Tennessee law requiring license for online auctioneering ruled unconstitutional

A new ruling from the U.S. District Court for the Middle District of Tennessee determines that the Tennessee law that requires a license for an online auction is unconstitutional and a violation of the commerce clause.

The case was initially brought by the Southeastern Legal Foundation and Beacon Center of Tennessee on behalf of two auctioneers who invented an online platform for conducting auctions, as well as the Interstate Auction Association, an organization dedicated to innovation in auctioneering. 

In 2019, Tennessee became one of the first states to require licenses for online auctions. The law, which exempted some platforms – like eBay, was halted before going into effect on the grounds that it was likely unconstitutional. 

Braden Boucek, the Director of Litigation at the Southeastern Legal Foundation, and former VP of Legal Affairs at the Beacon Center explained the significance of the court's most recent decision.

"This is a huge win not only for our clients, but for all American innovators whose freedom to engage in e-commerce has been reaffirmed. E-
commerce is the future and Tennessee needs to welcome it," he said.

"Instead of recognizing our clients' contributions to the state – creating a new Tennessee business and good paying jobs, choice in the marketplace, and expansion of a dynamic and fast-growing industry – Tennessee implemented this unconstitutional licensing scheme to protect the largest online auction
companies in our country and traditional auctioneers. And it did so at the taxpayers' expense," he added.