Some auctioneers lament that there is “shill” bidding in the auction industry — for example — and reply essentially, “Well, there’s no auction [license] law in that state so it’s legal (or not illegal.) As we titled this treatise, “Everything isn’t a license law issue.”
Auctioneers are held to a variety of laws beyond license law. License law is in place to “protect the public” and is permission to work, where if the auctioneer violates the law, the license can be suspended or revoked. Shill bidding could be one of the reasons for such action, but there are other laws that prohibit shill bidding and other malfeasance.
In fact, when it comes to “shill” bidding (chandelier bidding) the Supreme Court of the United States ruled in 1850 that “fictitious bidding” was not permitted and actionable by the high bidder — to “void the sale, or take the goods at the last good faith bid.” This has nothing to do with an auctioneer being licensed or not.
We wrote in 2013 about how charity or benefit auctions are exempt from licensing (in some instances) but are still subject to a variety of other laws: https://mikebrandlyauctioneer.wordpress.com/2013/12/15/the-benefit-auction-exemption/. The same premise here applies to all auctioneers.
Even more recently, auction licensing law was eliminated in New York City and there were many who proclaimed, “There’s no auction law now … it’s the wild west.” We pointed out that wasn’t true either: https://mikebrandlyauctioneer.wordpress.com/2022/05/23/new-york-city-auction-licensing/.
It’s better to think of licensing as an additional layer of laws and rules for auctioneers to follow, rather than the only rules auctioneers have to follow. Likely the most notable is the UCC § 2 and especially the UCC § 2-328, which includes state laws regarding types of auctions, seller bidding, withdrawing property, etc.
The above state law and a myriad of other laws regulate auctioneers in states with licensing as well as in states without licensing. Essentially, licensed auctioneers are held to a higher standard and have a license they risk losing if they don’t pay attention.
Oh, and if you aren’t a licensed auctioneer, you have to especially pay attention as well:
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at Mike Brandly, Auctioneer, Brandly Real Estate & Auction, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.
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