Federal Court Hears Oral Argument Today In Oklahoma Casket Licensing Law Case

John Kramer
John Kramer · November 18, 2002

Washington, D.C.—Do individuals have a right to earn an honest living in the profession of their choice, or is that merely a privilege that the government can grant or withhold as it sees fit?

That is the question the Institute for Justice will seek to answer as it goes to trial in a lawsuit in which it represents a pair of entrepreneurs who operate a web-based casket retail business. The independent casket sellers are challenging an Oklahoma law that prohibits them from selling caskets to Oklahoma residents because they are not licensed funeral directors in Oklahoma.

The trial is scheduled to begin at 9 a.m. on Monday, November 18, 2002, in the U.S. District Court for the Western District of Oklahoma at the U.S. Courthouse on NW 4th and Harvey in Oklahoma City. The Honorable Stephen P. Friot will preside in Courtroom 305 on the third floor of the building.

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 ten 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 several years of full-time college course work, a one-year apprenticeship including the embalming of 25 bodies, and an exam.

“Casket retailers in Oklahoma—but not in most other states—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 are able to greatly overcharge consumers for items such as caskets.

“Consumers looking to purchase a casket shouldn’t fall victim to a state-sponsored funeral home monopoly that marks up the prices on caskets as much as 600 percent,” said Neily. “There is no justification for these protectionist laws.”

Eliminating Oklahoma’s casket cartel by striking down 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 Circuit U.S. Court of Appeals where a decision is expected soon.

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 when it comes to shopping for caskets that people in most other states can exercise,” Powers concluded.

The Federal Trade Commission (FTC) filed a brief in support of entrepreneurs challenging Oklahoma’s law. The FTC, which previously has issued regulations to protect the rights of consumers purchasing funeral merchandise, filed the brief to clarify that its own regulations, unlike Oklahoma’s, are not intended to stifle competition.

“Rather than promote consumer choice, [Oklahoma’s Funeral Services Licensing Act] forces consumers to purchase caskets from funeral directors,” the FTC stated in its brief. “Whatever ends the FSLA can be said to be advocating, it is not advancing the ends of the FTC’s Funeral Rule.”