PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

CHARLES BROWN; JOSEPH B. 

JENKINS, III; BRIAN CHISHOLM; GAIL

MANUEL,

Plaintiffs-Appellants,

v.

DAVID HOVATTER; FAYE PETERSON;

MICHAEL RUCK, SR.; GLADYS

SEWELL; DONALD V. BORGWARDT;  No. 08-1121

MARSHALL JONES, JR.; MICHAEL

KRUGER; BRIAN HAIGHT; ROBERT

BRADSHAW; JEFFREY POPE; VERNON

STRAYHORN, SR., in their official

capacities as members of the

Maryland State Board of

Morticians,

Defendants-Appellees. 
CHARLES BROWN; JOSEPH B. 

JENKINS, III; BRIAN CHISHOLM; GAIL

MANUEL,

Plaintiffs-Appellees,

v.

DAVID HOVATTER; FAYE PETERSON;

MICHAEL RUCK, SR .; GLADYS

SEWELL; MARSHALL JONES, JR.;  No. 08-1125

MICHAEL KRUGER; DONALD V.

BORGWARDT; ROBERT BRADSHAW;

JEFFREY POPE; BRIAN HAIGHT;

VERNON STRAYHORN, SR., in their

official capacities as members of

the Maryland State Board of

Morticians,

Defendants-Appellants. 

Appeals from the United States District Court

for the District of Maryland, at Baltimore.

Richard D. Bennett, District Judge.

(1:06-cv-00524-RDB)

Argued: January 27, 2009

Decided: March 27, 2009

Before NIEMEYER, TRAXLER, and SHEDD,

Circuit Judges.

Affirmed in part and reversed in part by published opinion.

Judge Niemeyer wrote the opinion, in which Judge Traxler

joined. Judge Shedd wrote a separate concurring opinion.

2 BROWN v. HOVATTER
COUNSEL

ARGUED: Clark Neily, INSTITUTE FOR JUSTICE, Arlington, Virginia, for Appellants/Cross-Appellees. Steven Marshall Sullivan, OFFICE OF THE ATTORNEY GENERAL

OF MARYLAND, Baltimore, Maryland, for Appellees/CrossAppellants. ON BRIEF: William H. Mellor, Jeffrey T.

Rowes, INSTITUTE FOR JUSTICE, Arlington, Virginia, for

Appellants/Cross-Appellees. Douglas F. Gansler, Attorney

General of Maryland, Kathleen A. Ellis, Assistant Attorney

General, Grant D. Gerber, Assistant Attorney General,

OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Appellees/CrossAppellants. 

OPINION

NIEMEYER, Circuit Judge:

Charles Brown, Joseph Jenkins, Brian Chisholm, and Gail

Manuel, who refer to themselves as "funeral and cemetery

entrepreneurs," commenced this action to strike down as

unconstitutional the Maryland Morticians and Funeral Directors Act (the "Morticians Act"), Md. Health Occ. Code § 7-

101 et seq. They contend that the Act, insofar as it prohibits

corporate ownership of mortician’s licenses and funeral

establishments (except for 58 corporations grandfathered into

the Act in 1945) and unlicensed individual ownership of

funeral establishments (except for surviving spouses and

executors of licensed morticians), violates the Equal Protection Clause, the Due Process Clause, and the dormant Commerce Clause of the U.S. Constitution. They argue:

"Effectively shielded from most out-of-state competition,

Maryland funeral industry members profit handsomely from

the most blatantly anti-competitive funeral regulation in the

nation, [effectively] add[ing] nearly $800 to the cost of a

BROWN v. HOVATTER 3
funeral in Maryland." (Internal quotation marks and record

references omitted). They claim that they are unable to participate equitably in Maryland’s funeral industry because of

Maryland’s anticompetitive restrictions on funeral establishment ownership.

The district court, ruling on motions for summary judgment, concluded that the Morticians Act did not violate either

the Equal Protection Clause or the Due Process Clause, but

that it did violate the dormant Commerce Clause. In support

of its dormant Commerce Clause ruling, the court said that the

Act’s "corporate [ownership] prohibition severely limits the

ability of out-of-state businesses from opening a funeral home

in Maryland." The parties filed cross-appeals.

For the reasons that follow, we affirm the district court’s

conclusions with respect to the Equal Protection Clause and

the Due Process Clause for substantially the same reasons

given by the district court. And because Maryland’s licensing

requirements do not unjustifiably burden interstate commerce,

we reverse the district court’s dormant Commerce Clause ruling. At bottom, we conclude that the Morticians Act is constitutional as to each of the plaintiffs’ challenges.

I

The Morticians Act requires individuals who wish to "practice mortuary science in [Maryland]," to be licensed by the

Maryland State Board of Morticians. Md. Health Occ. Code

§ 7-301(a). To qualify for a license, an individual must be of

good moral character; must have completed an apprenticeship; must have a specified educational background; and must

have passed national and Maryland examinations. Id. § 7-

303(b).

The Act also requires any individual who owns a "funeral

establishment" to license the establishment, i.e., "building,

structure, or premises from which the business of practicing

4 BROWN v. HOVATTER
mortuary science is conducted." Id. §§ 7-310, 7-101(h). Unlicensed individuals may not own a funeral establishment,

except for spouses and executors of deceased licensed individuals. Id. §§ 7-310(c)(2), 7-308, 7-308.1.

Corporations, except those grandfathered in as of 1945,

may not be licensed as morticians or funeral directors, id. § 7-

309, and may not own a funeral establishment, see id. § 7-

310. Under the grandfather clause, enacted in 1945, a corporation, that held a license on June 1, 1945, that has been continually renewed, may own and operate a funeral establishment

and continue to do so as long as the corporation exists, provided that "any practice of mortuary science that is conducted

for the corporation is practiced by a licensed individual." Id.

§ 7-309(b), (d). The parties agree that there are 58 corporations grandfathered under § 7-309(b), that are licensed to

engage in the business or profession of "funeral directing or

embalming," allowing them to own and operate funeral establishments, and the stock of these corporations is freely transferable by its owners. Currently, the stock of 3 of the 58

corporations remains in the hands of the original owners, and

the stock of 30 of those corporations is held by out-of-state

public corporations and national chains. The plaintiffs claim

that it can cost up to $250,000 to purchase the stock of a corporation grandfathered to hold a license.

The four plaintiffs wish to own and operate funeral establishments through the corporate form without being individually licensed. Brown is a Maryland resident who owns a

cemetery in Hagerstown, Maryland, and who built a funeral

home that is now operated by his son. Because Brown is not

licensed under the Morticians Act, he cannot own the funeral

home he built, but he would like to do so through a corporation.

Jenkins is a Maryland resident who is licensed as a mortician. He is the supervising mortician of a funeral establishment in Prince George’s County, Maryland, which was built

BROWN v. HOVATTER 5
by his family. He indicates that he would like to own his own

funeral establishment through a corporation. He asserts that

he cannot afford to buy the stock of a grandfathered corporation that owns a license because the going rate is "up to

$250,000."

Chisholm is a former Maryland resident who now resides

in Florida. He is licensed by Maryland as a mortician and

owns a licensed funeral establishment in Timonium, Maryland. Since relocating to Florida in 2005, he states that his

business has been operated by a "subcontractor . . . as the

supervising mortician." He would like to expand his funeral

business in Maryland as an "ordinary business corporation."

Manuel is a Maryland resident who, through a corporation,

owns a cemetery in Waldorf, Maryland. Although she is not

a licensed mortician, Manuel would like to own and operate,

through a corporation, a funeral establishment on the grounds

of her cemetery because "owning a business through a corporation is the best way to operate." She states, however, that

her plans cannot include paying the "exorbitant price, as much

as $250,000," for the stock of a grandfathered corporation.

In short, each of the plaintiffs wants to engage in the practice of mortuary science through a corporation, and two wish

to do so without becoming individually licensed. Therefore

each is challenging Maryland’s right to bar corporations from

being licensed as morticians and owning licensed funeral

establishments and to require the owner of a funeral establishment to be a "licensed individual."

The plaintiffs commenced this action against the Maryland

State Board of Morticians and Funeral Directors ("Maryland")

to declare the restrictions unconstitutional and to enjoin their

enforcement. In their complaint, the plaintiffs allege that they

have been denied equal protection of the law, in violation of

the Equal Protection Clause of the Fourteenth Amendment,

because there is no rational reason why they are not permitted

6 BROWN v. HOVATTER
to own funeral homes either through a corporate form when

grandfathered corporations can do so or as unlicensed individuals when surviving spouses and executors can do so. They

also contend that the Morticians Act denies them the right "to

earn an honest living in the occupation of their choice by

imposing restrictions on the ownership of funeral homes that

are not rationally related to any legitimate public purpose," in

violation of the Due Process Clause of the Fourteenth Amendment. Finally, they allege that but for Maryland’s restrictions

on corporate and unlicensed individual ownership of funeral

homes, persons and companies outside of the State "would

pursue funeral home business opportunities in Maryland that

they are not currently pursuing because of the restriction[s].

This substantial barrier to entry into the Maryland funeral

home industry imposes an undue burden on interstate commerce in comparison with the legitimate local interests protected by the law, which in fact are none" and that therefore

the restrictions on corporate and unlicensed individual ownership violate the dormant Commerce Clause.

On cross-motions for summary judgment, the district court

rejected the plaintiffs’ challenges to the Morticians Act under

the Equal Protection and Due Process Clauses, concluding

that "the Maryland General Assembly could have rationally

determined that the public’s health, safety and welfare are furthered by requiring that a licensed mortician own the funeral

home where mortuary science is practiced." The court, however, sustained the plaintiffs’ challenge to the Act’s corporate

ownership prohibition under the dormant Commerce Clause,

concluding that it is "a protectionist piece of legislation" that

is "clearly anti-competitive." The court reasoned:

The corporate prohibition severely limits the ability

of out-of-state businesses from opening a funeral

home in Maryland. Even if one of the fifty-eight

licenses does become available, a prospective out-ofstate purchaser must pay an inflated price for the

license. The undisputed record in this case indicates

BROWN v. HOVATTER 7
that these burdens are intolerable and clearly excessive in relation to any benefits proffered by [Maryland].

The district court also held that the Morticians Act’s requirement that funeral establishments be owned by licensed individuals was not properly challenged under the dormant

Commerce Clause and that Maryland could require corporations wishing to own funeral establishments to be themselves

owned by licensed funeral directors or morticians.

The plaintiffs appeal from the portion of the district court’s

judgment upholding the Maryland Morticians Act against

equal protection and due process challenges, as well as the

court’s refusal to consider the licensed individual ownership

requirement under the dormant Commerce Clause. And Maryland appeals from the portion of the judgment ruling that the

corporate ownership restriction of the Morticians Act violates

the dormant Commerce Clause. Because the district court

struck down the Morticians Act under the dormant Commerce

Clause, we begin our analysis by addressing that issue.

II

The plaintiffs claim the following to support their argument

that the Morticians Act’s restrictions on corporate and unlicensed individual ownership of funeral establishments violate

the dormant Commerce Clause: (1) that as a result of the

restrictions, "the rate of out-of-state investment in the Maryland funeral industry is significantly lower than it would be

absent the challenged restrictions"; (2) that the restrictions

effectively exclude out-of-state funeral industry entrepreneurs

"from the Maryland funeral market, despite their strong desire

to enter it," because "the only practical way for out-of-state

investors to own funeral homes in Maryland is through corporate ownership"; and (3) that "Maryland funeral industry

insiders fought indefatigably for over a decade to prevent the

General Assembly from eliminating these restrictions that

8 BROWN v. HOVATTER
suppress competition and supply the industry [in Maryland]

with windfall profits." They conclude that in these ways the

restrictions "impose significant burdens on interstate commerce without any countervailing public benefits," in violation of the dormant Commerce Clause.

Maryland responds that the restrictions on corporate and

unlicensed individual ownership do not burden interstate

commerce, "even if [they] result[ ] in greater costs or inefficiencies for certain companies." It notes that "differences

between Maryland’s concededly ‘even handed’ and nondiscriminatory corporate licensure statute and the laws of other

states are to be expected, and should not be mistaken for a

‘burden’ on interstate commerce." Maryland argues that the

restrictions on funeral establishment ownership are rationally

justified because the use of corporations "causes such business to be owned by people who do not know anything about"

the business and because the restrictions foster a greater

degree of accountability to regulators. It claims that the Maryland General Assembly had a rational basis for believing that

"limiting funeral home licenses to licensed individuals would

foster a greater degree of accountability to regulators than

would the continued licensing of corporations, which are

inherently designed to limit the personal responsibility of

owners. That rational legislative judgment could reasonably

be expected to yield putative benefits by allowing the [Morticians’] Board to better ‘protect the health and welfare of the

public.’" (Quoting Md. Health Occ. Code § 7-103).

The Commerce Clause states, "The Congress shall have

Power . . . To regulate Commerce . . . among the several

States," U.S. Const. art. I, § 8, cl. 3, and it is well-established

that this affirmative grant of authority implies a "negative" or

"dormant" constraint on the power of the States to enact legislation that interferes with or burdens interstate commerce. See

Dennis v. Higgins, 498 U.S. 439, 447 (1991) ("It is also clear,

however, that the Commerce Clause does more than confer

power on the Federal Government; it is also a substantive

BROWN v. HOVATTER 9
restriction on permissible state regulation of interstate commerce" (internal quotation marks and citation omitted));

Healy v. Beer Inst., 491 U.S. 324, 326 n.1 (1989) ("This Court

long has recognized that this affirmative grant of authority to

Congress also encompasses an implicit or ‘dormant’ limitation on the authority of the States to enact legislation affecting

interstate commerce"). As the Supreme Court recently

observed, "The modern law of what has come to be called the

dormant Commerce Clause is driven by concern about economic protectionism—that is, regulatory measures designed

to benefit in-state economic interests by burdening out-ofstate competitors." Dep’t of Revenue of Ky. v. Davis, 128 S.

Ct. 1801, 1808 (2008) (internal quotation marks and citation

omitted). The dormant Commerce Clause walks a narrow path

leading courts to "rebuff[ ] attempts of states to advance their

own commercial interests by curtailing the movement of articles of commerce, either into or out of the state, while generally supporting their right to impose even burdensome

regulations in the interest of local health and safety." H.P.

Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 535 (1949).

Thus, not all economic harms or anticompetitive choices are

remedied through the application of the dormant Commerce

Clause, but rather only those that unjustifiably burden interstate commerce.

The analysis for determining whether a state law violates

the dormant Commerce Clause proceeds on two tiers. On the

first tier, it inquires whether the state law discriminates

against interstate commerce. Unless discrimination is demonstrably justified by a factor unrelated to economic protectionism, a "discriminatory law is virtually per se invalid." Davis,

128 S. Ct. at 1808 (internal quotation marks and citation omitted); see also Yamaha Motor Corp., U.S.A. v. Jim’s Motorcycle, Inc., 401 F.3d 560, 567 (4th Cir. 2005). If there is no

discrimination, a court will consider on the second tier

whether the state laws "unjustifiably . . . burden the interstate

flow of articles of commerce." Oregon Waste Sys., Inc. v.

Dep’t of Envtl. Quality of Oregon, 511 U.S. 93, 98 (1994); see

10 BROWN v. HOVATTER
also Yamaha, 401 F.3d at 567. In addressing whether a state

law unjustifiably burdens interstate commerce, the courts generally apply the so-called Pike test, under which the challenged law "will be upheld unless the burden imposed on

[interstate] commerce is clearly excessive in relation to the

putative local benefits." Pike v. Bruce Church, Inc., 397 U.S.

137, 142 (1970). 

In this case, no contention is made that the Morticians Act

discriminates against interstate commerce, and the district

court concluded that there was no evidence of any discriminatory purpose. Rather, the issue presented is whether the corporate and individual licensure restrictions in the Morticians Act

burden interstate commerce, and, if so, whether the burden is

"clearly excessive" and not justified by putative local benefits.

We begin that inquiry by identifying the commerce implicated

and how the Morticians Act purportedly burdens it.

The Morticians Act regulates the practice of mortuary science in Maryland, which includes the operation of funeral

establishments, the preparation of dead bodies for disposition,

and the arrangement for final disposition of dead bodies. See

Md. Health Occ. Code §§ 7-301(a), 7-302, 7-101(p),(q). The

practice of mortuary science is inherently a local profession,

typically used by relatives to have the bodies of dead family

members prepared for burial or other disposition and to provide a facility for visitation, mourning, and services. Indeed,

other than providing out-of-state caskets, which are not in any

way regulated by the Morticians Act, the service provided

through the practice of mortuary science begins and ends

within the State.

In licensing the profession and the establishments at which

it is practiced, the Maryland Morticians Act does not purport

to regulate activity outside of Maryland, and it focuses only

on the services provided in Maryland at a funeral establishment in Maryland. Importantly, the regulation does not

address, nor thereby affect, the flow of any goods or articles

BROWN v. HOVATTER 11
of commerce across state lines. The regulation concerns itself

only with the provision of services from a physical establishment in the State. Thus, the Morticians Act purports to regulate an industry that is inherently local, not interstate, in

nature.

Moreover, the Morticians Act does not treat persons from

out-of-state any differently than persons in-state. Any person

—out-of-state or in-state—may obtain a license to practice

mortuary science and own and operate a funeral establishment

in Maryland, and there is no limit on the number of licenses

that the State may issue. Likewise, with respect to the 58

grandfathered corporations owning licenses, any person or

corporation, out-of-state or in-state, may own the stock.

Indeed, over one-half of the grandfathered corporations are

owned by publicly-held out-of-state corporations.

In sum, any individual may practice mortuary science in

Maryland, own a funeral establishment in Maryland, or own

the stock of a grandfathered corporation holding a Maryland

license to operate a funeral establishment. The only restrictions that are imposed by the Morticians Act relate to professional education, experience, and accountability. Thus, entry

into the Maryland funeral services market is limited only by

the choices of the individual as to how best to allocate his or

her time and resources.

The dormant Commerce Clause is implicated by burdens

placed on the flow of interstate commerce—the flow of goods,

materials, and other articles of commerce across state lines.

See Oregon Waste Sys., 511 U.S. at 98 (stating that the dormant Commerce Clause "denies the States the power unjustifiably to discriminate against or burden the interstate flow of

articles of commerce"); Hughes v. Alexandria Scrap Corp.,

426 U.S. 794, 803 (1976) (noting that it is "well established

by the history of the Commerce Clause, that this Nation is a

common market in which state lines cannot be made barriers

to the free flow of both raw materials and finished goods in

12 BROWN v. HOVATTER
response to the economic laws of supply and demand"). And

it is a trade barrier to the free flow of goods, materials, and

other articles of commerce across state lines that violates the

dormant Commerce Clause. The Clause does not purport to

restrict or limit intrastate commerce, nor protect the participants in intrastate or interstate markets, nor the participants’

chosen way of doing business. See Exxon Corp. v. Governor

of Md., 437 U.S. 117, 127 (1978) ("We cannot . . . accept

appellants’ underlying notion that the Commerce Clause protects the particular structure or methods of operation in a retail

market" or "particular interstate firms").

Yet, it is precisely the particular structure or methods of

operation in the Maryland retail market for funeral services

about which the plaintiffs in this case complain, not about a

burden on the flow of articles of commerce across state lines.

Their complaints about the regulation center around either the

inconveniences presented to them personally or the restrictions on how they would prefer to run their businesses when

operating in Maryland.

They assert that corporate ownership of funeral establishments would facilitate financing, would protect them from

personal liability, and would enable them to pass the business

on to others, particularly family members. In addition, they

state that operating through a corporation would simply be a

preferable way of doing business. Brown states, "I want to

own and operate a funeral establishment on the grounds of

Rest Haven Cemetery, but I do not want to become a licensed

mortician." Jenkins states, "It is no coincidence that the largest funeral establishments in Maryland . . . are set up through

the 58 special corporate licenses under the ‘grandfather’

clause. I simply want to be able to do what the law allows

those businesses and businesspeople to do." Chisholm, who is

a mortician licensed in Maryland but who lives in Florida,

states, "[T]he challenges of running a Maryland business from

Florida, particularly with respect to financing and liability,

make corporate ownership essential if I am to expand ChisBROWN v. HOVATTER 13
holm Funeral Services according to my plans." And Manuel

states: "Neither my husband nor I want to devote the time and

money to becoming licensed funeral directors or morticians.

. . . Ideally, we want to own and operate our proposed funeral

home as an ordinary business corporation . . . [but] [o]ur plans

do not allow us to pay the exorbitant price, as much as

$250,000, that one of these ‘grandfather’ corporations cost."

In short, the plaintiffs are challenging the way Maryland

authorizes them to do business within the State in a profession

regulated by the State. Their complaints do not involve burdens placed on the interstate movement of goods, materials,

or other articles of commerce, and the matters of which they

complain—the manner of professional practice in Maryland—

are not matters protected by the dormant Commerce Clause.

As the Supreme Court stated in Exxon, "We cannot . . . accept

appellants’ underlying notion that the Commerce Clause protects the particular structure or methods of operation in a retail

market. . . . [T]he Clause protects the interstate market, not

particular interstate firms, from prohibitive or burdensome

regulations." Exxon, 437 U.S. at 127-28.

In Exxon, a Maryland statute provided that producers or

refiners of petroleum products, such as Exxon and Shell,

could not operate retail service stations within Maryland.

Exxon and other petroleum producers and refiners challenged

the statute on constitutional grounds, including the dormant

Commerce Clause, pointing to evidence that the statute’s

divesture requirements would cause at least three refiners to

stop selling gasoline in Maryland, depriving consumers of

competition and even certain special services. The Supreme

Court rejected the argument, noting that "interstate commerce

is not subjected to an impermissible burden simply because an

otherwise valid regulation causes some business to shift from

one interstate supplier to another," even if it will "change the

market structure by weakening independent refiners." Exxon,

437 U.S. at 127. The Court explained:

14 BROWN v. HOVATTER
[T]he Clause protects the interstate market, not particular interstate firms, from prohibitive or burdensome regulations. It may be true that the consuming

public will be injured by the loss of the high-volume,

low-priced stations operated by the independent

refiners, but again that argument relates to the wisdom of the statute, not to its burden on commerce.

Id. at 127-28.

Likewise in the case before us, the Morticians Act "does

not prohibit the flow of interstate goods, place added costs

upon them, or distinguish between in-state and out-of-state

companies in the retail market." Exxon, 437 U.S. at 126. In

fact, large funeral home conglomerates have a presence in the

Maryland funeral services market, albeit not as large as they

would like. But the fact that the burden of this permissible

state regulation falls on corporations that may have interstate

operations "does not, by itself, establish a [violation of the

dormant Commerce Clause]." Id.

Further, just like the oil companies in Exxon, the plaintiffs

complain that the Morticians Act hurts Maryland consumers

and drives up the costs of funerals. The burden of this regulation, however, falls on Maryland consumers, not on interstate

commerce, and a complaint about this burden "relates to the

wisdom of the [Maryland] statute, not to its burden on [interstate] commerce." Exxon, 436 U.S. at 128 (emphasis added).

The plaintiffs rely heavily on our decision in Yamaha

Motor Corp., U.S.A. v. Jim’s Motorcycle, Inc., 401 F.3d 560

(4th Cir. 2005), to support their claim that the Morticians Act

violates the dormant Commerce Clause. They assert that

Yamaha, which struck down a Virginia statute under the dormant Commerce Clause, is "directly on-point and provided

the legal basis for the district court’s commerce clause ruling"

in this case.

BROWN v. HOVATTER 15
In Yamaha, the Virginia statute at issue provided protection

to existing motorcycle dealers in Virginia against the creation

of new dealerships by motorcycle manufacturers and distributors such as Yamaha and Harley-Davidson, by giving the

existing dealers the right to protest the creation of a new

dealership through a process that "could take years to

resolve," even if the protest were "frivolous." Yamaha, 401

F.3d at 571 (internal quotation marks and citation omitted).

Moreover, a dealer could protest the appointment of a new

dealer even if the new dealership were across the State, some

500 miles away and indisputably outside of the relevant market of the protesting dealer for selling motorcycles. Id.

Yamaha, an out-of-state manufacturer and distributor of

motorcycles, challenged the statute under the dormant Commerce Clause, arguing that the Virginia statute created an

unjustifiable burden on interstate commerce by burdening

Yamaha’s ability to distribute motorcycles in Virginia. Agreeing with Yamaha’s claim, we concluded that the Virginia statute did indeed "create[ ] a significant barrier to market entry

. . . because of the virtual certainty of a protest whenever a

manufacturer attempts to authorize a new dealership." Id.

(internal quotation marks and citations omitted). Because the

delay in costs in the face of increasing demand in Virginia for

motorcycles caused Yamaha and Harley-Davidson to forego

establishing new dealers, we concluded that the Virginia statute imposed "heavy burdens predominantly on out-of-state

interests" and thus "unduly burden[ed] commerce." Id. at 573.

Thus, Yamaha invalidated a statute that was aimed at the

interstate flow of motorcycles into Virginia. Unlike in

Yamaha, however, the Maryland Morticians Act is not aimed

at any interstate flow of goods, materials, or articles of commerce. The Morticians Act is a local regulation of a localized

profession where services are performed for clients entirely in

Maryland. Rather than aiming at the interstate flow of commerce, the Morticians Act is aimed at making morticians and

funeral directors in Maryland directly accountable to clients

who come to them in Maryland to provide funeral services at

16 BROWN v. HOVATTER
their funeral establishments in Maryland. Yamaha does not

advance the plaintiffs’ argument that the Morticians Act

imposes an unjustified burden on interstate commerce.

Because the Morticians Act does not place a barrier or burden on the flow of interstate commerce, it does not violate the

dormant Commerce Clause. But even if it was considered to

place an incidental burden on commerce, that incidental burden would not be excessive in light of the putative benefits

from the Act’s regulation.

While Maryland does not have extensive records explaining the purpose of the Act, the Supreme Court has recognized

that promoting familiarity between an owner and his business

in a licensed and regulated industry is a legitimate local interest. See North Dakota State Bd. of Pharmacy v. Snyder’s

Drug Stores, Inc., 414 U.S. 156, 166-67 (1973); see also

Goldfarb v. Supreme Court of Va., 766 F.2d 859, 862 (4th

Cir. 1985) (recognizing that a state law exempting from

examination lawyers licensed out of state who moved into

Virginia to practice full time provides a putative local benefit

because "the full-time practice requirement promotes familiarity with Virginia law among attorneys who have not passed

the state bar examination"); id. (recognizing the "broad power

[of States] to establish standards for licensing practitioners

and regulating the practice of professions" (internal quotation

marks and citation omitted)). More broadly, a State "has a

substantial interest in preventing the corporate form from

becoming a shield for unfair business dealing." CTS Corp. v.

Dynamics Corp. of Am., 481 U.S. 69, 93 (1987). The district

court recognized that these very principles apply in this case

to support "the notion that ownership of corporations may be

limited in highly skilled occupations where licensing is

required, such as mortuary science."

Maryland asserts that "limiting funeral home licenses to

licensed individuals [will] foster a greater degree of accountability to regulators than would the continued licensing of

BROWN v. HOVATTER 17
corporations, which are inherently designed to limit the personal responsibility of owners. That rational legislative judgment could reasonably be expected to yield putative benefits

by allowing the [Morticians’] Board to better ‘protect the

health and welfare of the public.’" (Quoting Md. Health Occ.

Code § 7-103). And the State’s position is indeed advanced

by the complaint in this case and the affidavits of the plaintiffs where they assert that they desire to use the corporate

form because they "want to be insulated from personal liability for . . . negligence." This is precisely the kind of personal

responsibility that the Morticians Act wishes to maintain.

Indeed, the Maryland State Board of Morticians expressed

this concern, claiming that unlicensed individuals and corporations would be less accountable. Thus, the Morticians Act

provides individual liability and therefore more direct

accountability for owners of funeral establishments while the

plaintiffs desire less individual liability. This is the type of

legislative decisionmaking into which courts should avoid

inserting themselves. See, e.g., Powers v. Harris, 379 F.3d

1208, 1222 (10th Cir. 2004) ("While the creation of such a

libertarian paradise may be a worthy goal, Plaintiffs must turn

to the . . . electorate for its institution, not us").

In short, we conclude that the Morticians Act’s incidental

burden on interstate commerce is not excessive and is justified by the very real benefits of protecting the public health,

safety, and welfare by encouraging familiarity of the owner of

a funeral business with the day-to-day workings of that business and creating accountability to regulators and to clients.

Accordingly, we reverse the district court’s conclusion that

the Act violates the dormant Commerce Clause.

III

In addressing plaintiffs’ Due Process and Equal Protection

Clause arguments, we agree with the district court’s reasoning

rejecting these arguments. Because the Morticians Act is an

economic regulation, we may not strike it down unless it is

18 BROWN v. HOVATTER
"wholly arbitrary, without any basis in reason." Guardian

Plans Inc. v. Teague, 870 F.2d 123, 126 (4th Cir. 1989) (internal quotation marks and citation omitted). In other words, to

survive such challenges, the Act need only be "rationally

related to a legitimate state interest." Id.

Our court has already recognized that a State has a "legitimate interest in protecting the health, safety and welfare of its

citizens through regulation of the funeral profession." Guardian Plans, 870 F.2d at 126. A State’s legislature may "rationally determine[ ] that keeping the arrangement of funerals in

the hands of licensed funeral professionals would benefit the

public by ensuring competence in funeral arrangement. Our

inquiry [under the Equal Protection and Due Process Clauses]

ends here." Id.

Moreover, there is a rational basis to restrict corporate and

unlicensed individual ownership of professional businesses.

See North Dakota Pharmacy Bd., 414 U.S. at 166-67. In

North Dakota Pharmacy Board, the North Dakota legislature

required that in order to obtain a permit to operate a pharmacy, the applicant had to be a registered pharmacist in good

standing or a corporation or association, the majority of

whose stock must be owned by registered pharmacists in good

standing who are active in the day-to-day affairs of the corporation or association. In upholding those restrictions on corporate ownership, the Supreme Court explained that a rational

relationship exists between restricting corporate ownership

and the professions, quoting with approval Justice Holmes’

dissenting opinion in Louis K. Liggett Co. v. Baldridge, 278

U.S. 105, 114-15 (1928) (Holmes, J. dissenting):

"A standing criticism of the use of corporations in

business is that it causes such business to be owned

by people who do not know anything about it. Argument has not been supposed to be necessary in order

to show that the divorce between the power of control and knowledge is an evil. The selling of drugs

BROWN v. HOVATTER 19
and poisons calls for knowledge in a high degree,

and [the State] after enacting a series of other safeguards has provided that in that matter the divorce

shall not be allowed. Of course, notwithstanding the

requirement that in corporations hereafter formed all

the stockholders shall be licensed pharmacists, it still

would be possible for a stockholder to content himself with drawing dividends and to take no hand in

the company’s affairs. But obviously he would be

more likely to observe the business with an intelligent eye than a casual investor who looked only to

the standing of the stock in the market. The Constitution does not make it a condition of preventive legislation that it should work a perfect cure. It is enough

if the questioned act has a manifest tendency to cure

or at least to make the evil less."

North Dakota State Bd., 414 U.S. at 166-67. The same rationality exists for upholding the restrictions on corporate and

unlicensed individual ownership in the Morticians Act.

The rationality of restricting corporate ownership in the

Morticians Act is not undermined by exemptions contained in

the Act, so long as the exemptions too are rationally based.

See Goldfarb, 766 F.2d at 862-63 (finding rational an exemption from a state bar exam for out-of-state lawyers who

moved to Virginia to practice full time even though bar applicants generally must take the bar exam before being licensed).

In the Morticians Act, corporations that historically held

licenses in the funeral business were allowed to continue to

hold licenses because the General Assembly wanted to protect

reliance interests of family members. For a similar reason,

spouses of deceased licensees are exempted from being

licensed to allow the spouse, who presumably was already

involved in the affairs of the business, to continue the business. The Act also provides an exemption for executors of

licensees, allowing the temporary operation of the funeral

20 BROWN v. HOVATTER
establishment to wind down the affairs of the business. The

fact that the General Assembly created these rational exemptions does not undermine the overall rationality of the Morticians Act based on its relationship to a legitimate government

purpose. See Goldfarb, 766 F.2d at 862-63.

The plaintiffs’ position boils down to a disagreement with

the General Assembly’s judgment in refusing to authorize a

different structure for practicing mortuary science in Maryland. This disagreement, however, is not a basis on which to

render the Morticians Act unconstitutional.

[A] law may exact a needless, wasteful requirement

in many cases. But it is for the legislature, not the

courts, to balance the advantages and disadvantages

of the . . . requirement.

* * *

[T]he law need not be in every respect logically consistent with its aims to be constitutional. It is enough

that there is an evil at hand for correction, and that

it might be thought that the particular legislative

measure was a rational way to correct it.

The day is gone when this Court uses the Due Process Clause of the Fourteenth Amendment to strike

down state laws, regulatory of business and industrial conditions, because they may be unwise,

improvident, or out of harmony with a particular

school of thought. . . . For protection against abuses

by legislatures the people must resort to the polls,

not to the courts.

Williamson v. Lee Optical of Okla., Inc., 348 U.S. 483, 487-

88 (1955) (internal quotation marks and citations omitted).

BROWN v. HOVATTER 21
IV

We conclude that the Morticians Act does not violate the

dormant Commerce Clause, and accordingly we reverse the

district court’s judgment in that regard. We also conclude that

the Act does not violate either the Equal Protection Clause or

the Due Process Clause, and accordingly we affirm the district

court in that regard.

The judgment of the district court is therefore

AFFIRMED IN PART AND REVERSED IN PART.

SHEDD, Circuit Judge, concurring:

I concur in the judgment reached by the majority. As to the

dormant Commerce Clause issue, I concur to the extent that

we find "that the Morticians Act’s incidental burden on interstate commerce is not excessive and is justified by the very

real benefits of protecting the public health, safety, and welfare by encouraging familiarity of the owner of a funeral business with the day-to-day workings of that business and

creating accountability to regulators and to clients." See

Majority Op. at 18.

22 BROWN v. HOVATTER