Verlin Stoll is a 27-year-old entrepreneurial dynamo who owns Crescent Tide funeral home in Saint Paul, Minn. Verlin has built a successful business because he offers low-cost funerals while providing high-quality service. His business is also one of the only funeral homes that benefits low-income families who cannot afford the high prices of the big funeral-home companies.
Verlin wants to expand his business, hire new employees and continue to offer the lowest prices in the Twin Cities, but Minnesota refuses to let Verlin build a second funeral home unless he builds a $30,000 embalming room that he will never use.
Why is Minnesota forcing Verlin to waste $30,000 on a useless embalming room as a condition of expanding his thriving business?
So that the big, full-amenity funeral-home businesses can benefit from a law that drives up prices for consumers and operating expenses for competitors such as Verlin. Verlin’s basic services fee is only $250, which is about 90 percent lower than the $2,500 that the average Twin Cities’ funeral home charges. Verlin’s business model is built on minimizing fixed costs, which is why he does not have a hearse or chapel, and this law—to the advantage of his competitors—stands in the way of him expanding his low-cost, high-quality approach.
The government should not force Minnesotans to do useless things. That is why on January 19, 2012, Verlin and the Institute for Justice challenged the law in state court.
On October 9, 2013, a Ramsey County Court judge struck down Minnesota’s embalming-room requirement as unconstitutional and recognized that Minnesota had violated Verlin’s right to earn an honest living. The Judge ruled that “The embalming-room requirement, which would require Stoll to expend $30,000 or more to build a preparation and embalming room at any funeral establishment where no preparation and embalming is performed, constitutes an irrational exercise of the state’s police power.”
With this ruling, Verlin is free to expand his business to serve a broader community without having to waste money on useless government requirements.
The Funeral Consumers Alliance of Minnesota (FCA-MN) is a nonprofit organization dedicated to protecting a consumer’s right to choose a meaningful, dignified and affordable funeral. FCA-MN holds an annual board meeting where speakers discuss topics such as pre-arranging funerals, affordable funeral homes in the Twin Cities and other topics of interest to FCA-MN members.
Verlin Stoll has always been entrepreneurial. After mortuary school, he opened Twin Cities Trade Service, a trade embalming business where Verlin did nothing but embalm for other funeral homes. Verlin sold Twin Cities Trade Service and, in April 2011, opened Crescent Tide to fulfill his dream of owning his own funeral home. Verlin realized that…
St. Paul, Minn.—Today, Governor Mark Dayton signed the Omnibus HHS Policy Bill into law, which includes repealing the requirement that funeral-home entrepreneurs waste between $30,000 to $50,000 building useless embalming rooms in order to expand their businesses. The new law expands a major economic liberty victory from a 2013 lawsuit successfully brought by the Institute…
Arlington, Va.—Today, in a major victory for economic liberty, the Minnesota Second Judicial District relied on the Minnesota Constitution to strike down an irrational law that forced funeral-home entrepreneurs to waste $30,000 to $50,000 building useless embalming rooms in order to expand their businesses. Victorious plaintiff Verlin Stoll, owner of Crescent Tide Funeral Home in…
Arlington, Va.—May the government force entrepreneurs to do useless things, like build extra rooms in their stores that they do not need and will never use, just to prove they are serious about their business? That issue is at the center of a major lawsuit filed today, January 19, 2012, in Minnesota State District Court…
Fortunately, the Minnesota Constitution protects the right to earn an honest living, and the state’s embalming-room requirement violates that right by forcing entrepreneurs to do something time-consuming, expensive and completely unnecessary.
To protect the rights of entrepreneurs and consumers across Minnesota, both in the funeral context and in other areas where arbitrary government regulation serves no purpose, the Institute for Justice Minnesota Chapter filed a lawsuit in state district court in Ramsey County on January 19, 2012, to strike down the state’s embalming-room requirement as unconstitutional and to allow funeral directors to build funeral homes without embalming rooms.
Embalming is the process of using preservative chemicals to slow the decomposition of human remains for the purpose of public viewing.
Embalming is never legally required simply because a person has died. Embalming is only ever required for interstate transportation of human remains or when the body will not be buried for several days.
Embalming is in sharp decline for two reasons. First, cremation is a growing trend while burial is declining and embalming is rarely done prior to cremation. Second, for environmental and religious reasons, there is continuously shrinking demand for embalming even when a person is going to be buried. Islam and Judaism, for example, prohibit embalming.
The growth of cremation, which tends to be much less expensive than a traditional burial, illustrates the plummeting demand for traditional burial with embalming. During the ten-year period ending in 2009, cremation rates in Minnesota increased by more than 50 percent and now account for 46.8 percent of all funerals.
Funeral home businesses with multiple locations typically centralize embalming at one location. For example, Washburn McReavy, the largest funeral home chain in the Twin Cities, has 17 locations across the region but does all of its embalming at a single location in Minneapolis.
Many funeral homes do no embalming themselves, but instead contract out to independent trade embalmers who do nothing but embalm. Other funeral homes do some of their own embalming and contract out the rest. This is perfectly legal in Minnesota.
Crescent Tide Funeral Home: Changing the Traditional Funeral Home Model
Plaintiff Verlin Stoll has always been entrepreneurial. After mortuary school, he opened Twin Cities Trade Service, a trade embalming business where Verlin did nothing but embalm for other funeral homes. Verlin sold Twin Cities Trade Service and, in April 2011, opened Crescent Tide to fulfill his dream of owning his own funeral home.
Verlin realized that his key market advantage could be price. Most funeral homes have been around for several generations and have built businesses based on their longstanding reputations. But age can also make a funeral home business resistant to change and many of the older funeral homes have multiple locations with full amenities, which create high fixed costs, an approach that emphasizes expensive traditional burials costing thousands of dollars.
At Crescent Tide, Verlin offers “the new generation of service,” responding to the changing funeral market and recognizing that funeral consumers want high quality funerals but at much lower prices than what traditional funeral homes offer.
Verlin is determined to offer high-quality funerals at the lowest prices by stripping down his fixed costs. Consider the basic services fee that funeral homes charge their clients in addition to the itemized charges for each specific funeral good or service. The basic services fee at area funeral homes varies from roughly $2,000 to $3,000 with the average around $2,500. Crescent Tide’s basic services fee is only $250, which is a 90 percent discount.
In order to offer the lowest prices in town, Verlin built his funeral home as inexpensively as possible. Crescent Tide does not have a hearse, an on-site chapel or a lavish display room for expensive caskets. When a client wants a hearse or some other amenity, Verlin simply contracts with the lowest-cost outside provider. By not building extraneous amenities, Verlin has been able to pass on tremendous savings to his customers.
Not only does Verlin’s high-quality-with-low-prices model help the average consumer, it benefits lower-income citizens. Verlin works with plaintiff Helen Williams, a longtime advocate for reasonably priced funerals for Minneapolis’ African-American community. Helen, who has helped plan more than 1,000 funerals at no charge, became interested in funeral issues after her son lost two close friends to gang violence. Many people in her community need county financial assistance with burial and Helen discovered that the traditional funeral homes are unwilling to provide a high-quality funeral for those on a fixed budget.
Helen, who receives no compensation from Crescent Tide or anyone else, directs members of her community to Crescent Tide because Verlin is the only area funeral director able to provide high-quality funerals at prices within the Hennepin County financial assistance guidelines. Helen joined this lawsuit to advocate on behalf of consumers who directly benefit when entrepreneurs such as Verlin provide quality goods and services to the African-American community at reasonable prices.
Crescent Tide is proving to be very successful. In addition to Helen’s referrals, consumers in St. Paul and the east side of Minneapolis appreciate that Verlin offers such low prices without compromising on quality. Verlin would now like to build upon his success by opening up a second funeral office on the other side of the Twin Cities in St. Louis Park, a suburb of Minneapolis, so that he can be closer to Helen’s families, reach a new community and build his customer base.
Minnesota’s Irrational Embalming Room Requirement
Verlin’s strategic advantage is a minimalist approach that keeps costs and prices low. But one major overhead cost that Verlin was not able to avoid in building Crescent Tide was the $30,000 he had to spend to build an embalming room. Verlin built an embalming room at Crescent Tide even though doing so made no sense under his business model because Minnesota irrationally requires every funeral home to have an embalming room.
The embalming room requirement exists even though: (1) embalming is not required by law; (2) funeral directors do not have to personally perform the embalming services that they sell; and (3) a funeral home can contract out its embalming to third-party trade embalmers. At least one funeral home in the Twin Cities was grandfathered in without an embalming room in 1997. That funeral home relies exclusively on the services of trade embalmers and the continued operation of that grandfathered funeral home has had no adverse consequences for consumers
The only thing the embalming room requirement does is drive up Verlin’s costs, making it more difficult for him to compete with the full-amenity funeral homes. The embalming room requirement serves no practical purpose and is retained for the benefit of established businesses as a barrier to innovators such as Verlin. This fact is evident in Minnesota’s policy that the required embalming rooms do not have to be functional. There are unneeded embalming rooms across Minnesota that are being used as staff rooms, storage rooms and offices. As mentioned earlier, the largest funeral home chain in the Twin Cities, Washburn McReavy, has 17 branches and 17 embalming rooms, but only one embalming room is actually used.
Funeral Consumers Are Harmed When the Government Forces Funeral Directors to Waste Money on Useless Things
There are real losers when the government makes entrepreneurs do useless things and those losers are the consumers who must pay for bureaucratic foolishness. That is why the Funeral Consumers Alliance of Minnesota (FCA-MN) has joined Verlin and Helen in this constitutional fight against government-mandated waste. FCA-MN is a nonprofit organization dedicated to protecting a consumer’s right to choose a meaningful, dignified and affordable funeral. FCA-MN holds an annual board meeting where speakers discuss topics such as pre-arranging funerals, affordable funeral homes in the Twin Cities and other topics of interest to FCA-MN members. FCA-MN is also active in lobbying for legislation that benefits funeral consumers.
FCA-MN has found it difficult to find affordable funeral homes to recommend to its members. At present, FCA-MN has found only two funeral homes that offer sufficiently low prices. These two funeral homes are a local cremation provider, which has created a special deal for FCA-MN members, and Verlin’s business, Crescent Tide. FCA-MN wants consumers to have the option of more low-cost funeral homes like Crescent Tide.
The Legal Challenge
The only plausible explanation for why the embalming room requirement still exists is that it protects the established funeral homes from unconventional entrepreneurs like Verlin Stoll. By increasing the cost of opening a funeral home by $30,000 or more, the embalming room requirement limits entry into the field and ensures that existing funeral homes will not have to face lower-priced competition.
But the Minnesota Constitution protects the right to earn an honest living. That right includes the right not to have to do time-consuming, expensive and completely unnecessary things as a condition of operating a business. The people of Minnesota did not form a government and did not ratify a constitution, in order to have bureaucrats make them do useless things. Specifically, the embalming room requirement violates the Due Process, Equal Protection and Unenumerated Rights Clauses of the Minnesota Constitution.
The government seems to contend that the embalming room requirement serves three purposes: (1) deter fraud; (2) ensure that every funeral home can serve any customer; and (3) provide a place to touch up bodies prior to a funeral. Not only are these arguments unpersuasive, they are flatly illogical and in conflict with the overall licensing scheme.
First, the government’s anti-fraud justification makes no sense. Essentially, the government is claiming it can make entrepreneurs do expensive and useless things to demonstrate just how badly those entrepreneurs want to be in business. The purported theory is that the more money an entrepreneur has to start a business, the more that person can be trusted not to cheat a customer.
In the funeral context, the government’s argument appears to be that funeral directors who take money from clients in exchange for a promise to provide a funeral years later when the client dies are less likely to abscond with the money if the funeral directors are forced to make expensive capital investments in useless structures. This is such a peculiar way to deter fraud that the plaintiffs can think of no other business that is forced to do something useless and costly just to prove its trustworthiness to the government.
Minnesota already addresses fraud by regulating the sale of funerals on a pre-need basis. Specifically, when consumers want to pay for funerals in advance, funeral directors are already required by law to put the consumers’ pre-need deposits into trust accounts. This is a far more sensible way to regulate fraud than creating a barrier to entry by requiring new entrants to build useless things. Moreover, the state’s rationale is not even an argument for the embalming room requirement. It is just an argument for making entrepreneurs devote money to useless investments. This type of barrier to entry helps no one but existing firms, and, by this same logic, funeral directors could be required to build a gymnasium or any number of useless things in every funeral home to prove their commitment.
The second purported justification for the embalming room requirement similarly fails. Funeral directors must be capable of providing embalming services, but it is irrational to require every funeral home to have embalming facilities. The law does not require embalming. Nor does it require a funeral director or even an entire funeral-home business to conduct its own embalming. It is perfectly legal for funeral homes to contract out their embalming. The law does not even require embalming rooms to be functional. It just requires they exist. An embalming-room requirement that amounts to nothing more than the requirement that an embalming room exist, even if it is never used and is non-functional, is irrational. To be clear: The solution here is not to require that embalming rooms be functional and well used; the solution to this problem is to do away with the government’s embalming room requirement entirely.
Finally, requiring an embalming room as a place for last-minute touch-ups also makes no sense. Many funerals are held in locations that are far away from embalming rooms such as churches. In those cases, the funeral director does not even have the option of using the embalming room to do last-minute touch-ups. Even when the funeral occurs at the funeral home, few funeral directors would go to the unnecessary effort of carting the body all the way back to the embalming room for a touch-up. Instead, it is standard practice for funeral directors to carry cosmetics and be ready to apply them to the deceased on-site.
The plaintiffs will ask the court to strike down the embalming room requirement as a violation of the constitutional rights to economic liberty and equal protection and thereby reaffirm the longstanding principle that government cannot subject citizens to arbitrary and irrational laws.
The Institute for Justice: A History of Fighting for Economic Liberty
The Institute for Justice litigates in support of constitutionally protected individual rights, including the right to earn an honest living free from unconstitutional governmental interference. IJ has scored significant victories on behalf of individuals and businesses throughout the nation. A few of the important economic liberty cases IJ has litigated include:
Saint Joseph Abbey v. Castille. In August 2010, IJ teamed up with the monks of the Saint Joseph Abbey to challenge the constitutionality of Louisiana’s requirement that the monks be licensed as funeral directors in order to sell their handmade wooden caskets. IJ won at the trial court level and the case is now before a federal appeals court.
Craigmiles v. Giles. The Institute for Justice secured a federal court victory striking down Tennessee’s casket sales licensing scheme as unconstitutional, a decision that was upheld unanimously in December 2002 by the 6th U.S. Circuit Court of Appeals. This marked the first federal appeals court victory for economic liberty since the New Deal.
Richard Bergmann v. City of Lake Elmo. IJ-MN represented Minnesota small farmers who were threatened with 90 days in jail and $1,000 in fines under a city law prohibiting farmers from selling pumpkins and Christmas trees grown outside of city limits. Lake Elmo amended the law to permit small farmers to sell out-of-city products after IJ sued in federal district court.
Anderson v. Minnesota Board of Barber and Cosmetologist Examiners. Resolved by court order on June 10, 2005, the board was permanently enjoined from enforcing its cosmetology licensing regime against hairbraiders in Minnesota.
Minneapolis Taxi Owners Coalition, Inc. v. City of Minneapolis. IJ-MN defended the city of Minneapolis’ deregulation of taxis. In 2009, the 8th U.S. Circuit Court of Appeals dismissed a lawsuit filed by existing licensees who argued that the city’s eliminating the cap on the number of cabs was unconstitutional.
The Litigation Team
The team fighting to end Minnesota’s irrational embalming room requirement is led by IJ Minnesota Attorney Katelynn McBride and IJ Senior Attorney Jeff Rowes.
The Institute for Justice
The Institute for Justice is a public interest law firm that advances a rule of law under which individuals can control their destinies as free and responsible members of society. Through litigation, communication, outreach and strategic research, IJ secures protection for individual liberty and extends the benefits of freedom to those whose full enjoyment is denied by the government.
The Institute for Justice is based in Arlington, Va. IJ has state chapters in Arizona, Florida, Minnesota, Texas and Washington State, as well as a Clinic on Entrepreneurship at the University of Chicago Law School.
For more information, contact:
Institute for Justice
901 Glebe Road, Suite 900
Arlington, VA 22207
 Joshua Slocum and Lisa Carlson, Final Rights: Reclaiming the American Way of Death (Upper Access, Inc., Book Publishers) (2011).
 Minn. Stat. § 149A.91.
 Rochel U. Berman, Dignity Beyond Death; The Jewish Preparation for Burial, (Urim Publications) (2005); Leor Halevi, Muhammad’s Grave: Death Rights and the Making of Islamic Society (Columbia University Press) (2007).
 Minnesota Deaths and Cremations By Year, http://www.health.state.mn.us/divs/hpsc/mortsci/cremate.htm.
Minn. Stat. § 149A.50.
Minn. Stat. § 149A.92.
 Federal Trade Commission Funeral Rule: http://www.ftc.gov/bcp/rulemaking/funeral/index.shtm