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Imagine that you’re a single mother of modest financial means, but with the energy, passionate desire, and experience to run your own business. After exploring various product lines, you spot an item that millions of people need and buy, which you can provide to consumers at about half the going price. Sounds like a great opportunity � an American Dream come true. Think again. If you live in Oklahoma and your product is a casket, starting a business will be more like the American nightmare. Ask Kim Powers. She and her partner own Memorial Concepts Online. They want to sell caskets directly to the public, just like dozens of other stores, mail-order houses, and Internet vendors across the country � even Costco, the high-profile “membership warehouse club.” But Oklahoma law bans retail casket sales by anyone except a registered funeral establishment that employs a licensed funeral director and an embalmer. The ostensible goal of the statute is to protect the welfare of Oklahoma consumers. To no one’s surprise, the real purpose of the ban is to immunize already-entrenched firms from upstart competitors. When local politicians kowtow to favor-seekers and pass anti-competitive legislation, consumers are harmed and the legitimate aspirations of businessmen and women who want to take one more step up the economic ladder are frustrated. Now, the U.S. Supreme Court has an opportunity to provide relief to these entrepreneurs as it weighs whether to grant certiorari in Powers’ case. LIBERTY’S INTEREST Oklahoma’s type of anti-competitive legislation not only mocks the notion of free enterprise, but also represents a deprivation of liberty, which is expressly guaranteed by the 14th Amendment and ought to be defended by the federal courts. “Liberty,” declared the Supreme Court in Meyer v. Nebraska (1923), includes the right “to engage in any of the common occupations of life.” Indeed, Oklahoma’s own Bill of Rights affirms that “monopolies are contrary to the genius of a free government, and shall never be allowed.” But the federal courts in Oklahoma haven’t seen it that way. In Powers v. Harris (2002), the trial judge acknowledged that the state’s professed rationale � safeguarding consumer interests � was probably bogus. Still, the court upheld the regulations because they “could have been thought by the legislature to promote the goal of consumer protection.” Two years later, the U.S. Court of Appeals for the 10th Circuit affirmed. Instead of rubber-stamping the statute on the pretext that it might shield consumers from unhealthy, unsafe, or fraudulent practices, the appellate court conceded that the actual motivation may have been to insulate existing funeral establishments from competition. “There can be no serious dispute,” said the court, “that the FSLA [Funeral Services Licensing Act] is ‘very-well tailored’ to protecting the intrastate funeral-home industry.” Then, in an astonishing act of judicial abdication, the court concluded that “intrastate economic protectionism . . . is a legitimate state interest.” Here’s how Chief Judge Deanell Tacha explained the 10th Circuit’s unwillingness to intercede, no matter how blatant the legislature’s scheme to help its friends: “[W]hile 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.” That cynical explanation didn’t sit well with concurring Judge Timothy Tymkovich. He rejected economic protectionism as a legitimate state interest, and volunteered that “[c]onsumer interests appear to be harmed rather than protected” by the FSLA. Nonetheless, wrote Tymkovich, Oklahoma’s casket sales restrictions might possibly promote, “however imperfectly, an element of consumer protection.” NO RATIONAL BASIS Too often, when courts apply “rational basis” scrutiny to economic regulations, a knee-jerk stamp of approval fails to vindicate economic liberties. That’s why it is critically important for the Supreme Court to affirm that “rational” bases do not include irrational bases. Governments must demonstrate, at a minimum, that their regulations serve a legitimate public purpose. Helping the casket industry form an in-state cartel doesn’t qualify. Notably, the 6th Circuit got it right. In Craigmiles v. Giles (2002) � a nearly identical case involving casket sales in Tennessee � the court held, first, that “protecting a discrete interest group from economic competition is not a legitimate governmental purpose.” Then, overturning that state’s restrictions, the court observed caustically that Tennessee’s consumer protection justifications “come close to striking us with ‘the force of a five-week-old, unrefrigerated dead fish,’ a level of pungence almost required to invalidate a statute under rational basis review.” Thus, a clear split among the federal circuits ripens this issue for Supreme Court resolution. And the Court appears interested. Oklahoma apparently had not planned on filing a response to Powers’ petition for certiorari. The Court asked for one, and Oklahoma’s brief is due Feb. 9. SELLING CASKETS In assessing whether the state’s regulations make any sense, the Court will no doubt find it instructive to contrast the licensing requirements imposed on Powers with the state’s asserted aims. For starters, licensed funeral establishments must have a room with drainage and ventilation facilities, along with “adequate areas for public viewing of dead human remains.” Never mind that Memorial Concepts Online does not handle human bodies. Applicants for a license must demonstrate “proficiency as an embalmer or funeral director.” Yet only one school in Oklahoma offers an approved curriculum of mortuary science, which entails training in “pathology, chemistry, anatomy, embalming, and restorative art.” After completing the requisite academic training, applicants must serve a one-year apprenticeship, during which they must embalm at least 25 human bodies. In short, as the district court observed, casket retailers in Oklahoma “are required to spend years of their lives equipping themselves with knowledge and training which is not directly relevant to selling caskets.” Yet the State Board of Embalmers and Funeral Directors � consisting of seven members, five of whom happen to be licensed funeral directors � initially argued that the restrictions were essential to ensure the health and safety of Oklahoma’s casket customers. If so, that’s news to consumers in the 40 other states that have no licensing � none of which has reported casket-related illnesses. After all, a casket is basically a metal or wooden box, which demands little, if any, specialized knowledge to sell. Perhaps that explains why Oklahoma forgoes licensing when a casket is provided by a relative of the deceased or when a casket is sold by an unsupervised agent of a funeral director for use by someone who has not yet died. Are caskets provided under those circumstances especially sterile, or do they simply pose no competitive threat to the funeral industry? Furthermore, although the state law provides that “no person shall . . . engage in the sale of funeral service merchandise to the public,” the state board does not police unlicensed casket retailers outside Oklahoma that sell over the Internet to Oklahoma residents. Nor does the board control the sale of other funeral merchandise � markers, monuments, urns, or flowers, for example � all of which could presumably raise concerns about sharp dealing or even outright fraud. Meanwhile, cost-of-living increases in Oklahoma pale in comparison to the exploding cost of dying. The average in-state funeral has a price tag of around $5,500, not including the cemetery plot and grave. That’s roughly 17 percent above the national mean, despite Oklahoma’s generally low cost of living. Consumers don’t have to look very far to find the culprit. Casket purchases are typically the largest component of funeral expenses, and they have the highest profit margins. Markups of 600 percent were documented at trial in Powers v. Harris. Blue stainless-steel caskets range from $3,600 to $4,200 in Oklahoma, versus $1,990 for the comparable model from Memorial Concepts Online. Oak caskets average $3,900, almost twice the $1,985 charged by Powers’ company. So much for consumer protection. PURE FAVORITISM Federal courts have sometimes looked beyond sham consumer protection arguments to scrutinize the underlying anti-competitive motives of state regulators. Although the Supreme Court has occasionally allowed state legislatures to favor some business interests over others, the Court has always “insisted that the legislation advance some public good” (as Tymkovich emphasizes in his Powers concurrence). Until the 10th Circuit’s naked endorsement of Oklahoma’s statute, pure unadulterated favoritism had never been condoned as a legitimate state interest. There’s one thing about government on which people of all political persuasions should be able to agree: Government has no business protecting the profits of the politically powerful by enacting and enforcing oppressive, arbitrary laws designed to keep out competition. When a state creates barriers to entry, prevents entrepreneurs from launching new businesses, and thus forces consumers to buy higher-priced products, it’s time for the federal courts to step in. Under the 14th Amendment, no state may abridge the privileges or immunities of its citizens, or deprive them of due process, or deny them equal protection of the laws. But in Oklahoma, where a fraternity of privileged businessmen enjoys a monopoly licensed by the state, Powers cannot exercise her basic right to earn an honest living in the manner that she chooses. America should be the embodiment of free and unsubsidized markets � not a playground for special pleaders harvesting unjust favors from compliant politicians. The Supreme Court, if it agrees to review Powers v. Harris, will have an opportunity to put the final nail in the coffin of economic protectionism. Oklahoma’s casket cartel: R.I.P. Robert A. Levy is senior fellow in constitutional studies at the Cato Institute and author of Shakedown: How Corporations, Government, and Trial Lawyers Abuse the Judicial Process . Levy is also on the board of directors of the Institute for Justice, which represents the petitioner in Powers v. Harris .

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