1. The Department of Commerce failed to enforce its own policy requiring disclosure of a mystery box’s contents before approval, enabling the auctioneer to commit fraud.
2. RaiTheGuy paid $65,100 for a mystery box whose total value, per CPI records, was only $764.34, and some items lacked any CPI record.
3. The Department’s approval of the auction, without verifying value or contents, violated its duty under Section 4(5) of the Commercial Standards Act to prevent commerce-related fraud.
4. DOC employees commented publicly expressing desire for the mystery box, which the plaintiff argues misled bidders and artificially inflated the auction value, constituting Third-Party Misrepresentation under Section 8.
1. The Department of Commerce followed all relevant policies by verifying the existence and deliverability of the mystery box contents before approving the auction.
2. Comments made by DOC employees in the auction chat were personal, non-binding, and do not amount to official endorsements or misrepresentation.
3. The plaintiff was not misled or defrauded by the Department; any loss incurred resulted from their own voluntary decision to engage in a speculative transaction.
4. The Department’s role is regulatory, not evaluative; it is not responsible for judging fair market value or preventing buyer's remorse.
5. Misrepresentation under Section 8 of the Commercial Standards Act requires a knowingly false statement that induces reliance. None occurred here.
6. The auction outcome was driven by open bidding, and the plaintiff accepted the inherent risks; caveat emptor applies.
1. The court finds that there was an auction for a mystery box.
2. That said mystery box was listed at a starting auction of $50,000 despite the true value being significantly lower.
3. That the DOC did review the listing before allowing the auction to be posted.
4. That the employees who commented on the auction were acting within their official capacity.
5. Per the law, the DOC is charged with investigating commerce-related white-collar crimes. However, also per the law, they are to refer those findings to the DOJ.
6. The DOC was given the contents of said mystery box, knew it was well below the listed price, and approved the listing.
7. The DOC policy includes a line stating, “A mystery box may not be auctioned off without receiving a screenshot of its contents in order to prevent auctioneer fraud.”
8. A long review of the law is necessary from here:
There are a couple of problems that this court must resolve. To begin with, the claim for relief argues for a case of negligence by alleging that the defendant violated the Commercial Standards Act. Negligence is not a defined concept within our common law, nor is it enabled by statute.
However, we have begun to coalesce the elements for what is typically ascribed as negligence. We have established, as a matter of common law, what is known as a “duty of care.” A duty of care, as typically defined, is 1) an obligation; 2) that must be upheld; and 3) is set-out by either custom, norm, or by law. If a duty is not upheld, it is considered a breach, and the party who is obliged to uphold the duty can be liable for damages. This forms our basic principle for what this court will term proto-negligence.
Duty of care, as part of our concept of proto-negligence, was first established by the Supreme Court in 2021. In
nnmc, the appellant-defendant appealed a default judgment against them for police misconduct. While no mention of it was made within the subsequent appeals case, the Court concluded that the appellee-plaintiff had argued that the appellant-defendant had “neglected their duty of care by refusing to investigate the situation further.” The court then concluded that the appellant-defendant had a lawful duty of care, its constitutional duty, and upheld the original verdict. (see
Lawsuit: Adjourned - nnmc v. Department of Justice [2021] SCR 15).
Then the Federal Court in 2024 granted a form of this proto-negligence by establishing a duty of care and breach of said duty. In
smokeyybunnyyy, the plaintiff sued the defendant, the Commonwealth of Redmont’s Department of Construction and Transportation, for failing to prevent fraudulent bids from a third party that artificially raised bid amounts. The defendant argued that the plaintiff entered into a valid agreement. The court disagreed.
The court held that every department within the executive branch has a duty of care to uphold its constitutional obligations. “For the Department of Construction and Transport, this includes the responsibility to conduct auctions fairly and in strict accordance with its guidelines.” The fraudulent bids placed by a third party misled the plaintiff into raising their bid causing fraudulent inducement that was not allowed under the defendant’s policy. The defendant's inability to apply its policies fairly and equally across the auctions represented a breach of its duty. (see
Lawsuit: Adjourned - smokeyybunnyyy v. Commonwealth of Redmont [2024] FCR 103).
While the court has established a duty and breach of duty as a concept, it has not in full established negligence as a common law concept. This concept is not a statutory provision; it is only found in our case law. Since that is the case, the court will sum the elements thus far: duty of care and breach of duty. However, like any case, there must be standing. Standing requires remedy (see
Information - Court Rules and Procedures). Under
smokeyybunnyyy, it was found that the difference in bidding was a proper form of remedy for compensatory damages. (see
Lawsuit: Adjourned - smokeyybunnyyy v. Commonwealth of Redmont [2024] FCR 103). So, we must revise our elements to include damages. Thus, negligence requires: 1) a duty of care, 2) breach of duty, and 3) damages or remedy.
In the matter at hand, the plaintiff is arguing an application of law forms the basis for which the defendant is negligent. The plaintiff does not argue that the duty is established by the constitution. This is correct because the defendant’s constitutional obligations no longer exist under the new constitution. (see
Government - Constitution). Instead, a department’s obligations are defined in law under the Executive Standards Act, which is now congressional law and no longer a constitutional amendment. (see
Act of Congress - Executive Standards Act). For the consistency of the common law, the duties set up by
nnmc and
smokeyybunnyyy still exist, but they are now duties established by Congress for the defendant to exercise. Indeed, Congress can dictate to the defendant the duties and obligations it wishes for it to fulfill, as the clause that Congress cannot give or take power from the other branches has been removed. (see
Government - Constitution). It must logically follow then that all laws set out by Congress can impose a duty on the defendant. This would include the Commercial Standards Act. Therefore, it makes sense that the plaintiff argues that the defendant breached their duty by not following the Commercial Standard Act under a theory of negligence.
However, that alone does not resolve this case. Now that the Court has properly defined what it sees as negligence, it must review the law. Since a duty is statutorily created, it can be said that failing to follow the statute necessarily implies a breach, which is consistent with the common law. So now the court must review whether or not the defendant had a duty and then breached said duty.
The plaintiff argues that the defendant violated their duty by not failing to uphold Commercial Standards Act section 4(5). The law states “The Department of Commerce is charged with investigating commerce-related white-collar crimes.” (see
Act of Congress - Commercial Standards Act). The plaintiff points out that the defendant’s policy is to prevent “auctioneer fraud.” This is not defined under our law; however, fraud is. Accordingly, we must apply fraud to the facts of this case.
Fraud is defined as, “An intentional or reckless misrepresentation or omission of an important fact, especially a material one, to a victim who justifiably relies on that misrepresentation; and the victim party or entity suffered actual, quantifiable injury or damages as a result of the misrepresentation or omission.” (see 6 - Fraud (Fraud)
Act of Congress - Commercial Standards Act, see also
Appeal: Denied - [2024] FCR 102 - Appeal).
In this instance, the defendant's employees made comments towards the content of the mystery about wanting to purchase the contents and that they “could not” bid on them as members of the defendant. This created an air of value and incentive for prospective buyers to make a purchase. The defendant did this in spite of knowing the contents of the mystery box was worth far less than even the minimum bid price. Thus, the court agrees that at minimum the defendant made reckless misrepresentations of the mystery box, and that this fact is important because it is central to the case.
However, the plaintiff did not rely on those misrepresentations when they were making their decision to make the purchase. Therefore, the defendant did not defraud the plaintiff.
The plaintiff will point out that the general duty of the defendant is to protect the plaintiff against fraud. However, that third-party has not yet been civilly liable for fraud. (see
Lawsuit: In Session - RaiTheGuy v. lukeyyyMC_ [2025] FCR 30). The court cannot assume anything on the pending case. “[J]udicial consistency requires each case to be evaluated on its own merits at the time of its ruling.” (see
Appeal: Denied - [2024] FCR 102 - Appeal). For this court to assume fraud in the event that the court in [2025] FCR 30 does not, would lead to judicial inconsistency. Thus, the court cannot adjudicate the matter on the assumption that the third-party is civilly liable for fraud.
The court also points to the plaintiff that while the defendant is in charge of investigating white-collar crime, the DOJ prosecutes the crime (see Section 4(5)(a),
Act of Congress - Commercial Standards Act). So, the duty is not solely for the defendant to investigate commerce-related white-collar crimes, it is also to refer the findings of said investigation to the DOJ. The plaintiff does not show any proof that the defendant has not referred any action to the DOJ. Therefore, the plaintiff has not met its burden of proof in that the defendant breached their duty.
9. The plaintiff argues that the defendant violated Section 8 of the Commercial Standards Act, Third-Party Misrepresentation. (see
Act of Congress - Commercial Standards Act. The elements are as follows: 1) the act of intentionally or recklessly aiding and abetting; 2) a party or entity; 3) in committing market manipulation.
10. Plaintiff has charged a third-party in committing market manipulation. “[J]udicial consistency requires each case to be evaluated on its own merits at the time of its ruling.” (see
Appeal: Denied - [2024] FCR 102 - Appeal). That third party has not been found liable in committing market manipulation. For this court to assume market manipulation in the event that the court in [2025] FCR 30 does not, would lead to judicial inconsistency. Thus, the court cannot adjudicate the matter on the assumption that the third-party is civilly liable for market manipulation. Therefore, the plaintiff cannot meet their burden in proving third-party misrepresentation.
The Federal Court thanks all parties involved. Court is now adjourned.
