St. Joseph Abbey v. Paul Castille , 712 F.3d 215 ( 2013 )

Case: 11-30756 Document: 00512180747 Page: 1 Date Filed: 03/20/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 20, 2013
No. 11-30756 Lyle W. Cayce
Clerk
ST. JOSEPH ABBEY; MARK COUDRAIN
Plaintiffs-Appellees
v.
PAUL WES CASTILLE; ROYAL J. DAVID; GERALD L. SCHOEN, III;
J. STEVEN COX; ANDREW HAYES; MARGARET SHEHEE; KELLY RUSH
WILLIAMS; LOUIS CHARBONNET, in their official capacities as Members
of the Louisiana State Board of Embalmers and Funeral Directors; PATRICK
H. SANDERS, in his official capacity in place of Oscar A. Rollins (deceased)
Defendants-Appellants
Appeal from the United States District Court
for the Eastern District of Louisiana
Before HIGGINBOTHAM, HAYNES, and HIGGINSON, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
An Abbey of the Benedictine Order of the Catholic Church challenges as
unconstitutional rules issued by the Louisiana Board of Funeral Directors
granting funeral homes an exclusive right to sell caskets. The district court
enjoined their enforcement, finding that they deny equal protection and due
process of law. We will AFFIRM the judgment of the district court.
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I.
The thirty-eight monks of St. Joseph Abbey earn their way in a pastoral
setting. In years past, the Abbey’s timberland provided a source of income.
After Hurricane Katrina destroyed its timber, the Abbey began looking for other
revenue sources. For generations the Abbey has made simple wooden caskets
to bury its monks. Public interest in the Abbey’s caskets increased after two
bishops were buried in Abbey caskets in the 1990s. Seeing potential in this
demand, the Abbey invested $200,000 in “St. Joseph Woodworks,” managed by
Mark Coudrain, a deacon of the Church and an employee of the Abbey. The
business plan was simple. St. Joseph Woodworks offered one product – caskets
in two models, “monastic” and “traditional,” priced at $1,500 and $2,000
respectively, significantly lower than those offered by funeral homes. The Abbey
offers no funeral services. It does not prepare a deceased for burial and its
monks do not participate in funerals, except as pastors.
To be sure, Louisiana does not regulate the use of a casket, container, or
other enclosure for the burial remains; has no requirements for the construction
or design of caskets; and does not require that caskets be sealed. Individuals
may construct their own caskets for funerals in Louisiana or purchase caskets
from out-of-state suppliers via the internet. Indeed, no Louisiana law even
requires a person to be buried in a casket.
Nonetheless, the Abbey’s plan for casket sales faced significant regulatory
burdens. The Louisiana State Board of Embalmers and Funeral Directors
(“State Board”) argues that, under state law, intrastate sales of caskets to the
public may be made only by a state-licensed funeral director and only at a state-
licensed funeral home.1 This stricture has two layers. First, a prospective
1
See LA. REV. STAT. §§ 37:831(37)-(39), :848.
2
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casket retailer must become a licensed funeral establishment.2 This requires
building a layout parlor for thirty people, a display room for six caskets, an
arrangement room, and embalming facilities.3 Second, the establishment must
employ a full-time funeral director.4 A funeral director must have a high school
diploma or GED, pass thirty credit hours at an accredited college, and complete
a one-time apprenticeship.5 The apprenticeship must consist of full-time
employment and be the apprentice’s “principal occupation.” None of this
mandatory training relates to caskets or grief counseling. A funeral director
must also pass a test administered by the International Conference of Funeral
Examining Boards.6 The exam does not test Louisiana law or burial practices.
In Louisiana, funeral directors are the only individuals authorized by law to
provide funeral services. In sum, the State Board’s sole regulation of caskets
presently is to restrict their intrastate sales to funeral homes. There are no
other strictures over their quality or use. The district court found the State’s
scheme to be the last of its kind in the nation. The State Board had never
succeeded in any enforcement actions against a third party seller prior to its
effort to halt the Abbey’s consumer sales.
II.
Louisiana’s restriction on the sales of caskets exists against the
background of substantial federal regulation of the funeral industry. Beginning
in the early 1980s, the FTC promulgated regulations, known as the Funeral
2
See id. §§ 37:831(37), (39), :842(D).
3
See id. § 37:842(D)(3).
4
Id. § 37:842(D)(1).
5
Id. § 37:842(A).
6
Id. § § 37:842(A)(6), :831(38).
3
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Rule, to mitigate unfair or deceptive practices of funeral providers.7 These
practices included failing to disclose price information and “bundling” of products
and services. Bundling forced consumers to buy a range of funeral goods and
services – whether or not they needed or wanted the whole bundle. The FTC
determined that it could not rely on state funeral licensing boards to curb such
practices because the state boards were “dominated by funeral directors.”8 The
funeral directors had organized themselves into industry groups, which lobbied
state legislatures and made practices such as a refusal to disclose prices part of
their professional “ethics” code. The Funeral Rule required funeral directors to
provide consumers with itemized price lists and allow consumers to purchase
only those goods and services they actually wanted. A principal objective of the
Funeral Rule was to “encourage entry into the funeral market of new
competitors seeking to attract business by offering lower prices.”9
After the Funeral Rule forced funeral homes to disclose casket prices, the
significant mark-ups charged by the funeral homes became apparent, and a
market for third-party casket sales emerged. Funeral directors responded to this
growing competition by refusing to use third-party caskets unless consumers
paid large “casket-handling” fees. The FTC responded by amending the Funeral
Rule to ban casket-handling fees.10 In its comments on that rulemaking, the
FTC explained that “casket handling fees are unfair conditions on a consumer’s
right to decline unwanted items he or she may wish to purchase elsewhere.”11
7
Trade Regulation Rule; Funeral Industry Practices, 47 Fed. Reg. 42260 (Sept. 24,
1982); see 16 C.F.R. § 453.1 et seq.
8
Id. at 44289.
9
Id. at 42293.
10
Funeral Industry Practices Trade Regulation Rule, 59 Fed. Reg. 1592, 1593 (Jan. 11,
1994).
11
Id. at 1604.
4
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In 2008, the FTC not only decided to retain the Funeral Rule but also
expressly declined to subject third-party casket vendors to the rule because, in
contrast to state-licensed funeral directors, “[t]he record [was] bereft of evidence
indicating significant consumer injury caused by third-party sellers.”12 Because
of the FTC’s interventions, Louisiana funeral homes cannot discourage consumer
choice by applying casket-handling fees or by forcing consumers to purchase
bundled goods and services, and Louisiana consumers can now buy caskets from
third-party retailers – unless those retailers reside in Louisiana.
As the district court found, a funeral director may charge a non-declinable
service fee ranging from $3,000 to $4,000 in addition to charges for individually
priced goods and services.13 This non-declinable service fee includes advice
about casket selection, and the funeral director is contractually bound to assist
the consumer if a problem arises. Thus, whenever a consumer retains a funeral
director in Louisiana,14 the consumer pays the funeral director thousands of
dollars to provide advice on every aspect of funeral planning, including casket
purchase – whether the consumer is buying a casket from the funeral home or
using a homemade casket or one purchased from an out-of-state third-party
retailer.
III.
In December 2007, the State Board ordered the Abbey not to sell caskets
to the public, and the next month, Boyd Mothe, Sr., the chair of the Legislative
Committee for the Louisiana Funeral Directors Association and a state-licensed
12
73 Fed. Reg. 13740, 13745 (Mar. 14, 2008).
13
See Regulatory Review of the Trade Regulation Rule on Funeral Industry Practices,
16 C.F.R. § 453.2(b)(4)(iii)(C).
14
Indeed, it appears that all persons seeking to dispose of a deceased are obligated to
engage a Louisiana funeral establishment. See La. Rev. Stat. § 37:848(D)(5).
5
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funeral director who owns several funeral homes, initiated a formal complaint
against the Abbey. By law, the nine-member State Board must consist of four
licensed funeral directors, four licensed embalmers, and just one representative
not affiliated with the funeral industry.15 In 2008 and 2010, the Abbey
petitioned the legislature to change the law to allow non-profit charitable groups
such as the Abbey to sell caskets. Although two bills to amend the law were
drafted, it appears neither made it out of committee. No member of the public
opposed the bills.
Facing these hurdles, the Abbey and Deacon Mark Coudrain filed this suit
in the district court under 42 U.S.C. § 1983. The Abbey and Coudrain sought
declaratory and injunctive relief against enforcement of the Louisiana
Embalming and Funeral Directors Act by the nine members of the State Board.
These defendants are charged with the Act’s enforcement under state law and
are sued in their official capacity. The complaint asserted that the licensure
requirements confine intrastate sales of caskets to sales by funeral directors at
funeral homes, denying the Abbey and Coudrain equal protection and due
process under the Fourteenth Amendment because they bear no rational
relationship to any valid governmental interest. The State Board responded
that the challenged rules, insulating funeral directors from competition, are
rationally related to the State’s legitimate interest in regulating the funeral
profession. In the alternative, citing the Tenth Circuit’s decision in Powers v.
Harris,16 the State Board maintained that economic protection of a particular
industry is a legitimate state interest. After conducting a bench trial, the
district court issued judgment for the Abbey, reaffirming its earlier finding that
this brand of economic protectionism is not a legitimate state interest and
15
Id. § 37:832(A)(2), (B)(1), (B)(d)(2).
16
379 F.3d 1208 (10th Cir. 2004).
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finding no rational relationship between the challenged law and Louisiana’s
interests in consumer protection, public health, and public safety. The State
timely appealed.
After examining the record, we had serious doubts about the
constitutionality of the State Board’s regulation of intrastate casket sales, but
we saw a potential state law ground for deciding the case. Specifically, we
questioned whether, under Louisiana law, the State Board has authority to
regulate casket sales in and of themselves when such sales are not incidental to
the seller’s provision of any other funeral services.17 Because under well-settled
precedent this Court must avoid deciding a constitutional issue “if there is some
other ground upon which the case may be disposed of”18 and because resolution
of the State Board’s authority must come at the hand of the Louisiana Supreme
Court,19 we deferred a final decision in the case to allow the Louisiana Supreme
Court to rule on the statutory uncertainty. In the interest of federalism and
constitutional avoidance, we certified the following question to the Louisiana
Supreme Court: Whether Louisiana law furnishes the Louisiana State Board of
Embalmers and Funeral Directors with authority to regulate casket sales when
made by a retailer who does not provide any other funeral services.20 The
Louisiana Supreme Court denied certification without explanation.21 Ours
cannot be the final word on uncertainty in state law. The parties do not
17
St. Joseph Abbey v. Castille, 700 F.3d 154, 165-68 (5th Cir. 2012).
18
Ashwander v. Tennessee Valley Authority, 297 U.S. 298, 347 (1936) (Brandeis, J.,
concurring), reh’g denied 297 U.S. 728 (1936). See also County Court of Ulster County v. Allen,
422 U.S. 140, 154 (1979); Burton v. United States, 196 U.S. 283, 295 (1905).
19
See Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 508 (1985) (O’Connor, J.,
concurring).
20
St. Joseph Abbey, 700 F.3d at 169.
21
St. Joseph Abbey v. Castille, No. 2012-CQ-2326 (La. Jan. 11, 2013).
7
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challenge the Board’s authority here, and the state has declined our request to
clarify this statute’s meaning. We turn to the issues the parties have brought
and proceed to rule on the constitutionality of the challenged law.
IV.
We review the district court’s findings of fact for clear error and its
conclusions of law de novo.22
A.
The State Board maintains that the regulation of intrastate casket sales
enjoys the deference due classic economic regulation. Alternatively, the State
Board contends that it is a rational draw upon the State’s police powers in
protection of consumers and public health. The Abbey responds that no rational
basis can or has been articulated that it has not negated.
Chief Justice Stone’s footnote 4 in Carolene Products, etched in the brains
of several generations of law students, both described and prescribed a
fundamental dichotomy of judicial review; it retreated from the aggressive
review of state regulation of business in the Lochner period while proceeding in
the opposite direction in matters of personal liberty.23 Justice Douglas’s opinion
in Williamson v. Lee Optical24 is generally seen as a zenith of this judicial
deference to state economic regulation and the State Board invokes its
protections, including its willingness to accept post hoc hypotheses for economic
regulation. But even Williamson offers the State Board little succor. In
22
See One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258, 262 (5th Cir.
2011).
23
304 U.S. 144, 152 n.4 (1938).
24
348 U.S. 483 (1955).
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Williamson, the Oklahoma legislature forbade opticians to fit or replace eyeglass
lenses in frames without a lens prescription from an ophthalmologist or
optometrist, even when the replaced lens could easily be duplicated by an
optician.25 Despite the coloration of wealth transfer to ophthalmologists and
optometrists, the Court accepted the suggestion that the legislature might have
concluded that some persons would benefit from seeing a doctor when replacing
a lens and refused to strike down the legislation, in turn rejecting the opticians’
due process and equal protection claims. It placed emphasis on the “evil at hand
for correction” to which the law was aimed, concluding that the measure was a
rational, if not “in every respect logically consistent,” means of addressing the
perceived ill.26 The Supreme Court took the same approach in City of New
Orleans v. Dukes.27 It upheld a New Orleans ordinance that permitted only
pushcart food vendors with eight or more years of experience in the French
Quarter to continue to operate in the neighborhood. It reasoned that reducing
the number of pushcart vendors, and limiting their ranks to those most likely to
have the deepest ties to the area, advanced the City’s legitimate objective of
maintaining the French Quarter’s historic character and tourist appeal.28
As a threshold argument, the State Board urges that pure economic
protection of a discrete industry is an exercise of a valid state interest. It points
to the Tenth Circuit’s decision in Powers v. Harris, a case in which two members
of the panel said as much in turning back an attack on an Oklahoma scheme
25
Id. at 485. The law was also challenged for exempting sellers of ready-to-wear
glasses from the prescription requirement, barring advertising of lenses and frames, and
prohibiting retailers from sharing commercial space with certain eye care professionals. Id.
at 488-89.
26
Id. at 487-88.
27
427 U.S. 297 (1976).
28
Id.9
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similar to Louisiana’s.29 Judge Tymkovich, the third member of the panel,
refused to join the majority opinion’s broad approbation of “economic
protectionism” as a valid governmental interest.30 Rather, he concurred in the
judgment, persuaded that the State had otherwise identified a sufficient public
purpose.31 The Abbey in turn points to Craigmiles v. Giles, in which the Sixth
Circuit rejected “economic protectionism” as a rational basis for similar casket
regulations, striking down those regulations as a denial of due process and equal
protection.32
These two courts gave differing answers to the question of whether the
legislation before them, both statutory schemes quite similar to that now before
us, drew upon a legitimate state interest. Craigmiles found that “protecting a
discrete interest group from economic competition is not a legitimate
governmental purpose.”33 The Powers court saw the statutory scheme before it
as simple economic protectionism, “the favored pastime of state and local
government,” and in its mind a permissible basis for regulation.34 In turn, it
rejected the challenge to the regulations that limited the sale of caskets to
funeral directors.35
The Powers court claimed that only three courts have held that “‘protecting
a discrete interest group from economic competition is not a legitimate
29
379 F.3d 1208 (10th Cir. 2004).
30
Id. at 1225-27 (Tymkovich, J., concurring).
31
Id.32
312 F.3d 220 (6th Cir. 2002).
33
Id. at 224.
34
Powers, 379 F.3d at 1221.
35
Id. at 1225.
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governmental purpose,’”36 and criticized those courts’ holdings as having no
direct support in Supreme Court precedents. It then stated: “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.”37 However, none of the Supreme Court cases
Powers cites stands for that proposition. Rather, the cases indicate that
protecting or favoring a particular intrastate industry is not an illegitimate
interest when protection of the industry can be linked to advancement of the
public interest or general welfare. Craigmiles and Powers rest on their different
implicit answers to the question of whether the state legislation was supportable
by rational basis. Craigmiles looked for rationality and found none. Powers
found economic protection to be a traditional wielding of state power and
rational by definition.
As we see it, neither precedent nor broader principles suggest that mere
economic protection of a particular industry is a legitimate governmental
purpose,38 but economic protection, that is favortism, may well be supported by
a post hoc perceived rationale as in Williamson – without which it is aptly
described as a naked transfer of wealth.39 Recently, we upheld against similar
challenge a Houston taxi cab permitting scheme that disfavored small cab
36
Id. at 1218 (quoting Craigmiles, 312 F.3d at 224).
37
Id. at 1220.
38
See, e.g., Merrifield v. Lockyer, 547 F.3d 978, 991 n.15 (9th Cir. 2008) (“We conclude
that mere economic protectionism for the sake of economic protectionism is irrational with
respect to determining if a classification survives rational basis review. . . . [E]conomic
protectionism for its own sake, regardless of its relation to the common good, cannot be said
to be in furtherance of a legitimate governmental interest.”).
39
See Cass R. Sunstein, Naked Preferences and the Constitution, 84 COLUM. L. REV.
1689 (1984).
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companies.40 Notably, we approved of the Craigmiles court’s reasoning, as it
“confirm[ed] that naked economic preferences are impermissible to the extent
that they harm consumers.”41 However, we found that even if Houston had been
“motivated in part by economic protectionism, there is no real dispute that
promoting full-service taxi operations is a legitimate government purpose under
the rational basis test.”42 We thus sustained the City’s measure. It follows that
the State Board cannot escape the pivotal inquiry of whether there is such a
rational basis, one that can now be articulated and is not plainly refuted by the
Abbey on the record compiled by the district court at trial. We turn then to the
State Board’s alternative argument – that the challenged restrictions are
rationally related to protection of public health, safety, and consumer welfare,
beginning with some settled guiding principles.
B.
As the Abbey points out, although rational basis review places no
affirmative evidentiary burden on the government, plaintiffs may nonetheless
negate a seemingly plausible basis for the law by adducing evidence of
irrationality.43 And of course, as we earlier observed, Williamson insists upon
a rational basis, which it found. Mindful that a hypothetical rationale, even post
hoc, cannot be fantasy, and that the State Board’s chosen means must rationally
relate to the state interests it articulates, we turn to the State Board’s proffered
rational bases for the challenged law. Our analysis does not proceed with
abstraction for hypothesized ends and means do not include post hoc
40
Greater Houston Small Taxicab Co. Owners Ass’n v. City of Houston, 660 F.3d 235,
(5th Cir. 2011).
41
Id. at 240.
42
Id.43
See F.C.C. v. Beach Commc’ns, Inc., 508 U.S. 307, 314-15 (1993).
12
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hypothesized facts. Thus, we will examine the State Board’s rationale informed
by the setting and history of the challenged rule.
1. Consumer Protection
The State Board argues that the challenged law is rationally related to
consumer protection because it restricts predatory sales practices by third-party
sellers and protects consumers from purchasing a casket that is not suitable for
the given burial space. Of course, this is a perfectly rational statement of
hypothesized footings for the challenged law. But it is betrayed by the
undisputed facts.
For one, the State Board’s argument obscures the actual structure of the
challenged law. No provision mandates licensure requirements for casket
retailers or insists that a casket retailer employ someone trained in the business
of funeral direction. Rather, the licensure requirements and other restrictions
imposed on prospective casket retailers create funeral industry control over
intrastate casket sales. The scheme is built on the statute’s interlocking
definitions of “funeral establishment” and “funeral directing”:
“Funeral establishment” means any place or premises duly
licensed by the board and devoted to or used in the care and
preparation for burial of the body of a deceased person or
maintained or held out to the public by advertising or otherwise as
the office or place for the practice of funeral directing.44
“Funeral directing” means the operation of a funeral home, or, by
way of illustration and not limitation, any service whatsoever
connected with the management of funerals, or the supervision of
hearses or funeral cars, the purchase of caskets or other funeral
merchandise, and retail sale and display thereof, the cleaning or
dressing of dead human bodies for burial, and the performance or
supervision of any service or act connected with the management of
funerals from time of death until the body or bodies are delivered to
44
LA. REV. STAT. § 37:831(39) (emphasis added).
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the cemetery, crematory, or other agent for the purpose of
disposition.45
In other words, because a funeral establishment includes any “office or place for
the practice of funeral directing,” and “funeral directing” includes “the purchase
of caskets or other funeral merchandise and the retail and display thereof,” a
casket retailer must comply with all the statutory requirements for funeral
directors and funeral establishments. No rule addresses casket retailers or
imposes requirements for the sale of caskets beyond confining intrastate sales
to funeral homes. But, it is urged, this exclusivity will assure purchasers of
caskets informed counsel.
The district court found that the extensive training the law requires of
budding funeral directors does not include instruction on caskets, or how to
counsel grieving customers. Given that Louisiana does not require a person to
be buried in a casket, restrict casket purchases in any way by Louisianans over
the internet or from other sources out of state, nor imposes requirements on any
intrastate seller of caskets directly to consumers, including funeral directors,
regarding casket size, design, material, or price, whatever special expertise a
funeral director may have in casket selection is irrelevant to it being the sole
seller of caskets.46 This is because customers pay funeral directors a non-
45
Id. § 37:831(37) (emphasis added).
46
Indeed, we highlight that the statute does not clearly extend State Board Authority
to casket sales unconnected to funeral services. The monks, as carpenters and vendors of their
wares, do little that equates to operating a funeral home. Whereas the State Board regulates
the business of funeral directing, and specifically here, Section 848 (“Unlawful practice”),
states “[n]o person, not certified and registered under the provisions of this Chapter, shall .
. . conduct the business of funeral directing,” LA. REV. STAT. § 37:848(A), that prohibition only
raises the question of whether the monks are conducting the business of funeral directing. We
observe that Term 37 of Section 831 explains that “‘[f]uneral directing’ means the operation
of a funeral home . . . .” Id. § 37:831(37). This, the monks are not doing. As “illustration and
not limitation,” Term 37 clarifies that operating a funeral home encompasses: “any service
whatsoever connected with the management of funerals,” id.—not what the monks want to do;
“any service whatsoever connected with . . . the supervision of hearses or funeral cars,”
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declinable service fee, which contractually binds a funeral director to assist the
customer with funeral and burial logistics, including, for example, casket
selection, even if the customer does not purchase the casket from the funeral
director. As a consequence, the customer should receive the benefit of the
funeral director’s experience in matters of casket selection, including
complexities that arise from burial conditions in any given area. Indeed the FTC
has found that “[b]y allowing a basic services fee, the Rule ensures that
consumers get the benefit of choosing goods and services among a variety of
options – including the option to purchase goods from the funeral provider’s
competitors . . . .”47 A customer of a funeral home receives the same service
whether or not he purchases the casket from the funeral home, and because only
funeral homes can sell funeral services, and all disposing of dead bodies must be
“through a funeral establishment,” he must engage their service.48
Moreover, like the district court and consistent with its findings, we find
that the challenged law is not rationally related to policing deceptive sales
tactics. In declining to expand the Funeral Rule’s scope to cover third-party
sellers of caskets and urns, the FTC found “there is insufficient evidence that .
. . third-party sellers of funeral goods are engaged in widespread unfair or
id.—still not; “any service whatsoever connected with . . . the purchase of caskets or other
funeral merchandise,” id.—still not, but telling, because the broad interpretation of State
Board authority, suggested by the State Board, would give it not just oversight of selling but
also of all buying, which cannot be correct; and “any service whatsoever connected with . . . the
retail sale and display thereof . . . .” Id. This is it, but not exactly. The monks do not clearly
offer a funeral home “service . . . connected with . . . retail sale and display . . . .” Id. (emphasis
added). The remainder of Term 37 then lists services that unquestionably, like “hearses,” are
part of the “operation of a funeral home,” such as “cleaning and dressing of dead human bodies
. . . .” See id.
47
73 Fed. Reg. at 13747.
48
See LA. REV. STAT. § 37:848(D)(5).
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deceptive acts or practices.”49 In fact, the Commission found the record “bereft
of evidence indicating significant consumer injury caused by third-party
sellers”50 and recognized that third-party sellers do not have the same incentive
as funeral home sellers to engage in deceptive sales tactics.51
But, even if independent third-party sellers pose a risk of engaging in
deceptive sales practices, and assuming arguendo that the state legislature could
so conclude, there is a disconnect between restricting casket sales to funeral
homes and preventing consumer fraud and abuse. Putting aside the fact that
funeral homes, not independent sellers, have been the problem for consumers
with their bundling of product and markups of caskets,52 Louisiana’s Unfair
Trade Practices and Consumer Protection Law already polices inappropriate
sales tactics by all sellers of caskets. Louisiana’s Unfair Trade Practices and
Consumer Protection Law declares that “[u]nfair methods of competition and
unfair or deceptive acts or practices in the conduct of any trade or commerce are
. . . unlawful” and empowers the state attorney general to make “rules and
regulations” to interpret the provisions of the Chapter.53 Under the section of
Louisiana’s administrative code implementing the law, the state attorney
general is authorized to regulate unfair trade practices in casket sales, whether
or not those sales are made by state-licensed funeral homes, but must do so
consistent with rules promulgated by the FTC and court decisions interpreting
49
73 Fed. Reg. at 13742.
50
Id. at 13745.
51
Id. (“Indeed, third-party retailers have a strong economic incentive to display their
prices to the public at large because offering a lower price is the primary way they compete
against funeral providers for sales of funeral goods, such as caskets.”).
52
See supra notes 7-12, 48-50 and accompanying text.
53
LA. REV. STAT. § 51:1405.
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those rules.54 In short, Louisiana’s consumer protection regime reaches the sales
practices of all intrastate sellers of caskets and can strike at any unfair practices
but interestingly only in a way complementary and consistent with the Federal
Trade Commission Act.
To be clear, the FTC’s Funeral Rule has not preempted Louisiana from
making its own independent assessment of consumer abuse by third-party
intrastate sellers. But, were the attorney general to promulgate a rule that, as
the State Board’s enforcement action here aims to do, shut out third-party
sellers, implementing Louisiana’s ability to create a consumer protection scheme
would be in tension with the rules of the FTC – rules that compel funeral homes
both to accept caskets purchased from others and to not charge fees for doing so.
Nor would such a rule square with FTC findings or rulemaking resting on the
conclusion that third-party sellers do not engage in consumer abuse. This
matrix of Louisiana law, while not dispositive of our inquiry, sheds much light
on the disconnect between the post hoc hypothesis of consumer protection and
the grant of an exclusive right of sale to funeral homes. That grant of an
exclusive right of sale adds nothing to protect consumers and puts them at a
greater risk of abuse including exploitative prices.
54
See LA. ADMIN. CODE 16, § 501 (2012). Section 501 provides:
These rules and regulations shall be consistent with Section 5(a)(1) of the
Federal Trade Commission Act [15 U.S.C. 45(a)(1)], as from time to time
amended, any rule or regulation promulgated thereunder, and any finally
adjudicated court decision interpreting the provisions of said act, rules, and
regulations. This consistency shall be, therefore, the same as the Federal Trade
Commission’s responsibility over both:
1. anti-trust or other restraint of trade types of activities; and
2. unfair or deceptive types of activities relating to trade and commerce as it
affects consumer and business interests.
Section 5(a)(1) of the Federal Trade Commission Act is the provision under which the FTC
enacted the Funeral Rule, and under which it declined to extend the Funeral Rule to third-
party sellers of caskets and urns. See 73 Fed. Reg. at 13742 & nn. 1-2, 13745.
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2. Public Health and Safety
Relatedly, we find that no rational relationship exists between public
health and safety and restricting intrastate casket sales to funeral directors.
Rather, this purported rationale for the challenged law elides the realties of
Louisiana’s regulation of caskets and burials. That Louisiana does not even
require a casket for burial, does not impose requirements for their construction
or design, does not require a casket to be sealed before burial, and does not
require funeral directors to have any special expertise in caskets leads us to
conclude that no rational relationship exists between public health and safety
and limiting intrastate sales of caskets to funeral establishments.55
The great deference due state economic regulation does not demand
judicial blindness to the history of a challenged rule or the context of its adoption
nor does it require courts to accept nonsensical explanations for regulation. The
deference we owe expresses mighty principles of federalism and judicial roles.
The principle we protect from the hand of the State today protects an equally
vital core principle – the taking of wealth and handing it to others when it comes
not as economic protectionism in service of the public good but as “economic”
protection of the rulemakers’ pockets. Nor is the ghost of Lochner lurking about.
We deploy no economic theory of social statics or draw upon a judicial vision of
free enterprise. Nor do we doom state regulation of casket sales. We insist only
that Louisiana’s regulation not be irrational – the outer-most limits of due
process and equal protection – as Justice Harlan put it, the inquiry is whether
“[the] measure bears a rational relation to a constitutionally permissible
55
Cf. Merrifield, 547 F.3d at 989 (“[T]he singling out of a particular economic group,
with no rational or logical reason for doing so, was strong evidence of an economic animus with
no relation to public health, morals or safety.”).
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objective.”56 Answering that question is well within Article III’s confines of
judicial review.
V.
The funeral directors have offered no rational basis for their challenged
rule and, try as we are required to do, we can suppose none. We AFFIRM the
judgment of the district court.
56
Ferguson v. Skrupa, 372 U.S. 726, 733 (1963) (Harlan, J., concurring).
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