Alabama Caskets

Burying Alabama’s Casket-Sales Cartel

Entrepreneur Shelia (pronounced the same as “Sheila”) Champion has staked her retirement savings on an innovative business just outside her rural Alabama hometown that she hopes will help the world as much as change it. Shelia has opened The Good Earth Burial Ground in Hazel Green, which provides inexpensive, environmentally-friendly interments in a wild, untended forest. As part of her environmental ethic, Shelia’s cemetery allows remains to be buried only in biodegradable shrouds and caskets. Shelia wants to sell these simple, inexpensive items herself.

That, however, has made this unassuming grandmother a criminal. Under Alabama law, it is a crime for anyone but a state-licensed funeral director to sell a casket to the public. To become a funeral director, Shelia would have to attend mortuary college for at least a year and then serve as an apprentice for two years (even though she has no desire to be a funeral director). She would also have to spend hundreds of thousands of dollars building a full-service funeral home on her property, including facilities for embalming bodies, as well as a showroom for fancy, expensive, non-biodegradable caskets that she would never sell.

All of this just to sell a cardboard box or a shroud that might literally be nothing more than a bedsheet. And all of this even though Alabama law does not even require a shroud or casket for burial. Burial containers have no health and safety purpose.

There is only one reason to restrict who can sell a casket: economic protectionism. The legislature is simply protecting state-licensed funeral directors from competition.

That is an unconstitutional abuse of government power. The government cannot prevent someone like Shelia from earning an honest living solely to protect the private financial interests of the funeral-director cartel. Four out of five federal courts to examine restrictions on casket sales have struck them down as unconstitutional. Most recently, the 5th U.S. Circuit Court of Appeals invalidated a Louisiana law that forbade a monastery of Benedictine monks from selling their handmade caskets to the public.

That is why on March 29, 2016, Shelia joined with the Institute for Justice (“IJ”) to file a constitutional challenge in federal court to vindicate the right to earn an honest living. This case will address one of the most important unsettled questions in constitutional law: Can the government restrict economic liberty just to enrich politically favored insiders such as licensed funeral directors?

The case ended a mere month after it was filed, when the Alabama legislature changed the law so that Shelia and other entrepreneurs can sell caskets to the public.

Alabama Caskets

Date Filed

April 5, 2016

Original Court

U.S. District Court for Northern District of Alabama

Case Status

Closed

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Shelia Champion and The Good Earth Burial Ground

Shelia opened The Good Earth Burial Ground to offer families a simple, more environmentally friendly alternative to traditional burial. Shelia’s interest in low-cost, “green” burials arose as a result of her experiences with her parents’ passing. Shelia felt that the elaborate traditional funeral was both too expensive and lacked intimacy. As she did research, she discovered growing interest in alternative funeral practices. 1 Recognizing that there is a significant market among Baby Boomers like herself, Shelia decided to stake her retirement savings on The Good Earth.

In the traditional approach to burial, the remains are filled with preservative chemicals as part of the embalming process. The body is then placed in a casket made with treated wood or metal that resists decay (the caskets may also be sealed with a rubber gasket to keep them airtight and watertight as long as possible). In the final step, the casketed remains are often placed in a metal or concrete vault before being buried.

The goal of The Good Earth is to return the remains to nature in the most natural way possible and as quickly as possible while leaving the smallest footprint. First, to prevent toxic embalming fluids from eventually leaking into the soil, The Good Earth does not allow the burial of remains that have been embalmed, unless the embalming fluids are nontoxic and biodegradable. Next, the cemetery requires burial in shrouds or caskets made of readily biodegradable material such as bamboo fabrics or untreated cardboard or wood. Third, there are no vaults; the shroud or casket is interred directly in the soil. Last, with the exception of a small yard of gravesites arranged in traditional rows, interments will take place wherever there is a free spot beneath the branches in an untended forest.

As part of her cemetery business, Shelia wants to sell the shrouds and caskets that The Good Earth will accept. These items will sell for a fraction of their traditional counterparts.

She hopes to enable families to bury loved ones in a much less expensive manner than is usually possible with a more traditional approach. These days, funerals can easily cost upwards of $10,000,2 and families frequently spend thousands of dollars on the casket alone.3 In fact, it is possible to have one’s ashes shot into space for much less than the average cost of a funeral and burial these days.4

Alabama Buries the Competition

Unfortunately, Shelia’s plan to sell caskets and shrouds through The Good Earth makes her an outlaw. Under Alabama law, only state-licensed funeral directors are allowed to sell funeral merchandise to the public.5 The statute provides for thousands of dollars in fines and even a year in jail for violations.6

It is no answer to tell Shelia—a grandmother in her 60s who is trying to start a small business—to become a state-licensed funeral director. Becoming a funeral director is a long and expensive process. She would have to devote at least a year to mortuary school and then two years to an apprenticeship.7 She would also have to learn an enormous amount about things such as embalming that are irrelevant to casket sales and her cemetery business.

Not only would Shelia have to become a licensed funeral director, she would have to build a funeral home. Under the law, funeral merchandise such as a casket must be sold at a state-licensed “funeral establishment.”8 In addition to having a casket showroom and office space, a funeral establishment must also have embalming facilities.9 It would cost Shelia hundreds of thousands of dollars to build a funeral home that she does not want, does not need, and would never use.

The existence of these educational and facilities requirements is no accident. Alabama funeral law is designed to ensure the dominance of the traditional, full-service funeral model, as well as ensure that state-licensed funeral directors have a monopoly on the money that Alabamans spend on funerals. In particular, funeral directors want a monopoly on casket sales because the casket is typically the single largest expense for a funeral.

There is no legitimate reason why only funeral directors should be allowed to sell caskets or shrouds. A casket is just a box, which is why it can be made of anything, including cardboard. A shroud is just a piece of fabric, and could literally be just a bed sheet from the department store. These items serve no health and safety purpose, and Alabama has no regulatory standards for either. In fact, neither a casket nor a shroud is required for burial in Alabama.

Nor does forbidding Shelia or anyone else from selling caskets or shrouds protect consumers in other ways. In fact, there is ample reason to believe that the funeral-director monopoly harms consumers. The Federal Trade Commission (FTC) has instituted a series of regulations over the years—commonly called the Funeral Rule—to protect consumers from harmful practices that funeral directors were able to get away with because of their monopoly on the sale of funeral goods and services.10 The FTC’s regulations were driven in part by the fact that states were unlikely to reform their funeral practices themselves because state regulatory boards—as is the case in Alabama—are made up of state-licensed funeral directors.11

The FTC specifically found that funeral homes would take advantage of consumers when it came to caskets. Funeral homes typically required families to purchase a casket from the funeral home they used, and funeral homes, out of solidarity, would not sell caskets to be used elsewhere. The Funeral Rule requires funeral homes to allow families to use any casket the family wishes to use, no matter where it is bought, including caskets that are purchased inexpensively over the Internet from specialty retailers or even big-box stores such as Costco.12

Even though the FTC has found that the funeral-director monopoly on caskets harms consumers, and even though consumers can use any casket they want at any funeral home, a few states like Alabama still try to protect the monopoly by continuing to dictate that only funeral directors may sell caskets. Discount Internet retailers such as Costco will often not ship caskets into Alabama for fear of violating the casket-sales ban.13 Unsurprisingly, David Harrington, the country’s leading funeral-industry economist, has found that legal restrictions on who can sell a casket drive up the price of caskets by hundreds of dollars, which, as far as the funeral directors are concerned, is exactly the point.14

Legal Claims: The Constitutional Right to Earn an Honest Living

The federal courts overwhelmingly agree that restricting who may sell a casket is an unconstitutional violation of economic liberty. Four out of five federal courts to address this issue have struck such restrictions down as arbitrary and irrational abuses of government power.15

As in those cases, Shelia has brought her claims here under the Due Process and Equal Protection Clauses of the 14th Amendment. Under those provisions, a restriction on the right to earn an honest living is unconstitutional when there is not at least some plausible reason for the law. That reason is as absent here as it has been in the other cases: There is no legitimate reason—whether in terms of health and safety or in terms of consumer protection—for restricting who may sell a casket.

The 10th U.S. Circuit Court of Appeals is the only federal court to uphold a casket-sales restriction, ruling that it is constitutionally permissible for the government to restrict economic liberty solely for the private financial benefit of funeral directors.16 This has become one of the most important unsettled constitutional questions of our time: Is private economic protectionism a legitimate government interest? The 10th Circuit, which covers certain Rocky Mountain and Plains states, upheld Oklahoma’s casket-sales restriction by noting that “dishing out favors” to special interests as “the national pastime of state and local legislators.”17 The 2nd U.S. Circuit Court of Appeals recently agreed in a case involving teeth-whitening services.18

The majority of courts, however, disagree. The 5th,19 6th20 and 9th21 Circuits reject the idea that private economic protectionism is a legitimate reason for a law. The 5th and 6th Circuit cases are particularly important because the courts there struck down the casket-sales restrictions in Louisiana and Tennessee, respectively.

Importantly, Alabama is in the 11th U.S. Circuit Court of Appeals, which has yet to weigh in on the constitutionality of economic protectionism. Thus, whatever the outcome of Shelia’s case, the disagreement among the federal courts about economic protectionism is bound to deepen, thus positioning her case for a run at the U.S. Supreme Court.

Shelia’s case is the latest in the Institute for Justice’s path-breaking litigation in defense of economic liberty, and many of those cases have involved restrictions on casket sales. IJ litigated the cases discussed above from the 2nd, 5th, 6th and 10th Circuits. The larger strategic objective—one that goes to the heart of the constitutional dispute over economic protectionism—is to have courts recognize that the U.S. Constitution requires them to protect economic liberty in a meaningful way. There is uncertainty among the federal courts over how engaged judges can be in deciding economic liberty cases: Should they consider evidence of a law’s effectiveness or should they more or less rubberstamp whatever law the legislature has written?

The 5th Circuit recently set forth the model for judicial engagement in its decision striking down Louisiana’s casket-sales restriction in favor of the casket-making monks of Saint Joseph Abbey, a Benedictine monastery just outside New Orleans. In that case, the court made clear that although legislatures are entitled to deference in passing economic regulations, they could not rely on flatly illegitimate justifications such as private economic protectionism. In addition, the 5th Circuit made it clear that the government’s justifications for economic regulations must have some demonstrable basis in reality and cannot just be a pretext for protecting the financial interests of politically connected industry groups such as funeral directors. Shelia will ask the federal trial court and, if eventually necessary, the 11th Circuit to adopt the reasoning of the Abbey case.

The Client

Shelia Champion lives in Hazel Green, Alabama, which is north of Huntsville close to the Tennessee border. Her cemetery, The Good Earth Burial Ground, is a few miles up the road in Hazel Green. Shelia has lived in Alabama for over 37 years and has children and grandchildren living nearby.

The Defendants

The Defendants are the members of the Alabama Board of Funeral Service, each of whom is sued in his or her official capacity.

The Litigation Team

IJ Senior Attorney Jeff Rowes and IJ Attorney Renée Flaherty will represent Shelia. They will be assisted by Charles Paterson of Balch & Bingham, LLP, as local counsel.

Founded in 1991, the Institute for Justice is the national law firm for liberty. It has repeatedly vindicated the right to economic liberty across the country in the face of arbitrary government regulations and economic protectionism.

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