I believe it is the # of different IP addresses that flag the ad, or something along those lines.
Yes, this. I've never seen 1 person pull down an ad. But if he links the auction to a few friends and they flag it, that seems to trigger it.
A few years ago, there was a guy posting a bunch of gay XXX rated dvd pornos movies on CL, day after day, and in his pics, you could see close up details of the covers. It was obscene. I emailed some friends, and they all flagged it, and we kept getting it taken down, as it was not something I felt the world should have to look at.
Maybe that's what Old Doc was selling too? Not sure.