The Auctioneering Business is a Legitimate Subject of Regulation to Prevent Abuses and Frauds

In Gatlinburg Art Gallery v. Gatlinburg, 215 Tenn. 107 (Tenn. 1964), the Tennessee Supreme Court upheld the City’s ordinance that regulated the business hours of auctions of certain type of items.  The Court found that the business of auctioneering could be regulated to prevent abuses and frauds.  The Court noted that the City of Gatlinburg was a resort town with tourism as its sole trade.  Therefore, it was important for the City to maintain a good image in the eyes of its visitors and the public.  The ordinance in question was to meet that goal and hence was not invalid. 
This case relates to an action brought by the Gatlinburg Art Gallery, Incorporated, (“Art Gallery”) and its stockholders (collectively “Complainants”) against the City of Gatlinburg (“City”) and its officials questioning the validity of an ordinance that regulated the conduct of auctions. The said ordinance made it unlawful for any auctioneer, person, firm or corporation conducting or holding a public or private auction of personal property within the City of Gatlinburg to hold any auction of jewelry, diamonds, precious or semi-precious stones or imitations thereof, watches, clocks, pictures, paintings, gold or silverware or plated ware, rugs, carpets, curios, bedspreads, table covers, tablecloths, napkins, doilies, shawls, china ware, glass ware, and porcelain ware at any time other than between the hours of 8:00 a.m. and 6:00 p.m.  The Chancellor upheld the validity of the ordinance.  Consequently the Complainants appealed. 

Complainants alleged that the ordinance deprives them of privileges enjoyed by others.  Further they pointed out that the ordinance does not apply to other business types.  They alleged that the ordinance was to suppress the auction sales rather than regulate it.  They also insisted that the City discriminated their business from others by prohibiting their operation after 6:00 P.M.; when, a large percentage of the businesses in Gatlinburg operated during the hours between 6:00 P.M.-11:00 P.M. Id. at 109-10. 
The Defendants insisted that they, as a municipality, have the right to regulate businesses operated within the City of Gatlinburg. Id. at 109.  They contended that the ordinance is necessary to protect the visitors to the resort town who are in a holiday mood and much likely to being defrauded or deceived as to the value of articles after 6:00 P.M. Id. at 110.   The City insisted that it is necessary to protect the public in order to avoid giving Gatlinburg a bad name and destroying property values. Id.
The Court found that the record discloses that the City of Gatlinburg is a resort town that is nationally known. Id. at 109.  The City has outstanding hotel, motel, restaurant and other facilities. Id. at 114. The City earned this reputation through many years of planning, advertising, hard work and investments by the City and the business people of Gatlinburg. Id.  Gatlinburg depends almost entirely on visitors for its existence. Id.

The Defendants cited to the case of Jones v. City of Jackson, 195 Tenn. 329, 259 S.W.2d 649 in which the Supreme Court of Tennessee reviewed the holdings of the courts of many states and referred to 111 A.L.R. 473, which stated that, generally, the business of auctioneering is a legitimate subject of regulation to prevent abuses and frauds. Id. at 112 (internal citations omitted). 
The Court in this case referred to the statements and citations from the case of Jones v. City of Jackson which related to auction regulation by municipalities. Id. at 116.  The statements and citations read as below:
"(3) HN5An ordinance is not invalid merely because it regulates a lawful business and due process of law is not denied when an ordinance fairly and reasonably regulates a lawful business."  
"(5-8) Complainant's statements in his bill that the ordinance is not valid is not supported by statements of specific facts from which complainant might draw such a conclusion and in the absence of further statements of specific facts justifying the conclusions therein, such statements are insufficient to evoke the aid of a court of equity, as is here sought."
Id. at 116-17. 
In light of the above, the Court found that Ordinance No. 219 as amended by Ordinance No. 323 under the authorities cited has a reasonable connection with the moral and natural well-being of Gatlinburg and its citizens and that the City has the power to regulate same. Id. at 117.  This Court reviewed the authorities cited by Complainants and Defendants and found that the Supreme Court of Tennessee by its holding in Jones v. City of Jackson aligned itself with the Courts from other states which uphold restrictions on the hours of auctions of certain personal property. Id.
The Supreme Court held that the ordinance in question as amended is reasonable and is neither discriminatory nor oppressive.  The Court affirmed the Chancellor’s decree that upheld the ordinance.  Id.