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I quote from court cases involving auctions all the time. Court decisions are important for auctioneers to comprehend to avoid possible lawsuits and associated liability. However, are all court cases mentioning or involving an auctioneer good to use for guidance?

I would offer probably not.

Cases at the Supreme Court of the United States are probably the best ones to use as fact. Yet, consider Supreme Court cases such as Dred Scott v. Sanford (1857) or Plessy v. Ferguson (1896) which have since been considered disgraceful at best and have been overturned subsequent.

However, two or more courts could disagree and we could have no resolution yet on which one is correct or which decision is necessarily binding. For example concerning the issue of whether or not a defendant is deemed to have submitted to police authority:

  • A Tenth Circuit Court said in 1991 (In United States v. Morgan (10th Cir. 1991)) that even the slightest form of compliance, in this case, a momentary hesitation, is enough to constitute submission.
  • A First Circuit Court said in 2011 (In United States v. Camacho (1st Cir. 2011)) that once a defendant responds to questions posed by the police, he or she has submitted to police authority.
  • A D.C. Circuit Court said in 2014 (In United States v. Brodie (D.C. Cir. 2014)) that when a defendant complies with an officer’s orders by engaging in overt acts, such as putting one’s hands on the car, the defendant has submitted to police authority.

With no further clarification, including The Supreme Court of the United States not yet granting certiorari, these “circuit splits” and the like can remain contradictory or otherwise out of concert.

In 1963 the New York Supreme Court (Drew v. John Deere) noted that there were only two (2) types of auctions, based largely on the newly adopted UCC 2-328 all around the United States.

As well, the 1980 case known as Pitchfork Ranch v. Bar TL discussed at length the two types of auctions, never once noting there were other options nor a third type.

Since then the Kansas Appeals Court in 2007 told us that they thought there were three (3) types of auctions: https://mikebrandlyauctioneer.wordpress.com/2016/06/15/toto-ive-a-feeling-were-not-in-kansas-any-more/.

Following that case, the United States District Court of New York in Truman Capital Advisors LP v. Nationstar Mortg., LLC in 2014 said the same thing, and then in 2017 the United States Bankruptcy Appeals Court of the Tenth Circuit in Burgess v. Coffey (In re Wasson Props., Inc.) said the same thing …

For that matter, the National Association of Realtors says there are “essentially” three types of auctions: https://www.nar.realtor/auctions/types-of-auctions.

What is this so-called third-type of auction these three courts (and NAR) are referencing? This type of auction is where the seller can accept or reject the high bid following the close of bidding — reserving the right to accept or reject, commonly known as a “seller confirmation” auction, and necessarily not a without reserve auction and thus with reserve.

We would offer, rather, that it would seem fair to categorize auctions in regard to their contractual nature — in that a without reserve auction essentially constitutes an offer to sell, where a with reserve auction solely invites offers — and auctioneers/sellers are necessarily either offering or not offering.

What if a court said there were four (4) types of auctions: absolute, disclosed reserve, secret reserve and seller confirmation? Why not five (5) types of auctions: absolute, disclosed reserve, secret reserve, seller bidding and seller confirmation? Why not six (6) types of auctions: absolute, disclosed reserve, secret reserve, seller bidding, seller right to withdraw and seller confirmation? Why not seven (7) types: absolute, minimum bid, disclosed reserve, secret reserve, seller bidding, seller right to withdraw and seller confirmation?

It could be the word, “type” that courts are/would be confused about. For example, an ice cream shop might sell 31 flavors [types?] of ice cream, but have two types of delivery — in a cone or in a cup. Yet, we all know there are indeed 31 flavors so maybe there are 31 types of auctions depending upon what ice cream flavor the auctioneer enjoyed just prior?

I also have a pretty good idea that a fair number of auctioneers view the type of auction landscape as binary: It is selling with reserve or without reserve. We suggested the same here: https://mikebrandlyauctioneer.wordpress.com/2009/11/15/different-types-of-auctions/.

Many auctioneers also know that state law in every state in the United States says there are strictly two types of auctions.

As I continue to testify in court cases around the country regarding auction/auctioneer litigation, I find a nearly perpetual number of situations with attorneys, judges and juries (and courts) who don’t quite understand the subtleties of auction law and customary practice — so no surprises here.

Yes, a judge or court — even a District or Bankruptcy Court — could walk in to a Baskin Robbins and see 31 flavors (or types) of ice cream.

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, an Instructor at the National Auctioneers Association’s Designation Academy and Texas Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.