Southeastern Legal Foundation Client Challenges Nashville’s Unconstitional Online Auction Licensing Scheme

Nashville, TN: The government frequently imposes licensing requirements. But all too frequently, those requirements are unconstitutional because they violate First Amendment and the Commerce Clause. Southeastern Legal Foundation has once again joined forces with Beacon Center of Tennessee and filed a federal lawsuit challenging one of these unconstitutional licensing regimes – this time, it is Tennessee’s imposition of an auctioneer license on online auctions.

When Will McLemore started McLemore Auction Company in 2006, it was one of the first online auction houses in the country. At the time, most auctioneers practiced exclusively in live auctions, but with the growth of online shopping, online auctions presented new opportunities for auctioneers to grow their businesses around the country. Will, with his traditional live-auction background, had already gotten his auctioneering education, served as an apprentice, and gotten his auctioneer license—all requirements that he believes to be too overbearing.

“I am sure the auctioneer license requirement has kept interested entrepreneurs out of the business. The apprenticeship is the most onerous requirement by far. It can keep qualified service providers from being able to operate independently in the state,” Will argues. “A lot of harm has been done in the name of protecting the public. Instead, the auction law protects the industry from competition and from having to adapt to innovations in the industry.”

When the Tennessee General Assembly passed a law in 2019 to further regulate online auctions, Will knew he had to do something about it. “I’ve been working to prevent the State of Tennessee from regulating online auctions since 2014,” he says. While Will is licensed, he is still directly hurt by these new regulations because Will’s auction managers, people who have helped him build the business, are unlicensed and can no longer work.

Braden Boucek, SLF director of litigation explains, “The lawsuit we filed last year was just the next step in carrying out a long campaign to preserve the freedom we have had to operate since 2006 when the legislature deregulated online auctions. There are 25 states that do not regulate auctioneers at all. The market works just fine in these states.”

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