D.J. Bauer, individually and d/b/a AmbroseBauer Trains (LLC) v. PA State Board of Auctioneer Examiners , 154 A.3d 899 ( 2017 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Drew J. Bauer, individually and :
d/b/a AmbroseBauer Trains (LLC), :
:
Petitioner :
:
v. : No. 501 M.D. 2015
: Submitted: June 10, 2016
Pennsylvania State Board of :
Auctioneer Examiners, :
:
Respondent :
BEFORE: HONORABLE P. KEVIN BROBSON, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION BY
SENIOR JUDGE COLINS FILED: February 16, 2017
Drew J. Bauer (Bauer), individually and doing business as
“AmbroseBauer Trains (LLC),” petitions for review of an order of the State Board
of Auctioneer Examiners (Board) upholding citations issued against him and
AmbroseBauer Trains, LLC (ABT) for violations of the Auctioneer Licensing and
Trading Assistant Registration Act (the Act).1 We affirm.
In 2009 and 2010, Bauer auctioned toy trains using AuctionsByTM, a
computer auction program that he owned. (Certified Record (C.R.) Item 34, Exs.
C-5, C-6, C-7 & D-1 ¶¶4-6, Reproduced Record (R.R.) at 212-246, 248.) Bauer
conducted these auctions through his company, ABT. (Id., Exs. C-5, C-6, C-7 &
1
Act of December 22, 1983, P.L. 327, as amended, 63 P.S. §§ 734.1–734.34.
D-1 ¶5, R.R. at 212-246, 248.) Section 3(a) of the Act provides that it is unlawful
for any person to engage in the profession of auctioneer, hold himself out as an
auctioneer, conduct an auction, or offer to conduct auctions in this Commonwealth
without a license. 63 P.S. § 734.3.2 In addition, the Act requires a license for
operation of an auction company. Former 63 P.S. § 734.10(a); see also 63 P.S. §
734.3(a)(1), (e.1)(1).3 Bauer is an attorney licensed to practice law in
Pennsylvania. (C.R. Item 34, Hearing Transcript (H.T.) at 52 & Ex. D-1 ¶1 & D-5,
R.R. at 186, 247, 426.) Bauer, however, held no license to practice auctioneering
and ABT held no license to operate as an auction company. (Id., H.T. at 26 & Ex.
C-1, R.R. at 160, 193-94.)
On May 20, 2010, the Commonwealth filed citations against Bauer
and ABT charging that Bauer had conducted auctions without a license, charging
that ABT had operated as an unlicensed auction company, and imposing a $1,000
fine on Bauer and a $500 fine on ABT. (C.R. Items 2 & 3, Citations, R.R. at 5-6.)4
2
At the time of the events at issue here, Section 3(a) of the Act provided that “it is unlawful for
any person to engage in or carry on the profession of auctioneer, to conduct a sale at auction, to
hold himself out as an auctioneer or as an apprentice auctioneer or to offer to conduct sales at
auction in this Commonwealth without first obtaining a license from the board as an auctioneer
or apprentice auctioneer.” In 2016, subsequent to both the events at issue here and the Board’s
order, the Act was substantially amended. See Act of July 20, 2016, P.L. 789 (2016 Legislation).
The 2016 Legislation expanded the definition of “auction” with respect to online auctions,
changed the numbering of certain sections of the Act, and made changes to numerous sections of
the Act. The 2016 Legislation did not change the requirement of Section 3(a) of the Act that it is
unlawful to engage in auctioneering, hold oneself out as an auctioneer, or conduct or offer to
conduct auctions without a license.
3
At the time of the events at issue here, this requirement was set forth in Section 10(a) of the
Act. Although Section 10 of the Act was repealed by the 2016 Legislation, the 2016 Legislation
did not eliminate the requirement that auction companies be licensed and moved the licensure of
auction companies to Section 3 of the Act. See 63 P.S. § 734.3(a)(1), (e.1).
4
Although the citation against ABT referenced Section 9(a) of the Act, which did not govern
auction companies, it stated that the charge against ABT was that it was not “licensed as an
(Footnote continued on next page…)
2
Bauer and ABT denied the violations but did not appear at an August 2010 hearing
on the citations and the hearing examiner issued orders sustaining the citations.
Bauer and ABT appealed these orders to the Board, asserting, inter alia, that they
had reason to believe that the hearing would not be held on that date, and the
Board, on November 15, 2013, vacated the orders and remanded the matter to the
hearing officer for a new hearing.
Before the new hearing was scheduled, Bauer and ABT filed
preliminary objections seeking dismissal of the citations on the ground that Bauer
was an attorney, which the Board overruled on March 13, 2014. Bauer also filed a
petition for review in this Court’s original jurisdiction against the Commonwealth,
the Board and other Commonwealth parties docketed at No. 287 M.D. 2014
(Commonwealth Court action), and sought a preliminary injunction to enjoin the
hearing on the citations, which was scheduled for August 11, 2014. On August 7,
2014, following a hearing at which the parties presented a stipulation of facts and
argument, this Court denied Bauer’s motion for preliminary injunction for failure
to exhaust administrative remedies and on the ground that the petition for review
“is not likely to succeed on the merits in that Petitioners have failed to state that
conducting auctions is comparable to the practice of law.” (8/7/14 Order in 287
M.D. 2014, R.R. at 770-771.)5
(continued…)
auction company.” (C.R. Item 2, Citation, R.R. at 6.) Bauer and ABT had ample notice that the
citation charged a violation of Section 10(a) of the Act, requiring licensure of auction companies,
as the hearing examiner ruled that the reference to Section 9(a) was a typographical error and
that the citation against ABT charged a violation of Section 10(a) almost four years before the
evidentiary hearing at which Bauer and ABT contested the citations. (C.R. Item 8, August 2010
Hearing Examiner Order at 1 n.1, R.R. at 12.)
5
The Commonwealth Court action was subsequently dismissed without prejudice at Bauer’s
request in September 2014.
3
On August 11, 2014, the hearing examiner held a hearing on the
citations at which Bauer appeared on his own behalf and as attorney for ABT. At
this hearing, Bauer and a Department of State professional conduct investigator
testified. The parties also introduced documentary evidence, including a 2009
client agreement hiring Bauer to sell a consignment of toy trains by auction, April
2010 and May 2010 printouts from ABT’s website, www.ambrosebauer.com, and
the stipulation of facts entered into by Bauer and the respondents in the
Commonwealth Court action. The parties were given the opportunity to file post-
hearing briefs and filed such briefs after the hearing. On December 18, 2014, the
hearing examiner issued a 61-page proposed adjudication and order concluding
that Bauer had engaged in the practice of auctioneering without a license in
violation of Section 3(a) of the Act, concluding that ABT had operated as an
auction company without a license in violation of Section 10(a) of the Act, and
upholding both citations. Bauer and ABT filed exceptions to the hearing
examiner’s proposed adjudication and order. On September 15, 2015, the Board
issued an order adopting the hearing examiner’s proposed adjudication and
upholding the citations. This appeal followed.6
Bauer argues that the Act’s license requirements cannot apply to him
because he is an attorney, contending that the Act cannot constitutionally apply to
6
Bauer filed this petition for review in both this Court’s original jurisdiction and its appellate
jurisdiction. By Order entered February 3, 2016, this Court sustained the Board’s preliminary
objections to the portion of the petition for review addressed to the Court’s original jurisdiction,
which had sought a declaratory judgment and injunctive relief. This matter is therefore before us
solely in our appellate jurisdiction as an appeal from the Board’s order. Our review is limited to
determining whether constitutional rights were violated, whether an error of law was committed,
or whether necessary findings of fact are supported by substantial evidence. Stiles v. Auctioneers
Examiners Board, 816 A.2d 1254, 1255 n.1 (Pa. Cmwlth. 2003).
4
attorneys and that auctions by attorneys fall within the Act’s exemptions from
license requirements.7 We do not agree.
The Pennsylvania Supreme Court has exclusive jurisdiction to
regulate the conduct of attorneys in the practice of law in this Commonwealth. Pa.
Const., art. V, § 10(c) (“The Supreme Court shall have the power to prescribe
general rules . . . for admission to the bar and to practice law, and the
administration of all courts and supervision of all officers of the Judicial Branch”);
Commonwealth v. Stern, 701 A.2d 568, 570, 572-73 (Pa. 1997); Maunus v. State
Ethics Commission, 544 A.2d 1324, 1325-26 (Pa. 1988). The fact that a statute
regulates both lawyers and non-lawyers does not automatically make its
application to lawyers constitutional. Shaulis v. Pennsylvania State Ethics
Commission, 833 A.2d 123, 132-33 (Pa. 2003); Gmerek v. State Ethics
Commission, 751 A.2d 1241, 1254 (Pa. Cmwlth. 2000) (en banc), aff’d by an
equally divided court, 807 A.2d 812 (Pa. 2002). The application to attorneys of
7
This Court notes that Bauer’s brief is in violation of Pa. R.A.P. 2135(a), which provides, with
exceptions not relevant here, that “[u]nless otherwise ordered by an appellate court: (1) [a]
principal brief shall not exceed 14,000 words.” The only portions of a brief that may be
excluded from this word count limitation are “[s]upplementary matters, such as, the cover of the
brief and pages containing the table of contents, tables of citations, proof of service and any
addendum containing opinions, signature blocks or any other similar supplementary matter
provided for by these rules.” Pa. R.A.P. 2135(b). Nothing in Rule 2135 permits exclusion of
footnotes from the 14,000 word limit. Bauer’s brief is 74 pages in length and contains 109
footnotes, many of which are lengthy. Bauer represented to this Court that his brief complied
with Rule 2135 by excluding footnotes from the word count that he ran on the brief.
(Petitioner’s Br. at 75 (stating that the supplementary matter excluded from the word count
consists of “the cover of the brief, pages containing the table of contents, tables of citations,
proof of service, this Certificate of Compliance, footnotes, and any addendum containing
opinions, signature block or any other similar supplementary matter provided for the rules”)
(emphasis added).) This attempt to evade the limitations on the length of briefs is disingenuous
and unprofessional. When the word count is properly calculated and the 109 footnotes are
included, Bauer’s brief contains 22,246 words. Rather than strike the brief, the Court has chosen
to issue a reasoned opinion dealing with the issues presented. Counsel is admonished that
similar conduct in the future will result in the brief being stricken, as well as sanctions.
5
statutes governing conduct unrelated to the legal profession, however, does not
constitute regulation of the practice of law and is not barred by the Supreme
Court’s exclusive jurisdiction over the practice of law. P.J.S. v. Pennsylvania State
Ethics Commission, 723 A.2d 174, 178 (Pa. 1999); Gmerek, 751 A.2d at 1252-54.
As the Supreme Court has made clear,
the jurisdiction of this court is not infringed when a regulation
aimed at conduct is applied to all persons, and some of those
persons happen to be attorneys.
* * *
To hold … that the mere status of “attorney” exempts one
from meeting the necessary professional regulations which
flow from whatever position one holds in addition to that of
“attorney” is absurd.
P.J.S., 723 A.2d at 178.
Whether a statute governing the actions of both lawyers and non-
lawyers constitutes an unconstitutional regulation of the practice of law depends on
whether it attempts to control the conduct of lawyers in rendering professional
legal services to their clients. Gmerek, 751 A.2d at 1254. The types of services
that have been held to constitute professional legal services are generally those
involving legal advice to clients, preparation of documents for clients involving
legal principles beyond the knowledge of ordinary laypersons, and the appearance
on behalf of clients before tribunals whose actions could affect the clients’ rights.
Office of Disciplinary Counsel v. Marcone, 855 A.2d 654, 660 (Pa. 2004); Gmerek,
751 A.2d at 1255.
Bauer’s conduct here does not constitute the rendering of professional
legal services. Bauer’s services in conducting auctions consisted of selling toy
trains at auction, not providing legal advice to his clients, preparing documents for
his clients that required legal training, or appearing before any tribunal. Bauer’s
6
client contracts provided that the client hires Bauer “for the limited purpose of
selling the Consignment,” which it defined as “certain toy train(s) and/or related
item(s)” owned by the client, and provided that the “relationship arising from this
Agreement is limited solely to the offer, sale and transfer of the Consignment and
that the Attorney [Bauer] does not represent the Client, or provide the Client legal
advise [sic], or legal service, in or on any other matter.” (C.R. Item 34, Ex. C-7
¶¶2, 4, 5 & D-3 ¶¶2, 4, 5, R.R. at 236, 255.) The auctioning of toy trains or other
merchandise does not constitute the practice of law. While Bauer’s auctions may
involve specialized knowledge or skill concerning how to run an auction so as to
obtain the highest or most favorable offer or concerning the valuation of the items
being sold, that knowledge and skill is unrelated to legal training and competence
in the practice of law. Requiring Bauer to obtain an auctioneering license therefore
does not violate the Supreme Court’s exclusive jurisdiction over the practice of
law.
Bauer argues that even if his auctions do not constitute legal services,
the Rules of Professional Conduct adopted by the Supreme Court regulate the
providing by lawyers of nonlegal services and that the Act conflicts with the
confidentiality requirements of Rule 1.6 of the Rules of Professional Conduct and
with other Rules of Professional Conduct. The flaw in these arguments is that the
Rules of Professional Conduct apply to nonlegal services only where the attorney
is also providing legal services to the client or the nonlegal services could
reasonably be understood by the client to be legal services. Rule 5.7 provides that
the Rules of Professional Conduct apply to nonlegal services “that might
reasonably be performed in conjunction with and in substance are related to the
provision of legal services” where there is potential for confusion because the
7
nonlegal services “are not distinct from legal services provided to that recipient” or
because the recipient could reasonably believe that he is receiving legal services.
Pa. R.P.C. 5.7(a)-(c), (e). Here, Bauer’s contracts demonstrate that he was
conducting auctions for clients for whom he was providing no other services and
the auctioning of toy trains is not an activity that would reasonably be understood
as involving legal services unless it was provided in conjunction with other
services that involved legal advice or the exercise of legal training.
Bauer’s claim that the Act by its terms does not apply to attorneys
likewise fails. At the time of the events at issue here, Section 3(h)(3) of the Act
provided that “[t]he requirement to obtain a license under this act does not apply to
sales at auction in the following circumstances: … (3) To a sale conducted by or on
behalf of a person appointed by judicial order or decree.” Former 63 P.S. §
734.3(h)(3).8 Contrary to Bauer’s assertions, this does not exempt attorneys from
the requirement of an auctioneering license. Rather, the clear intent of this
exemption is to permit auctions by persons appointed by a court to conduct an
auction or to sell the property being auctioned, not to authorize individuals to
auction property without a license simply because they have been appointed by a
court to some position or responsibility completely unconnected to any auction of
any property. The fact that Bauer has been admitted by the Pennsylvania Supreme
Court to practice law in Pennsylvania is not an appointment to sell or auction
property; it is a determination by the Supreme Court that he may practice law. As
explained above, auctioning toy trains is not the practice of law. Because Bauer
8
The 2016 Legislation moved the exemptions that had been in Section 3(h) of the Act to a new
Section 3.1, but made no change in the language of the exemption that had been set forth in
Section 3(h)(3). See 63 P.S. § 734.3.1(3).
8
did not show that he was appointed by a court to auction property or that he was
appointed by a court to sell the toy trains that he auctioned in 2009 and 2010, the
exemption for persons appointed by judicial order or decree does not apply here
and cannot provide a defense to the citations.9
Nor does the exemption in the Act for sales from a decedent’s estate
bar the citations against Bauer and ABT. At the time of the events at issue here,
Section 3(h)(4) of the Act provided an exemption from licensure for “a sale
conducted in the settlement of any decedent’s estate.” Former 63 P.S. §
734.3(h)(4).10 While Bauer has represented decedents’ estates and has sold toy
trains for decedents’ estates, he testified that estates constituted only approximately
one-third of the clients for whom he has auctioned toy trains. (C.R. Item 34, H.T.
at 46 & Ex. D-1 ¶2, R.R. at 180, 247.) Indeed, nothing in the 2009 client
agreement indicated that a decedent’s estate was involved or that the toy trains to
be auctioned under that agreement were owned by an estate. (Id., Ex. C-7, R.R. at
236-246.) Because Bauer’s testimony established that most of his sales did not fall
within the exemption for estate sales, the hearing examiner and the Board
reasonably concluded that this exemption did not provide a defense to the charge
9
Bauer argues that applying the requirement of an auctioneering license to attorneys serves no
purpose because attorneys have sufficient education and training and because they are subject to
regulation in their practice of law. This is a challenge to the wisdom of the Act, an issue that can
be determined only by the legislature, not by this Court. Khan v. State Board of Auctioneer
Examiners, 842 A.2d 936, 947 (Pa. 2004). Moreover, the education requirements for an
auctioneering license consist of subjects that attorneys would not necessarily have studied in law
school. See 49 Pa. Code § 1.11(c) (providing that the areas of study for an auctioneering license
are “[a]udience communications,” “[p]rocurement of merchandise for auction,” “[a]ppraisal,”
“[a]uction law,” “[p]reparation for auction,” and “[c]onducting an auction”).
10
The 2016 Legislation amended the language of this exemption and it now exempts sales
“conducted in the settlement of any decedent’s estate conducted by the executor or administrator
of the estate.” 63 P.S. § 734.3.1(4).
9
that Bauer had conducted auctions for which the Act required an auctioneering
license.
Bauer also contends that the Commonwealth did not prove that he
violated the licensure requirement because his auctions were online auctions and
that the Commonwealth did not prove that ABT was required to obtain an auction
company license. In this administrative proceeding, the burden was on the
Commonwealth to prove by a preponderance of the evidence that Bauer and ABT
committed the violations of the Act with which they were charged. Agostino v.
Township of Collier, 968 A.2d 258, 269-70 (Pa. Cmwlth. 2009); Boguslawski v.
Department of Education, 837 A.2d 614, 617 n.3 (Pa. Cmwlth. 2003); Samuel J.
Lansberry, Inc. v. Pennsylvania Public Utility Commission, 578 A.2d 600, 602 (Pa.
Cmwlth. 1990). The Commonwealth satisfied its burden of proof on both of these
issues.
At the time of the events in question, the Act defined “auction” and
“sale at auction” as
[t]he offer to sell property by an auctioneer or apprentice
auctioneer to the members of an audience congregated for the
purpose of making bids for the purchase of the property in an
effort by the auctioneer or apprentice auctioneer to advance
the amount of the bids to obtain the highest or most favorable
offer. The term “auction” or “sale at auction” excludes any
sale conducted through an online Internet bidding platform.
Former 63 P.S. § 734.2 (emphasis added).11 Bauer’s claim that all of his auctions
were “conducted through an online Internet bidding platform” and that his actions
therefore did not violate the Act fails for three reasons.
11
The 2016 Legislation removed the exclusion of sales conducted through an “online Internet
bidding platform.” The Act now defines “auction” and “sale at auction” as follows:
(Footnote continued on next page…)
10
First, the Commonwealth introduced evidence that Bauer conducted
in-person auctions in addition to online auctions. The printouts from ABT’s
website show that Bauer represented in 2010 that he conducted private auctions
that some bidders attended in person. Bauer testified that he owns the ABT
website, that ABT’s actions are his actions, and that information in the website
printouts was authored by him. (C.R. Item 34, H.T. at 42-43, 54, R.R. at 176-177,
188.) The ABT website stated that Bauer conducted private auctions, repeatedly
referred to bidders that “attend” his private auctions, distinguished bidders who
(continued…)
(1) A method for the sale or lease of property, or any interest in property, by
means of a verbal exchange, regular mail, telecommunications, the Internet, an
electronic transmission or a physical gesture between an auctioneer, apprentice
auctioneer or auction company and one or more potential purchasers or lessees
through the solicitation of offers, in the form of bids, in an effort to advance the
amount of the bids to obtain the highest or most favorable offer.
(2) The term “auction” or “sale at auction” includes:
(i) live auctions;
(ii) online auctions;
(iii) real-time auctions;
(iv) extended auctions;
(v) any similar such events as may be devised with the development of
technology; and
(vi) any combination of the foregoing.
(3) The term “auction” or “sale at auction” does not include a negotiated
transaction. Nothing in this act is intended to deny an auctioneer, apprentice
auctioneer or auction company a commission or other compensation earned for
auction-related activities that result in or facilitate a negotiated transaction by
the seller, or other agent of the seller, and a buyer.
63 P.S. § 734.2 (emphasis added).
11
“attend” such auctions from those who bid online, and stated that payment by high
bidders at private auctions was required “before they leave the premises on the day
of the Auction.” (Id., Exs. C-5, C-6, R.R. at 212, 214, 232-235; see also Hearing
Examiner’s Proposed Adjudication and Order Findings of Fact (Hearing Examiner
F.F.) ¶¶14-16, R.R. at 483-485.) These admissions by Bauer are sufficient to
support the conclusion that Bauer had in fact conducted non-online auctions
without a license.
Contrary to Bauer’s assertions, the stipulation of facts in the
Commonwealth Court action did not bar the Commonwealth from proving that
Bauer conducted in-person auctions. Although the Commonwealth and Bauer
stipulated in that document that “Bauer uses AuctionsByTM to auction the
aforementioned toy trains through his company’s, AmbroseBauer Trains, LLC,
website” and that “Bauer admits that he has conducted approximately 210 internet
auctions” (C.R. Item 34, Ex. D-1 ¶¶5-6, R.R. at 248), nothing in the stipulation
states that online and internet auctions were the only auctions that Bauer conducted
or that Bauer did not conduct in-person private auctions. To the contrary, with
respect to private auctions, the stipulation of facts states only that “Bauer’s
company website states that he is conducting private auctions.” (Id., Ex. D-1 ¶7,
R.R. at 248.)
Second, even if all of Bauer’s auctions were conducted on the
internet, the hearing officer and Board correctly concluded that the auctions
conducted by him using his AuctionsByTM program did not qualify as sales through
an “online Internet bidding platform.” The Act defined “online Internet bidding
platform” as
[h]ardware or software architecture that provides or enables
computer access by multiple users to an interactive computer
12
server for the purpose of allowing users to offer property for
sale and that does not examine, set the price or prepare the
description of the property to be offered.
Former 63 P.S. § 734.2. This definition does not encompass all online auctions.
Rather, it excludes from the definition of “auction” and “sale at auction” only sales
through internet sites on which multiple users can independently sell property.
AuctionsByTM was not an internet site that multiple users independently access to
sell property; it was a computer program owned by Bauer that was run by him and
by auction houses to which he sold the program. (C.R. Item 34, Ex. D-1 ¶4, R.R.
at 248.) In his AuctionsByTM auctions, the internet site that Bauer used to sell toy
trains was the website of his company, ABT, not a website where the general
public could auction property without Bauer’s participation and involvement. (Id.,
Ex. D-1 ¶5, R.R. at 248; see also id., Ex. C-5, R.R. at 212.) The evidence also
showed that Bauer examined, set the price, and prepared descriptions of the toy
trains being auctioned, placed these descriptions and prices on the ABT website,
and did not merely offer a website through which others could auction toy trains
under their own descriptions and pricing. (Id., Exs. C-5, C-6, R.R. at 212-213,
215-222, 234-235; see also Hearing Examiner F.F. ¶¶18, 21, R.R. at 485-487;
Board Final Memorandum Order at 4-5.) Because Bauer’s AuctionsByTM auctions
were not conducted through an internet site that permitted multiple users to sell
property and that did not examine, set the price, or prepare descriptions of the
property being sold, they were not sales “conducted through an online Internet
bidding platform” and were auctions for which the Act requires an auctioneering
license.12
12
Contrary to Bauer’s assertions, nothing in the testimony of the Department of State
professional conduct investigator shows that Bauer’s auctions were conducted through an
“online Internet bidding platform.” What constitutes an “online Internet bidding platform” is a
(Footnote continued on next page…)
13
Third, the Commonwealth was not required to prove that Bauer
actually conducted auctions that required a license. The citation against Bauer
charged that he violated Section 3(a) of the Act. Section 3(a) not only prohibits the
conducting of auctions without a license, but also provides that it is unlawful for a
person to “hold himself out as an auctioneer” or offer to conduct auctions without
obtaining a license from the Board. Former 63 P.S. § 734.3(a); see also 63 P.S. §
734.3(a)(1). Under the Act, any individual “who sells or offers or attempts to sell
property at auction” is an “auctioneer.” Former 63 P.S. § 734.2; see also 63 P.S. §
734.2. Although the citation also stated that Bauer “conducts auctions in this
Commonwealth without being licensed to do so by the Board” (C.R. Item 3,
Citation, R.R. at 5), Bauer admitted that he “understands that the act of merely
advertising ‘auctions’ would fall within the coverage of the May 20, 2010 Citation
as to him.” (Respondents’ Exceptions to the Proposed Order of the Hearing
Officer at 14 n.41, R.R. at 551.) Because Bauer’s representations on the ABT
website show that he held himself out as conducting in-person private auctions, the
evidence before the hearing officer and Board was sufficient to uphold the citation
against him even if all auctions that Bauer actually conducted had been conducted
through an “online Internet bidding platform.”
The Commonwealth likewise satisfied its burden of proving that ABT
was required to obtain an auction company license. At the time of the events at
issue here, the Act defined “auction company” as “[a] company which, as part of
(continued…)
question of law. It is the facts concerning the website through which auctions are conducted, not
the labels or nomenclature used by a witness, that determine whether an auction was conducted
through an “online Internet bidding platform.” Neither the investigator nor Bauer testified that
the ABT website was open to users to conduct auctions not run by Bauer.
14
its business, arranges, manages, sponsors, advertises or carries out auctions,”
former 63 P.S. § 734.2, and Section 10(a) of the Act provided:
Requirement for license. -- Every person, except an individual
who is licensed as an auctioneer or an individual who is
licensed to operate an auction house, shall, before operating
an auction company, obtain a license from the board to
operate the auction company. Every partnership, association
or corporation must obtain a license even though a member or
officer is licensed as an auctioneer.
Former 63 P.S. § 734.10(a).13 Bauer contends that ABT was a sole proprietorship
and was not required to obtain a license because it was not a partnership,
association, or corporation. This argument fails for two reasons.
First, evidence was introduced that ABT operated as a partnership
when it advertised and carried out auctions in 2009. The 2009 client contract
stated that “AmbroseBauer Trains (hereinafter “AmbroseBauer”) is a Pennsylvania
General Partnership comprised of Paul V. Ambrose and Drew J. Bauer” and was
signed by Bauer and Mr. Ambrose as partners. (C.R. Item 34, Ex. C-7 at 1 ¶3 & at
11, R.R. at 236, 246.)
Second, Section 10(a) was not limited to partnerships, associations
and corporations, and required that “[e]very person … shall, before operating an
auction company, obtain a license from the board to operate the auction company.”
13
The 2016 Legislation redefined “auction company,” and it is now defined as “[a] legally
recognized entity that sells or attempts to sell property at auction or performs, or offers to
perform, any of the functions or activities requiring licensure as an auction company under
section 3(a)(1)[,] … includ[ing] any legally recognized entity that holds itself out as engaged in
the business of selling property at auction”. 63 P.S. § 734.2. The 2016 Legislation moved the
licensure of auction companies to Section 3 of the Act, as was noted above, and also modified
the language of former Section 10(a). See 63 P.S. § 734.3(e.1)(1) (providing that “[e]very
legally recognized entity shall, before operating as an auction company, obtain an auction
company license issued by the board”).
15
Former 63 P.S. § 734.10(a) (emphasis added). The Act, at the time at issue here,
defined “person” as including any “individual, partnership, association,
corporation, limited liability company or other entity.” Former 63 P.S. § 734.2.
When ABT advertised and carried out auctions in 2010, its name, AmbroseBauer
Trains, LLC, identified it as a limited liability company. See 15 Pa. C.S. §
8904(a)(3) (requiring that the name of a limited liability company include “the
term ‘company,’ ‘limited’ or ‘limited liability company’ or an abbreviation of one
of those terms”), repealed by the Act of October 22, 2014, P.L. 2640.14 While
Bauer claims that ABT was a sole proprietorship owned by him in 2010, that
contention is contradicted by the fact that ABT’s name, with its LLC abbreviation,
would not have constituted a valid fictitious name for a sole proprietorship owned
by an individual. See 54 Pa. C.S. § 311(b)(1) (prohibiting registration of fictitious
names that “contain a corporate designator such as ‘corporation,’ ‘incorporated’ or
‘limited’ or any derivation or abbreviation thereof unless the entity or at least one
entity named in the application for registration of fictitious name is a corporation”).
The document that Bauer introduced in evidence to support his claim that ABT
was a sole proprietorship was not inconsistent with ABT’s status as a limited
liability company in 2010, as it was a 2014 fictitious name filing and was for the
name “AmbroseBauer Trains,” not “AmbroseBauer Trains, LLC.” (C.R. Item 34,
Ex. D-2, R.R. at 251-253.) Moreover, this filing identified “AmbroseBauer Trains,
LLC” as an “[e]ntity” that had “withdrawn from the business” and identified Bauer
as the “[i]ncorporator” of ABT. (Id.)
Bauer also argues that ABT did not arrange, manage, sponsor,
advertise or carry out auctions to which the Act applied. This argument is without
14
This requirement now appears in 15 Pa. C.S. § 204(c).
16
merit. There was ample evidence before the hearing examiner and Board that
Bauer conducted auctions through ABT and that ABT’s website advertised toy
train auctions. (C.R. Item 34, Exs. C-5 & D-1 ¶5, R.R. at 212-220, 248.) As was
demonstrated above, these auctions included auctions that were not conducted
through an “online Internet bidding platform.” The evidence therefore established
that ABT, as part of its business, carried out and advertised auctions, as that term
was defined by the Act, and that ABT was an “auction company” to which Section
10(a)’s license requirement applied.
Finally, in addition to challenging the validity of the citations, Bauer
claims that the Board violated his and ABT’s due process rights to a fair and
impartial tribunal. Bauer bases this argument on contentions that the Board was
almost entirely composed of members of the Pennsylvania Auctioneers
Association, who are his competitors, and that the Board showed bias in its
findings. Neither of these contentions has merit.
Bauer makes allegations in his brief concerning members of the Board
and the organizations to which they belong. These allegations, however, are
unsupported by anything in the certified record. This Court may consider on
appeal only what is in the certified record. B.K. v. Department of Public Welfare,
36 A.3d 649, 657 (Pa. Cmwlth. 2012); C.J. v. Department of Public Welfare, 960
A.2d 494, 500 (Pa. Cmwlth. 2008). Accordingly, Bauer’s allegations must be
disregarded and the only evidence before this Court as to the Board’s membership
is what the Act provides. Section 31 of the Act provides, and provided at the time
of all of the Board’s actions in this matter, that the Board consists of the
Commissioner of Professional and Occupational Affairs, the Director of the
Bureau of Consumer Protection in the Office of Attorney General or his designee,
17
two individuals representing the public at large, one registered trading assistant,
and four licensed auctioneers. 63 P.S. § 734.31(a). The licensed auctioneers,
registered trading assistant, and individuals representing the public are all
appointed by the Governor and confirmed by the State Senate. Id. This
composition does not prevent the Board from fairly and impartially adjudicating
citations for violations of the Act.
North Carolina State Board of Dental Examiners v. F.T.C., _ U.S. _,
135 S. Ct. 1101 (2015), relied on by Bauer, is not to the contrary. In North
Carolina State Board of Dental Examiners, the Supreme Court did not hold that
members of the regulated profession cannot constitute a fair and impartial tribunal;
rather, it held only that such board members were not under the facts of that case
clothed with state immunity from injunctive relief under the federal antitrust laws.
In fact, the Court in North Carolina State Board of Dental Examiners recognized
that states have substantial reasons for staffing such boards with members of the
profession, who would be most familiar with the subjects they are to address. Id.
at _, 135 S. Ct. at 1115. Moreover, the facts in that case were substantially
different from the Board’s composition and actions here. Seven of the eight
members of the state board in North Carolina State Board of Dental Examiners
were members of the regulated professions and those seven members were elected
by the other licensed members of their professions, not appointed by the state. Id.
at _, 135 S. Ct. at 1108. In addition, the actions of the state board there involved a
subject that was not addressed by the legislature in the governing statute and were
not subject to review or reversal by state officials. Id. at _, 135 S. Ct. at 1116.
Here, in contrast, the members of the Board who were Bauer’s competitors were
appointed by the Commonwealth, the Board’s action applied express statutory
18
provisions adopted by the legislature, and the Board’s interpretation and
application of the Act is subject to judicial review by this Court.
The record amply demonstrates that the Board provided Bauer and
ABT a full, fair and impartial hearing and adjudication in this matter. Bauer and
ABT received a full evidentiary hearing before a hearing examiner whose
impartiality Bauer has not challenged and a full opportunity to brief the legal
questions at issue. The hearing examiner’s proposed adjudication and the Board’s
decision addressing Bauer’s and ABT’s exceptions and upholding the citations are
detailed, well-reasoned and supported by the evidence. Moreover, there is nothing
in the record to suggest that the issuance of the citations was affected by any intent
to diminish competition. The investigation was prompted by a complaint filed by
one of Bauer’s auction clients, not a complaint of an auctioneer, and the
investigation was conducted by an employee of the Department of State, not by an
auctioneer or auctioneering association. (C.R. Item 34, H.T. at 14, 22, 26-27, R.R.
at 148, 156, 160-161.)
For the foregoing reasons, we affirm the order of the Board in this
matter.
____________________________________
JAMES GARDNER COLINS, Senior Judge
19
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Drew J. Bauer, individually and :
d/b/a AmbroseBauer Trains (LLC), :
:
Petitioner :
:
v. : No. 501 M.D. 2015
:
Pennsylvania State Board of :
Auctioneer Examiners, :
:
Respondent :
ORDER
AND NOW, this 16th day of February, 2017, the order of the State
Board of Auctioneer Examiners in the above matter is affirmed.
____________________________________
JAMES GARDNER COLINS, Senior Judge