Funeral Home Entrepreneurs Score a Victory

John Kramer
John Kramer · October 11, 2006

Arlington, Va.—Today a federal judge in Baltimore denied the State of Maryland’s attempt to dismiss an economic liberty lawsuit brought by five entrepreneurs, represented by the Institute for Justice, who are being arbitrarily excluded from the funeral home market. Current State law has established a funeral home cartel that overcharges customers and prevents entrepreneurs from entering the market.

“The Judge recognized that our clients have important constitutional rights at stake and deserve an opportunity to vindicate those rights,” said Institute for Justice Senior Attorney Clark Neily, who serves as lead attorney in the lawsuit. “We are one step closer to seeing the end of Maryland’s government-imposed funeral home cartel.”

The suit was filed on March 1, 2006, in U.S. District Court for the District of Maryland challenging State law that allows only licensed funeral directors and a handful of specially favored corporations and individuals to own a funeral home. Obtaining the government-issued license takes two years of study and thousands of dollars.

“This law is so outrageous that both the State health department and the Federal Trade Commission agree that it’s a pointless restraint on trade that clobbers consumers,” added Neily. The FTC has acknowledged that Maryland’s funeral home law hurts the public by artificially raising prices while preventing competition. Even the State health department has agreed that the law hurts the industry as well as consumers.

“All our clients want is the chance to earn an honest living by offering consumers the best service at the best price,” said Jeff Rowes, a staff attorney with the Institute. “We intend to prove that this law does nothing but protect cartel members from honest competition, and that the Constitution doesn’t allow Maryland to prevent people from working just to make cartel members rich.”

The clients challenged Maryland’s funeral home ownership law under four separate provisions of the U.S. Constitution. Only one claim, which concerned the Privileges or Immunities Clause of the Fourteenth Amendment, was dismissed. The three remaining challenges are under the Due Process Clause of the Fourteenth Amendment, the Equal Protection Clause of the Fourteenth Amendment and the Commerce Clause of Article One, Section Eight.

Founded in 1991, the Institute for Justice has successfully represented entrepreneurs nationwide who fight arbitrary government regulation. Among other victories, the Institute’s litigation led a federal court to strike down Tennessee’s casket sales licensing scheme as unconstitutional, a decision that was upheld unanimously by the 6th U.S. Circuit Court of Appeals. This marked the first federal appeals court victory for economic liberty since the New Deal. IJ recently won a case before the U.S. Supreme Court on behalf of Virginia and California vintners and New York wine consumers looking to open New York State’s wine market to the interstate direct shipment of wine to New York consumers. IJ’s goal is to restore constitutional protection for the right to earn an honest living in the occupation of one’s choice, free from discriminatory government regulations—the right to economic liberty.

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