Bryan Caplan  

The Constitutionality of Useless Regulation

Tell Me the Difference Between... Ferguson on Murray...
The aptly-named Institute for Justice is challenging another democratic achievement: Regulations requiring useless expenditures.
May the government force entrepreneurs to do useless things, like build extra rooms in their stores that they do not need and will never use, just to prove they are serious about their business?

That issue is at the center of a major lawsuit filed today, January 19, 2012, in Minnesota State District Court by the Institute for Justice (IJ) on behalf of Verlin Stoll, the 27-year-old owner of Crescent Tide Funeral Home in Saint Paul.

Verlin has built a successful business by offering low-cost funerals while providing high-quality service. [...] Minnesota refuses to let Verlin build a second funeral home unless he builds a $30,000 embalming room that he will never use.

"Minnesota's law is irrational," said Katelynn McBride, an IJ-MN attorney.  "Embalming is never required just because someone passes away and the state does not require funeral homes to do their own embalming.  In fact, it is perfectly legal to outsource embalming to a third-party embalmer.  Minnesota's largest funeral chain has 17 locations with 17 embalming rooms, but actually uses only one of those rooms."  
Why are useless regulations on the books?  Rent-seeking:
Minnesota is forcing Verlin to waste $30,000 to protect the big, full-amenity funeral-home businesses from competition.  Verlin's basic services fee is only $250, which is about 90 percent lower than the $2,500 charged on average by many Twin Cities' funeral homes...

"The Minnesota Constitution protects the right to earn an honest living and this law violates that right by forcing entrepreneurs to do something time-consuming, expensive and completely unnecessary," said IJ Senior Attorney Jeff Rowes.  "A victory here will not only free Verlin from an unconstitutional restraint on his economic liberty, but protect entrepreneurs across the state from pointless laws and bureaucracy."  
Will they win?

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CATEGORIES: Regulation
Twitter: Bryan Caplan @bryan_caplan

COMMENTS (11 to date)
Steve Z writes:

Well, they won a similar case, also concerning funerals, in the Sixth Circuit. But it is highly probable that they will lose, based on mainstream jurisprudence.

Jeremy, Alabama writes:

If they changed the regulation into a universal mandate for embalming insurance, I'm sure some supreme court justices would consider it constitutional.

Pandaemoni writes:

While I can't speak to the Minnesota constitutional law question, under the law of most states they'd lose (unless the U.S. Supreme Court revives its Lochner v. New York era jurisprudence).

"Constitutional" does not mean "wise", it just means that the state has the power to do it. States generally have broad regulatory authority and discretion to use it stupidly, especially in commercial contexts.

Vadim writes:

If this was a federal law/issue they would surely lose. The federal gov't has almost unlimited authority under the commerce clause to regulate pretty much all human activity. Economic rights are also reviled by the judicial branch.

Dushan29 writes:

I recall when my father died many years ago. We paid far too much for his funeral. Since that time, I've long decided that many funeral homes are a huge rip-off. I'm pleased that Costco sells caskets on their website at reduced prices, but they are still expensive.

Therefore, my wife and I decided we will be cremated at far lesser expense. More and more people are choosing this route.

Throughout America, senseless laws exist just about everywhere. In Minnesota, it seems to me that it's totally inane to require an additional embalming room, especially if it will never be used. I would like the low-cost funeral owner to keep his costs as low as possible. Many people still prefer a formal funeral rite.

Chris writes:

I assume they're making a substantive due process challenge, which requires them to show that the law is not rationally related to a legitimate government interest. It's a very, very difficult standard to satisfy. As long as the law arguably serves some legitimate purpose, it will be sustained. The actual intentions that motivated the statute -- e.g., erecting a barrier to low-cost competitors -- are irrelevant; the court will be free to hypothesize purposes on its own. The facts don't matter too much, either, as long as a legislator could conceivably believe them to be true.

That said, due process challenges are sometimes successful. I don't know enough about the funeral business to know whether there's some straight-faced justification one could make for the statute.

They might have a better claim if the statute is unevenly enforced -- i.e., if the state funeral homes police make some homes buy embalming homes but not others.

Telnar writes:

While I join with the vast majority in disliking this law, I'm not sure that having a court overturn it is a good idea. The power to decide whether a law does something substantively useful (as opposed to creating a cost designed to change the minimum efficient scale in an industry) is not one which judges receive training to exercise well.

joeftansey writes:

"I don't support bad government, I only support good government"

How many cases of government corruption would it take to loosen the statists' faith?

Tom writes:

Chances are the state will just 'fix' it by requiring on-site embalming.

Kevin writes:
"The power to decide whether a law does something substantively useful (as opposed to creating a cost designed to change the minimum efficient scale in an industry) is not one which judges receive training to exercise well." - Telnar

It's not something legislators or voters are trained in either, so why not take advantage of this sporadic opportunity to bludgeon a bad law out of existence?

Telnar writes:


My concern is that the legitimacy of court decisions invalidating bad laws is a valuable resource and overturning laws which are bad only for substantive reasons risks expending that resource to a degree that invalidating laws which violate more explicit constitutional protections doesn't.

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