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courthouse-1223280_1920Article III of the United States Constitution sets out the overall requirements for standing.

By standing in our context here we mean, “Who does have a legitimate right to sue … an auctioneer?”

In a somewhat recent discussion regarding opening up a so-called non-existent “tie bid” in disregard to the UCC 2-328, contract law and legal customary practice, the issue of standing became material.

For instance, an auctioneer says, “Sold!” and gestures to his bidder #128, when another bidder holds his bidder card up (#410.) The auctioneer concludes he has a so-called “tie bid” and reopens the bid.

Our question we hope to answer is whether or not auctioneers should not reopen the bid to keep the buyer (#128) from suing us, or reopen the bid so the other bidder (#410) doesn’t sue us, although it seems clear there is no such thing as a tie bid: https://mikebrandlyauctioneer.wordpress.com/2016/07/28/terms-which-say-there-are-tie-bids/

Of course, virtually anyone can sue anyone else. However, courts look at standing before proceeding with these cases. If the plaintiff lacks standing, the lawsuit is customarily dismissed.

Standing stems from Article III of the constitution and is defined by the Supreme Court of the United States as follows. The irreducible constitutional minimum of standing contains three elements, referencing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992):

    1. The plaintiff must have suffered an “injury in fact”—an invasion of a legally protected interest which is (a) concrete and particularized, and (b) “actual or imminent, not ‘conjectural’ or ‘hypothetical,'”
    2. There must be a causal connection between the injury and the conduct complained of—the injury has to be “fairly … trace[able] to the challenged action of the defendant, and not … the result of the independent action of some third party not before the court.”
    3. It must be “likely,” as opposed to merely “speculative,” that the injury will be “redressed by a favorable decision.

If our auctioneer here keeps #128 in contract, and denies bidder #410 the right to bid further, would #410 have standing? If our auctioneer reopened the bid to allow #410 to bid, would #128 have standing?

Actually, the UCC 2-328 gives us a hint as to the answer. In the UCC 2-328 (4) where “If the auctioneer knowingly receives a bid on the seller’s behalf or the seller makes or procures such a bid, and notice has not been given that liberty for such bidding is reserved, the buyer may at his option avoid the sale or take the goods at the price of the last good faith bid prior to the completion of the sale.” it’s the “buyer” who has recourse, not just any bidder.

In countless now-famous lawsuits such as Hoffman v. Horton, 212 Va. 565, 186 S.E.2d 79 (Va. 1972) and Callimanopulos v. Christie’s Inc., United States District Court for the Southern District of New York, 621 F. Supp. 2d 127 (2009), the plaintiff is the bidder who was declared the buyer, only to have the auctioneer reopen (void) that contract; these cases are important not only for their conclusions, but also for who had standing — the very bidders who had their bids voided.

Relatedly, in the landmark case of John M. Drew v. John Deere Company of Syracuse, 07/01/63, Supreme Court of New York, Appellate Division, Fourth Department, the plaintiff (Mr. Drew’s) standing was questioned since he wasn’t the buyer. In other words, the plaintiffs appear to be our #128 much more often — and rarely if ever our #410.

Could a seller sue an auctioneer regarding reopening a bid? Surely the likelihood of a lawsuit is less if the auctioneer reopens the bid; yet, if reopening heightens the chances of a lawsuit by the legitimate high bidder, isn’t not reopening saving the seller from being a defendant in a similar lawsuit? And isn’t it our job as auctioneers to protect our clients? It is.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.