An Auctioneer Disciplined in one State is not Suddenly Rehabilitated After Crossing State Borders

The Supreme Court of Pennsylvania in Khan v. State Bd. of AuctioneerExaminers,577 Pa. 166, 842 A.2d 936(2004 Pa)held that thePennsylvania State Board of Auctioneer Examiners may impose a reciprocal sanction on auctioneers licensed in Pennsylvania when there is an actual or constructive finding of guilt in foreign jurisdiction.  The court found that the auctioneer disciplined in a foreign state cannot be suddenly rehabilitated on crossing state borders. The Supreme Court found that out-of-state disciplinary orders provided a basis for a sanction pursuant to § 20(a)(11) of the Auctioneer and Auction Licensing Act.

The Supreme Court stated that the Board is the agency charged with the authority and responsibility to oversee those engaged in the auctioneering profession within this Commonwealth, and to determine the competency and fitness of an applicant to practice here. Id. at 191-192. The authority of the Commonwealth to regulate those engaged in this profession is inherent as a sovereign state, and it is a valid exercise of its police power. Id. at 192. Thus, it is for Pennsylvania, and Pennsylvania alone, to determine the fitness of an individual to practice within this Commonwealth.Id.

In the instant case, two Pennsylvania licensed auctioneers, Azam Khan (“Khan”) and Abid Butt (“Butt”) (collectively "Auctioneers") were issued and served with a Notice and Order to Show Cause by the Pennsylvania State Board of Auctioneer Examiners (Board) for violating section 20 (a)(11)of the Auctioneer and Auction Licensing Act (“Act”), 63 P.S. § 734.20(a)(11), which dealt with disciplinary action taken against auctioneer licenses by other states. Khan 577 Pa.at 172-173.The notice was sent on account of the disciplinary actions taken by: Virginia and Maine against Khan; and Virginia, Texas, and Wisconsin against Butt.

Auctioneers argued that the infractions resulting in disciplinary action in Virginia, Maine, and Texas were effectively minor violations. Khan 577 Pa. at 177. They complained that the Board ignored their contentions which should have mitigated in their favor.Id. at 178.The Supreme Court disagreed. Id.

The Supreme Court found that a reciprocal disciplinary forum is not an appropriate venue for re-litigating the merits of a foreign disciplinary action. Id. at 191. The principal objective of a disciplinary inquiry is to determine whether the individual may properly be permitted to practice his profession in this Commonwealth. Id. The court stated that a Board, in a reciprocal disciplinary action, may not consider the merits of the discipline imposed by the foreign jurisdiction, which is the appropriate forum in which to litigate them. Id. In order to render the imposition of reciprocal discipline improper, the auctioneer must show either that: 1) there was no disciplinary action taken in the foreign disciplinary proceeding; 2) an appeal from the disciplinaryaction is pending; 3) the foreign disciplinary proceeding was ultra vires or lacking in the fundamentals of due process; or 4) the misconduct established in the foreign adjudication justifies substantially different discipline in this Commonwealth. Id. Cf.Morrissey v. Morrissey, 552 Pa. 81, 713 A.2d 614 (Pa. 1998).

After analyzing the situation, the court found that both the Virginia and Maine Agreements constituted disciplinary actions, but concluded that the Board could not take action against Auctioneer Khan based upon the Virginia Consent Order. The court foundthattherewas violationof due process when the Board imposed sanctions based upon another jurisdiction's disciplinary order, where there is neither an admission nor finding of wrongdoing regarding the alleged conduct. The court noted that the Virginia settlement explicitly states that it was entered into without a finding of fault. Without an actual or constructive finding of guilt, the Board is without authority to impose a reciprocal sanction. While the auctioneer may not re-litigate the foreign disciplinary proceeding, the Board likewise may not reassess the guilt or innocence of the professional appearing before it. Therefore, the Supreme Court held that the Commonwealth Court did not err in concluding that the Virginia Consent Agreement was not a disciplinary action that could form the basis for reciprocal disciplinary action in Pennsylvania. The Supreme Court affirmed the Commonwealth Court’s conclusion that the Board could not sanction Khan for the disciplinary action and resulting settlement in Virginia because there was no actual finding of fault. Id. at 190

The Supreme Court found that the State of Maine does not permit the commingling of prosecutorial and adjudicative functions in violation of the procedural due process rights of defendants. Id. at 182. Therefore, the court found that the application of reciprocal discipline based on the Maine Consent Agreement does not violate procedural due process. Id. 

The Supreme Court found that there was no constitutional infirmity in Butt’s arguments and challenges were unavailing. Khan 577 Pa.at 191.Butt either admitted to the violation or was found guilty by the disciplinary authorities of both Virginia and Texas. Therefore the court found that the Board could take reciprocal disciplinary action against Butt. Id.Auctioneer Butt's conduct in Wisconsin not only reflected unfavorably upon him, but also upon the integrity of the auctioneering profession. Hence, the court found that the Board did not abuse its discretion by revoking Butt’s license.Id. at 191.

The Supreme Court found that, in the case at hand, the imposition of reciprocal discipline was proper. The court observed that both auctioneers were provided with notice and an opportunity to be heard in Virginia, Maine, Texas, and Wisconsin by the proper licensing authority of each state. Id. at 192. Only Khan was able to demonstrate that no disciplinary action was taken in the Virginia proceeding. Id.Auctioneers did not contend that the disciplinary actions taken by Virginia, Maine, Texas, or Wisconsin were on appeal. Id. Additionally, the court found that there was no infirmity of proof because each auctioneer signed a consent agreement ending the disciplinary action. Id. Finally, neither Khan nor Butt argued or demonstrated that some other discipline, other than that imposed, was more appropriate here.Id. 

Therefore the Supreme Court affirmed the Commonwealth Court’s determination in all respects. Id.