Heritage Auctions Lawsuit

[paul]

The final page of the online article has a separate window with the complaint that was filed in court. According to the complaint (around paragraph 16 or 17), Heritage places bids on lots until the reserve is met, and then stops bidding.

Heritage's catalog uses the word "opening bid" to describe the starting bid, not the word "reserve." So it's possible that there is a higher, secret reserve price that has been agreed to by Heritage and the consignor. I don't like that practice, but I believe it is common. Certainly, ebay allows for that practice.

Based on this, I don't see any basis for the plaintiff's claim that he was harmed. If he was bidding on a lot, but didn't meet the secret reserve price, then the consignor keeps the lot and the plaintiff/bidder gets nothing. If Heritage keeps bumping up the lot until the reserve is reached, the bidder gets the lot for the minimum price that the buyer was willing to sell it for. As long as Heritage does not keep bidding beyond the reserve, it simply is not true that the plaintiff paid extra for the lot due to Heritage's bidding. He paid the minimum that the seller was willing to sell it for.

Again, I don't like the practice, but I don't see that the plaintiff has anything to complain about. Now, if there was some kind of "floating" reserve -- a goal post that the seller or Heritage could keep moving -- that would be a different story. But if that was going on, there would be a real risk that Heritage would accidentally win a lot of lots. Presumably, Heritage would then offer the lot to the underbidder (the high legit bidder). And the underbidder would likely be paying much more than he should have. I haven't heard of that going on. And if it was, I assume it would be in the plaintiff's complaint that he filed in court.