Do you need a West Virginia auctioneer's license to sell a West Virginia estate's stuff through an online auction site, or to sell the contents of a delinquent storage unit at a live auction?

Plain-English summary

The Commissioner of Agriculture asked the AG two questions about West Virginia's auctioneer-licensing law (W. Va. Code §§ 19-2C-1 et seq.).

Question 1: Online auctions of estate property. When an in-state or out-of-state company contracts with a West Virginia resident to sell that resident's real or personal property through an online auction, does the company need a West Virginia auctioneer's license? The AG said no. Several pieces of the statute pointed toward in-person auctions:

• § 19-2C-2 requires a license only for an auctioneer operating "in this State."
• § 19-2C-5 requires an auctioneer to "[p]romptly produce for inspection his or her license at all sales conducted by or participated in by the licensee when requested to do so by any person." Online auctions cannot satisfy a physical license-inspection right.
• § 19-2C-10 requires that any "advertis[ement] [of] an auction sale by a licensed auctioneer" prominently identify "the principal auctioneer or auctioneers who physically conduct the sale." Internet auctions have no one physically conducting the sale.
• The Legislature has elsewhere expressly extended state-law regulation to internet operations when it wanted to: W. Va. Code § 32A-2-2 (currency exchange) defines "in this state" to include "an internet website West Virginia citizens may access"; W. Va. Code § 11-15A-1(8) (use tax) includes operating an "Internet-based business from a location within the state." The auctioneer statute does not include comparable language. The 2014 amendments did not add such language either (2014 W. Va. Laws Ch. 16, H.B. 4410).
• Other states (Minnesota, North Dakota, Tennessee) have taken the same narrowing view of similar statutes.
• The rule of lenity favors the narrower reading where the statute carries criminal sanctions (§ 19-2C-8(a)). State v. Stone (2012); State ex rel. Morgan v. Trent (1995).

The AG acknowledged the statutes could "plausibly be construed" to require a license but recommended Legislature involvement if explicit online-auction coverage was wanted. The opinion noted that some states have added clarifying provisions (N.D. Cent. Code § 51-05.1-04(5) excludes internet auction operators; 225 Ill. Comp. Stat. 407/10-27(b) includes them under certain conditions; 63 Pa. Cons. Stat. § 734.2 excludes them).

Question 2: Storage-unit auctions. When a storage facility sells the contents of a delinquent storage unit at a live in-person auction to recoup unpaid rent, does the operator need an auctioneer's license? The AG said yes, generally, with two exceptions.

Live storage-unit auctions look like classic auctions: the operator describes items, sets a starting bid, works the price up, and ends bidding. They are "in this State" (in-person), they are conducted "for another" (the storage tenant owns the property until lien rights transfer ownership), and the operator typically retains compensation (the difference between sale proceeds and unpaid rent).

Two exceptions might apply:

1. Owner exception (§ 19-2C-1(a)): an "owner" of property who has not personally conducted an auction within the previous twelve months can sell it without a license. If the rental contract automatically transfers ownership of the contents to the storage facility under specified conditions (W. Va. Code § 38-11-14), the facility can then sell as the owner of the property and skip the licensing requirement.

2. Judicial order or public-authority exception (§ 19-2C-1(a)): sales "conducted by or under the direction of any public authority or pursuant to any judicial order or direction" do not require a license. If the facility follows W. Va. Code § 38-11-14's lien-enforcement procedures (notice, demand, suit on the debt, judgment), then conducts the sale under that judgment, the sale falls within the judicial-order exception.

The default rule absent contractual transfer or judicial order: the storage facility needs an auctioneer's license to conduct the live auction.

Currency note

This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The auctioneer-licensing statutes were last amended in 2014 (referenced in the opinion) and the Legislature could amend further. The storage-facility lien statute (§ 38-11-14) and online-auction state-by-state laws have continued to evolve. Anyone making a current call on either question should pull the present text of W. Va. Code §§ 19-2C-1 et seq., 38-11-3, and 38-11-14, and check for later amendments and AG opinions.

Common questions

Q: What does the auctioneer-licensing statute actually require?
A: § 19-2C-2 makes it unlawful to "conduct[] an auction as an auctioneer in this State" without a Department of Agriculture license. § 19-2C-1(a) defines "auctioneer" as "a person who sells goods or real estate at public auction for another on commission or for other compensation." § 19-2C-1(e) defines "public auction" as "any public sale of real or personal property when offers or bids are made by prospective purchasers and the property sold to the highest bidder."

Q: Why does "in this State" matter for online auctions?
A: Because the auction is not located in West Virginia. The bidders may be anywhere in the world; the platform may be operated from outside West Virginia. Even if the underlying property is physically in West Virginia, the act of "conducting the auction" is online. The Legislature has shown that when it wants to extend state law to online activity, it knows how to write that.

Q: What about the operator that runs the online sale, are they conducting an auction "in this State" simply because the property is here?
A: The AG's reading says no. The operative locus for licensing purposes is where the auction itself takes place, not where the property sits. Other state AGs have reached similar conclusions on similarly worded statutes (Minnesota, North Dakota, Tennessee).

Q: Is the AG's online-auction conclusion just a reading of "in this State," or does the rule of lenity matter?
A: Both. The AG argues from statutory structure (the inspection and physical-conduct requirements), from the comparator statutes (currency exchange, use tax), from out-of-state authority, and finally from the rule of lenity. The rule of lenity is the backstop: when a criminal statute is ambiguous after careful examination, it must be construed narrowly in favor of defendants (State v. Stone; Morgan v. Trent).

Q: For storage auctions, what is the cleanest route to skip the license?
A: Either build automatic ownership transfer into the rental contract (per § 38-11-14), or follow the lien-enforcement procedures and obtain a judgment before the auction. Both routes are statutorily contemplated. The judicial-order route is cleaner because it removes any doubt about ownership-transfer rights.

Q: What if the storage-facility owner only auctions one or two units a year, would the owner exception cover that?
A: The owner exception requires (a) ownership of the property and (b) no personal auction within the previous twelve-month period. If the facility holds title via contractual transfer for one tenant per year, that might fit. But if the facility holds multiple auctions per year, the twelve-month limit excludes them from the exception, and they would need a license unless the judicial-order route applies.

Q: What is the criminal penalty for unlicensed auctioneering?
A: § 19-2C-8(a) provides for criminal sanctions. The opinion does not detail the penalty structure; the statute should be consulted for current penalties.

Q: Should the Legislature amend the statute to address online auctions explicitly?
A: The opinion suggests yes. Other states have done so in different directions: North Dakota and Pennsylvania exclude online auctions from licensing; Illinois requires registration under defined conditions. West Virginia's silence creates ambiguity that the rule of lenity resolves narrowly but that legislative clarification could resolve more durably.

Background and statutory framework

Auctioneer licensing. W. Va. Code §§ 19-2C-1 (definitions); 19-2C-2 (license required "in this State"); 19-2C-5 (license inspection); 19-2C-8(a) (criminal sanctions); 19-2C-10 (advertising and "physically conduct"). Last major amendments: 2014 W. Va. Laws Ch. 16 (H.B. 4410).

Internet-coverage statutes elsewhere. W. Va. Code § 32A-2-2 (currency exchange "in this state" expressly extends to internet websites accessible by West Virginia citizens). W. Va. Code § 11-15A-1(8) (use tax: "Retailer engaging in business in this state" includes "operating a website or Internet-based business from a location within the state").

Storage-facility lien. W. Va. Code § 38-11-3 (storage owner has lien on personal property). § 38-11-14 (enforcement procedures: parties may contract for automatic ownership transfer; absent that, owner must notify renter, demand payment, sue on the debt, and may then sell at auction under judgment).

Statutory construction. Smith v. State Workmen's Comp. Comm'r, 159 W. Va. 108 (1975) ("In ascertaining the legislative intent, effect must be given to each part of the statute and to the statute as a whole so as to accomplish the general purpose of the legislation").

Fair-notice doctrine. State ex rel. Whitman v. Fox, 160 W. Va. 633 (1977) (fair notice and prevention of arbitrary law enforcement).

Rule of lenity. State v. Stone, 229 W. Va. 271 (2012); State ex rel. Morgan v. Trent, 195 W. Va. 257 (1995).

Out-of-state AG opinions on online auctions. Minn. Op. Att'y Gen. 16-B (2014) (no county auctioneer license required for online auctions of property in county). N.D. Op. Att'y Gen. 2005-L-40 (2005) (eBay-style sales are not auctions under N.D. statute). Tenn. Op. Att'y Gen. 06-053 (2006) (internet drop-off stores are not auctioneers).

Out-of-state statutes. N.D. Cent. Code § 51-05.1-04(5); 225 Ill. Comp. Stat. 407/10-27(b); 63 Pa. Cons. Stat. § 734.2.

Citations

• W. Va. Code §§ 5-3-1; 19-2C-1; 19-2C-2; 19-2C-5; 19-2C-8(a); 19-2C-10; 32A-2-2; 11-15A-1(8); 38-11-3; 38-11-14
• 2014 W. Va. Laws Ch. 16 (H.B. 4410)
• Smith v. State Workmen's Comp. Comm'r, 159 W. Va. 108 (1975)
• State ex rel. Whitman v. Fox, 160 W. Va. 633 (1977)
• State v. Stone, 229 W. Va. 271 (2012)
• State ex rel. Morgan v. Trent, 195 W. Va. 257 (1995)
• Minn. Op. Att'y Gen. 16-B (Oct. 17, 2014); N.D. Op. Att'y Gen. 2005-L-40 (Nov. 4, 2005); Tenn. Op. Att'y Gen. 06-053 (Mar. 27, 2006)
• N.D. Cent. Code Ann. § 51-05.1-04(5); 225 Ill. Comp. Stat. Ann. 407/10-27(b); 63 Pa. Cons. Stat. Ann. § 734.2; Minn. Stat. Ann. § 330.01(a)

Source

• Landing page: https://ago.wv.gov/media/17941/download?inline
• Original PDF: https://ago.wv.gov/media/17941/download?inline

Original opinion text

State of West Virginia
Office of the Attorney General
Patrick Morrisey
Attorney General

March 2, 2015

(304) 558-2021
Fax (304) 558-0140

The Honorable Walt Helmick
Commissioner
West Virginia Department of Agriculture
1900 Kanawha Blvd. E.
Charleston, WV 25305

Dear Commissioner Helmick:

You have asked for an Opinion of the Attorney General regarding whether a West Virginia auctioneer license is required under certain specific circumstances. This Opinion is being issued pursuant to West Virginia Code § 5-3-1, which provides that the Attorney General "shall give written opinions and advice upon questions of law . . . whenever required to do so, in writing, by . . . the commissioner of agriculture." To the extent this Opinion relies on facts, it is based solely upon the factual assertions set forth in your correspondence with the Attorney General's Office.

In your letter, you ask whether an auctioneer license is required under the law in two circumstances. The first situation is when an individual or business (in- or out-of-state) contracts with a West Virginia resident to sell that resident's real or personal property in an online auction. You explain that this "most frequently comes up when a person contracts with an out-of-state business to sell the entire contents of an estate located in" West Virginia. These online auctions are "akin to a silent auction, with bids being taken over the internet and the highest responsible bidder winning." The company "doing the listing, price setting[,] and selling is not the individual/entity that owns the property." The second situation is when the owner of a rented storage unit sells at an auction the contents of that storage unit to recoup unpaid rent. These individuals "frequently advertise the sale as an auction, call out bids using a typical auctioneer's cadence (ie: describe the item, start/set a bid price, work the bid price up, and decide when to end the bidding) and recoup more than the unpaid rent."

Your letter thus raises two legal questions, each addressed in turn below:

(1) Is a West Virginia auctioneer license required to sell the real and personal property of a West Virginia estate through an online auction? (2) Is a West Virginia auctioneer's license required to sell the contents of a storage unit at a live auction to recoup unpaid rent owed on the unit?

Question One: Is a West Virginia Auctioneer License Required To Sell the Real and Personal Property of a West Virginia Estate Through an Online Auction?

The West Virginia Code sets forth specific requirements for conducting an "auction" as "an auctioneer" "in this State." Specifically, Section 19-2C-2 prohibits a person from conducting "an auction as an auctioneer in this State" without a license issued by the West Virginia Department of Agriculture. The statute defines "auctioneer" as "a person who sells goods or real estate at public auction for another on commission or for other compensation." W. Va. Code § 19-2C-1(a). In turn, a "public auction" is defined as "any public sale of real or personal property when offers or bids are made by prospective purchasers and the property sold to the highest bidder." Id. § 19-2C-1(e). To our knowledge, the West Virginia Supreme Court of Appeals has never interpreted these provisions of law.

We conclude that the best reading of the law does not require an individual to obtain an auctioneer's license to sell the property, real or personal, of a West Virginia estate through an online auction. Various parts of the law suggest that the Legislature intended for the licensing requirement to apply to auctions that physically take place in West Virginia. See Smith v. State Workmen's Comp. Comm'r, 159 W. Va. 108, 115, 219 S.E.2d 361, 365 (1975) ("In ascertaining the legislative intent, effect must be given to each part of the statute and to the statute as a whole so as to accomplish the general purpose of the legislation"). Most important, a license is only required for persons conducting an auction "in this State." W. Va. Code § 19-2C-2. In addition, the law mandates that an auctioneer "[p]romptly produce for inspection his or her license at all sales conducted by or participated in by the licensee when requested to do so by any person." Id. § 19-2C-5 (emphasis added). This "inspection" requirement suggests that the Legislature had in-person auctions in mind; after all, an auctioneer could not permit his actual license to be promptly inspected if he were conducting an auction online. Finally, the law's advertising restrictions mandate that any "advertis[ement] [of] an auction sale by a licensed auctioneer" include "prominently" the "principal auctioneer or auctioneers who physically conduct the sale." Id. § 19-2C-10 (emphasis added). Taken together with the other provisions, this requirement is further evidence that the Legislature contemplated that live auctions would be subject to the licensing requirement.

This reading of the statute is supported by the fact that the Legislature has, in other areas of law, expressly provided for the inclusion of Internet or website-based businesses that interact with West Virginia consumers, while it has not done so in this area of the law. For instance, a company may not engage in currency exchange "in this state" without obtaining a license. W. Va. Code § 32A-2-2 (emphasis added). The statute then goes on to clarify that "a person is considered to be engaging in those businesses in this state if he or she makes available, from a location inside or outside this state, an internet website West Virginia citizens may access in order to enter into those transactions by electronic means." Id. (emphasis added). Similarly, in the context of the State's use tax, the phrase "[r]etailer engaging in business in this state" is defined specifically to include "the service of operating a website or Internet-based business from a location within the state." W. Va. Code § 11-15A-1(8) (emphasis added). Here, in contrast, auctioneering licenses are required for auctions "in this State," and the Legislature has not made specific reference to online auctions, even though it has amended the relevant statutory provisions as recently as last year. See 2014 West Virginia Laws Ch. 16 (H.B. 4410) (removing "other security agreements" from the exception for property sold pursuant to a deed of trust, defining "escrow account," updating requirements for license renewals, and authorizing rulemaking by the Commissioner of the Department of Agriculture).

In addition, other state attorneys general have determined not to apply similar auctioneering license statutes in certain online contexts. Most recently, the Minnesota Attorney General has concluded that Minnesota law, which requires a license "to conduct the business of an auctioneer in the state", did not mandate "the issuance of an auctioneer's license by a county for the sale of property physically located within that county through an online auction website such as eBay." Minn. Op. Att'y Gen. 16-B, 2014 WL 5343573, at 1 (Oct. 17, 2014); Minn. Stat. Ann. § 330.01(a). The North Dakota Attorney General has opined that "sales similar to those conducted by eBay are not auctions within the contemplation" of North Dakota's auctioneering statute, which defines an "auctioneer" as "a person, who for a compensation or valuable consideration, sells or offers for sale either real or personal property at public auction as a whole or partial vocation." N.D. Op. Att'y Gen. 2005-L-40, 2005 WL 3015979, at 1 (Nov. 4, 2005); N.D. Cent. Code Ann. § 51-05.1-04. The Tennessee Attorney General has determined that "Internet drop-off stores, which assist individuals in selling items through Internet sites such as eBay, do not fit the statutory definition of 'auction' or 'auctioneer.'" Tenn. Op. Att'y Gen. 06-053, 2006 WL 1197446, at 1 (Mar. 27, 2006). While these opinions each involved differently worded statutes and different questions than that specifically presented here, they reflect a general approach to reading auctioneering license statutes "carefully" so as to "leave the decision of whether or not to regulate Internet auction-type sites to the considered judgment of the [state legislatures]." Id., 2006 WL 1197446, at 4.

Finally, this reading of the statute is supported by the fundamental legal principle that the law must give fair notice as to what conduct is prohibited, especially where criminal sanctions may be imposed, as is the case here. See W. Va. Code § 19-2C-8(a). This principle vindicates two components of due process: (1) fair notice so that prohibited conduct can be avoided; and (2) prevention of arbitrary law enforcement. See State ex rel. Whitman v. Fox, 160 W. Va. 633, 638-39, 236 S.E.2d 565, 569-70 (1977). A corollary to this legal principle is the rule of lenity, which provides "that in construing an ambiguous criminal statute," a court will strictly construe the statute in favor of the defendant. State v. Stone, 229 W. Va. 271, 277, 728 S.E.2d 155, 161 (2012); State ex rel. Morgan v. Trent, 195 W. Va. 257, 263, 465 S.E.2d 257, 263 (1995). Given the absence of a clear indication that the Legislature intended for this licensing regime and its criminal sanctions to apply to the conduct in question, we believe these longstanding principles further require the statutes to be interpreted to exclude such conduct.

We recognize that the statutory provisions could plausibly be construed to require an individual to obtain an auctioneer's license to sell the property of a West Virginia Estate through an online auction. But for the many reasons above, we believe that the better reading of the law is not to require a license in those circumstances and, in general, to leave to the Legislature the option to expressly articulate whether and in what circumstances a license would be required for conducting an online auction. We note that a number of States have chosen to enact provisions expressly addressing the issue of auctioneering licenses for online auctions. See, e.g., N.D. Cent. Code Ann. § 51-05.1-04(5) ("A person conducting, or employed by a person conducting, an internet auction is not an auctioneer or clerk within the meaning of this chapter."); 225 Ill. Comp. Stat. Ann. 407/10-27(b) (requiring registration for online auctions when the entity providing the listing service, the property to be sold, the prospective seller, or the prospective buyer is located in Illinois); 63 Pa. Cons. Stat. Ann. § 734.2 ("The term 'auction' or 'sale at auction' excludes any sale conducted through an online Internet bidding platform.").

Question Two: Is a West Virginia Auctioneer's License Required To Sell the Contents of a Storage Unit at a Live Auction To Recoup Unpaid Rent Owed on the Unit?

We conclude that a West Virginia auctioneer's license is required for a storage company to sell at auction in West Virginia the contents of a storage facility, unless the storage company becomes the owner of the property to be sold or obtains a judicial order providing for the sale. As noted above, an auctioneer's license is required to conduct "in this State" "for another" for compensation "any public sale of real or personal property when offers or bids are made by prospective purchasers and the property sold to the highest bidder." W. Va. Code § 19-2C-1; id. § 19-2C-2. There are two exceptions that might apply here: auctioneers do not include (1) "[p]ersons conducting sales at auctions conducted by or under the direction of any public authority or pursuant to any judicial order or direction," and (2) "[t]he owner of any real or personal property when personally sold at auction by the owner and the owner has not personally conducted an auction within the previous twelve-month period." Id. at § 19-2C-1(a).

The analysis is necessarily case-by-case. As you have described it, these sales do appear to qualify as auctions, since they are conducted in-person and the individuals "frequently advertise the sale as an auction [and] call out bids using a typical auctioneer's cadence (ie: describe the item, start/set a bid price, work the bid price up, and decide when to end the bidding)." Moreover, the owner of the storage unit does not own the property being sold, but rather is selling it on behalf of the property owner to satisfy the property owner's debt, and is retaining the proceeds of the sale as compensation.

In some cases, however, one of the two exceptions to licensing may apply. Under West Virginia law, the owner of a storage unit has a lien on the personal property in the storage unit and may retain possession of the contents as security for the debt owed. W. Va. Code § 38-11-3. How this lien is satisfied will vary from case to case and may affect the need for an auctioneer's license. For example, the parties may expressly provide in the rental agreement that ownership of the property will automatically transfer under certain conditions, see id. § 38-11-14, after which time the owner of the storage unit (and now owner of the property) could sell the property at auction under the exception permitting a property owner a limited right to auction his or her own property. Absent a specific contractual provision, however, the owner must follow the procedures outlined in West Virginia Code § 38-11-14 for enforcement of the lien, including notifying the renter, demanding payment on the claim, and bringing suit on the debt. If the storage facility obtains a favorable judgment, it might then sell the property at auction without a license either as the owner of the property or pursuant to a judicial order.

Sincerely,

Patrick Morrisey
Attorney General

Elbert Lin
Solicitor General