Bottleneckers. William Mellor

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СКАЧАТЬ dead body propped in a corner while awaiting the arrival of a casket ordered over the Internet. They ignored that online retailers could deliver merchandise anywhere in the country within twenty-four hours of purchase¹²⁰ and that third-party merchandise sales from unlicensed providers were already legal, as long as they came from outside of Oklahoma.

      The absurdity of the bottleneckers’ arguments only highlighted the weakness of their position, an observation not lost even on members of the funeral-director cartel. One lawmaker with a background in the funeral industry admitted:

      I would be hard pressed to argue that you necessarily have to have a license to sell a casket. We don’t license automobile dealers to sell you an automobile, and they’re certainly selling you a product that’s much more expensive and much more complicated than a casket . . . [I]s there some mystical something about the structural components of a casket that forces someone to be licensed? No, not necessarily.¹²¹

      Coleman’s amendment failed 31–64.

      The following year, Coleman tried again to pass the amendment, but the bill met the same fate as its predecessor, never even receiving a hearing in the House Public Health Committee. Undeterred, Coleman was back at it in 2002, and again in 2003, finally receiving a committee hearing, only to see the bill defeated 5–4.¹²²

      According to Coleman, the various defeats could be traced to one source—the state’s funeral directors.¹²³ With lawmakers, paid lobbyists, and several former funeral directors having a strong presence in the ranks of the capitol, Oklahoma funeral directors wielded significant influence. “The power of the funeral industry in this state is such that they were able to prevent this bill or one like it from even being heard for several years,” observed Edwin Kessler from Common Cause, a citizens’ advocacy organization.¹²⁴ Even with support from Common Cause, the AARP, the Oklahoma Conference of Churches, and the Farm Bureau, Coleman could not overcome the bottlenecker juggernaut.¹²⁵

      Kim and Dennis could not place their business on hold in order to wait for a legislative fix might never materialize. The state’s funeral board had already shut down at least one other unlicensed casket retailer,¹²⁶ and Kim and Dennis were not rule breakers by nature. There was also the matter of the stiff fines and possible jail sentences they would face if they proceeded on their path. On March 14, 2001, they sued the State Board of Embalmers and Funeral Directors, seeking to have Oklahoma’s anticompetitive casket-sales laws struck down as unconstitutional. The lawsuit drew the private ire of funeral-industry insiders. “While in my office, I would receive phone calls from funeral homes. I could tell who they were because of caller-ID,” Kim recalled. “They would tell me to drop the suit, that I was hurting the industry.” She also received letters from incensed funeral directors. “I received a scathing letter from a young man telling me I was unprofessional and ruining the industry. He told me drop the whole thing.”¹²⁷

      While still supporting the law, industry leaders were more measured in their response. Scott Smith, then president of the Oklahoma Funeral Directors Association, told NBC Nightly News: “The law is good. I see it as protecting the consumer.” On the same broadcast, Joseph McCormick IV of the Oklahoma attorney general’s office added, “There’s just no evidence in the record to support an argument that this law is anti-competitive.”¹²⁸ McCormick’s statement put him at direct odds with none other than the FTC, which had by then been studying and overseeing the funeral industry for decades. As part of the trial court proceedings, the FTC filed a brief on behalf of Kim and Dennis. Noting the intent of its then-almost-twenty-year-old Funeral Rule, the FTC argued that competition and choices are good for consumers and that being forced to do business with a state-mandated cartel is not. “Rather than promote consumer choice, the FSLA [Oklahoma’s Funeral Services Licensing Act] forces consumers to purchase caskets from funeral directors,” the FTC’s brief said. “Whatever ends the FSLA can be said to be advancing, it is not advancing the ends of the FTC’s Funeral Rule.”¹²⁹

      Regardless, on December 12, 2002, Judge Stephen P. Friot ruled against Kim and Dennis. He acknowledged that “less than 5 percent of the education and training requirements necessary for licensure in Oklahoma pertain directly to any knowledge or skills necessary to sell caskets” and that those who wish to sell caskets “are required to spend years of their lives equipping themselves with knowledge and training that is not directly relevant to selling caskets.”¹³⁰ Nevertheless, he placed deference to the bottlenecker-controlled legislature above the right to earn an honest living, writing,

      The Legislature may determine . . . that protection of the consumer lies in creation of a cartel-like scheme for protection of an industry. . . . The choice of whether to be paternalistic, and, given that choice, as to how best to be paternalistic, was one for the Oklahoma Legislature to make.¹³¹

      Kim and Dennis appealed the case to the Tenth US Circuit Court of Appeals, but the appellate court upheld the lower-court ruling on August 23, 2004. Like Friot, the appellate court was fully aware of both the inefficacy of the law and the private interests it served. One tenth-circuit judge even noted that the law’s “limitations on the free market of casket sales have outlived whatever usefulness they may have had.”¹³² The court also acknowledged that by the time it ruled, three attempts to change the law had failed, and in a now-(in)famous quote, it cast its judicial eye on the reason for those failures: “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.”¹³³ Nevertheless, the appellate court, too, deferred to the legislature.

      But Kim remained undeterred. Upon the release of the court’s decision, she noted, “This is wrong. All we want to do is give consumers a choice to buy their caskets at reasonable prices and where they won’t be exploited or subjected to high-pressure sales practices that are often found in funeral homes.”¹³⁴ On November 22, 2004, Kim and Dennis appealed their case to the US Supreme Court, but on March 21, 2005, almost four years to the day after they had filed their first lawsuit, the high court declined to review the appellate decision. In so doing, it let stand the demonstrably unrealistic ruling that Kim and Dennis should seek relief through the legislature.

      When the 10th Circuit pointed to the legislature, Kim was exasperated. “We’ve tried through the Legislature,” she said. “The Legislature has chosen not to cooperate, and the consumer loses.”¹³⁵ Upon the Supreme Court’s 2005 decision, the citizens of Oklahoma lost even more as Kim and Dennis moved Memorial Concepts Online to Tennessee, where they eventually, and given Kim’s background not surprisingly, expanded their operations to work with thirty-two funeral homes and cemeteries in nine states, eventually employing more than 130 people.¹³⁶

      As Kim departed Oklahoma, the illusory nature of the legislative remedy recommended by the courts was further illustrated when an attempt to change the state’s law was once again turned back by the bottleneckers. After Representative Coleman left the legislature, Representative Paul Wesselhoft picked up the flag in 2005, introducing a bill to free casket sales from the monopoly held by the state’s funeral directors.¹³⁷

      As before, the powerful funeral-home cartel was instrumental in killing his bill. “My colleagues were receiving phone calls from their funeral homes in their district. They were all against this law,” Wesselhoft recalled, and went on to say,

      The funeral industry has a cartel on caskets being purchased in the state of Oklahoma, and that’s unfortunate. . . . [T]hey will definitely contact their representatives if they see a bill that threatens their dominance, and that happened during that time that I ran that bill, and so my bill died.¹³⁸

      In a sort of postscript to the years-long battle, in 2010 Wesselhoft proposed to introduce competition in the state’s casket market by allowing sales by Native American tribes in addition to funeral СКАЧАТЬ