Post & Schell Leads Victory in Industry-Changing Constitutional Challenge to Pennsylvania’s Funeral Director Law

Federal Judge John E. Jones III Orders Injunction, Awards $1.1M Attorneys’ Fees, Recognizes “Herculean” Work of Lawyers, “Protectionist Regime of State Board”

HARRISBURG, Pa.--(BUSINESS WIRE)--Post & Schell PC proudly announces that it secured a significant victory, on behalf of a group of Pennsylvania funeral directors, and other members within the death care industry, challenging the constitutionality of the 60-year-old Funeral Director Law (FDL), with the ordering of a permanent injunction to cease the Pennsylvania Board of Funeral Directors from enforcing 11 regulatory provisions. The injunction, along with an attorneys’ fees award of $1.1 million, was ordered August 22, 2012 by the Honorable John E. Jones III of the United States District Court for the Pennsylvania Middle District. The injunction and fees award mark the latest triumph in a four-year, complex legal battle against the State Board to modernize Pennsylvania’s funeral industry by removing competitive barriers and improving consumer options and protections. Industry observers saw the federal court’s decision as “historic” and a “game changer” for funeral directors in Pennsylvania and possibly the nation.

“The risks and complexity of mounting a wide-scale constitutional challenge are high and we are pleased the court weighed in with our clients, and ultimately with the Commonwealth’s consumers who will benefit from the modernization of funeral service offerings”

Post & Schell principal and veteran commercial litigator James J. Kutz served as lead plaintiffs’ counsel in the firm’s representation of a group of 33 plaintiffs, which was headed by Ernest F. Heffner, a licensed funeral director in York, PA. The high-profile litigation, filed against 10 defendants in May 2008, included Kutz’s strategic decision to bring the action primarily under the U.S. Constitution’s Commerce Clause. His argument focused on an economic balancing test, and secondarily on a due process argument, which had been the basis of previous state court constitutional challenges. An additional successful strategy was Kutz’s decision to consolidate the multiple constitutional arguments into a single case rather than pursuing individual claims.

“The risks and complexity of mounting a wide-scale constitutional challenge are high and we are pleased the court weighed in with our clients, and ultimately with the Commonwealth’s consumers who will benefit from the modernization of funeral service offerings,” said Mr. Kutz. “I extend my appreciation to our team of top-notch litigators, and I congratulate our clients, a courageous group who remained relentless in a hard-fought triumph.”

In awarding Post & Schell attorneys’ fees of $1.1 million, against the defendants’ vociferous objections, Judge Jones wrote: “The fee we award hereby is commensurate with the herculean and focused work by a team of lawyers who are a credit to their profession.” Kutz’s litigation team included Post & Schell principal Barbara A. Zemlock and attorneys Jason G. Benion and Jason L. Reimer.

The first key court victory in the case, Heffner et al v. Murphy et al, occurred on May 8, 2012 when the court granted Post & Schell’s clients summary judgment on 11 of 12 substantive counts. Areas of the FDL named as violating the Constitution included provisions that restricted funeral home ownership to only licensed funeral directors, prohibited ownership of more than two locations, and forbade serving food in funeral homes. Judge Jones stayed that order for 90 days to allow the State Board of Funeral Directors to react to the decision and, possibly, propose reforms that might save the statute. The court denied the defendants’ subsequent motion seeking permission to take an immediate appeal.

Prior to issuing the final order, Judge Jones held a conference to determine if the State Board had enacted any changes in the 90-day period. After determining the State Board’s failure to act, the judge rejected the Board’s assertion that an injunction would “wreak havoc” on the Board’s regulation of the industry. He issued the injunction and noted:

“…throughout the hundreds upon hundreds of pages submitted by Defendants in support of the clearly archaic FDL, they have failed to highlight even one piece of evidence demonstrating how the public interest would be adversely affected by a ruling that declines to uphold the protectionist regime and status quo perpetuated by the FDL concerning funeral regulation in Pennsylvania.”

The judge included exceptionally pointed language against the State Board in the court’s explanation of its decision as:

“…the culmination of a massive, systemic failure to promote appropriate public policy by the Board. That the Board would cling to a law that is so outdated and patently unconstitutional in so many ways is as embarrassing as it is unconscionable. Frankly, the members of the Board should be ashamed of themselves.”

“Should the State Board seek an appeal, we remain ready and able to uphold the Constitution and protect the rights of our clients to the full extent of the law,” said Mr. Kutz.

The case is Heffner et al v. Murphy et al, Case 4:08-cv-00990-JEJ in the United States District Court for the Middle District of Pennsylvania.