.

Hugely successful, lack of standards grading labs, are totally capable of doing the right grading work,too, but purposely use lower standards to gain market share far larger than they deserve. It is big money, big greed and apparently little fear of any real consequences.

On a realistic level, individual consumers can't do a whole lot about past purchases. Impulsive purchases, belief in impossible retail and dramatic discount prices, and thinking that any lab is the same as another are quite ingrained into the US consumers minds. It is difficult to change that although Pricescope has done a huge job for most of the Pricescopers. There sure are plenty of the uninformed left around. Caveat Emptor is a very important part of capitalism, yet there is no better system if one looks back at history.
 

John P

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

Update:

Retailer Faces More Lawsuits Over EGL Int’l Reports

http://www.jckonline.com/2014/08/20/retailer-faces-more-lawsuits-over-egl-intl-reports?

<< By Rob Bates, JCK Online:

Two more consumers are suing Nashville, Tenn., retailer Genesis Diamonds over its sales of diamonds with EGL International reports. The retailer has already been the subject of a critical local news broadcaston the issue, as well as a lawsuit filed one month ago from a consumer complaining that he was sold an over-graded diamond.

The two new suits, filed this week in the circuit court for Davidson County, Tenn., bear certain resemblances to the initial one. In the first, plaintiff M. Nathaniel Averitt says that in October 2012, he bought a pair of diamond cufflinks from the three-store chain, which carried EGL International reports. Those reports called one diamond a 3.01 ct. G SI excellent cut and the other a 3.04 ct. G SI very good cut. They were appraised at $135,000, it said.

But according to the lawsuit, another appraisal called the 3.01 ct. stone an M SI1 very good cut, and the 3.04 ct. stone an N SI1 good cut. It valued them at $22,500. The suit also contends that Averitt later bought a diamond eternity band with was represented as a 7.8 ct. F VS1 excellent cut, purported to be worth $45,000. A second appraisal termed it a J VS1 good cut, worth $18,000, the suit says.

Genesis lawyer Eli Richardson says the cufflinks were custom-ordered and designed from scratch. “Genesis Diamonds worked for weeks to have them completed,” he says. “The complaint makes it sound like he just walked in off the street one day and selected these cufflinks out of the case.” He adds that Genesis’ out-of-pocket costs for the cufflinks were more than $53,000—or more than double the plaintiff’s appraisal—plus time and labor. Averitt paid $85,000, plus tax, for them. He says there was never any kind of report issued for the eternity band, which he called a “blatant error” in the complaint.

The second suit, launched by plaintiff Richard Vien, claims that Genesis sold him a diamond with an EGL International report that called it a 1.01 ct. D S12 excellent cut. An appraisal valued it at $6,395. However, the GIA graded the stone as an F I1 excellent cut, worth about $4,400, the complaint says.

Both suits charge fraud and violations of the Tennessee Consumer Protection Act and seek triple the difference between the stones’ stated value and what they are actually worth. Richardson counters that both plaintiffs never complained about their purchases. “You have to wonder whether the customer was perfectly satisfied with his purchase until he encountered a plaintiff’s attorney, who saw an opportunity to take advantage of Genesis Diamonds and use litigation to try to make money,” he says. He adds that when the attorney contacted the store with their complaints, both customers were offered full refunds, which they turned down, preferring to sue.

Richardson also told local station WSMV that all grading is subjective. “EGL International is known to be more lenient than GIA,” he said. “That does not make EGL International certifications fraudulent, just more lenient.” EGL International could not be reached for comment, but has called its grading “more practical.”

The lawyer who filed the first suit, Brian Manookian, had said more suits were coming, and that he hoped to consolidate them all into a class action. However, the two new complaints use a different lawyer, Brian Cummings. The lawyers did not respond to requests for comments on whether the suits were related—although Richardson notes that both attorneys once worked at the same firm.>>
 

baby monster

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

John Pollard|1408562958|3736352 said:
Richardson also told local station WSMV that all grading is subjective. “EGL International is known to be more lenient than GIA,” he said. “That does not make EGL International certifications fraudulent, just more lenient.” EGL International could not be reached for comment, but has called its grading “more practical.”>
I don't understand this concept. Grading has to be done to a universal standard. Why can't GIA patent their grading system to that any other lab using it must grade to same standard?

It'd be interesting of a dairy farm starts selling gallons of milk short of an ounce and calling their gallons "more practical and lenient" than full gallons.
 

WinkHPD

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

baby monster|1408567081|3736377 said:
John Pollard|1408562958|3736352 said:
Richardson also told local station WSMV that all grading is subjective. “EGL International is known to be more lenient than GIA,” he said. “That does not make EGL International certifications fraudulent, just more lenient.” EGL International could not be reached for comment, but has called its grading “more practical.”>
I don't understand this concept. Grading has to be done to a universal standard. Why can't GIA patent their grading system to that any other lab using it must grade to same standard?

It'd be interesting of a dairy farm starts selling gallons of milk short of an ounce and calling their gallons "more practical and lenient" than full gallons.

The ECL (European Cow Laboratory) has stated that its Farmer Friendly Gallons (FFG's) are making millions of extra dollars for Farmers smart enough to use its special Farmer Friendly Gallon Jugs. Even though knowledgeable milk vendors avoid ECL Gallons like the plague the vast majority of milk vendors realize that the vast majority of the public is not smart enough to know the difference and is too busy putting those extra dollars into their Swiss Cheese accounts to care about the financial damage that they are doing to their uneducated clients. Ironically, while selling the FFG's they make much more money than the educated vendors who try to educate their clients, many of whom do not want to hear it and go elsewhere where they can get their less expensive and equally as good ECL FFG jugs of milk.

Caveat Emptor say the vendor of 100,000,000 FFG's per month. It is only an ounce, what is the big deal???

Wink
 

WinkHPD

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

P.S. Baby Monster, I thank you for the inspiration for that last silly post. I just wish it was not so accurately describing both the vendors and the buyers of the EGL International toilet paper.

Wink
 

Rockdiamond

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

baby monster|1408567081|3736377 said:
John Pollard|1408562958|3736352 said:
Richardson also told local station WSMV that all grading is subjective. “EGL International is known to be more lenient than GIA,” he said. “That does not make EGL International certifications fraudulent, just more lenient.” EGL International could not be reached for comment, but has called its grading “more practical.”>
I don't understand this concept. Grading has to be done to a universal standard. Why can't GIA patent their grading system to that any other lab using it must grade to same standard?

It'd be interesting of a dairy farm starts selling gallons of milk short of an ounce and calling their gallons "more practical and lenient" than full gallons.

It's a widely misunderstood concept- Diamond Grading, that is.
Diamond grading is subjective- period.
If 10 knowledgeable accurate diamond graders look at a given stone there may be a variance of one grade.
Bad labs take this to the extreme- like in Wink's example.
If we ( EGL International) can be one grade off, why not 5?
This is what allows the rampant grading BS to continue unabated.

This is a bit self serving ( it's my job)- but the truth is, consumers who can find a seller they are comfortable with can make wading through the sea of misinformation far easier.
In a given grade, the differences between the best examples, and poor examples can be dramatic- as can the price.
Do a PS search for a popular size stone- say 1.00-1.05 RBC
Search G/SI2 ( for example)
Even if you restrict to GIA EX cut grade, the variance in price is massive.
That's because all SI2's are not equal.

And there are indeed dishonest schmucks taking advantage of the subjective nature of grading.
A gallon can be easily measured- not so a J color, or SI2
 

RockyRacoon

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

Wink|1408569445|3736394 said:
baby monster|1408567081|3736377 said:
John Pollard|1408562958|3736352 said:
Richardson also told local station WSMV that all grading is subjective. “EGL International is known to be more lenient than GIA,” he said. “That does not make EGL International certifications fraudulent, just more lenient.” EGL International could not be reached for comment, but has called its grading “more practical.”>
I don't understand this concept. Grading has to be done to a universal standard. Why can't GIA patent their grading system to that any other lab using it must grade to same standard?

It'd be interesting of a dairy farm starts selling gallons of milk short of an ounce and calling their gallons "more practical and lenient" than full gallons.

The ECL (European Cow Laboratory) has stated that its Farmer Friendly Gallons (FFG's) are making millions of extra dollars for Farmers smart enough to use its special Farmer Friendly Gallon Jugs. Even though knowledgeable milk vendors avoid ECL Gallons like the plague the vast majority of milk vendors realize that the vast majority of the public is not smart enough to know the difference and is too busy putting those extra dollars into their Swiss Cheese accounts to care about the financial damage that they are doing to their uneducated clients. Ironically, while selling the FFG's they make much more money than the educated vendors who try to educate their clients, many of whom do not want to hear it and go elsewhere where they can get their less expensive and equally as good ECL FFG jugs of milk.

Caveat Emptor say the vendor of 100,000,000 FFG's per month. It is only an ounce, what is the big deal???

Wink

Hilarious and apt analogy, Wink!
 

baby monster

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

Rockdiamond|1408573978|3736433 said:
And there are indeed dishonest schmucks taking advantage of the subjective nature of grading.
A gallon can be easily measured- not so a J color, or SI2
Is that a fair statement? There are many manufacturing processes that rely on exact color measurement. Anything from textiles to baked goods. Can't colorimetry technology be adapted for diamond color grading? Or is there a significant financial benefit to the subjectivity?
 

denverappraiser

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

baby monster|1408567081|3736377 said:
John Pollard|1408562958|3736352 said:
Richardson also told local station WSMV that all grading is subjective. “EGL International is known to be more lenient than GIA,” he said. “That does not make EGL International certifications fraudulent, just more lenient.” EGL International could not be reached for comment, but has called its grading “more practical.”>
I don't understand this concept. Grading has to be done to a universal standard. Why can't GIA patent their grading system to that any other lab using it must grade to same standard?

It'd be interesting of a dairy farm starts selling gallons of milk short of an ounce and calling their gallons "more practical and lenient" than full gallons.
Gallons, grams, hours and bunches of other things are well defined and well understood units. They’re regulated by the Feds to see to it that everyone is using the units in the same way and it’s illegal to make your own definition. That said, you CAN make up your own units and it happens all the time.

Take, for example, the system of stars for grading hotels and restaurants. When Michelin says a particular hotel is 3 stars, what do you REALLY know? The Michelin guy liked it but didn't love it. They passed an inspection for things like cleanliness, room size, amenities like phones, tv’s and so on but the fundamental standards are Michelins alone. They failed on a few things, but we don't really know exactly what. Someone else can give it 4 stars if they want, but that doesn’t make it better. They can use their own scales and their own standards. They can and do use the same words, in this case calling them stars, but they aren’t using them in the same way.

Another example is cell phone bars. When you see 4 bars on your phone, what do you really know? That has to do with way the phone manufacturer programmed the display. Traditionally it means that the reception is good but that’s not required. It can men whatever they want. They could make it show 5 bars all the time if they wanted. You’re not trusting in some agreed upon standard, you’re trusting the phone manufacturer to be giving you useful data.

There’s plenty more like this. I’m a member of the Better Business Bureau and they have a rating system for businesses. I’m an A+. I’m pleased enough with that and it sounds really good but what’s the scale? Everyone who went to public school is familiar with a scale that looks like that but what’s really the difference between an A and an A+? Hint: A business is not eligible for an A+ score if they’re not ‘accredited’, and what accredited means is that you paid them. It has nothing to do with the operation of the business.

NIST, the people who regulate the use of grams and seconds, want nothing to do with this sort of thing. They want hard solid units and we don’t offer them, at least not for clarity, color, symmetry, polish, and fluorescence. It would take a total revamping of the way diamonds are graded to make this happen. In the meantime, the solution for consumers is simple enough and it’s exactly the same as with hotels. Establish FIRST the credibility of the grader. They can say anything they want but you don’t have to care. The reason to trust Michelin is because of confidence in Michelin, not in some universal standard of what stars mean.
 

RADIANTMAN

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

denverappraiser|1406218040|3719822 said:
One of the tricky areas here is deciding on the damages. Let us assume that the jeweler knowingly misrepresented grades. Obviously that would be wrongdoing and a violation of a fair number of laws, but what are the appropriate damages?

A refund?
A better diamond that actually matches the specs represented?
The difference in ‘value’ between what they got and what was represented?
Something else?

This third one is what they’re asking for but that gets tricky. Value according to whom? GIA? They don’t assign values at all. Rapaport? Why them? They don’t use the GIA grading scale either by the way, and they’re nearly as opaque as EGLI about their methodology. Comparative prices to other stores in Tennessee or Internet sellers? That’s better than Rap, but it’s neither illegal or even unethical to charge more than your competitors so it’s still not there. Comparative prices to what THEY charge for accurately graded goods? If such comps exist, that would be good, but somehow I doubt that their business model includes a lot of this. In any case, that’s not what the suit is asking for.

This hits the nail on the head with respect to damages. The customer actually got more or less what they paid for (which was not a GIA GVS2 so they were not, in legal terms, economically damaged. It's extremely unlikely that a court will give the customer the windfall they are seeking in the form of compensatory damages. I assume that the case alleges fraud not just breach of contract which ought to create the possibility of punitive damages. If a court agrees that the use of GIA terminology requires other labs to adhere at least loosely to GIA standards, and that the store both knew that EGL International did not and misrepresented that fact to the customer they could, and in my opinion should be zapped with enough punitives to discourage the use of these types of Labs if they don't tighten their standards to within an acceptable range.

It may not even matter whether the store actually claimed the EGL International Certificate was equivalent to GIA since intentional omission of a material fact can be fraud even if no actual misrepresentation can be proven. A bigger problem may be proving that the customer detrimentally relied on the misrepresentation (active or by omission) since it's highly unlikely that the customer really believed that he was getting the equivalent of a GIA stone for that price.

If I sound like a lawyer that's because I was one in another life.
 

oldminer

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

The technology to color grade diamond with precision, repeatability and consistency in multiple locations does exist. However, the major players tend to prefer the market they currently understand and find comfort with. Some amount of subjectivity allows for a bit of gambling on grading outcome which they like complain about and also find exciting when they win on their gamble. There is huge money out there and the status quo suites this very powerful customer base of the GIA. GIA would be hard pressed to adopt a change where any lab, not just the GIA, can grade virtually identically anywhere in the world 24/7. What becomes of the GIA business model? Labs that misuse GIA standards also have a huge role in all of this and they would find themselves hardly necessary if there is no loose grading retailers would be willing to risk using. If a retailer uses an EGL International Report and says it is equivalent to a GIA report, one must assume they know exactly what they are doing and that they are somehow not liable for knowingly misleading customers. The excuse they are not GIA gemologists is not an excuse. A buyer should leave if a seller is unqualified to represent the item they have for sale with sufficient knowledge.

The reticence of adopting new technology because of the upset and discomfort it will create in the short term, the unknown issues it will create in the longer term and the belief that it isn't as broken a system as it might be, all have played into doing little to nothing about better grading through technological solutions.

Some things with the GIA system of color grading make little sense in a scientific approach. Why grade diamonds from the side in the D to non-fancy range and from the top view when they can be cut to create more color intensity face up than their actual body color from the side? How would a machine handle such a strange grading issue? It could be programmed, but it is hardly scientific in approach. The odd or rare fancy colors are graded differently than the yellow colors of fancy diamonds. It depends on the scarcity and rarity when colors are assigned, not their exact saturation of color on a universal basis. Blue or Pink become fancy colors much sooner and much less intense in color than yellow fancy colors.

The more pressure exerted by consumers to adopt universal, scientific, diamond grading, the sooner you will have it. There is just no way to move this glacial process without putting some heat and pressure into the process.
 

Rockdiamond

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

David- my experience with the colorimeter is that its not bulletproof in any way.
This goes back a few years- maybe you have more recent experience.
Is it your experience that these color grading machines are infallible- or even very accurate?
 

Texas Leaguer

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

Alot of good analysis above. Add me to the list of those a little skeptical that the plaintiffs will prevail, though I very much hope they do.
"Professional", programatic fraudsters are pretty adept at gaming the system. Being able to point to a third party (the EGLI) as the real culprit gives them some cover. As does the general knowledge that color and clarity grading involves an element of subjectivity.

There is still injury done when someone thinks they are buying one thing and ends up with something substantially different, even if the "price was right". And it is not just the individual who is harmed. It is an entire industry.

There is colorimetry technology available to prevent wild misgrading of color. And it is used in the top tier labs as a step in the color grading process. In fact, I recently learned that GIA is using entirely automated color grading on a very narrow range of their reporting. I believe I posted about that on that in a recent thread - I will try to pull it up.

Clarity grading is less amenable to a technological solution so it may be a while before that can be automated.

My best hope is that there are enough lawsuits and enough publicity surrounding this that consumers become more aware of the issue, and that those businesses seeking to mislead consumers in this way will find it too costly to continue that practice. I would also hope that EGL USA could get some help in enforcing their hard fought rights. It seems from what I have been reading that they are trying to do the right thing. Maybe they should join the class action lawsuit against EGLI !
 

RADIANTMAN

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

Rockdiamond|1408653284|3737052 said:
David- my experience with the colorimeter is that its not bulletproof in any way.
This goes back a few years- maybe you have more recent experience.
Is it your experience that these color grading machines are infallible- or even very accurate?

I think the issue is less whether the machines are accurate it's that the way our world works now value is established largely by what the GIA calls a diamond not what it "objectively" or scientifically is. To be useful in the world as it exists, a colorimeter needs to accurately predict what the GIA will call a diamond, not accurately describe with scientific precision what the diamond is. So being "better" than the GIA is not necessarily a commercial asset. Nobody will pay you for a G color if the GIA calls it an H no matter what the machine says. And no one will sell you a GIA G for an H price because the machine calls it an H.

Of course none of this has to do with EGL Int'l whose grading does not seem to have any relationship to diamond grading as any of us know it.
 

Texas Leaguer

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Re: Been Wondering When This Would Happen - Lawsuit Over Gra

This is tangential, but for those interested in the use of technology in color grading I found the earlier discussion:
[URL='https://www.pricescope.com/community/threads/why-is-gia-so-slow.202789/page-2']https://www.pricescope.com/community/threads/why-is-gia-so-slow.202789/page-2[/URL]

by Texas Leaguer » 18 Jun 2014 17:01
Written by 30yearsofdiamonds » 09 Jun 2014 11:48:
Info that came my way is that on diamond dossier stones, two color grading machines are used to find an agreement on color and if there is a split then human eyes will decide with an opinion. But, maybe someone has heard differently?

Dan, I have confirmed on good authority that you are absolutely correct. Here's a little more detail:

Very few diamonds are actually color graded entirely by machine, and as your post suggested it is confined to diamonds under 1 carat.
The color grading devices that GIA uses are proprietary, developed in-house, and employ spectroscopic analysis. They output more than just a grade on the scale. They will indicate when certain "modifiers" are present such as hues other than yellow and fluorescence. Those stones are referred for human grading. So only the subset of small stones with no modifiers can be color graded entirely by machine.

It was the opinion of the person I talked to that color grading will go more in the direction of device-only grading as the machines continue to get better at taking all the subtle variables into account.
 
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