“Going Once, Going Twice . . .”: The Dubious Legality and Necessity of North Carolina’s Auctioneer License Statute

BY Enrique Armijo

Calling an auction in North Carolina without a state-granted license is illegal. More than half the states in the United States have also criminalized unlicensed auctioneering. North Carolina claims to restrict who can call auctions to protect the public from frauds. It has even gone so far as to claim the restriction applies to online auctioneers.

The history of auctioneering, however, as manifested in a range of self-regulatory protections developed over time to protect actors in the State’s own loose-leaf tobacco auction market, demonstrates the capacity of auction systems to deter fraudulent conduct by auctioneers without legislative intervention. In addition, State constitutional law, which protects the individual’s right to practice the trade of his choice, bars use of the police power to limit occupational entry. And auctioneering’s status as an expressive occupation raises free speech concerns with imposing a prior restraint on who can speak (or more precisely, be paid to speak) in such a manner. Finally, criminal fraud and common law tort and contract actions have long served to protect bidders wronged by fraudulent auctioneers or sellers.

Given the incentives to act honestly during auctions for goods, the legitimate constitutional concerns an auctioneer licensing requirement raises, and the effectiveness and availability of buyer-side ex post remedies, an ex ante, state-imposed limitation on auction calling is both legally suspect and practically unnecessary.

 

DOWNLOAD PDF | 91 N.C. L. Rev.1887 (2013)