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Institute for Justice Victory for Casket Entrepreneurs Puts Nail in Coffin Of State-Imposed Monopoly

Washington, D.C. – In a resounding victory for economic liberty that will bolster entrepreneurs nationwide, a federal court ruled today that four entrepreneurs may once again sell discounted caskets to Tennessee consumers without having to secure a state-issued funeral director’s license. Such sales were a crime in Tennessee and are still outlawed in at least eleven other states.

Last year, Tennessee’s Board of Funeral Directors and Embalmers (which is made up of seven members, six of whom are licensed funeral directors) forced Reverend Nathaniel Craigmiles and Tommy Wilson of Craigmiles Wilson Casket Supply in Chattanooga, and Angela Brent and Jerry Harwood of The Casket Store in Knoxville to close their businesses and threatened them with fines and jail time for selling caskets without a funeral director’s license. But Reverend Craigmiles and the others teamed up with the Institute for Justice, a Washington, D.C.-based public interest law firm, to file a federal lawsuit challenging the requirement.

Today’s decision from Chief Judge R. Allan Edgar of the U.S. District Court for the Eastern District of Tennessee, allows the four entrepreneurs to re-open their businesses.

“Entrepreneurs everywhere can breathe more freely thanks to this decision, which establishes unequivocally that the state cannot arbitrarily stifle honest enterprise,” said Chip Mellor, president and general counsel of the Institute, the lead attorney on this case.

“All we ever wanted to do from the beginning was save consumers money by providing good service and good products,” said Angela Brent. “If the judge had ruled against us, we would have had to shut down and move out of the state. This decision means we can continue educating the public about the funeral industry’s efforts to make people spend more money than they need to.”

“Requiring us to go through this training when we don’t handle the deceased or perform burials makes as much sense as requiring the person who sells the tombstone to go through this training,” explained Tommy Wilson.

In his ruling, which came after taking expert testimony and evidence at a two-day trial, Judge Edgar held that requiring individuals who sell caskets from retail locations to obtain a funeral director’s license—which requires two years of training and the passage of a licensing exam—violated the Due Process and Equal Protection Clauses of the Fourteenth Amendment. Judge Edgar explained that any regulation of the right to pursue a chosen occupation not only must have a legitimate government purpose, but also that “there must be a rational relationship between that purpose and the means chosen by the State to achieve it.” He concluded that while Tennessee may protect public health and consumers, “the means chosen in this instance to accomplish these purposes have no rational basis.”

The judge’s 16-page opinion set a complete record establishing that requiring casket retailers to undergo training and testing in funeral directing is not rationally related to health and safety and consumer protection. As Judge Edgar explained, “there is no reason to require someone who sells what is essentially a box to undergo the time and expense of training and testing that has nothing to do with the State’s asserted goals of consumer protection and health and safety.”

Judge Edgar reasoned that customers “can choose any casket they desire, snug or airy, despite the views of the funeral director and regardless of the cause of the deceased’s death.” He rejected the assertion that consumers are protected by the licensure requirement “because funeral directors can better inform customers of their specific casket needs.” Noting that the only example the state gave of a specific casket requirement was the fact that Orthodox Jews require an all-wood casket, Judge Edgar stated that “it is irrational to require casket sellers to obtain funeral directors’ licenses to ‘protect’ Orthodox Jewish consumers from making a choice that is rightfully theirs to make.”

“By requiring a fit between the state’s asserted purpose and its chosen means, Judge Edgar has reinvigorated the protection given to the right to earn an honest living,” said Miranda Perry, an Institute for Justice staff attorney. “The state no longer has carte blanche to trample over the rights of aspiring entrepreneurs.”

The government-enforced cartel enabled funeral directors to overcharge customers who, in the midst of grief, don’t want to feel miserly toward the deceased. As Judge Edgar noted, “caskets are often the single most expensive item in the cost of a funeral. Consumers deserve to have a choice about where to purchase them.” The judge found that caskets are marked up by funeral directors from 250 to 400 percent; perhaps as high as 600 percent. Nationally, the average price of a funeral with burial is about $8,000.

Independent casket retailers, however, offer prices that are a fraction of those found at funeral homes. When open, The Casket Store sold a popular oak casket for $2,249, compared to $3,350 charged by area funeral homes. Yet soon after these stores opened up, the state acted swiftly to protect the public from these low prices—all because the retailers refused to submit themselves to the absurdity of obtaining a funeral director’s license.

“Similar arbitrary licensing laws still affect hundreds of other occupations across the country,” Mellor noted. “Our goal is to restore economic liberty—the right to earn an honest living free from excessive government regulation—as a fundamental civil right. Today’s victory is a major step forward toward that end.”

In potentially historic terms, the judge also recognized that it may be time to reinvigorate the Privileges or Immunities Clause of the Fourteenth Amendment, the constitutional provision most directly intended to protect economic liberty. As Judge Edgar noted, the Privileges or Immunities Clause was reduced to a “practical nullity” by a sharply-divided Supreme Court in the 1873 Slaughter-House Cases. In ringing language, Judge Edgar spelled out why Craigmiles could well be the vehicle to restore this vital provision to its originally intended status. Exploring the history surrounding the Clause and Slaughter-House, he explained that it “is not for this trial court to breathe new life into the Privileges and Immunities Clause 127 years after its demise.” Judge Edgar concluded, however, that “it may be time, as Justice Thomas suggests . . . to take another look at the Privileges and Immunities Clause and its place within the Fourteenth Amendment.”

Joining the Institute as pro bono local counsel is Hal North of the Chattanooga law firm Shumacker & Thompson.

 

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