Caseflicks

Court of Appeals for the Sixth Circuit • 2002

Craigmiles v. Giles

312 F.3d 220

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Takeaway

In short, this case shows that even deferential rational-basis review can invalidate an occupational licensing rule when its asserted public purposes are plainly pretextual and the law operates chiefly to protect established businesses from competition.

Background

Tennessee’s Funeral Directors and Embalmers Act (FDEA) required anyone engaged in “funeral directing” to obtain a funeral-director license. A 1972 amendment defined funeral directing to include selling funeral merchandise, including caskets. Licensure required either mortuary-school study plus an apprenticeship or a two-year apprenticeship, followed by a state examination. Very little of that training concerned casket selection or retailing.

Nathaniel Craigmiles and other plaintiffs operated independent stores that sold caskets, urns, and related merchandise, but did not embalm bodies or arrange funerals, burials, or cremations. They sold caskets only after death, not through pre-need contracts. The state Board issued cease-and-desist orders because the stores sold funeral merchandise without employing licensed funeral directors, and the stores stopped operating.

The plaintiffs brought a § 1983 action challenging the FDEA’s application to stand-alone funeral-merchandise retailers under the Due Process, Equal Protection, and Privileges and Immunities Clauses of the Fourteenth Amendment. The district court held that the licensing requirement, as applied to their retail businesses, lacked a rational basis and violated due process and equal protection. It enjoined enforcement only against the plaintiffs’ existing retail operations. Tennessee appealed.

Issues

Issue #1

Whether rational-basis review governed the challenge to Tennessee’s funeral-director licensing requirement for independent casket retailers.

Holding

Yes. Because the law burdened neither a fundamental right nor a suspect or quasi-suspect classification, rational-basis review applied.

Reasoning

The court began with the familiar three-tier framework for Due Process and Equal Protection challenges. Strict scrutiny applies to burdens on fundamental rights and suspect classifications; intermediate scrutiny applies to certain classifications such as sex; and other economic and social regulations receive rational-basis review.

The parties agreed that the sale of caskets did not implicate a fundamental right and that casket retailers were not a protected class. Thus, the FDEA enjoyed a strong presumption of validity and would ordinarily be sustained if any reasonably conceivable facts could rationally connect it to a legitimate state purpose.

Issue #2

Whether requiring independent casket retailers to become licensed funeral directors bore a rational relationship to a legitimate governmental purpose.

Holding

No. The licensing requirement, as applied to plaintiffs who only sold funeral merchandise after death and did not handle bodies or arrange funerals, was an unconstitutional exercise of economic protectionism and violated the Due Process and Equal Protection Clauses.

Reasoning

Although rational-basis review is highly deferential, it is not toothless. The court concluded that Tennessee’s stated justifications were so weak that they exposed the 1972 amendment as a measure designed to shield licensed funeral directors from price competition in casket sales. Protecting a favored economic group from competition, standing alone, is not a legitimate governmental purpose.

The public-health justification did not fit the plaintiffs’ activities. The plaintiffs did not handle corpses, embalm bodies, or conduct burials; they merely sold and delivered caskets to the funeral home handling the body. Tennessee did not require any particular type of casket—or any casket at all—even for people who died of communicable diseases. Nor did the State establish standards requiring funeral directors to select safer caskets or show that funeral-home caskets were safer than those sold by independent retailers.

The court also found the licensing rule poorly related to casket quality. Licensed funeral directors could sell low-quality caskets at high prices, while competition from independent retailers could make higher-quality caskets more affordable. The required training therefore did not rationally ensure safer burial containers, and funeral directors remained free to advise families about casket selection even if retailers could sell caskets independently.

Tennessee’s consumer-protection rationale likewise failed. General fraud and misrepresentation laws already governed retailers, and the legislature could directly apply particular conduct rules to casket sellers without forcing them through two years of funeral-director training. The availability of such direct regulation made the State’s circuitous use of a comprehensive funeral-director license especially suspect.

The Federal Trade Commission’s funeral rule did not save the statute. By its own terms, the rule covered persons who sell funeral goods or services, which appeared to include independent casket retailers. In any event, the rule’s anti-bundling purpose had little relevance to retailers who sold only merchandise, and independent casket competition could counteract the very package-pricing problem that the FTC rule addressed.

The State’s reliance on protections for pre-need sales was also insufficient. The plaintiffs did not make pre-need sales, and the injunction was limited to their existing operations. If Tennessee wished to regulate pre-need casket transactions, it could impose trust-account or similar requirements directly rather than couple them to funeral-director licensure.

Finally, the claimed benefit of grief-sensitive training was too attenuated. Families buying from an independent retailer still dealt with licensed funeral directors for body handling and funeral arrangements, and they also dealt with many other funeral-related vendors who were not required to receive such training. Taken together, the asserted purposes did not rationally justify excluding unlicensed retailers from the casket market.

Issue #3

Whether the court needed to decide the plaintiffs’ Privileges and Immunities Clause challenge.

Holding

No. The court declined to reach that claim because the Due Process and Equal Protection holdings fully supported the injunction.

Reasoning

The court noted that the Fourteenth Amendment’s Privileges and Immunities Clause has been narrowly construed since the Slaughter-House Cases and generally has not protected a person’s right to pursue an occupation against his own state. Because the licensing restriction was already unconstitutional under due process and equal protection, the court found no need to revisit that doctrine or resolve the plaintiffs’ alternative claim.