Washington, D.C.—Two entrepreneurs today launched a web-based casket retail business along with a federal lawsuit challenging Oklahoma’s law that bars them from selling caskets to Oklahoma residents.
Kim Powers, of Ponca City, Oklahoma, and Dennis Bridges, of Knoxville, Tennessee, launched Memorial Concepts Online (www.memorialconceptsonline.com), a company that provides high-quality caskets to consumers across the nation at a discount price. But, Oklahoma is one of twelve states that shuts out potential competitors by requiring anyone who sells caskets and other funeral-related merchandise to be a licensed funeral director, even if the retailer, like Powers and Bridges, performs no funeral services of any kind. Obtaining an Oklahoma funeral director’s license requires at least two years of full-time college course work, a one-year apprenticeship including the embalming of 25 bodies and an exam.
“Casket retailers must complete all of these requirements just to sell what amounts to a wooden or metal box,” said Clark Neily, lead attorney on the case for the Washington, D.C.-based Institute for Justice, which filed suit on behalf of the two entrepreneurs. “This makes as much sense as requiring the person who carves the tombstone to go through this kind of training.”
Supposedly enacted to protect vulnerable consumers, the true purpose and effect of such laws is to create a cartel in the funeral merchandise market for the benefit of licensed funeral directors. By limiting competition, funeral directors greatly overcharge consumers for items such as caskets.
“Consumers looking to purchase a casket shouldn’t have to get taken advantage of by a state-sponsored funeral home monopoly that marks up the prices on caskets as much as several hundred percent,” said Neily. “There is no justification for these protectionist laws.”
Eliminating Oklahoma’s casket cartel by eliminating protectionist licensing laws will benefit consumers by giving them more choices when it comes to purchasing a casket and by driving down the current monopoly prices charged by licensed funeral directors. Moreover, the Internet has expanded consumers’ power to get a good deal on everything from books to cars. Whether going online to buy or just to shop around, consumers are empowered with more information and options to shop when, where and how they want while getting better buys both online and at brick and mortar stores because of the increased competition e-commerce brings.
“These regulations amount to nothing more than naked economic protectionism,” said Institute for Justice President Chip Mellor. “They are striking examples of an industry that has taken over government’s authority and is using that power to protect itself from competition and enrich itself in the process.”
The Institute for Justice is a public interest law firm that represents entrepreneurs nationwide who are fighting for economic liberty—the right to earn an honest living free from excessive government regulation. The Institute for Justice is challenging Oklahoma’s licensing laws on the ground that they violate the 14th Amendment’s Due Process, Equal Protection and Privileges or Immunities Clauses by imposing unreasonable and arbitrary barriers to entry into the casket retail market. The Institute won a similar challenge to Tennessee’s licensing law in October 2000. Tennessee has appealed that ruling to the Sixth U.S. Court of Appeals.
The lawsuit challenging Oklahoma’s licensing laws was filed on behalf of Powers and Bridges by the Institute for Justice in the U.S. District Court for the Western District of Oklahoma. Powers and Bridges have asked the court to declare that, under the U.S. Constitution, Oklahoma’s protectionist licensing laws violate their due process rights to earn an honest living, their right to equal protection and their right to economic liberty protected by the Privileges or Immunities Clause.
The U.S. Constitution prevents the government from arbitrarily interfering with citizens’ ability to earn honest livings in their chosen occupations. The government may only restrict a person’s right to pursue his or her chosen livelihood when there is a “rational basis” for the restrictions. To establish a rational basis, the government must show that there is a reasonable fit between the government-imposed restrictions in question and a legitimate public purpose. Creating insurmountable barriers to entry into a given profession in order to promote the economic interests of a favored group, such as funeral directors, is not a legitimate public purpose.
“Consumers may not realize they have choices,” said Bridges. “With Memorial Concepts they can learn more about their choices, get better prices and shop from the comfort and convenience of their own homes.”
“We want to bring the same options to the citizens of Oklahoma that casket consumers in other states enjoy,” Powers concluded.