Disappointing decision by the 10th Circuit in Powers v. Oklahoma this week upholding Oklahoma’s law permitting only licensed funeral directors to sell caskets. Why someone would need a to embalm 25 bodies, pass a licensing examination, and complete a specified 60-credit program of undergraduate training for the required funeral director’s license just to sell a box remains unclear to me. Indeed, given the complete lack of any link between box-selling and embalming, it is surprising that the funeral home directors don’t just go ahead and have their monopoly extend to all forms of box-selling, including cardboard boxes and luggage.
These restrictions have always struck me as especially distasteful, in that these guys mark up their caskets by a couple hundred percent and take advantage of people who may be grieving. To add insult to injury, the price-gouging morticians defend their practices by saying that they are proctecting people in their time of need.
One of the more disturbing aspects about this opinion is that it suggests that protecting an interest-group from economic competition is itself a legitimate government purpose. “In contrast, the Supreme Court has consistently held that protecting or favoring one particular intrastate industry, absent a specific federal constitutional or statutory violation, is a legitimate state interest.” On the other hand, there is a refreshing honesty to the court’s characterization of the realities of the political process (especially when it comes to regulation of the licensed professions): “We also note, in passing, that while baseball may be the national pastime of the citizenry, dishing out special economic benefits to certain in-state industries remains the favored pastime of state and local governments.” The court goes on to state, however, “While the creation of such a libertarian paradise may be a worthy goal, Plaintiffs must turn to the Oklahoma electorate for its institution, not us.”
In fact, according to FTC studies of the funeral industry, it turns out that in many families there is one person who essentially specializes in buying funerals–i.e., “Uncle Joe” or “Aunt Sue” handles all the funeral arrangements for family funerals. So in fact the decision-maker can and will shop–if given the chance. These sorts of laws like the Oklahoma decision in Powers instead just deliver up consumers to get ripped-off by a licensed monopoply. And it has been well-recognized since at least Mancur Olson that the political process is likely to fail in exactly this situation–where there is a delivery of concentrated benefits to a well-organized interest group and the costs are borne by dispersed consumers as a whole who lack the incentive and ability to organize themselves to overturn these regulations. Indeed, in this situation the incentives would appear to be even more attenuated, in that purchase of funeral goods and services is at best a rare shopping incursion, distinguishing it from such goods and services as plumbers, lawyers, and doctors.
The 10th Circuit’s opinion creates a circuit split with the 6th Circuit’s decision in Craigmiles v. Giles, 312 F.3d 220 (6th Cir. 2002), so perhaps this will make the issue ripe for Supreme Court cert.
A nice summary and analysis is provided by Fritz Schrank at sneakingsuspicions.com, who brought the decision to my attention.
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