## Facts

- A finance company repossessed a 1993 Ford Explorer and consigned it to New Texas Auto Auction Services, L.P., doing business as Big H Auto Auction (Big H), to be sold at auction in Houston.
- On October 12, 2000, Big H auctioned the vehicle and collected fees from the seller and buyer.
- After the buyer discovered an odometer discrepancy, an arbitration found Big H made a clerical error, rescinded the sale, and required Big H to buy back the vehicle; Big H briefly took title.
- On October 17, 2000, Big H re-auctioned the Explorer to another auctioneer, which sold it to a dealer; the dealer sold it to Jose Angel Hernandez Gonzalez.
- About a year later, Hernandez died in a rollover accident in Mexico while driving the Explorer; plaintiffs alleged the tires were subject to a recall when the vehicle was auctioned.
- Hernandez’s survivors sued multiple defendants, asserting strict products liability and negligence claims against Big H, manufacturers, and sellers in the distribution chain.

## Issues

1. Whether an auto auctioneer that briefly holds title and re-auctions a used vehicle is a “seller” subject to strict products liability for alleged defects.
2. Whether an auto auctioneer owes a negligence duty to inspect auctioned vehicles or warn downstream purchasers about alleged defects or recall information.

## Decision

- The Texas Supreme Court reversed the court of appeals and reinstated the trial court’s summary judgment for Big H.
- Big H was not a strict-liability “seller” because it functioned as a service intermediary facilitating sales rather than as a commercial seller placing products in the stream of commerce.
- Big H owed no duty to inspect the vehicle or warn about alleged defects or recalls under the circumstances presented.

## Legal Principles

- Strict products liability applies to entities engaged in the business of selling and distributing products, not to service intermediaries who merely facilitate transactions; brief, incidental title-holding does not convert an auctioneer into a strict-liability seller.
- Absent a special relationship or an undertaking to inspect or provide safety information, an auctioneer generally has no duty to inspect auctioned goods or warn downstream purchasers about potential defects or recall information.
- Duty in negligence depends on the nature of the relationship and the practical scope of the asserted obligation; imposing broad inspection/recall-monitoring duties on high-volume auctioneers is not required without a legal basis for such a duty.

## Conclusion

The court held that a vehicle auctioneer that primarily sells auction services, even if it briefly acquires title during the process, is not subject to strict products liability as a “seller” and does not owe a general negligence duty to inspect auctioned vehicles or warn ultimate consumers of alleged defects or recalls.


New Texas Auto Auction Servs., L.P. v. Gomez de Hernandez, 249 S.W.3d 400 (Tex. 2008)