A California state judge rules that the online auction company is not liable for the sale of fake sports memorabilia on its site.
"The judge has essentially decided to throw the case out," said James Krause, a lawyer representing eBay buyers who say they were sold fake items. Krause said he would appeal the decision by San Diego Superior Court Judge Linda B. Quinn.
"We never expected the case to be resolved at the trial court level. We intend to appeal because we think this is clearly wrong," Krause said.
eBay Chief Executive Meg Whitman said in a conference call with investors that she was pleased with the decision.
"We now have two lawsuits that have been ruled in our favor," she said, noting a similar case that was decided in a San Francisco court late last year.
On Wednesday, eBay announced that its fourth-quarter earnings beat Wall Street expectations. The company pulled in pro forma net income of $25 million on $134 million in revenue.
The buyers suing eBay said they bought baseball bats, trading cards and jerseys with forged signatures of professional athletes on the leading auction site. The group sued eBay, the eBay sellers who allegedly sold the faked merchandise and the experts who allegedly authenticated the signatures last spring.
The group argued that eBay was liable under a California law that requires sellers of sports memorabilia to provide certificates of authenticity with those items. eBay denied that it was liable.
The ruling means that the public has "no protection" against fraud on eBay and other online auction sites, even if those sites are negligent in some way, Krause said.
"As more and more people get ripped off, eventually they're going to have play by the same rules everyone else has to," he said. "Right now, we haven't gotten to that advanced stage of thinking."
eBay spokesman Kevin Pursglove said that less than one-tenth of one percent of eBay transactions result in a confirmed case of fraud. The ruling confirms what eBay has argued all along, he said.
"eBay can't be held responsible if a third party misuses or abuses the site," he said.