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Washington Report
December 2007
Court's Maryland funeral decision confusing
by ICCFA General Counsel Robert M. Fells, Esq.
On October 17, the U.S. District Court for Maryland issued its decision in Brown v. Hovatter, a case involving Maryland's longtime prohibition on the corporate ownership of funeral homes. The only exceptions to this prohibition are 58 corporate licenses that were grandfathered into the law in 1945. The ICCFA submitted a friend of the court brief last spring stating that the existing law is anti-competitive and anti-consumer.
The court's 31-page opinion may have confused the issue more than anything else. The court ruled that the section of the Morticians Act "which prohibits corporate ownership in Maryland with indefinite exemptions for corporations holding licenses existing as of June 1, 1945, violate the dormant Commerce Clause of the United States Constitution. Defendants and their successors are hereby enjoined from prohibiting or limiting the corporate ownership of funeral homes in Maryland."
However, the court upheld the section of the Morticians Act "which establishes a licensing scheme for the operation of funeral homes in Maryland, [because it] is rationally related to a legitimate state interest and does not violate the Due Process and Equal Protection Clauses of the Fourteenth Amendment. The licensing requirement may be imposed upon corporate and non-corporate owners of funeral homes in Maryland."
It is interesting to note that the court refers twice to the Pennsylvania corporate licensing statute for funeral homes that allows corporations to own mortuaries, but requires that all shareholders of the corporation must be licensed funeral directors or members of the immediate family of a licensed funeral director. The court may be hinting that Maryland should look at Pennsylvania's approach to enacting a restrictive corporate licensing statute.
The Institute for Justice, which represented the plaintiffs in this case, is planning to file a motion asking the court to clarify its decision. It is also possible that the state of Maryland will file an appeal to reverse the decision. The full text of the court decision can be read on the ICCFA Web site, at www.iccfa.com/pdf/md_brown_case_opinion.pdf.
Copyright ICCFA 2007
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