Occupational licensing is often justified on the grounds that consumers, lacking full information, will be exploited by informed industry practitioners (Akerlof 1970; Darby and Karni 1973; Dulleck and Kerschbamer 2006; Law and Kim 2005; Leland 1979; Shapiro 1986; Stigler 1971). Licensing requirements such as education and training, examinations, practical experience, and registration are thus adopted on the basis that they will protect consumers and advance public health. While occupational licensing in the United States was initially isolated to a few recognized professions, such as medicine and law, it was gradually extended to cover a growing portion of the workforce (Friedman and Kuznets 1954; Bryson and Kleiner 2010, p. 670; Habenstein and Lamers 1955, p. 446).
In practice, occupational licensing is often adopted at the request not of consumers and public health advocates, but of industry practitioners seeking to inflate industry wages by erecting costly barriers to entry--often with licensing requirements having no worthwhile influence on consumer safety or public health (Adams, Ekelund Jr., and Jackson 2003; Carroll and Gatson 1983; Carpenter II 2012; Gellhorn 1976; Gittleman and Kleiner 2015; Hogan 1983; Gross 1986; Kleiner 2000, 2006; Maurizi 1974; Powell and Vortotnikov 2012; Svorny 2004; Thornton and Timmons 2013; Timmons and Thornton 2010). There is even evidence suggesting that some licensing boards protect industry practitioners to the detriment of consumer safety and public health (Levine, Oshel, and Wolfe 2011; Svorny 2015; Wolfe 2000). Of particular concern is that the costs of occupational licensing may fall most heavily on minorities and low-income individuals (Dorsey 1983; Williams 2011).
Despite the preponderance of evidence finding that occupational licensing often harms consumers and restricts occupational opportunity, some US courts have upheld licensure laws using the rational basis test. The rational basis test was first used by the Supreme Court in 1877 in Munn v. Illinois,1 but it became prominently used in the 1930s as a method to assess the due process and equal protection of the law when it comes to legislation dealing with economic rights (Kingsmill 2015, p. 936; Neily 2005; Raynor 2013). (2)
The rational basis test is a two-part test. First, courts must determine whether a piece of economic legislation has a legitimate purpose; then, they must determine whether there is a possible connection between the purpose and the legislation (Kingsmill 2015, p. 936). The test impels courts to hypothesize feasible justifications for occupational licensure. Whether plausible or not, the hypothesized justifications must then be negated to overturn the licensing law (Neily 2005, p. 912). The rational basis test, in essence, encourages courts, which are supposed to be impartial, to act as a defendant and seek out hypothetical justifications for legislation that could feasibly be construed as a legitimate function of government. In doing so, it transforms the role of a judge from making an impartial ruling on the merits of a case to being an advocate for defending legislative rules (Neily 2013, p. 53). Thus, the rational basis test often puts courts in the position of deferring to legislatures when it comes to occupational licensing. (3) This deference to legislatures is particularly concerning when a preponderance of evidence demonstrates that licensure often harms consumers and restricts economic opportunity without providing worthwhile benefits to consumers in terms of improved safety and quality. Thus, the rational basis test tends to undermine rights not considered fundamentally protected by the Constitution (Jackson 2011, p. 492; Neily 2005; Ward 2014).
We critique the rational basis test by examining the Powers v. Harris case, which upheld casket licensure in Oklahoma under the rational basis test. (4) The case originated when two national online casket sellers, Kim Powers and Dennis Bridges, were prevented from selling caskets in Oklahoma due to the state's funeral licensing laws, which required casket sellers to be licensed funeral directors. Powers and Bridges filed a federal case challenging the law since obtaining a funeral director license in Oklahoma would have required several years of undergraduate coursework, a year-long apprenticeship, and the passing of two exams. The rational basis arguments for casket licensure in the Powers v. Harris case fall into three broad categories:
* protecting public health
* protecting consumers from fraud
* industry protectionism as a legitimate function of government
This paper challenges the rational basis of casket licensure on all three grounds. A major problem with the rational basis test as it applies to occupational licensing, and specifically occupational licensing of the funeral industry, is that the Tenth Circuit Court, when reviewing Powers v. Harris, ruled that protectionism--government regulation that protects one firm or industry at the expense of other firms, industries, and consumers--was a legitimate function of government. While other courts have ruled that protectionism is not a legitimate function of government, the fact that this case has not been reviewed by the Supreme Court means that courts have a large degree of leeway when it comes to the rational basis test (Florman 2012; Trafton 2014). (5) The standard adopted in Powers v. Harris, however, means that any amount of protectionism will suffice to uphold these laws, no matter how high the economic costs they may impose upon consumers and competitors in terms of decreased occupational choice and economic mobility.
While this paper provides a case study specific to casket licensure, our arguments can be applied to the literature on occupational licensing more generally. Beyond casket licensure, the rational basis test continues to be utilized by US courts to uphold occupational licensing laws even when there is an explicit recognition that licensure is being used to restrict entry to the profession--sometimes even without a worthwhile benefit being provided to consumers (Neily 2005). Thus, occupational licensing research that fails to address the rational basis test may fall short of policy impact and relevance. By providing a case study critiquing the application of the rational basis test to casket licensure, this paper may prove instructional for overcoming the rational basis test for other forms of licensure. (6)
Section 2 provides a brief history of funeral licensing in the United States. Section 3 details the current state of casket licensure in the United States and reviews recent court cases addressing casket licensure. In section 4, we critique as a case study the rational basis test using the Tenth Circuit Court's Powers v. Harris ruling, which upheld casket licensure under the rational basis test. Section 5 concludes.
Funeral Licensing in the United States
It wasn't until the emergence of large cities in the late nineteenth and early twentieth centuries in the United States that funeral homes emerged as a profitable business (Robertson 1959, p. 87; Cahill 1999, p. 108; Moller 1996, p. 82). Prior to this point, families provided burial preparation and buried their deceased in a local or family graveyard. Licensing soon followed on the tails of the creation of city, state, and national funeral directors associations (Robertson 1959, p. 93; Cahill 1999, p. 108; Habenstein and Lamars 1955, p. 460). Habenstein and Lamars (1955, p. 458) speculate, "It is probable that in most of the major cities during the period 1865-1880 undertakers founded associations for the purposes of mutual protection, dispensing information and setting of preliminary standards for operation in their trade." The first step toward occupational licensing in the funeral industry came with the passage of simple regulations on the process of embalming and burial, which was gradually expanded to include occupational licensing requirements for embalmers, and finally for funeral directors (Habenstein and Lamars 1955, pp. 499-530). Virginia was the first state to officially set up licensing requirements for embalmers, with the majority of states following over the next few decades.
The original intention of funeral licensure, as expressed by policymakers and interpreted by the courts, was to protect and promote public health (Habenstein and Lamars 1955, p. 530). While funeral licensing was promoted as a means to protect consumers, it was advanced by industry practitioners seeking to protect themselves from the competition of traveling "cross road coffin peddlers" who cut into local embalmers' and funeral homes' profits, especially during the economic collapse of the Great Depression (Robertson 1959, pp. 91-92). In addition, Habenstein and Lamars (1955, p. 467) write,
The need for protection from unfair, even though legal, competition within the occupation itself was quite evident. Protection was especially needed by funeral directors in Eastern and Midwestern states where nearly every merchant who sold furniture could include a line of caskets in his wares, and thus threaten the very existence of recognized establishments. Complex barriers have been added to occupational licensing requirements over time, including education, internship, and exam requirements, despite the fact that, as Moller (1996, p. 84) notes, "there is little that is new and unique to the activities of the present-day American undertaker." Historically, the educational requirements between states have lacked uniformity. For instance, Habenstein and Lamars (1955, p. 528) quote Dr. Robert McFater speaking at the 1947 National Funeral Directors meeting:
State laws were passed prescribing complete college curricula for the courses in embalming and funeral directing, so many hours of this subject, so many hours of that, and with no flexibility allowed. Furthermore, the requirements of one state would...
The Undertaker's Cut: Challenging the Rational Basis for Casket Licensure.
|Author:||Smith, Daniel J.|
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