IJ Takes on Oklahoma Casket Cartel

May 2001

IJ Takes on Oklahoma Casket Cartel

By Clark Neily

I knew Kim wouldn’t sit still for it.  And I could almost see Dennis giving his head a sad, slow shake.  Kim Powers and Dennis Bridges sell funeral merchandise over the Internet, and their website hadn’t been up for two weeks before the personal attacks from the Oklahoma funeral industry came rolling in.  First there was a snide letter from a funeral director in Oklahoma City who likened casket sales by non-funeral directors to “dumpster diving.”  Then came an op-ed from the president of the Oklahoma Funeral Directors Association accusing Kim and Dennis of insincerity and a lack of compassion—qualities that he seemed to believe only licensed funeral directors possess.  Why such venom?

From left, Clark Neily, IJ staff attorney, Kim Powers, president & CEO Memorial Concepts Online, Inc.; William Mellor, IJ president and general counsel; Dennis Bridges, co-owner Memorial Concepts Online, Inc.; and Andrew Lester, an attorney with Lester, Loving & Davies, gather in Oklahoma City to announce the launch of a lawsuit to break up Oklahoma’s government-imposed casket cartel.

Like a dozen other states, Oklahoma forbids anyone who is not a licensed funeral director from selling caskets and other funeral merchandise.  By eliminating competition from independent retailers, those states create a monopoly on casket sales that many licensed funeral directors use to exploit hapless consumers and inflate their own profit margins.  As we showed when we broke up Tennessee’s casket cartel last year, licensed funeral directors typically mark up the prices on caskets anywhere from 200 to 600 percent, secure in the knowledge that their customers have nowhere else to turn.

After a total of 26 years in the funeral industry, Kim and Dennis knew there had to be a better way—a way for people to buy caskets without the price mark-ups and sales pitches that funeral directors often use to get customers to spend far more than they ever expected or intended.  So they figured, “Why not let our customers shop from the comfort of their own homes?  Why not create a website where people can browse through caskets, memorials and other products at their own pace, deciding for themselves which products they like and how much they wish to spend?”

And that’s how Memorial Concepts Online, Inc. was born.  When they started out, Dennis and Kim knew a lot about the needs of customers shopping for funeral merchandise, but little about computers and even less about starting their own business on the Web.  But they tackled this new challenge with the same tenacity and focus that had propelled each of them into top levels of responsibility at one of the country’s largest funeral services companies.  They went to seminars and classes, learned to write HTML, and even (eventually) conquered the dreaded on-line “shopping cart.”  But there remained one final obstacle to Dennis and Kim’s dream of running their own business:  the State of Oklahoma.

In Oklahoma, it’s a crime to sell caskets unless you’ve been to school for two years, served a one-year apprenticeship in a funeral home, embalmed 25 bodies, passed several exams and paid a licensing fee to the state.  Why?  Well, the average cost of a funeral in Oklahoma is about $5,500, and the majority of that often comes from the casket.  When you consider the 200-600 percent mark up that licensed funeral directors routinely slap on those caskets, you’re looking at hundreds or even thousands of dollars of pure, unearned monopoly profit on every sale.  Then you begin to understand why funeral directors are so vehemently opposed to any attempt to dismantle the casket cartel.  But while they may be vehement, they are not particularly coherent. It’s almost impossible to get a straight story from the funeral industry or a state regulatory agency (not that there’s all that much difference between the two) about the supposed justifications for casket licensing laws.  Sometimes they’ll tell you that the laws are meant to protect public health and safety.  After all, caskets hold dead bodies, so they must present some health and safety concern, right?  Actually, they don’t.  Contrary to what most people may think, caskets play no role whatsoever in preventing the spread of disease or protecting the environment.  Indeed, the fact that Oklahoma doesn’t even require the use of a casket in burials makes it pretty obvious that no one seriously believes caskets have anything to do with health and safety.

Another argument is that people are especially vulnerable after the death of a loved one, and the government therefore needs to protect them by regulating all aspects of the funeral industry, including casket sales.  Of course, this kind of paternalism knows no bounds, and it strips away both personal responsibility and human dignity in equal measures.  The “vulnerable consumer” argument is particularly ironic because it ends up giving funeral directors a license to do the very thing the laws are ostensibly designed to prevent:  namely, fleece consumers by depriving them of any meaningful choice when it comes to buying caskets.

In short, casket merchandising laws lack any justification.  And it is the total illegitimacy of those laws that explains why the funeral industry has responded to Dennis and Kim’s federal court challenge with personal attacks instead of reasoned argument.  The funeral directors are on the wrong side of a losing debate, and they seem to know it.  One Oklahoma funeral director, expressing his hope that the state board would defend the law as long as it could, said it best:  “Eventually they’re going to punch through.  Sometimes you’ve got to keep the jungle back a little ways.”  Lions and tigers and—competition?!  Oh my!

Clark Neily is a staff attorney with the Institute for Justice.