There is a “new” case being currently litigated (Will McLemore et al. v. Tennessee Auction Commission et al., in the United States District Court for the Middle District of Tennessee Nashville Division, September 25, 2023) concerning Tennessee’s licensing of “online auctioneers.”
This argument centers on that such would restrict protected free speech. Indeed the First Amendment says the government cannot restrict speech, the press, assembly, etc. As we explain here, actually the government can restrict free speech — it’s never been an unfettered right.
If online auctioneers are held exempt from licensing because online auctions constitute free speech, it certainly seems live auctioneers (live bid calling) would as well be exempt from licensing for the very same reason? Yet, auctioneers are currently required to be licensed in many states including Tennessee.
As we’ve suggested, it’s not quite that simple. Free speech can be infringed upon by the government if there is a governmental interest and licensing or other regulations are thoughtfully tailored toward furthering that interest. For instance, let’s say licensing requires schooling, testing, and continuing education which then helps to protect the public.
What is “public protection” in this regard? Licensing could be justified — for example — by noting that 124 complaints were filed last year, but with licensing and continuing education, only 17 were filed this year. Here, the government likely has a justifiable interest in protecting the public from 107 complaints.
Or do they? What were these 107 complaints about? The seller complains an item should have been sold in the front yard instead of the side yard? The auctioneer taking too long to say “Sold!?” The auctioneer’s niece bidding at the auction — and she “shouldn’t be allowed?” The auctioneer sold $5,001 worth of tools for only $5,000?
It’s more than just the number of complaints. Statewide licensing should show a pattern of behavior that has substantially caused public harm and the license lessening that harm to sellers, bidders, and buyers at auction. We shouldn’t license anything “just to license it.”
We’ve testified in two states regarding auctioneer licensing and auctioneer continuing education. We have consistently held that licensing (schooling, testing) and continuing education are reasonable as more complaints — many substantial and warranted — come from states with no licensing and related protections.
However, licensing is not always good nor prudent. If the licensing agency only exists to take largely frivolous complaints to justify its existence, then that isn’t a good way to license any auctioneers. On the other hand, if the licensing agency handles legitimate complaints and presumes the auctioneer innocent unless proven guilty, that’s likely prudent oversight.
Auctioneer licensing (regulation) should also be reasonable. For instance, knowingly passing a law that can’t possibly be complied with, noting that the auctioneer will “just have to figure it out …” isn’t a good way to regulate auctioneers. Additionally, the regulatory agency should freely share with every auctioneer how they interpret those laws that govern the auction industry.
Will this Tennessee issue be resolved by preserving live auctioneer and online auctioneer licensing for property located in — or the licensee doing business in — Tennessee? Possibly. Any state attempting to license out-of-state commerce seems entirely misguided.
Certainly, there have been deregulation trends in the past 20 years, followed by regulation trends. No clear big changes seem imminent … well … until they do. We wrote more about the “good” and “bad” regarding auction licensing here: https://mikebrandlyauctioneer.wordpress.com/2009/12/25/auctioneer-licensing-good-or-bad/.
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 formerly at 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 Auction 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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