2014 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-19-2014

Heffner v. Murphy

Precedential or Non-Precedential: Precedential

Docket 12-3591

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

________________

No. 12-3591

________________

ERNEST F. HEFFNER; HARRY C. NEEL; BART H. 

CAVANAGH, SR.; JOHN KATORA; BRIAN LEFFLER; 

REBECCA ANN WESSEL; MARK PATRICK 

DOUGHERTY; CYNTHIA LEE FINNEY; NATHAN RAY; 

TODD ECKERT; BEN BLASCOVICH; MATTHEW 

MORRIS; WILLIAM SUCHARSKI; JOHN MCGEE; 

AMBER M. SCOTT; ERIKA HAAS; NICOLAS 

WACHTER; DAVID HALPATE; PATRICK CONNELL; 

EUGENE CONNELL; MATTHEW CONNELL; JAMES J. 

CONNELL, JR; JEFFERSON MEMORIAL PARK, INC; 

JEFFERSON MEMORIAL FUNERAL HOME, INC.; 

WELLMAN FUNERAL ASSOCIATES INC., doing business 

as Forest Park Funeral Home; EAST HARRISBURG 

CEMETERY COMPANY, doing business as East Harrisburg 

Cemetery & Crematory; ROBERT LOMISON; CRAIG 

SCHWALM; GREGORY J. HARVILLA; BETTY FREY

v.

DONALD J. MURPHY; JOSEPH A. FLUEHR, III; 

MICHAEL J. YEOSOCK; BENNETT GOLDSTEIN; 

JAMES O. PINKERTON; ANTHONY SCARANTINO; 

BASIL MERENDA; MICHAEL GERDES; PETER 

MARKS; C.A.L. SHIELDS,

 Appellants
2

________________

Appeal from the United States District Court

for the Middle District of Pennsylvania

(D.C. Civil Action No. 4-08-cv-00990)

District Judge: Honorable John E. Jones III

________________

Argued: June 11, 2013

Before: MCKEE, Chief Judge

AMBRO and GREENBERG, Circuit Judges

(Opinion filed: February 19, 2014)
3

James K. Kutz (argued) 

Jason G. Benion

Post & Schell, P.C.

17 North Second Street, 12th Floor

Harrisburg, PA 17101

Counsel for Appellees

Kathleen G. Kane, Attorney General

John G. Knorr, III, Chief Deputy Attorney General (argued)

Maryanne M. Lewis, Senior Deputy Attorney General

Office of Attorney General

15th Floor, Strawberry Square

Harrisburg, PA 17120

Counsel for Appellants

________________

OPINION OF THE COURT

________________

McKEE, Chief Judge

Contents

I. Facts and Procedural History ...................................................................................... 6

II. Discussion ................................................................................................................. 10

A. Jurisdiction and Standard of Review....................................................................... 10

B. Facial versus As-Applied Challenge ....................................................................... 10

C. Fourth Amendment.................................................................................................. 11

D. Dormant Commerce Clause .................................................................................... 18

1. Restrictions on Ownership and Alienability of 

Funeral Establishments ............................................................................................. 19

2. Preparation Room Requirement........................................................................... 28

3. Place of Practice and Full-Time Supervisor 

Requirement .............................................................................................................. 30

E. Substantive Due Process.......................................................................................... 31

1. “One-and-a-Branch” Limitation........................................................................... 32
4

2. Licensing Restrictions.......................................................................................... 33

3. “Place-of-practice” and Full-Time Supervisor 

Requirement .............................................................................................................. 35

4. The Preparation Room Requirement.................................................................... 36

5. Restriction on Serving Food................................................................................. 37

6. Trusting Requirement........................................................................................... 39

F. First Amendment...................................................................................................... 42

1. Restriction on Use of Trade Names ..................................................................... 42

2. Payment on Commissions to Unlicensed Salespeople......................................... 45

G. Contract Clause ....................................................................................................... 47

III. Conclusion............................................................................................................... 48

The Pennsylvania Board of Funeral Directors (the 

“Board”) appeals the grant of summary judgment that the 

District Court awarded based upon its conclusion that several 

provisions of Pennsylvania’s Funeral Director Law (“FDL”), 

63 Pa. Stat. Ann. § 479.1 et seq., violate various provisions of 

the U.S. Constitution. The suit was brought by individuals 

and entities who are either involved in, or wish to be involved 

in, Pennsylvania’s “death care industry.”1

 In relevant part, 

the Plaintiffs challenged statutory provisions that: (1) permit 

warrantless inspections of funeral establishments by the 

Board; (2) limit the number of establishments in which a 

funeral director may possess an ownership interest; (3) 

restrict the capacity of unlicensed individuals and certain 

entities to hold ownership interests in a funeral establishment; 

(4) restrict the number of funeral establishments in which a 

funeral director may practice his or her profession; (5) require 

every funeral establishment to have a licensed full-time 

supervisor; (6) require funeral establishments to have a 

“preparation room”; (7) prohibit the service of food in a 

funeral establishment; (8) prohibit the use of trade names by 

funeral homes; (9) govern the trusting of monies advanced 

pursuant to pre-need contracts for merchandise; and (10) 

prohibit the payment of commissions to agents or employees.

 1 The Plaintiffs-Appellees are collectively referred to as the “Plaintiffs.”
5

As a threshold matter, we surmise that much of the 

District Court’s conclusions regarding the constitutionality of 

the FDL, enacted in 1952, stem from a view that certain 

provisions of the FDL are antiquated in light of how funeral 

homes now operate. That is not, however, a constitutional 

flaw. Thus, for the reasons that follow, we reverse the 

District Court’s judgment striking down the FDL’s 

warrantless inspection scheme on Fourth Amendment 

grounds. We also reverse the District Court’s judgments 

concerning the Plaintiffs’ dormant Commerce Clause 

challenges to certain provisions of the FDL. We reverse as 

well the District Court’s conclusions that the disputed FDL 

provisions violate the substantive component of the Due 

Process Clause. We also reverse the District Court’s ruling 

that the Board’s actions unconstitutionally impair the 

Plaintiffs’ private contractual relations with third parties in 

violation of the Constitution’s Contract Clause. We will 

affirm the District Court’s ruling that Pennsylvania’s ban on 

the use of trade names in the funeral industry runs afoul of 

First Amendment protections, but reverse its ruling that the 

ban on the payment of commissions to unlicensed salespeople 

violates the Constitution. Finally, we remand to the District 

Court to modify its order in accordance with this opinion. 
6

I. Facts and Procedural History

The FDL was enacted in 1952 to “provide for the 

better protection of life and health of the citizens of 

[Pennsylvania] by requiring and regulating the examination, 

licensure and registration of persons and registration of 

corporations engaging in the care, preparation and disposition 

of the bodies of deceased persons . . . .” 63 Pa. Stat. Ann. § 

479.1. The FDL created the Board, it entrusts the Board with 

enforcing the FDL, and “empower[s] [it] to formulate 

necessary rules and regulations not inconsistent with [the 

FDL] for the proper conduct of the business or profession of 

funeral directing and as may be deemed necessary or proper 

to safeguard the interests of the public and the standards of 

the profession.” Id. § 479.16(a); see also id. § 479.19.

The FDL requires individuals to obtain a license to be 

a funeral director or own funeral homes in Pennsylvania.2

 Id. 

§ 479.13(a). Generally, only licensed funeral directors or 

partnerships of two or more licensed funeral directors may 

own funeral homes. Id. § 479.8(a). The statute also restricts 

the types of individuals and entities that may obtain such 

licenses. However, upon the death of a licensee, the FDL 

authorizes the Board to issue a license to the licensee’s estate 

 2 The FDL defines “funeral director” as

includ[ing] any person engaged in the 

profession of a funeral director or in the care 

and disposition of the human dead, or in the 

practice of disinfecting and preparing by 

embalming the human dead for the funeral 

service, burial or cremation, or the 

supervising of the burial, transportation or 

disposal of deceased human bodies, or in the 

practice of funeral directing or embalming 

as presently known, whether under these 

titles or designation or otherwise. The term 

“funeral director” shall also mean a person 

who makes arrangements for funeral service 

and who sells funeral merchandise to the 

public incidental to such service or who 

makes financial arrangements for the 

rendering of such services and the sale of 

such merchandise.

63 Pa. Stat. Ann. § 479.2(1).
7

for a period of three years or to the licensee’s surviving 

spouse while s/he remains unmarried. Id. The statute 

authorizes restricted corporations (“RBCs”) to obtain 

licenses, provided that they are formed for the sole purpose of 

conducting a funeral directing practice. Id. § 479.8(b).3

 The 

FDL prohibits an RBC from having an ownership interest in 

any other funeral establishment and requires that at least one

of its principal officers be a licensed funeral director. Id. 

Upon the death of a shareholder funeral director, shares or 

stock of an RBC may be transferred to members of the 

decedent’s immediate family. Id.

The FDL also codifies Pennsylvania’s prohibition of 

general business corporations owning funeral directing 

licenses. See id. § 479.8(d). Prior to 1935, Pennsylvania 

issued funeral directing licenses to individuals as well as 

corporations. However, in 1935 the General Assembly 

imposed restrictions. Consistent with a 1936 decision of the 

Pennsylvania Supreme Court, see Rule v. Price, 185 A. 851 

(Pa. 1936), the legislature eventually allowed a total of 

seventy-seven “pre-1935” licenses to be “grandfathered” into 

the new law. Currently, any person or entity—including 

general business corporations—may own an interest in one of 

these licenses and own and operate a funeral establishment 

pursuant to the authority granted by that license. 

Licensed funeral directors are limited to operating at 

one principal place of business with no more than one branch

location. 63 Pa. Stat. Ann. § 479.8(e). These establishments 

must be conducted under the name of a licensed principal or 

that of a predecessor establishment. Id. §§ 479.8(a)-(c). In 

addition, the FDL requires that each establishment retain a 

licensed funeral director as a “full-time supervisor,” id., and 

include a “preparation room . . . for the preparation and 

embalming of human bodies,” id. § 479.7. Food service is 

generally prohibited inside a funeral establishment. Only 

“non-intoxicating” beverages may be served, and they may 

 3 As defined by § 479.8(b), “[a] restricted business corporation is . . . a 

corporation formed by one or more licensed funeral directors specifically for the 

purpose of conducting a funeral directing practice and whose shareholders are 

licensed funeral directors or members of the immediate family of a licensed 

funeral director.” H.P. Brandt Funeral Home, Inc. v. Commonwealth of 

Pennsylvania, et al. 467 A.2d 106, 107 (Pa. Cmwlth 1983). 
8

only be served in rooms “not used for the preparation and 

conduct of [] funeral service[s].” Id.

As the administrative entity entrusted with enforcing 

the FDL, the Board’s inspectors are authorized to conduct 

warrantless and unannounced inspections of funeral 

establishments. Specifically, Section 16(b) of the FDL 

authorizes the Board to appoint inspectors who have:

[T]he right of entry into any 

place, where the business of 

funeral directing is carried on, or 

advertised as being carried on, for 

the purpose of the inspection and 

for the investigation of complaints 

coming before the board and for 

such other matters as the board 

might direct.

Id. § 479.16(b). 

Finally, the FDL also contains two provisions relating 

to the “pre-need” sale of funeral arrangements that are at 

issue here.4

 First, Section 11(a)(8) of the FDL provides that a 

funeral director or funeral home’s license may be suspended 

or revoked if a licensed funeral director pays unlicensed 

employees commissions on sales. See id. § 479.11(a)(8) 

(“The board . . . may refuse to grant, refuse to renew, suspend 

or revoke a license of any applicant or licensee . . . for . . . (8) 

paying a commission . . . to any person . . . for . . . business 

secured. . . .”). Second, the FDL requires that a funeral 

director who enters into a pre-need contract to provide funeral 

services deposit 100% of any advance payments into an 

escrow or trust account. Id. § 479.13(c).

In May 2008, the Plaintiffs initiated this suit against 

the Board, asserting claims under 42 U.S.C. § 1983 and 28 

U.S.C. § 2201 for alleged violations of their rights under the 

U.S. Constitution. Specifically, the Plaintiffs’ amended 

complaint asserted that the above-referenced FDL provisions 

 4 “‘Preneed’ services are what their name implies: a customer makes his or her 

funeral arrangements and pays for them, either in a lump sum or over time with 

the idea that, at the time of death, the services are fully paid for.” In re Forest 

Hill Funeral Home & Mem’l Park, 364 B.R. 808, 811 (Bankr. E.D. Okla. 2007).
9

violated several constitutional provisions, including the 

Commerce Clause, the Contract Clause, the First 

Amendment, the Fourth Amendment, and the substantive 

component of the Fourteenth Amendment’s Due Process 

Clause.

By way of stipulation, the parties dismissed one of the 

counts in the amended complaint with prejudice.5

 Thereafter, 

the Board and Plaintiffs both moved for summary judgment.

The District Court largely agreed with the Plaintiffs

that the challenged FDL provisions violated various 

constitutional provisions. See Heffner v. Murphy, 866 F. 

Supp. 2d 358 (M.D. Pa. 2012). The Court struck down FDL 

provisions that: (1) permit warrantless inspections of funeral 

establishments by the Board; (2) limit the number of 

establishments in which a funeral director may possess an 

ownership interest; (3) restrict the capacity of unlicensed 

individuals and certain entities to hold ownership interests in 

a funeral establishment; (4) restrict the number of funeral 

establishments in which a funeral director may practice 

his/her profession; (5) require every funeral establishment to 

have a licensed full-time supervisor; (6) require funeral 

establishments to have a “preparation room”; (7) prohibit the 

service of food in a funeral establishment; (8) prohibit the use 

of trade names by funeral homes; (9) govern the trusting of 

monies advanced pursuant to pre-need contracts for 

merchandise; and (10) prohibit the payment of commissions 

to agents or employees.6

This appeal followed.

 5 The parties agreed to dismiss Count X, which claimed that the Board had 

arbitrarily and unreasonably restricted licensed funeral directors from securing 

continuing education credits online.

6 The District Court found in the Board’s favor on Count XI of the amended 

complaint, which alleged that certain restrictions that the FDL places on 

cremation violated the Plaintiffs’ rights under the Commerce Clause, the First 

Amendment, and the Due Process Clause. See Heffner, 866 F. Supp. 2d at 408-

18. The Plaintiffs have not appealed the District Court’s ruling on this issue.
10

II. Discussion

A. Jurisdiction and Standard of Review

We have jurisdiction to review a district court’s order 

granting an injunction under 28 U.S.C. § 1292(a). The 

District Court had federal question jurisdiction over this case 

pursuant to 28 U.S.C. §§ 1331 and 1343.

We exercise plenary review over a district court’s 

grant or denial of summary judgment. Carter v. McGrady, 

292 F.3d 152, 157 (3d Cir. 2002). “To prevail on a motion 

for summary judgment, the moving party must demonstrate 

that ‘there is no genuine dispute as to any material fact and 

the movant is entitled to judgment as a matter of law.’” 

Interstate Outdoor Adver., L.P. v. Zoning Bd. of Twp. of 

Mount Laurel, 706 F.3d 527, 530 (3d Cir. 2013) (quoting Fed. 

R. Civ. P. 56(a)). Moreover, “where, as was the case here, 

the District Court considers cross-motions for summary 

judgment ‘the court construes facts and draws inferences in 

favor of the party against whom the motion under 

consideration is made.’” J.S. ex rel. Snyder v. Blue Mountain 

Sch. Dist., 650 F.3d 915, 925 (3d Cir. 2011) (quoting Pichler 

v. UNITE, 542 F.3d 380, 386 (3d Cir. 2008) (internal 

quotation marks omitted)).

B. Facial versus As-Applied Challenge

Before we proceed to the merits of the Plaintiffs’ 

constitutional claims, we need to address the threshold matter 

of whether we are reviewing a facial or an as-applied 

challenge to the disputed FDL provisions. The difference 

between the two is significant. “A party asserting a facial 

challenge ‘must establish that no set of circumstances exists 

under which the Act would be valid.’” United States v. 

Mitchell, 652 F.3d 387, 405 (3d Cir. 2011) (quoting United 

States v. Salerno, 481 U.S. 739, 745 (1987)). This is a 

particularly demanding standard and is the “most difficult 

challenge to mount successfully.” Salerno, 481 U.S. at 745. 

By contrast, “[a]n as-applied attack . . . does not contend that 

a law is unconstitutional as written but that its application to a 

particular person under particular circumstances deprived that 

person of a constitutional right.” United States v. Marcavage, 

609 F.3d 264, 273 (3d Cir. 2010). 
11

In granting summary judgment to the Plaintiffs on all 

but one of their asserted counts, the District Court only

engaged in a facial analysis. Confusingly, however, the 

District Court’s subsequent order invalidated those same FDL 

provisions both on their face and as-applied to the Plaintiffs.

When confronted with this kind of ambiguity in the 

past, our inquiry has examined whether the challenged 

statutes survive either type of challenge. See Mitchell, 652 

F.3d at 405-06; Marcavage, 609 F.3d at 273. However, in 

those cases, the parties themselves disputed the nature of the 

challenges. Here, the amended complaint is generally 

consistent with a facial challenge and Plaintiffs’ briefs 

exclusively advance facial challenges. This is consistent with 

the position Plaintiffs’ counsel took at oral argument. On 

appeal, counsel relies on several grounds in continuing to 

argue that the FDL is invalid on its face. Accordingly, we 

will limit our inquiry to whether the challenged provisions of 

the FDL are facially invalid.7

C. Fourth Amendment

Section 16(b) of the FDL gives board inspectors “the 

right of entry into any place, where the business or profession 

of funeral directing is carried on or advertised as being 

carried on, for the purpose of inspection and for the 

investigation of complaints coming before the board and such 

other matters as the board may direct.” 63 Pa. Stat. Ann. 

§ 479.16(b). Count I of the Plaintiffs’ amended complaint 

charged that this authority to conduct warrantless searches of 

funeral establishments violates the Fourth Amendment.

The Supreme Court has recognized that “warrantless 

searches are generally unreasonable, and [] this rule applies to 

commercial premises as well as homes.” Marshall v. 

Barlow’s, Inc., 436 U.S. 307, 312 (1978). Therefore, the 

 7 As noted above, a finding that the FDL’s provisions are facially invalid negates 

any need to conduct an as-applied challenge. See Salerno, 481 U.S. at 745. If 

the FDL is determined to be unconstitutional as written, it is irrelevant whether 

the statute’s application to a particular person under particular circumstances 

deprived that person of a constitutional right. See Marcavage, 609 F.3d at 273. 

Moreover, given the arguments asserted by Plaintiffs and the record before us, 

we conclude that an “as applied challenge” is not supported by this record. 
12

government must secure a warrant before searching or 

inspecting private premises absent certain narrow 

circumstances that are not alleged here. Showers v. Spangler, 

182 F.3d 165, 172 (3d Cir. 1999). The Board defends its 

authority to conduct warrantless searches by relying on the 

“well recognized exception” to the warrant requirement that 

applies to highly regulated industries. See id.; see also Free 

Speech Coal., Inc. v. Att’y Gen. of U.S., 677 F.3d 519, 544 

(3d Cir. 2012) (“Certain industries have such a history of 

government oversight that no reasonable expectation of 

privacy could exist.”). 

In New York v. Burger, 482 U.S. 691 (1987), the Supreme Court 

rejected a Fourth Amendment challenge to a New York statute that authorized 

warrantless inspections of vehicle- dismantling businesses. The Court reasoned 

that the authority to inspect such businesses without a warrant came within the 

narrow exception to the warrant requirement for administrative inspections of 

closely regulated businesses. Id. at 703. The state had a substantial interest in 

regulating industries associated with motor vehicle theft, and warrantless 

administrative inspections advanced that interest. Id. at 708. The Court held 

that the challenged statute provided a “constitutionally adequate substitute” for 

warrants by informing operators of a vehicle-dismantling business that 

inspections will be made on a regular basis and by limiting discretion of 

inspection officers. Id. at 711.

Accordingly, we begin our Fourth Amendment inquiry 

by determining whether the FDL is a “closely regulated 

industry.” Free Speech Coal., Inc., 677 F.3d at 544. “Factors 

to consider when determining whether a particular industry is 

closely regulated include: duration of the regulation’s 

existence, pervasiveness of the regulatory scheme, and 

regularity of the regulation’s application.” Id.

The funeral “industry” in Pennsylvania is clearly 

subjected to extensive regulations.8 The FDL and its 

supporting regulations prescribe a broad range of standards

that funeral directors in Pennsylvania have long been required 

to comply with. These include licensing requirements, health 

standards, and funeral services that funeral homes must 

provide. See, e.g., 63 Pa. Stat. Ann. §§ 479.6 (issuance of 

licenses), 479.7 (health restrictions); see also Guardian Plans 

v. Teague, 870 F.2d 123, 126 (4th Cir. 1989) (describing 

 8 Indeed, one need look no further than the breadth of the regulations being 

challenged by the Plaintiffs to understand the breadth of Pennsylvania’s 

regulations of the funeral industry.
13

similar requirements governing funeral service professionals 

in Virginia as “extensive”); Toms v. Bureau of Prof’l and 

Occupational Affairs, 800 A.2d 342, 349 (Pa. Cmwlth. 2002) 

(“The [FDL] . . . impose[s] rules and restrictions on funeral 

directors not only to protect the bereaved . . . , but also to 

provide a framework with which to help the bereaved address 

each of the issues that arise when making final arrangements 

for a deceased loved one.”). The funeral industry is also 

subject to significant federal regulation. Not only does the 

Federal Trade Commission require funeral homes to disclose 

pricing information prior to all transactions, see 16 C.F.R. 

453.2, funeral establishments must also comply with several 

health and safety standards imposed by the Occupational 

Safety and Health Administration, see, e.g., 29 C.F.R. 

1910.1030 (Blood borne Pathogen Standard).

Since we have no difficulty concluding that 

Pennsylvania’s funeral industry is a “closely regulated 

industry,” our Burger inquiry proceeds to determining if the 

searches authorized by the FDL are reasonable. Free Speech 

Coal., Inc., 677 F.3d at 544 (“Once a business is determined 

to be part of a closely regulated industry, then we must decide 

whether the alleged warrantless search was reasonable.”).

That inquiry requires us to focus on three criteria:

First, there must be a substantial 

government interest that informs 

the regulatory scheme pursuant to 

which the inspection is made. . . . 

Second, the warrantless 

inspections must be necessary to 

further the regulatory scheme. . . .

Finally, the statute’s inspection 

program . . . must provide a 

constitutionally adequate 

substitute for a warrant.

Burger, 482 U.S. at 702-03 (internal quotation marks and 

citations omitted); Free Speech Coal., Inc., 677 F.3d at 544.

The Plaintiffs argue that the searches authorized by the 

FDL are not supported by a sufficient governmental interest 

to withstand Fourth Amendment scrutiny under Burger. 

However, Pennsylvania obviously has a substantial interest in 
14

public health, safety, and consumer protection. See, e.g.,

Grime v. Dep’t of Public Instruction, 188 A. 337, 381 (Pa. 

1936) (noting that the General Assembly has a legitimate 

interest in regulating the licensing of funeral directors in order 

“to protect the public health from the dangers attendant upon 

the inexpert conduct of undertaking by those not qualified by 

the necessary knowledge of principles of sanitation and 

disease prevention.”); Brown v. Hovatter, 561 F.3d 357, 368 

(4th Cir. 2009) (“[A] State has ‘a legitimate interest in 

protecting the health, safety and welfare of its citizens 

through regulation of the funeral profession.’” (quoting 

Guardian Plans, Inc., 870 F.2d at 126)); Toms, 800 A.2d at 

346 (“‘[T]he General Assembly has a legitimate interest in 

regulating the funeral industry to safeguard the interests of the 

public and the standards of the profession.’” (quoting 

Ferguson v. Pa. State Bd. of Funeral Dirs., 768 A.2d 393, 

397-98 (Pa. Cmwlth. 2001))). 

The Plaintiffs claim that Section 16(b) of the FDL does 

not satisfy Burger because a warrantless search is not 

necessary to further the regulatory objectives. The Plaintiffs 

support that argument by highlighting differences between 

funeral homes on the one hand, and searches of premises 

involved in the rapid exchange of fungible items—e.g., the 

“chop shops” at issue in Burger—on the other. According to 

the Plaintiffs, inspectors’ searches of funeral establishments 

are likely to focus on compliance with such regulations as 

building standards, and the need for surprise inspections is 

therefore attenuated to such an extent that it cannot justify a 

warrantless intrusion under Burger. 

Although that may be true, it is neither outcome 

determinative nor does it advance our inquiry. Although the 

need for unannounced inspections of funeral parlors may not 

be as great as for other kinds of businesses, that does not 

negate the need for surprise inspections of funeral parlors. 

The Board need not show that warrantless searches are the 

most necessary way to advance its regulatory interest. See 

Contreras v. City of Chicago, 119 F.3d 1286, 1290 (7th Cir. 

1997) (“The pertinent inquiry is whether the [government’s] 

objectives would be frustrated by requiring a warrant or 

notice.”) (internal quotation marks and alterations omitted). 
15

The Board persuasively explains that if inspectors are 

barred from entering funeral homes without a search warrant 

or advance notice, unscrupulous funeral practitioners could 

bring their establishments into regulatory compliance prior to 

an inspection, only to let them fall below prescribed standards 

when the threat of detection passes. We agree. Thus, 

Pennsylvania’s warrantless search regime is not qualitatively

different from various other administrative inspection 

schemes that depend on the element of surprise to both detect 

and deter violations. See, e.g., Lesser v. Espy, 34 F.3d 1301, 

1308 (7th Cir. 1994) (upholding statutory regime authorizing 

warrantless searches of businesses that supplied rabbits to 

research laboratories). 

Plaintiffs also argue that Section 16(b) cannot survive 

the third prong of the Burger inquiry because it does not 

sufficiently limit inspectors’ discretion and therefore cannot 

be a constitutionally adequate substitute for a warrant. The 

Plaintiffs base that claim on the statutory text which allows 

inspection for any complaints or “other matters as the board 

may direct[.]” 63 Pa. Stat. Ann. § 479.16(b). According to 

the Plaintiffs, this gives inspectors nearly absolute discretion 

and infringes upon the privacy interests of funeral directors. 

Plaintiffs stress, for example, that “no regulation or policy 

specifies what will be inspected or when,” and they claim that 

the “frequency, nature, and extent of an inspection” appear to 

be left to an inspector’s discretion. Plaintiffs’ Br. at 11.

The third prong of the Burger test requires that a 

regulatory statute authorizing warrantless searches both (1) 

advise the owner of the premises that a search is pursuant to 

the law, and (2) limit the discretion of the officers conducting 

the search. See Burger, 482 U.S. at 703. “Inspectors, in other 

words, cannot barge into an establishment any time they want 

and inspect the place however they please.” Contreras, 119 

F.3d at 1291. 

We agree that a delegation of authority as broad as that 

which Plaintiffs describe could not satisfy Burger. However, 

Plaintiffs mischaracterize Section 16(b). Their argument 

ignores other aspects of the statutory regime that place 

restrictions on warrantless searches under the FDL as 

required by Burger. The statute plainly states that any 
16

business that engages (or represents itself as engaging) in the 

practice of funeral directing is subject to search by Board 

inspectors. Notice that inspections of private premises may 

take place “pursuant to the law” is sufficient under Burger, so 

long as limits are placed on the discretion of the inspecting 

officer. See id. at 703, 711; see also LeSueur-Richmond Slate 

Corp. v. Fehrer, 666 F.3d 261, 265 (4th Cir. 2012) (“[T]he 

Burger Court meant that a statute permitting warrantless 

administrative searches must clearly indicate that the 

[relevant] property is subject to search, whether or not any 

government official actually conducts one.”).

Section 16(b) provides that only Board-appointed 

inspectors may search private premises used in the funeral 

business. Accordingly, the FDL more closely circumscribes 

who may conduct searches than the statutory regimes that the 

Supreme Court upheld in Burger. See Burger, 482 U.S. at 

704, 711 (discussing scheme authorizing inspections “by the 

police or any agent of the Department of Motor Vehicles”); 

see also Tart v. Commonwealth of Mass., 949 F.2d 490, 497 

(1st Cir. 1991) (upholding scheme authorizing “any 

authorized person” to inspect fishing permits). 

Moreover, while the FDL permits officers to inspect 

for “such . . . matters as the Board may direct,” it exclusively

restricts the Board’s enforcement duties to matters pertaining 

to the FDL. See 63 Pa. Stat. Ann. § 479.16(a). As the Board 

correctly notes, under Burger we have upheld significantly 

broader grants of authority. See Watson v. Abington Twp., 

478 F.3d 144, 152 (3d Cir. 2007) (recognizing that 

Pennsylvania’s liquor board is authorized to inspect for “‘any 

violation of the Liquor Code or any law of the 

Commonwealth’” (quoting In re Catering Club Liquor 

License No. CC-4837 Issued to Fulton Post, Inc., 438 A.2d 

662, 663 (1981))); see also LeSueur-Richmond Slate Corp., 

666 F.3d at 266.

Plaintiffs’ Burger challenge also relies on the absence 

of appropriate temporal limitation on searches of funeral 

establishments. The point is well taken, but we believe the 

absence of such restrictions is not fatal to the FDL. Time 

limitations, along with those related to the scope and location 

of a search, are key to restricting inspectors’ discretion. See 

Burger, 482 U.S. at 703. Accordingly, courts reviewing 
17

regulatory search schemes under Burger generally look to 

whether the statutes and regulations at issue place adequate 

temporal limits on government officers’ ability to conduct 

searches of private property. Here, neither Section 16(b) of 

the FDL nor relevant Board regulations establish any such 

limitations—e.g., by requiring that officers conduct 

inspections during normal business hours.

However, context matters and courts have consistently 

upheld statutes permitting administrative searches in the 

absence of time restrictions where such limitations would 

frustrate the underlying governmental interest. See United 

States v. Vazquez-Castillo, 258 F.3d 1207, 1212 (10th Cir. 

2001) (upholding regulatory inspection scheme on 

commercial carriers and noting that “trucks operate twentyfour hours a day”) (internal quotation marks omitted); Crosby 

v. Paulk, 187 F.3d 1339, 1347 (11th Cir. 1999) (upholding 

statute authorizing inspections of properties where alcohol 

was sold and permitting Georgia officers to “enter upon the 

licensed premises . . . at any time” (emphasis omitted) 

(quoting O.C.G.A. § 3-2-32)); United States v. DominguezPrieto, 923 F.2d 464, 470 (6th Cir. 1991) (noting “limitation 

[on searches of commercial carriers] would . . . render the 

entire inspection scheme unworkable and meaningless”).

Obviously, the concerns that lead to the regulation of 

funeral facilities do not disappear at the close of business, nor 

is the need for regulatory compliance restricted to business 

hours. In fact, just the opposite may be true. It is quite 

reasonable for the state to assume that owners of funeral 

businesses will be particularly careful to avoid disturbing or 

offending visitors and family members who are already 

grieving the loss of a loved one. However, the health 

concerns that underlie much of the FDL’s regulatory scheme 

do not dissipate when those visitors and family members 

leave the funeral home. Death is obviously not restricted to 

normal business hours and a funeral facility must continually 

maintain the corpse until it is finally removed. Therefore the 

state has a strong interest in ensuring that the funeral business 

complies with applicable regulations 24 hours a day, 7 days a 

week. Limiting regulatory inspections to business hours 

would not advance that interest.
18

In mounting a facial challenge to the FDL, Plaintiffs

must persuade us that “there is no set of circumstances” under 

which the FDL’s inspection scheme may be applied 

constitutionally. See Mitchell, 652 F.3d at 415-16. Plaintiffs 

have failed to do so. As we have just explained, the very fact 

that death is not restricted to normal business hours or 

workdays belies any suggestion that administrative searches 

of funeral parlors should be so restricted. Given the totality 

of the FDL’s warrantless administrative inspection scheme, 

we hold that the statute adequately limits the discretion of 

government officers.9

D. Dormant Commerce Clause

The Commerce Clause of the U.S. Constitution grants 

Congress the power to “regulate Commerce . . . among 

the several States.” U.S. Const. Art. I, § 8, cl.3. “This 

clause has an implied requirement—the Dormant 

Commerce Clause—that the states not ‘mandate 

differential treatment of in-state and out-of-state 

economic interests that benefit the former and burdens 

the latter.’” Keystone Redev. Partners, LLC v. Decker, 

631 F.3d 89, 107 (3d Cir. 2011) (quoting Granholm v. 

Heald, 544 U.S. 460, 472 (2005)). Accordingly, it is 

“[a]xiomatic . . . that a state cannot impede free market 

forces to shield in-state businesses from out of state 

competition.” Cloverland-Green Spring Dairies, Inc. 

v. Pa. Milk Mktg. Bd., 298 F.3d 201, 210 (3d Cir. 

2002) (“Cloverland I”).

Our dormant Commerce Clause inquiry begins with 

determining whether the FDL discriminates against interstate 

commerce in either purpose or effect. See Am. Trucking 

Ass’n, Inc. v. Whitman, 437 F.3d 313, 319 (3d Cir. 2006). If

so, the discriminatory restrictions must then survive 

heightened scrutiny to survive the Plaintiffs’ Commerce 

Clause challenge. Am. Exp. Travel Related Servs., Inc. v. 

Sidamon-Eristoff, 669 F.3d 359, 372 (3d Cir. 2012). 

 9 In addition, we note that nothing in the record suggests that Board officers 

have conducted inspections of funeral homes outside of normal business hours. 

Indeed, the Board asserts—and the Plaintiffs concede—that because government 

inspectors are only paid for work performed between 8:30 a.m. and 5:00 p.m., 

administrative inspections have exclusively taken place during those hours.
19

Heightened scrutiny requires the State to “‘demonstrate (1) 

that the statute serves a legitimate local interest, and (2) that 

this purpose could not be served as well by available 

nondiscriminatory means.’” Freeman v. Corzine, 629 F.3d 

146, 158 (3d Cir. 2010) (quoting Am. Trucking Ass’n, Inc., 

437 F.3d at 319). 

If we determine that heightened scrutiny is 

inappropriate because the FDL’s provisions do not

discriminate in favor of in-state interests, we then must 

balance interests pursuant to Pike v. Bruce Church, Inc., 397 

U.S. 137 (1970). Pike balancing is necessary because 

“[s]tates may not impose regulations that place an undue 

burden on interstate commerce, even where those regulations 

do not discriminate between in-state and out-of-state 

businesses.” United States v. Lopez, 514 U.S. 549, 579-80 

(1995). The Pike balancing inquiry requires that we 

determine “whether the [law’s] burdens on interstate 

commerce substantially outweigh the putative local 

benefits.’” Freeman, 629 F.3d at 158 (quoting CloverlandGreen Spring Dairies, Inc. v. Pa. Milk Mktg. Bd., 462 F.3d 

249, 258 (3d Cir. 2006) (alterations omitted) (“Cloverland 

II”)). Here, the District Court concluded that several of the 

FDL’s provisions unconstitutionally shielded Pennsylvania 

funeral establishments from out-of-state competition in 

violation of the Commerce Clause. In explaining why we 

disagree with that conclusion we will separately discuss each 

of the allegedly discriminatory provisions. 

1. Restrictions on Ownership and Alienability of Funeral 

Establishments

The Plaintiffs first argue that FDL’s limits on the 

ownership of funeral establishments in Pennsylvania 

violate the dormant Commerce Clause. The first 

challenged restriction that we will discuss is referred to

as the “one-and-a-branch” limitation. It restricts 

licensees to possessing an ownership interest in one 

funeral establishment with only a single “branch” 

location. 63 Pa. Stat. Ann. §§ 479.8(a)-(e). 

The second limitation that is challenged under the 

dormant Commerce Clause arises from a set of provisions 

governing funeral licensing requirements in Pennsylvania. 
20

These provisions generally restrict ownership of an interest in

funeral establishments to individuals and entities that had a 

license before 1935. See id. §§ 479.8(a)-(c). However, as we 

explained earlier, notwithstanding this limitation, these 

ownership provisions allow the estate of a deceased licensee 

or surviving spouse to receive a license to continue the 

business of the deceased licensee. Similarly, immediate 

family members may hold a deceased funeral director’s stock 

in a restricted corporation upon death of the licensee.

The District Court did not independently analyze the 

one-and-a-branch limitation in concluding that these 

“ownership restrictions” violated the dormant Commerce 

Clause. We will nevertheless examine the constitutionality of 

each of the ownership restrictions.

a. One-and-a-Branch Provision

The one-and-a-branch provision states that “[l]icensees 

authorized to conduct a funeral practice . . . may practice at 

one principal place and no more than one branch place of 

business.” Id. § 479.8(e). Other provisions, in Section 8 of 

the FDL, similarly restrict business entities’ ownership 

interests. See id. §§ 479.8(a), (b), (d). The Plaintiffs allege

that these provisions unconstitutionally prohibit out-of-state 

interests from operating a funeral business at more than two 

locations. Plaintiffs claim that the unconstitutionality results 

from the resulting inability to “cluster”10 facilities so that they 

can more effectively compete with in-state funeral directors.

We begin our analysis by asking “whether [the State 

law] discriminates on its face against interstate commerce.” 

United Haulers Ass’n, Inc. v. Oneida-Herkimer Solid Waste 

Mgmt. Auth., 550 U.S. 330, 338 (2007). The answer to that 

question is as obvious as it is straightforward. Despite 

Plaintiffs’ attempt to conjure up a discriminatory impact on 

out-of-state funeral owners, it is clear from the text of the 

 10 Plaintiffs define “clustering” as the sharing of employees and equipment 

between multiple locations. Plaintiffs’ Br. at 26. Plaintiffs contend that the 

prohibition on clustering -- i.e., limiting the extent to which the services of a 

funeral director can be shared across a cluster of funeral homes -- means that a 

firm attempting to cluster in Pennsylvania is required to hire more personnel at 

greater expense. See Heffner, 866 F. Supp. 2d at 396.
21

statute that the challenged provisions impose the same 

limitation on out-of-state funeral directors and those in 

Pennsylvania. There is simply no distinction under the FDL 

between in-state and out-of-state interests or impact. The 

restriction burdens both to the same extent. Any burden that 

results from these limitations affects all licensed individuals 

who possess an ownership interest in a funeral business 

operated in Pennsylvania regardless of the state of residency

of any of its owners. 

Our dormant Commerce Clause inquiry only considers

whether the impact of the limitation falls equally upon instate and out-of-state funeral directors; if so, there is clearly 

no discrimination in favor of Pennsylvania operators. See 

Sixth Angel Shepherd Rescue, Inc. v. West, 477 F. App’x 903, 

907 (3d Cir. 2012) (noting that, under the dormant Commerce 

Clause analysis, “we ask whether a challenged law 

discriminates against interstate commerce . . . [but a]bsent 

discrimination for the forbidden purpose . . . the law will be 

upheld unless the burden imposed on interstate commerce is 

clearly excessive in relation to the putative local benefits.”) 

(quoting Dep’t of Revenue of Ky. v. Davis, 553 U.S. 328, 338-

39 (2008) (internal quotations and citations omitted). 

By way of example, a Pennsylvania resident who is a 

licensed funeral director in Pennsylvania and a Maryland 

resident who is a licensed funeral director in Pennsylvania are 

similarly barred from owning an interest in more than two 

funeral establishments in Pennsylvania. In-state funeral 

parlor owners who want to achieve an economy of scale 

through “clustering” face the same obstacles as out-of-state 

owners who want to cluster.11 

We realize, of course, that the vast majority of individuals who apply 

for and obtain a Pennsylvania funeral directing license will probably reside instate in order to practice their trade. Indeed, like the one-and-a-branch 

provision, many of the FDL’s requirements may render that choice all but 

inevitable. However, that does not elevate the resulting choice to the level of 

unconstitutional coercion under the dormant Commerce Clause. The funeral 

 11 The Plaintiffs describe clustering as “the primary competitive advantage of [] 

out-of-state competitors.” Plaintiffs’ Br. at 25. Although the record contains 

evidence that supports the alleged consumer benefits flowing from an economy 

of scale business model, the record does not support the contention that the 

FDL’s interposition of an obstacle to clustering unilaterally advances the interest 

of Pennsylvania funeral establishments.
22

service “industry,” involving the internment and cremation of consumers’ loved 

ones, is by nature a highly localized enterprise. So long as a State’s regulation 

operates evenhandedly as to both in-state and out-of-state actors seeking to enter 

such an industry, we do not subject it to heightened scrutiny under dormant 

Commerce Clause analysis. See Am. Trucking Assocs., Inc., 545 U.S. at 437 (in 

upholding Michigan’s annual fee assessed on trucks engaged in intrastate 

commercial freight, the court noted the disputed provision “taxe[d] purely local 

activity; it does not tax an interstate truck’s entry into the State nor does it tax 

transactions spanning multiple States”); CTS Corp. v. Dynamics Corp. of Am., 

481 U.S. 69, 87 (1987) (holding Indiana statute regulating acquisition of 

corporation stock did not merit heightened scrutiny because it had “same effects 

on tender offers whether or not the offeror is a domiciliary or resident of 

Indiana”). 

Accordingly, we hold that the one-and-a-branch

restriction does not discriminate against out-of-state interests,

and we thus reject the Plaintiffs’ contention that we should 

subject the applicable provisions of the FDL to heightened 

scrutiny. See McBurney v. Young, 133 S. Ct. 1709, 1719 

(2013) (noting dormant Commerce Clause jurisprudence “is 

driven by a concern about ‘economic protectionism—that is, 

regulatory measures designed to benefit in-state economic 

interests by burdening out-of-state competitors’” (quoting 

New Energy Co. of Ind. v. Limbach, 486 U.S. 268, 273-74 

(1988)).

Having determined that the one-and-a-branch 

limitation does not discriminate against out of state interests, 

we need only determine whether it can withstand scrutiny 

under the Pike balancing test. See Dep’t of Revenue of Ky. v. 

Davis, 553 U.S. 328, 353 (2008). We believe that it does. 

The “incidental burdens” that we must assess under Pike

consist of “the degree to which the state action incidentally 

discriminates against interstate commerce relative to 

intrastate commerce.” Norfolk S. Corp. v. Oberly, 822 F.2d 

388, 406 (3d Cir. 1987). As we have just explained, the 

FDL’s one-and-a-branch restriction imposes the very same 

burdens on Pennsylvania funeral directors as it imposes on 

out-of-state interests. Thus, the regulation here is a burden on 

commerce without discriminating against interstate

commerce. See Instructional Sys., Inc. v. Computer 

Curriculum Corp., 35 F.3d 813, 826-27 (3d Cir. 1994) 

(“[W]here the burden on out-of-state interests rises no higher 

than that placed on competing in-state interests, it is a burden

on commerce rather than a burden on interstate commerce.”)

(emphasis in original).
23

b. Licensing Restrictions

The Plaintiffs contend that the FDL’s restrictions on 

who may obtain a funeral director license violate the dormant 

Commerce Clause. Usually, a funeral establishment in 

Pennsylvania may be owned by a licensed funeral director 

who, in turn, may operate the business as a sole 

proprietorship, a partnership (with one or more licensed 

funeral directors), or a restricted business corporation 

established for the sole purpose of providing funeral services. 

General business corporations are barred from owning a 

funeral home in Pennsylvania unless they are able to obtain 

one of 76 existing “pre-1935” licenses issued before the ban 

on corporations went into effect. The law carves out limited 

exceptions and allows certain unlicensed individuals and 

entities—namely, the spouses, children, grandchildren, 

surviving spouse, or estate of a deceased licensed funeral 

director—to own and operate funeral homes in Pennsylvania. 

However, they may only do so if they employ a full-time 

licensed funeral director as supervisor. 63 Pa. Stat. Ann. § 

479.8(a).

The District Court agreed with the Plaintiffs’ contention that this 

scheme effectively bans out-of-state entities from owning funeral homes within 

Pennsylvania and subjected the ownership restrictions to heightened scrutiny. 

The Court then ruled that the restrictions could not survive the resulting inquiry. 

Alternatively, the Court found that even if heightened scrutiny was not 

appropriate, the FDL’s licensing restrictions could not survive Pike balancing. 

See Heffner, 866 F. Supp. 2d at 387. We disagree with both conclusions.

Any individual or entity can obtain the required license 

to operate a funeral home in Pennsylvania as long as certain 

requirements are satisfied. None of those requirements 

mandate state residency or citizenship. See id. at 388 (noting 

“an out-of-state individual may obtain a Pennsylvania funeral 

license by complying with the requirements for applicants”). 

Similarly, the statutory exceptions to the rule that only 

licensed individuals may own funeral homes in Pennsylvania 

provide that surviving family members of a deceased funeral 

director may own interests in a restricted business corporation 

regardless of their state of residency. 

Concomitantly, a general business corporation that 

does not own a “pre-1935” license is ineligible for a license 
24

regardless of where it is domiciled. Therefore, we cannot 

agree that the FDL’s ownership provisions “erect a barrier” 

protecting in-state interests from out-of-state competition that

would trigger heightened scrutiny. See Dean Milk Co. v. City 

of Madison, 340 U.S. 349, 354 (1951); see also Keystone 

Redev. Partners, LLC, 631 F.3d at 108.

The limitation on licensing also survives the Pike 

balancing test. As noted above, when we engage in Pike 

balancing, we consider whether any incidental burdens that 

the FDL’s ownership and license restrictions place on the 

flow of interstate commerce outweigh the statute’s putative 

local benefits. See Norfolk S. Corp., 822 F.2d at 405-06. 

Here, Plaintiffs again posit that the FDL’s ownership 

restrictions burden interstate commerce by requiring out-ofstate interests to be licensed in order to own or operate funeral 

homes in Pennsylvania while excepting deceased licensed 

funeral directors’ families from that obligation. The Board 

articulates three countervailing benefits of these restrictions: 

(1) disfavoring ownership of funeral homes by unlicensed 

individuals or corporations; (2) advancing the public interest 

in the continued operation of a funeral home after the 

licensee’s death; and (3) alleviating the financial loss to 

survivors who, on the death of a licensed director, might find 

themselves with a funeral home which they could neither 

operate nor sell at a fair price.

The situation here is analogous to that which 

confronted the Court of Appeals for the Fourth Circuit in

Brown v. Hovatter, 561 F.3d 357 (4th Cir. 2009). There, the 

court rejected a dormant Commerce Clause challenge to 

Maryland’s Morticians and Funeral Directors Act. That

statute, like the FDL, required all individuals who desired to 

practice mortuary science in Maryland be licensed by the 

State’s Board of Morticians. Md. Health Occ. Code § 7-

301(a). Only the surviving spouses or executors of the estates 

of deceased licensed individuals could own a funeral 

establishment without a license. Id. §§ 7-310(c)(2), 7-308, 7-

308.1. Maryland’s law also prohibited licensing corporations 

but carved out an exception for corporations grandfathered 

under an earlier version of the statute. Id. § 7-310. The 

plaintiffs in Brown also argued that they should be able to 

own and operate funeral establishments without being 
25

individually licensed or going through general purpose 

corporations. Brown, 561 F.3d at 360.

In rejecting that argument, the Court explained: 

Any person—out-of-state or instate—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 [] 

grandfathered corporations 

owning licenses, any person or 

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

Id. at 364. After surveying the alleged restrictions that 

Maryland placed on licenses, the Brown Court concluded that 

“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.” Id.

Were we to substitute “Pennsylvania” for “Maryland” 

in the above-quoted text, we could easily adopt the Fourth 

Circuit’s description of the operation of Maryland’s 

Morticians Act as our analysis of the corresponding 

provisions of the FDL. Contrary to the Plaintiffs’ 

characterization of the effect, the FDL’s licensing and 

ownership restrictions affect in-state and out-of-state players 

equally. 

The Plaintiffs highlight four alleged “significant differences” between 

the Maryland Morticians Act and the Pennsylvania FDL in an attempt to 

distinguish Brown. They argue: (1) Maryland does not allow ownership by 

unlicensed spouses, children, and grandchildren of funeral directors and their 

trusts; (2) unlike Maryland, Pennsylvania allows corporate ownership of funeral 

homes through RBCs; (3) Maryland does not limit the number of funeral homes 

that may be owned, whereas Pennsylvania’s one-and-a-branch restriction limits 

ownership to two locations; and (4) Maryland does not allow the “Pinkerton 

rule,” a well-recognized (and Board-acknowledged) way to circumvent the 

FDL’s limitations that allows a licensee to “own” more than two locations by 

ceding his or her stock in other homes to third parties while retaining ownership 

over the establishments’ assets.
26

These purported differences are neither significant nor persuasive. The 

first claim is only partially correct—Maryland allows the executors and 

surviving spouses of deceased licensed funeral directors to own and operate a 

funeral establishment. See Md. Health Occ. Code §§ 7-310(c)(2), 7-308, 7-

308.1. The fact that Maryland does not extend similar benefits to the children 

and grandchildren of licensed funeral directors is of little import. The second 

distinction is no less relevant to our analysis. We do not agree with the level of 

importance that the Plaintiffs ascribe to Pennsylvania’s choice to allow restricted 

business corporations to own funeral homes within the State because that 

provision of the FDL applies equally to in-state and out-of-state interests. 

Indeed, the provision appears to expand access to the relevant market rather than 

contracting it as the Plaintiffs claim. Moreover, we have already explained why 

the third purported distinction (Pennsylvania’s one-and-a-branch limitation) 

does not excessively burden interstate commerce. Finally, that licensees—

whether they reside in-state or out-of-state—may avail themselves of the 

“Pinkerton rule” or other existing “end-runs” to circumvent the FDL’s express 

requirements says nothing about the constitutional validity of those provisions 

for purposes of a dormant Commerce Clause analysis. The fact that some 

potential owners of funeral homes can circumvent the goals of the FDL through 

the Pinkerton mechanism also fails to establish a scheme that favors 

Pennsylvania businesses and residents. The Pinkerton end-run operates the 

same way for in-state and out-of-state businesses and residents. 

Under the FDL, any individual—out-of-state or instate—may apply for and obtain the applicable license as long 

as they satisfy general requirements relating to citizenship, 

professional education, and experience. See 63 Pa. Stat. Ann. 

§§ 479.3(a)-(f). Once an applicant satisfies these 

requirements, that individual—whether he or she resides in 

Pennsylvania or elsewhere—may be licensed as a 

“Pennsylvania funeral director” and is entitled to the same 

benefits that the FDL grants all other licensees regardless of 

state of residence. The unlicensed surviving spouse of a 

deceased funeral director who resides in Ohio but routinely 

commutes to Pennsylvania to operate a funeral establishment

that s/he owned, for example, is statutorily entitled to the 

same license under Section 479.8(a) as the surviving spouse 

of a funeral director residing in-state.

To be sure, this scenario likely represents the 

exception and not the norm; as this record attests, the vast 

majority of funeral directors who obtain a license to practice 

in Pennsylvania will no doubt choose to reside in the 

Commonwealth because of convenience or economic 

necessity. However, this does not evidence any burden on 

interstate commerce nor discrimination against out-of-state 

operators. Rather, there is nothing on this record to suggest 

that this is a reflection of anything other than the nature of the 
27

funeral business. “The practice of mortuary science is,” after 

all, “inherently a local profession.” Brown, 561 F.3d at 363. 

Moreover, as we have explained, “virtually all state 

regulation involves increased costs for those doing business 

within the state, including out-of-state interests doing 

business in the state . . . . In this absolute sense, virtually all 

state regulation ‘burdens’ interstate commerce.” Norfolk S. 

Corp., 822 F.2d at 406. Thus, our examination of a statute’s 

burden on interstate commerce must focus on whether 

regulatory scheme results in an excessive burden on interstate 

commerce. That inquiry is informed by whether a State has 

“unjustifiably [] discriminate[d] against or burden[ed] the 

interstate flow of articles of commerce.” Or. Waste Sys., Inc. 

v. Dep’t of Envi. Quality of State of Or., 511 U.S. 93, 98 

(1994).

We do not believe that the licensing requirements of 

the FDL run afoul of that limitation. The State has made a 

rational decision that consumers in need of funeral services 

are better served by licensed individuals who, in the usual 

case, are not shielded by the cloak of corporate ownership. 

Cf. N.D. State Bd. of Pharma. v. Snyder’s Drug Stores, Inc., 

414 U.S. 156, 166-67 (1973) (“‘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.’” 

(quoting Louis K. Liggett Co. v. Baldridge, 278 U.S. 105, 

114-15 (1928))); see also Brown, 561 F.3d at 367. We cannot 

“accept [the] 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 Corp. v. Governor of Md., 437 U.S. 117, 

127-28 (1978); see also McBurney v. Young, 667 F.3d 454, 

469 (4th Cir. 2012) (rejecting dormant Commerce Clause 

challenge where state law “prevent[ed] [plaintiff] from using 

his ‘chosen way of doing business,’ but [did] not prevent him 

from engaging in business in the [State]”). 

Similarly, although Pennsylvania has carved out

limited exceptions to its own rule by allowing unlicensed 

family members to participate in the ownership of a funeral 

home, those exceptions—enacted with the twin purposes of 
28

ensuring that a funeral establishment continues to serve the 

community after the death of a licensed funeral director and 

protecting the deceased’s director’s family—do not impose 

burdens (excessive or otherwise) on the flow of interstate 

commerce. We therefore conclude that the District Court 

erred in ruling that that the FDL’s licensing and ownership 

restrictions violate the dormant Commerce Clause.

2. Preparation Room Requirement

Section 7 of the FDL provides that “every 

establishment in which the profession of funeral directing is 

carried on shall include a preparation room, containing 

instruments and supplies for the preparation and embalming 

of human bodies.” 63 Pa. Stat. Ann. § 479.7. The Plaintiffs 

claim that this provision violates the dormant Commerce 

Clause by protecting established in-state funeral homes at the 

expense of out-of-state interests seeking to enter the market. 

According to Plaintiffs, the preparation room requirement

deprives out-of-state competitors of any competitive 

advantage that they could otherwise gain from consolidating 

embalming operations in one centralized facility from which 

they could service other locations.12

Here again, the Plaintiffs’ challenge ignores the fact 

that any impediments arising from the preparation room 

requirement burden all funeral directors operating in 

Pennsylvania. Out-of-state entities are not specifically 

targeted, deprived of a competitive advantage, nor afforded a 

competitive advantage compared to Pennsylvania businesses. 

See Cloverland II, 462 F.3d at 263; see also Town of Southold 

v. Town of E. Hampton, 477 F.3d 38, 49 (2d Cir. 2007). 

Indeed, to the extent that the preparation room requirement 

has an effect on interstate commerce, it is incidental at most. 

Consequently, the provision will only violate the dormant 

Commerce Clause if it does not survive Pike balancing—i.e., 

if its burdens on interstate commerce “clearly outweigh” its 

putative local benefits. See Dep’t of Revenue of Ky., 553 U.S. 

at 353.

 12 The Plaintiffs do not allege that the FDL’s preparation room requirement is 

discriminatory on its face, but in its operation. 
29

The “burden” that the preparation room requirement

imposes on interstate commerce consists of the cost of 

equipping each funeral establishment with a preparation room 

and the resulting impediment that arises from requiring 

“centralized” embalming facilities. We do not doubt that 

these burdens can be significant.13 However, they are not so 

significant as to “clearly outweigh” the State’s asserted 

interests in minimizing the time between death and 

embalming, reassuring customers that the remains of their 

loved ones will be in the funeral home’s custody at all times, 

minimizing the possibility of accidents in-transit between 

embalming facilities, and ensuring accountability.

Moreover, although the Plaintiffs make much of the 

State’s apparent admission that the preparation room 

requirement is either unnecessary or unduly burdensome, 

Plaintiffs fail to realize that the concession is without 

constitutional significance. Specifically, the Plaintiffs point 

to a 2008 legislative initiative in which the Board advocated 

for the repeal of the preparation room requirement because of 

the economic benefits of dispensing with the policy. The 

Plaintiffs also highlight a 1994 Audit Report, which said that 

requiring each funeral home to have its own preparation room 

was “burdensome and unnecessary” and noted the resulting 

additional costs to funeral directors and consumers. J.A. 846. 

There are two reasons why this concession lacks the 

constitutional significance that Plaintiffs attach to it. First, 

the recommendation that the preparation room requirement be 

repealed appears to have resulted from the requirement’s 

intrastate economic impact. The Report is therefore not 

particularly helpful to our focus on the burdens on interstate 

commerce as required under Pike. See C&A Carbone, Inc. v. 

Town of Clarkstown, N.Y., 511 U.S. 383, 430 (1994) 

(“[L]ocal burdens are not the focus of the dormant Commerce 

Clause . . . .”). Second—and more importantly—neither the 

Board’s views in the above-referenced 2008 legislative 

initiative nor the Audit Report’s recommendation to repeal 

the preparation room requirement were enacted into law. 

Thus, notwithstanding any reservations that some 

 13 The Plaintiffs estimate the costs of establishing a preparation room to be 

approximately $220,000 to a funeral home during its first year.
30

Pennsylvania officials might have expressed in the past, the 

preparation room requirement remains the law of 

Pennsylvania.14

3. Place of Practice and Full-Time Supervisor 

Requirement

Section 7 of the FDL provides that a “license shall 

authorize the conduct of the [funeral directing] profession at 

the particular place of practice thereon and no other.” 63 Pa. 

Stat. Ann. § 479.7. Somewhat confusingly, this section also 

provides that a funeral director is free to “assist another duly 

licensed person, partnership or corporation[.]” Presumably, 

this applies to assisting at another branch location. Id. In 

addition, Section 8(e) mandates that each branch location 

must retain a licensed funeral director as a “full-time 

supervisor.” Id. 479.8(e). However, a funeral director may 

not supervise more than one location. Id. § 479.2(11). In 

Counts V and VI of the amended complaint, the Plaintiffs 

alleged that both the FDL’s “place-of-practice” restrictions 

and full-time supervisor requirement violate the dormant 

Commerce Clause. Once again, the District Court agreed. 

See Heffner, 866 F. Supp. 2d at 397-99. 

The Plaintiffs claim that these provisions facially 

discriminate against out-of-state interests and must therefore 

be subjected to heightened scrutiny. They allege that, under 

the place-of-practice provision, a funeral director who 

practices at one location in another state would be precluded 

from practicing in Pennsylvania because that would constitute 

practicing at a second location. According to the Plaintiffs, a 

 14 In addition, the opinions that the Board may have expressed in the past in its 

capacity as an administrative arm of the Commonwealth may inform judicial 

inquiry into whether the full-time supervisor requirement excessively burdens 

interstate commerce, but it does not end it. The 2008 legislative initiative 

simply does not have the force of Commonwealth law. Unlike a statute or 

Board-issued regulation, it does not embody official Commonwealth policy, but 

only the views that the Board saw fit to communicate to the Pennsylvania 

legislature at a particular time. See Shannon v. United States, 512 U.S. 573, 584 

(1994) (“‘[C]ourts have no authority to enforce a principle gleaned solely from 

legislative history that has no statutory reference point.’” (quoting Int’l Bhd. of 

Elec. Workers, Local Union 474 v. NLRB, 814 F.2d 697, 712 (1987) (alterations 

omitted))); see also Abrego v. Dow Chem. Co., 443 F.3d 676, 686 (9th Cir. 

2006) (per curiam) (discounting importance of legislative silence “coupled with 

a sentence in a legislative committee report untethered to any statutory 

language”).
31

funeral director who manages a location in another state 

would be similarly barred from obtaining a funeral supervisor 

license in Pennsylvania. Plaintiffs’ argument is supported by 

a letter from the Board denying a New Jersey applicant’s 

request for a funeral supervisor license on these grounds. J.A. 

1455.

We decline to adopt Plaintiffs’ reasoning as to these 

provisions. We recognize that the FDL’s place-of-practice 

restriction and full-time supervisor requirement compel a 

funeral director to relinquish one operating license in favor of 

another, should he or she wish to supervise another location. 

§ 479.2(11). However, we disagree that this provision 

facially discriminates against out-of-state interests. Having to 

surrender an out- of-state license to practice in Pennsylvania 

is simply the result of the operation of the one-and-a-branch 

rule, and the limits it places on being an owner and/or 

supervisor of a funeral home. Moreover, Pennsylvania 

residents also have to surrender an existing license in order to 

operate more than the two establishments allowed under the 

restriction. Thus, it makes no difference where the funeral 

homes or owners are located. 

E. Substantive Due Process

The Fourteenth Amendment Due Process Clause prohibits the states 

from “depriv[ing] any person of life, liberty, or property, without due process of 

law.” U.S. Const. Amend. XIV, § 1. The prohibition has both a procedural and 

substantive component. See Planned Parenthood of S.E. Pa. v. Casey, 505 U.S. 

833, 846 (1992); Troxel v. Granville, 530 U.S. 57, 65 (2000). The Plaintiffs 

have continually alleged that several of the FDL’s provisions violate their right 

to substantive due process.

Unless a legislative enactment abridges “certain fundamental rights and 

liberty interests,” Washington v. Glucksberg, 521 U.S. 702, 720 (1997), we 

apply a more lenient “rational basis” inquiry, Roe v. Wade, 410 U.S. 113, 173 

(1973), in determining the statute’s constitutionality. Here, Plaintiffs concede 

that we should apply rational basis review to their substantive due process 

challenge. 

Under rational basis review, “‘a statute withstands a substantive due 

process challenge if the state identifies a legitimate state interest that the 

legislature could rationally conclude was served by the statute.’” Alexander v. 

Whitman, 114 F.3d 1392, 1403 (3d Cir. 1997) (quoting Sammon v. N.J. Bd. of 

Med. Exam’rs, 66 F.3d 639, 645 (3d Cir. 1995)). We have repeatedly warned 

that rational basis review is by no means “toothless”—“[a] necessary corollary 

to and implication of rationality as a test is that there will be situations where 

proffered reasons are not rational.” Doe v. Pa. Bd. of Prob. & Parole, 513 F.3d 

95, 112 n.9 (3d Cir. 2009); see also Murillo v. Bambrick, 681 F.2d 898, 905 n.15 
32

(3d Cir. 1982). Nevertheless, rational basis review allows legislative choices 

considerable latitude. See FCC v. Beach Commc’ns, Inc., 508 U.S. 307, 315 

(1993). A governmental interest that is asserted to defend against a substantive 

due process challenge need only be plausible to pass constitutional muster; we 

do not second-guess legislative choices or inquire into whether the stated motive 

actually motivated the legislation. See United States R.R. Ret. Bd. v. Fritz, 449

U.S. 166, 179 (1980) (“Where . . . there are plausible reasons for Congress’ 

action, our inquiry is at an end. It is . . . ‘constitutionally irrelevant whether this 

reasoning in fact underlay the legislative decision’ . . . .” (quoting Flemming v. 

Nestor, 363 U.S. 603, 612 (1960))). 

Thus, as we recently explained, “‘the rationality requirement [is] 

largely equivalent to a strong presumption of constitutionality.’” Connelly v. 

Steel Valley Sch. Dist., 706 F.3d 209, 213 (3d Cir. 2013) (quoting Laurence H. 

Tribe, American Constitutional Law § 16-2, at 1442-43 (2d ed. 1988)).

1. “One-and-a-Branch” Limitation

In addition to the dormant Commerce Clause challenge discussed 

above, the Plaintiffs also attack the one-and-a-branch limitation on substantive 

due process grounds. The Board argues that the limitation advances five 

legitimate state interests. Those interests are: (1) diversifying the ownership of 

funeral establishments; (2) preventing a single firm from dominating a local 

market through “clustering”; (3) limiting the damage to consumers and a 

community from the possible failure of a single firm; (4) promoting familiarity 

and accountability between funeral directors and their consumers; and (5) 

preventing licensees from being “spread too thin.” We perceive no substantive 

difference in the first three goals and will treat them as the same legislative 

objective for purposes of our analysis.15

These goals are clearly legitimate. “[A] state has a ‘legitimate interest 

in protecting the health, safety and welfare of its citizens through regulation of 

the funeral profession[;]’” Brown, 561 F.3d at 368 (quoting Guardian Plans, 

870 F.2d at 126), and the Pennsylvania legislature could have reasonably 

concluded that these objectives advance those interests. Accordingly, the oneand-a-branch limitation will survive rational basis review unless the State 

legislature could not rationally conclude that the provision furthered these ends.

The Plaintiffs make several arguments to support their contention that 

the one-and-a-branch restriction does not reasonably advance the State’s stated 

objectives. For example, they claim that restricting the number of locations that 

a licensee may own (to two) does not rationally prevent a funeral director from 

being “spread too thin,” since s/he may still have to perform thousands of 

funerals a year at the locations that are licensed. The Plaintiffs also note that a 

funeral director could effectively own a potentially unlimited number of homes 

by employing loopholes like the so-called “Pinkerton rule,” thereby allowing a 

single firm to de facto dominate a local market and thus undermine the goal of 

limiting the damage to consumers when a firm that is “too big to fail” does, in 

fact, fail.

16 

 15 Diversification is merely one of the ways that the Commonwealth is trying to 

advance the second and third objectives. 

16 As we explained above, the “Pinkerton rule” refers to the practice of allowing 

a licensee to circumvent the one-and-a-branch restriction by transferring his or 

her stock in a funeral establishment to another entity or individual while 
33

However, the one-and-a-branch limitation is not constitutionally infirm 

merely because its response to legitimate governmental concerns is imprecise

and imperfect. “[U]nder the deferential standard of review applied in 

substantive due process challenges to economic legislation there is no need for 

mathematical precision in the fit between justification and means.” Concrete 

Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Trust for S. Cal., 508 

U.S. 602, 639 (1993). Therefore, the one-and-a-branch limitation can survive 

our substantive due process inquiry even though it neither targets all applicable 

threats nor succeeds in preventing all of them. Despite the limitation’s 

imperfection, the State could have rationally concluded that limiting licensees to 

owning funeral businesses at no more than two locations would limit the number 

of consumers that a director could service and avoid the problems that could 

arise when a funeral director is “spread too thin.” All that is necessary is that 

the selected means is rationally linked to the stated ends. See Stretton v. 

Disciplinary Bd. of Supreme Court of Pa., 944 F.2d 137, 146 (3d Cir. 1991) (“A 

state is permitted to take steps . . . that only partially solve a problem without 

totally eradicating it.”).

Similarly, the fact that Pennsylvania’s current statutory and regulatory 

scheme does not prevent licensees from sidestepping the limitation by seizing 

upon loopholes such as the “Pinkerton rule” is not constitutionally fatal. “‘A 

legislature need not . . . risk [] losing an entire remedial scheme simply because 

it failed, through inadvertence or otherwise, to cover every evil that might 

conceivably have been attacked.’” Parker v. Conway, 581 F.3d 198, 202 (3d 

Cir. 2009) (quoting McDonald v. Bd. of Election Comm’rs, 394 U.S. 802, 809 

(1969)). We therefore conclude that the FDL’s one-and-a-branch limitation 

easily weathers scrutiny under rational basis review. 

2. Licensing Restrictions

The Plaintiffs also raise a substantive due process challenge to the other 

restrictions in the FDL that we have discussed above as part of our dormant 

Commerce Clause discussion. Specifically, the Plaintiffs argue that the State

acted irrationally in limiting ownership of funeral homes to licensed funeral 

directors while barring general business corporations from obtaining the 

required license. 63 Pa. Stat. Ann. § 479.8(a). Here, as before, the Plaintiffs

highlight the FDL’s “exceptions,” which allow the administrators of a deceased 

licensee’s estate and his or her surviving spouse and family members to possess 

an ownership interest in a funeral establishment under specific circumstances, 

whether or not they possess a funeral directors’ license.

17 Plaintiffs contend that 

these exceptions belie the Board’s asserted interest in promoting consumer 

protection, accountability, competency, trust, and accessibility. Rather, 

 retaining ownership over the establishment’s assets. Since the Board has 

recognized that the FDL does not restrict who may own or lease the assets 

necessary to operate a funeral home, this “loophole” would presumably allow a 

licensee to de facto “own” an unlimited number of funeral homes within the 

Commonwealth. 17 As explained, administrators of a licensee’s estate may possess an ownership 

interest for a maximum of three years. Widows and widowers may own an 

interest in a funeral home for an indefinite period so long as they remain 

unmarried. Section 8(b)(4) of the FDL allows immediate family members of a 

deceased licensed funeral director or shareholder to own shares of an RBC.
34

according to Plaintiffs, these exceptions demonstrate that the licensing

requirement is not rationally related to those objectives.

The argument incorrectly presupposes that Pennsylvania’s response to 

its stated objectives had to be limited to addressing a single objective at a time. 

An otherwise rational legislative response to a given concern cannot be 

invalidated under the Due Process Clause merely because the chosen solution 

creates other problems while addressing the original concern. Rather, 

legislatures are generally free to consider and balance several interests in 

carrying out their legislative responsibilities. See, e.g., Salazar v. Buono, 130 S. 

Ct. 1803, 1817 (2010) (noting “Congress’s prerogative to balance opposing 

interests”); Dennis v. United States, 341 U.S. 494, 539-40 (1951) (“How best to 

reconcile competing interests is the business of legislatures . . . .”); see also Pace 

Res., Inc. v. Shrewsbury Twp., 808 F.2d 1023, 1035 (3d Cir. 1987) (noting 

“process of democratic political decision-making often entails [] accommodation 

of competing interests”). Accordingly, where, as here, a State does not infringe 

upon fundamental rights or interests, it may address multiple or even competing

objectives as long as its actions are rationally related to legitimate legislative 

objectives.

Throughout this litigation, the Board has consistently reasoned that the 

exceptions to the FDL’s licensing requirement address Pennsylvania’s distinct 

interest in protecting the livelihood of a licensed director’s surviving family 

members and the interests of the community in a funeral home’s continued 

operation following the death of the owner. It is not at all difficult to see how 

the licensing exceptions that the Plaintiffs have chosen to attack address that 

legitimate governmental interest – albeit imperfectly. In upholding Maryland’s 

Mortician’s Act against a similar Due Process challenge in Brown v. Hovatter,

the Court explained “exemptions” to Maryland’s licensing requirement that 

allowed unlicensed surviving spouses and executors of deceased licensed 

morticians to possess an ownership in funeral establishments as follows:

[C]orporations 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 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.

561 F.3d at 369.

We agree. As in Brown, the Pennsylvania legislature was free to 

consider the reliance interests of communities throughout the state as well as 
35

those of the deceased funeral directors’ family in crafting the limitations 

contained in the FDL. The means chosen is a rational (though perhaps 

imperfect) means of achieving those ends, and Section 8(a) of the FDL does not 

violate substantive due process.18

3. “Place-of-practice” and Full-Time Supervisor 

Requirement

As explained above, a license issued pursuant to the FDL only 

authorizes a licensee to practice at one primary location and one branch location; 

each location must have its own full-time and licensed supervisor. 63 Pa. Stat. 

Ann. §§ 479.7, 479.8(e). The District Court concluded that both provisions 

denied Plaintiffs’ right to substantive due process because the Board’s asserted 

interests in ensuring “competency, public health, accountability, and 

competition [were] not rationally related to the [FDL’s] restrictions . . . .” 

Heffner, 866 F. Supp. 2d at 400.

On appeal, the Plaintiffs concede the State has a legitimate concern in 

safeguarding these interests, but they argue that the legislature could not have 

rationally believed that the place-of-practice restriction and full-time supervisor 

requirement would serve that purpose.19 Once again, we disagree. 

We haven repeatedly stressed the obvious; Pennsylvania clearly has a 

legitimate interest in protecting consumers who must venture into the potentially 

exploitative market for funeral services. See Brown, 561 F.3d at 368. As the 

Court explained in Kleese v. Pa. State Bd. Of Funeral Dirs , 738 A.2d 523, 526 

(Pa. Cmwlth. 1999), “[g]enerally, the time in which the consumer seeks the 

services of a funeral establishment is a very emotional and vulnerable time as a 

loved one has most likely just passed away leaving the consumer vulnerable and 

more susceptible to being deceived or cheated.” Limiting licensees to one 

primary location and one branch, each with its own licensed supervisor, clearly 

helps to protect against funeral directors being “spread too thin” to provide 

personal, caring, and sensitive services to those who are mourning the loss of a 

loved one. Funeral businesses clearly must operate with a sensitivity and 

personalized service unlike few other business we can think of, and 

Pennsylvania’s legislature can hardly be faulted for imposing restrictions that 

are intended to address the unique concerns in that industry. 

 18 For the same reasons, we also reject the Plaintiffs’ claim that Section 8(e) of 

the FDL is unconstitutional. That provision provides that a licensed shareholder 

of an RBC may bequeath his or her shares or stock in the restricted corporation 

to immediate family members. 

19 The Plaintiffs correctly note that the Board has not articulated benefits or 

legitimate purposes that specifically underlie the place-of-practice restriction in 

its briefing to us. Plaintiffs’ Br. at 35. However, the Board’s brief does assert 

that the FDL’s “operational provisions”—which it defines to include the FDL’s 

place-of-practice restriction, full-time supervisor requirement, preparation room 

requirement, and restrictions on food service—are all in place to further “a 

variety of legitimate interests such as quality assurance, accountability, and 

health and safety.” Appellant’s Br. at 16. In any case, we note that, as the party 

challenging the Commonwealth’s statute, the Plaintiffs bear the burden of 

refuting “‘every conceivable basis which might support it,’” Beach Commc’ns, 

Inc., 508 U.S. at 315 (emphasis added), not just those that the Commonwealth 

may assert, see Connelly, 706 F.3d at 216.
36

Likewise, the place-of-practice requirement is a rational means of 

advancing accountability by ensuring that a funeral director is more readily 

accessible to answer questions from grieving and particularly vulnerable 

consumers. The requirement of a full-time supervisor is so obviously reasonable 

as to negate the need for in-depth discussion or inquiry. We merely note that the 

Pennsylvania General Assembly could have rationally believed that requiring a 

licensed funeral director to oversee each funeral home advances the goal of 

maintaining professional standards at funeral establishments, and, by extension,

safeguards public health, safety, and welfare. It also increases the likelihood 

that vulnerable consumers will be able to readily communicate with someone 

who is responsible for providing services for a deceased loved one. It is 

reasonable to assume that the individuals who have met the State’s licensing 

requirements are much better equipped to supervise funeral home operations

than an unlicensed entrepreneur would be. Cf. Guardian Plans Inc., 870 F.2d at 

126 (noting legislature “could have rationally determined that keeping the 

arrangement of funerals in the hands of licensed funeral professionals would 

benefit the public by ensuring competence in funeral arrangement”).

We are similarly unpersuaded by the Plaintiffs’ suggestion that a

funeral home that routinely performs 1,000 funerals each year and another that 

performs only twenty-five would each comply with the requirement so long as 

they hired a single supervisor. That reality does not alter the result of our 

rational basis review. The State could have adopted a different scheme that 

would have required funeral homes that routinely perform a high volume of 

funerals each year to retain multiple supervisors. However, as we explained 

above, “[a] legislative policy decision about where [] line[s] should be 

drawn . . . ‘[is] not legally relevant under substantive due process 

jurisprudence.’” Alexander, 114 F.3d at 1406 (quoting Sammon, 66 F.3d at 

647)).

4. The Preparation Room Requirement

The Plaintiffs also argue that requiring each funeral home to include a 

preparation room for on-site embalming is irrational because neither the FDL 

nor the Board’s regulations require that a funeral establishment actually use this 

room.

20 According to Plaintiffs, the preparation room requirement is not 

practical and it hinders funeral directors’ ability to prepare bodies in a more 

cost-effective centralized location. Plaintiffs explain that centralizing this 

service would achieve economies of scale that would benefit consumers and 

allow funeral directors to service other locations as part of a “cluster.” Plaintiffs 

contend that requiring each funeral home to have its own preparation room 

(which may not even be used) thus imposes significant expense on consumers 

with little (if any) corresponding benefit. The District Court agreed that “there 

is no rational relationship between providing access to preparation rooms and 

requiring that funeral homes expend unnecessary funds on the same when the 

Board [has] recognize[d] that many existing preparation rooms remain [] 

 20 Pennsylvania law does not require that all deceased remains be embalmed. 

Instead, families can choose whether or not to embalm a deceased person. See, 

e.g., 49 Pa. Code § 13.201(6)(i) (“Human remains held 24 hours beyond death 

shall be embalmed or sealed in a container that will not allow fumes or odors to 

escape or be kept under refrigeration, if this does not conflict with a religious 

belief or medical examination.”).
37

unused, and . . . costs are merely passed on to consumers.” See Heffner, 866 F. 

Supp. 2d at 402.

The Board once again asserts several purportedly legitimate interests 

that support this requirement. The Board claims that this requirement: (1) 

minimizes the time between death and embalming, leading to better results; (2) 

reassures families regarding the safeguarding of their loved ones; (3) minimizes 

the possibilities for accidents in transit and mix-ups at separate embalming 

facilities; and (4) ensures that the funeral director with whom the family 

communicates is directly accountable for the results of his/her work.

The record contains an uncontested expert report which shows that 

Pennsylvania’s requirement of an on-site embalming preparation room at each 

funeral establishment is consistent with the regulatory scheme of at least

eighteen other states – each of which had a similar requirement as of the latterhalf of 2010.

21 See J.A. 635; see also Powers v. Harris, 379 F.3d 1208, 1212-13 

(10th Cir. 2004) (noting Oklahoma had similar preparation room requirement as 

of date case decided). Although a majority of states have chosen not to adopt 

this approach and either allow funeral directors to “cluster” embalming 

operations under an economy of scale model or exempt certain funeral 

establishments from having a preparation room, the costs or benefits of these 

approaches are beyond the parameters of our due process inquiry. A chosen 

legislative scheme need not be the most efficient or even the most practical to be 

reasonable under the Due Process Clause. See Williamson v. Lee Optical of 

Okla., 348 U.S. 483, 487-88 (1955) (“[A] 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.”). Moreover, the 

rationale advanced by the Board to support the preparation room requirement 

seems so patently reasonable as to eliminate the need for much discussion. See 

Ferguson v. Skrupa, 372 U.S. 726, 729 (1963). As long as the State has chosen 

a rational method of addressing its concerns, our inquiry is at an end. See id.

(“[I]t is up to legislatures, not courts, to decide on the wisdom and utility of 

legislation.”).

Indeed, even if we credit the Plaintiffs’ assertion—and the Board’s 

concession in the 2008 legislative materials that many preparation rooms built to 

comply with the FDL are never actually used for embalming—the result of our 

rational basis review would be the same. The Constitution does not protect

against inefficient, wasteful, or meaningless legislation. “[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.” 

Id. at 487. Consequently, we hold that the District Court erred in concluding 

that the separate embalming room requirement violates the Plaintiffs’ right to 

substantive due process. 

5. Restriction on Serving Food

 21 According to the Board’s submissions, the following states, in addition to 

Pennsylvania, all required funeral homes to each contain a preparation room as 

of late 2010: Alabama, Arizona, Connecticut, Delaware, Georgia, Idaho, 

Massachusetts, Mississippi, Minnesota, Nevada, New Hampshire, New Jersey, 

New Mexico, New York, North Carolina, South Dakota, Tennessee, and 

Wyoming. J.A. 635. 
38

In addition to the preparation room requirement, Section 7 of the FDL 

also prohibits funeral establishments from serving “food or intoxicating 

beverages.” 63 Pa. Stat. Ann. § 479.7. The provision does allow funeral 

establishments to serve customers non-alcoholic beverages, but only in “a 

separate room not used for the preparation of funeral service.” Id.

The District Court concluded that this restriction also violated 

substantive due process. See Heffner, 866 F. Supp. 2d at 403-04. The Court 

based its ruling, in part, on a proposed 2009 regulation in which the Board 

recommended repeal of these restrictions. The District Court explained its 

rejection of the Board’s argument that the food prohibition furthered the 

government’s legitimate interest in promoting public health as follows: “[the 

Board] fail[ed] to explain how the use of [] chemicals in one part [of the facility]

. . . would necessarily contaminate other areas of the establishment providing 

food service . . .” Id. at 404. The Court relied on the fact that bodies are 

prepared in one area of a funeral establishment and food is served elsewhere. 

Ultimately, the District Court concluded that the restriction did not survive 

rational basis review because: (1) the fact that non-alcoholic beverages could be 

served but food could not presented a “distinction without a difference,” id., and 

(2) it was irrational for the FDL to allow food to be served in certain areas 

within the same structure so long as those areas were not designated as parts of a

“funeral establishment,” id.

On appeal, the Board reiterates its position that “public health” is a 

legitimate government interest justifying the FDL’s ban on food service at 

funeral establishments. The Board argues that the legislature could have 

reasonably concluded that food should not be served where the embalming of 

human bodies is occurring. The Board also argues that the ban on serving food 

furthers the government’s interest in upholding the unique nature and solemnity 

of funeral services.

Whether one agrees with the Board’s position, and assuming arguendo 

that the Board’s reasoning is erroneous, it is exceedingly difficult to understand 

how it could be viewed as unreasonable. The first prong of the rational basis 

test is easily satisfied by the Board’s asserted interest in public health.22 See 

Watson v. Maryland, 218 U.S. 173, 176 (1910) (“It is too well settled to require 

discussion . . . that the police power of the states extends to the regulation of 

certain trades and callings, particularly those which closely concern the public 

health.”). We fail to see anything irrational in the legislative decision to prohibit 

the service of food and alcoholic beverages in areas designated as “funeral 

establishments” under the FDL.

23 It may well be that the legislature’s concern 

 22 Because we believe that the Commonwealth’s asserted interest in protecting 

public health is legitimate, we do not pass judgment on whether the Board’s 

second asserted interest—i.e., “preserving the unique nature and solemnity of 

the funeral service”—also qualifies as a legitimate government interest under 

substantive due process review. See N.J. Retail Merchs. Ass’n, 669 F.3d at 398 

(noting statute “will pass rational basis examination” where one of several stated 

purposes was not legitimate “as long as it was not the only legitimate purpose 

underlying the legislation”).

23 Indeed, the authority of states to regulate and tightly restrict the availability of 

alcohol is far too evident to require either citation or discussion, and 

Pennsylvania’s restrictions on the availability of alcohol are particularly strict. 

See generally 47 Pa. Stat. §§ 4-491– 494. However, such tight controls (of 
39

had more force in an earlier time when refrigeration and sanitation were not as 

developed as they are today, outdoor temperatures could more readily affect 

sanitation as well as food storage and preservation, and attitudes about serving 

and consuming alcohol were nowhere near as liberal. Thus, the passage of time, 

and the advanced technology used in modern air conditioning and ventilation 

systems suggest that the Pennsylvania General Assembly may want to revisit the 

need for some of these restrictions as the Board has suggested. 

However, there is a fundamental difference between legislative

enactments that may be archaic and those that are irrational for purposes of our 

substantive due process inquiry. These restrictions may now be overly cautious, 

but excess caution does not rise to the level of a due process deprivation if it is 

reasonably intended to advance a legitimate governmental interest. It is not up 

to a court to determine if the State has struck the perfect balance of advantage 

and disadvantage in addressing its interest, nor should we compel legislatures to 

reexamine restrictions that may seem better suited for an earlier time. See 

Heller v. Doe, 509 U.S. 312, 321 (1993) (“[C]ourts are compelled under 

rational-basis review to accept a legislature’s generalizations even when there is 

an imperfect fit between means and ends.”). The Constitution is not a lever that 

we can use to overcome legislative inertia. This restriction, though perhaps 

antiquated, is nevertheless sufficiently reasonable to survive rational basis 

review.

6. Trust Requirement

Funeral directors in Pennsylvania routinely sell and provide “pre-need” 

funeral services – i.e., services selected in advance of a person’s death. See 

generally Walker v. Flitton, 364 F. Supp. 2d 503 (M.D. Pa. 2005). Because 

these contracts require advance payment for goods and services associated with 

funeral homes, Pennsylvania (like many other states) imposes trust requirements 

on pre-need sellers.24 Specifically, the FDL requires that a funeral director who 

enters into a pre-need contract deposit 100% of the proceeds accepted for 

“funeral services,” such as embalming, into an escrow account or trust. 63 Pa. 

Stat. Ann. § 479.13(c).25

 which the FDL is but one example) do not rise to the level of a due process 

violation. 

24 See generally Judith A. Frank, Preneed Funeral Plans: The Case for 

Uniformity, 4 Elder L.J.1, 7-8 (1996) (discussing trust arrangement as “most 

common form of funding” in preneed funeral contract context and collecting 

States’ statutes establishing trust requirement).

25 In relevant part, the FDL states:

No person other than a licensed funeral 

director shall, directly or indirectly, or 

through an agent, offer to or enter into a 

contract with a living person to render 

funeral services to such person when 

needed. If any such licensed funeral director 

shall accept any money for such contracts, 

he shall . . . either deposit the same in an 

escrow account in, or transfer the same in 

trust to, a banking institution in 

[Pennsylvania], conditioned upon its 

withdrawal or disbursement only for the 
40

This trust arrangement is confusing because another statute, the 

Pennsylvania Future Interment Act (“FIA”), only requires that 70% of the sales 

price of funeral-related property—e.g., caskets, vaults, or urns— be held in trust. 

Id. § 480.1. This creates an obvious problem for funeral directors who provide

pre-need services. In an attempt to reconcile the tension in these statutes, the 

Board took the position that funeral directors were only required to hold in trust 

70% of the sales price customers paid for pre-need funeral merchandise, but that 

they had to hold 100% of pre-need monies for other “funeral services” in trust.

In Pennsylvania Funeral Directors Ass’n v. Bd. of 

Funeral Directors, 494 A.2d 67 (Pa. Cmwlth. 1985), aff’d 

mem., 511 A.2d 763 (Pa. 1986) (“PFDA”), the 

Commonwealth Court of Pennsylvania disagreed with the 

Board’s position and held that the FIA “did not abrogate the 

one hundred per cent trust requirement in . . . the [FDL].” Id.

at 72. The Board thereafter adopted the view that a 

merchandising company that is not itself a licensee but is 

nevertheless owned in part by a licensed funeral director may 

trust at the FIA-prescribed rate of 70%, so long as the 

company is not used to evade the FDL’s requirements.

In challenging the trusting provisions, Plaintiffs argue

that requiring licensed funeral directors to hold in trust 100% 

of pre-need monies received does not further the State’s 

asserted interest in consumer protection, and the District 

Court agreed. See Heffner, 866 F. Supp. 2d at 423. However, 

the fact that Pennsylvania’s statutory scheme restricts 

individuals whom the State has certified as experts, while 

exempting unlicensed merchants, does not necessarily result 

in an irrational (and therefore unconstitutional) scheme. As 

the Commonwealth Court explained in PFDA, Pennsylvania’s

legislature could have reasonably “believed that the public’s 

perception of funeral directors as licensed professionals 

necessitated stricter standards to protect consumers.” 494 

A.2d at 71.

In addition, the Board correctly notes that the trust

requirements also pass constitutional muster under the 

separate interpretation that it has adopted and endorsed. See 

Skilling v. United States, 130. S. Ct. 2896, 2929 (2010) 

(“‘[E]very reasonable construction must be resorted to, in 

 purposes for which such money was 

accepted.

63 Pa. Stat. Ann. § 479.13(c).
41

order to save a statute from unconstitutionality.’” (quoting 

Hooper v. California, 155 U.S. 648, 657 (1895))). As we 

have just explained, after PFDA was decided, the Board 

adopted the view that funeral directors with an ownership 

interest in a merchandising company may sell pre-need

funeral property if their company is owned and operated 

“separate and apart” from a funeral home or establishment. 

Plaintiffs concede that the Board explained its position in a 

1991 memorandum, which outlined a series of factors that 

could be used to determine whether a merchandising 

company’s operations are sufficiently separate from those of 

a funeral establishment. J.A. 1144-45.26

Moreover, the potential for consumer abuse and fraud 

in any scheme that allows merchants to accept payment for 

goods and services that will not be tendered until some future 

date is painfully obvious. This is especially true where, as 

here, the date for the vendor’s performance may well be 

decades after accepting payment. Requiring proceeds 

accepted under such an arrangement to be placed in trust is 

not only logical, but imperative if vulnerable consumers are 

to be protected from the unscrupulous (or financially 

“strapped”) vendor. Cf. Nat’l Funeral Servs., Inc. v. 

Rockefeller, 870 F.2d 136, 143 n.11 (4th Cir. 1989) (relying 

upon attorney solicitation Supreme Court cases to uphold 

West Virginia’s ban on door-to-door and telephone 

solicitation for funeral pre-need contracts and noting that, 

“[i]n both [contexts], an advocate trained in the art of 

persuasion is trying to convince an emotionally vulnerable 

layperson that he needs professional services”). The 

requirements of the FDL and FIA are reasonable standing 

alone. The Board’s attempt to resolve the tension between 

 26 Among the factors outlined in a memo authored by then-Board prosecutor 

Kathleen Grossman are:

[A]re the pre-need sales merchandising 

corporations . . . operated separate and apart

from the funeral business . . . .? Are there 

two sets of bookkeeping records kept? 

Separate advertising signs? Do the 

corporations display signs for public view at 

all? Which businesses display signs? Are 

there separate entrances? How is the 

building set up, i.e., a common vestibule 

leading to separate suites?

J.A. 1145.
42

those two statutes may be awkward or even strained, but it is 

not unreasonable and it is consistent with Pennsylvania’s

legitimate public interest.27 Accordingly, we part with the 

District Court’s conclusion that the trust requirement results 

in a constitutional deprivation. 

F. First Amendment

The Plaintiffs claim that the FDL’s restrictions on commercial speech 

violate the First Amendment. It is long-settled that the First Amendment

protects commercial speech. See Va. Bd. of Pharma. v. Va. Citizens Consumer 

Council, Inc., 425 U.S. 748, 765 (1976). Several arguments are subsumed in the 

Plaintiffs’ First Amendment challenge, and we will discuss the merits of each of 

these claims in turn.

1. Restriction on Use of Trade Names

Subject to limited exceptions,28 Section 8 of the FDL requires that 

funeral homes operate under the name of the current funeral director or that of a 

predecessor. See 63 Pa. Stat. Ann. §§ 479.8(a), (b), (d), 479.9(a).29 For 

example, if a hypothetical funeral director named “Jane Smith” purchased the 

“Johnson Funeral Home,” she would only be able to continue to operate the 

establishment under its current name or as the “Smith Funeral Home.” The 

Plaintiffs claim that this restriction on the use of trade names violates the First 

Amendment.

a. Applicability of Central Hudson & Gas Electric Corp.’s 

Test

At the outset, the parties dispute whether we should assess the merits of 

the First Amendment claim under Central Hudson Gas & Electric Corp. v. 

Public Service Commission, 447 U.S. 557 (1980), or whether Friedman v. 

Rogers, 440 U.S. 1 (1979), controls. 

In Friedman, the earlier of these two cases, the Supreme Court upheld a 

Texas law that proscribed the practice of optometry under a trade name. See 

Friedman, 440 U.S. at 3-4. The Court distinguished the use of trade names from 

other types of “commercial speech” such as product or service advertisements 

 27 Indeed, although we do not hold that resolution of the tension between the 

100% requirement in the FDL and the 70% requirement in the FIA necessitates 

it, the Commonwealth could rationally have argued that the dangers inherent in 

the deferral of performance that is endemic in pre-need contracts requires that 

100% of the contract price be placed in trust to ensure performance under the 

contract.

28 Section 9 of the FDL excepts funeral homes owned by “grandfathered” pre1935 corporations from this requirement. 63 Pa. Stat. Ann. § 479.9(a).

29 Even in that circumstance, funeral homes owned by a sole proprietor or 

partnership that operate under the name of a predecessor funeral director must 

disclose the name of the current owner in advertising. Id. § 479.8(a). Funeral 

homes owned by an RBC or professional (pre-1935) corporation that operate 

under a predecessor’s name must similarly disclose the name of the home’s 

licensed supervisor. Id. §§ 479.8(b), (d). 
43

by explaining that while the latter are “self-contained and explanatory,” a trade 

name will generally have “no intrinsic meaning.” Id. at 12. The Court then 

stated that because “ill-defined associations of trade names with price and 

quality information can be manipulated by the users of trade names, there is a 

significant possibility that trade names will be used to mislead the public.” Id. at 

12-13. Given the State’s “substantial” interest in “protecting the public from the 

deceptive and misleading use of [] trade names” and the Court’s conclusion that 

the restriction only had “incidental effect on the content of the commercial 

speech involved,” the Supreme Court rejected the plaintiffs’ challenge. Id. at 

15-16. Not surprisingly, Pennsylvania urges us to apply Friedman because it is 

more favorable to the State’s position than Central Hudson. 

However, Friedman’s applicability and continued viability is not as 

clear as the Commonwealth would have us believe because the Court 

subsequently adopted a more detailed test for limitations on commercial speech

in Central Hudson. There, the Court explained that a court considering the 

validity of a restriction on commercial speech must first ask whether the 

commercial speech concerns unlawful activity or is misleading. 447 U.S. at 

566. If the speech is neither, the reviewing court must then determine “whether 

the asserted governmental interest is substantial.” Id. If it is, the third and 

fourth prongs of the Central Hudson inquiry require a court to respectively 

inquire “whether the regulation directly advances the governmental interest 

asserted” and whether the regulation is “more extensive than is necessary to 

serve that interest.” Id.

In subsequent cases, the Supreme Court has provided additional 

guidance by explaining that—in the professional services context—commercial 

speech that is actually misleading “may be prohibited entirely,” In re R.M.J., 

455 U.S. 191, 203 (1982), while potentially misleading speech may be regulated

but not entirely curtailed, id.

Although Pennsylvania does not urge us to wholly disregard the 

Central Hudson test, it does suggest that Friedman is sufficiently on point to 

resolve our inquiry in the Commonwealth’s favor and that we should avoid 

parsing through the four prongs of Central Hudson. The State’s argument goes 

too far. 

As noted, Friedman predated the four-part Central Hudson test and the 

latter distinction between commercial speech that is “actually misleading” and 

that which is “potentially misleading.” See Wine & Spirits Retailers v. Rhode 

Island, 481 F.3d 1, 8 (1st Cir. 2007) (“Since its decision in Friedman, the Court 

has made a doctrinal refinement, distinguishing in the professional services 

context between commercial speech that is inherently or actually misleading and 

commercial speech that is only potentially misleading.”). Accordingly, even 

where Friedman applies, federal courts commonly conduct an analysis within 

the framework of the more “refined” and nuanced test set forth in Central 

Hudson. See Alexander v. Cahill, 598 F.3d 79, 95-96 (2d Cir. 2010) 

(considering Friedman’s applicability to challenge against certain New York 

restrictions on attorney advertising as part of Central Hudson test); Wine & 

Spirits Retailers, 481 F.3d at 8-9 (same).30 Our inquiry will be thus be guided 

by the more recent decision in Central Hudson.

 30 Thus, the Central Hudson test would not apply if the Commonwealth could 

show that the use of trade names in the funeral industry is either unlawful or 

inherently misleading. See Wine & Spirits Retailers, 481 F.3d at 8 (“It is not 

always necessary . . . to deal with each of the test’s four parts. In framing the 
44

b. The Central Hudson Test

As noted, Central Hudson’s threshold requirement is that the regulated 

speech concern lawful activity and not be misleading. Here, there is neither 

evidence nor allegation that the use of trade names in the funeral industry would 

either mask or facilitate illegal activity. Instead, Pennsylvania heavily relies on 

Friedman to suggest that the use of trade names presents “numerous” 

opportunities for deception of the public—e.g., by keeping a trade name despite 

staff changes and freeing proprietors from relying on their personal reputation to 

attract business.

We agree that Friedman underscored “the significant possibility that 

trade names will be used to mislead the public” in the context of invalidating 

Texas’s ban on trade names in the field of optometry. Friedman, 440 U.S. at 12. 

However, the Board’s argument ignores the record that the Court’s analysis was 

based on in Friedman. See Friedman, 440 U.S. at 13 (“The concerns of the 

Texas Legislature about the deceptive and misleading uses of optometrical trade 

names were not speculative or hypothetical, but were based on experience in 

Texas with which the legislature was familiar . . . .”). Indeed, as other courts 

have noted when considering challenges to an across-the-board ban on the use of 

trade names, in Friedman Texas “marshaled substantially strong[] and [] 

specific evidence supporting its prohibition on trade names” in the field of 

optometry. Alexander, 598 F.3d at 96. There has been no such showing here. 

Moreover, while Friedman provides some support for the 

Commonwealth’s position, the lack of record support for its parade of 

hypothetical horribles suggests caution before concluding that trade names in the 

funeral industry are sufficiently misleading to rest our analysis upon Friedman. 

Instead, we conclude that the assignment of trade names to funeral homes is, at 

best, potentially misleading, and we must therefore consider the remaining 

prongs of the Central Hudson test.

Obviously the Board’s asserted government interest in providing 

accurate information to the public is “substantial.” See Friedman, 440 U.S. at 

15-16 (noting State’s interest in protecting public from deceptive and misleading 

use of trade names in optometry industry is “substantial and well 

demonstrated”). However, the FDL’s ban on the use of trade names in the 

funeral industry cannot survive the limitations imposed under Central Hudson. 

Under its requirements, “the government must demonstrate that the challenged 

law ‘alleviates’ the cited harms ‘to a material degree.’” Pitt News v. Pappert, 

379 F.3d 96, 107 (3d Cir. 2004) (quoting Fla. Bar v. Went For It, Inc., 515 U.S. 

618, 624 (1995) (alterations omitted)). 

That requirement is inconsistent with a statutory scheme that is fatally

“underinclusive.” See City of Ladue v. Gilleo, 512 U.S. 43, 52 (1994) 

(“Exemptions from an otherwise legitimate regulation . . . . [m]ay diminish the 

credibility of the government’s rationale for restricting speech in the first 

place.”); see also Metro Lights, L.L.C. v. City of Los Angeles, 551 F.3d 898, 905

(9th Cir. 2009) (“To put it in the context of the Central Hudson test, a regulation 

 inquiry, the threshold question is whether ‘the commercial speech concerns 

unlawful activity or is misleading.’ If so, the inquiry ends there: ‘the speech is 

not protected by the First Amendment.’” (quoting Thompson v. W. States Med. 

Ctr., 535 U.S. 357, 367 (2002))). The Board has not made such a showing.
45

may have exceptions that ‘undermine and counteract’ the interest the 

government claims it adopted the law to further; such a regulation cannot 

‘directly and materially advance its aim.’” (quoting Rubin v. Coors Brewing Co., 

514 U.S. 476, 489 (1995))).

The restrictions on commercial speech here are so flawed that they 

cannot withstand First Amendment scrutiny. Indeed, the District Court correctly 

identified the pivotal problem concerning the FDL’s proscription at Central 

Hudson’s third step: by allowing funeral homes to operate under predecessors’ 

names, the State remains exposed to many of the same threats that it purports to 

remedy through its ban on the use of trade names. See Heffner, 866 F. Supp. 2d 

at 408. A funeral director operating a home that has been established in the 

community, and known under his or her predecessor’s name, does not rely on 

his or her own personal reputation to attract business; rather, the predecessor’s 

name and reputation is determinative. Nor does a funeral home operating under

a former owner’s name provide transparency or insight into changes in staffing 

that the Board insists is the legitimate interest that the State’s regulation seeks to 

further. 

Moreover, unlike in Friedman, there is nothing in the record here to 

even suggest that the use of trade names in the funeral industry has either 

mislead or deceived the public to a greater degree than using a predecessor’s

name, and the Board does not suggest otherwise. Thus, we agree with the 

District Court that the FDL’s trade name ban is irrevocably “pierced” by the 

type of “exemptions and inconsistencies” that the Supreme Court has in found 

fatal to First Amendment scrutiny.

31 Greater New Orleans Broad. Ass’n, Inc. v. 

United States, 527 U.S. 173, 190 (1999); see also Rubin v. Coors Brewing Co., 

514 U.S. 476, 488 (1995); Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 

424-26 (1993); Fla. Star v. B.J.F., 491 U.S. 524, 540 (1989).

2. Payment on Commissions to Unlicensed Salespeople

The second issue that the Plaintiffs attack on First Amendment grounds 

concerns the constitutionality of Section 11(a)(8) of the FDL. In relevant part, 

that section provides that a funeral director or funeral home’s license may be 

suspended if a licensee pays unlicensed employees commissions on sales for 

pre-need funeral arrangements. See 63 Pa. Stat. Ann. § 479.11(a)(8). The 

Board has implemented this restriction by promulgating regulations prohibiting 

payment of “any gratuity” or “valuable consideration” to unlicensed employees. 

In Count XIII of the Plaintiffs’ amended complaint, they argue that this 

restriction is unconstitutional because it prohibits anyone but a licensed funeral 

director from communicating with customers about services or merchandise. 

See Walker v. Flitton, 364 F. Supp. 2d 503, 503, 507 (M.D. Pa. 2005) (holding 

that the First Amendment precludes a prohibition on unlicensed employees and 

 31 Because we conclude that the FDL’s proscription on the use of trade names 

does not pass Central Hudson’s third step, we need not discuss the fourth 

“narrow-tailoring” prong. We note, however, that the Supreme Court has 

recognized that the third and fourth prongs of the test complement each other 

and has observed that the four factors of the analysis are “not entirely discrete.” 

See Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 556 (2001); Greater New 

Orleans Broad. Ass’n, Inc., 527 U.S. at 183, 188; see also Metro Lights, L.L.C., 

551 F.3d at 904 (noting “[i]t has not always been clear how [inquiry into a 

regulation’s ‘fit’] differs with respect to the last two steps of the Central Hudson

analysis”).
46

agents from interacting with customers). The Plaintiffs allege that this 

restriction on commissions similarly violates the First Amendment under the 

reasoning in Central Hudson. We disagree. 

Here again, the Commonwealth’s articulated interest in consumer 

protection is undoubtedly substantial. “The whole premise behind earning a 

commission is that the amount of sales [] increase[s] the rate of pay.” Parker v. 

NutriSys., Inc., 620 F.3d 274, 284 (3d Cir. 2010) (internal quotation marks and 

citation omitted). It is therefore eminently reasonable for a legislature to want to 

protect consumers from dealing directly with salespeople who have a financial 

interest in “upselling” more expensive or unnecessary merchandise and services

than are appropriate for a given consumer’s situation or resources. See Walker, 

364 F. Supp. 2d at 520 (recognizing “substantial governmental interest in 

protecting the general public as it relates to the dissemination of information 

regarding, and the purchasing of, preneed funerals.”). 

The potential for this evil to manifest itself in the context of sales 

personnel being rewarded for exploiting the need to afford a loved one a 

“proper” or “respectful” burial or memorial is too obvious to require elaboration. 

Customers looking to purchase funeral arrangements and services are clearly 

among the most vulnerable consumers to be found in any marketplace.

We therefore have little difficulty in concluding that this restriction 

easily satisfies the third Central Hudson prong. Section 11(a)(8) “directly and 

materially” advances the State’s asserted interest by removing the financial

incentive that salespersons would have to oversell pre-need funeral services. 

We realize that the consumer protection afforded by this statutory 

scheme is imperfect. For example, it still allows salaries or bonuses to be 

influenced by the volume or amount of sales, and this may still incentivize the 

unscrupulous sales person to prey upon the unwary and vulnerable consumer. 

However, this flaw does not suggest that the protection is so under-inclusive that 

it imposes an unconstitutional restriction on commercial speech. Salespersons 

in the funeral industry are obviously as entitled to compensation as any other 

sales persons, and any compensatory scheme may favor those who sell more 

goods and/or services than their colleagues. Perhaps because such realistic 

considerations limit the potential effectiveness of any such scheme, the Supreme 

Court has explained that “[its] commercial speech cases establish that localities 

may stop short of fully accomplishing their objectives without running afoul of 

the First Amendment.”). Discovery Network, Inc., 507 U.S. at 442; see also 

Metromedia, Inc. v. San Diego, 453 U.S. 490, 511 (1981) (upholding San 

Diego’s proscription on offsite billboard advertising and rejecting plaintiffs’ 

argument that ban was underinclusive because it did not also cover onsite 

advertising). We therefore believe that the FDL’s ban on payment of 

commissions to unlicensed sales people is a constitutional remedy that is 

sufficiently tailored to satisfy Central Hudson.

32

 32 The only alternative that would eliminate any room for upselling would be 

mandating a flat compensation for all employees. Assuming such a scheme 

would be legal, it would prevent businesses from rewarding those employees 

who show extraordinary dedication to their jobs by doing the “little things” that 

employers rarely require but nevertheless expect from employees. 
47

G. Contract Clause

Finally, the Plaintiffs contend that the Board’s interpretation of the 

FDL’s trust provisions violates the Constitution’s Contract Clause by impairing 

pre-need contracts between the Plaintiffs and their customers.

The Contract Clause provides that “[n]o State shall . . . pass any . . . 

Law impairing the Obligation of Contracts.” U.S. Const. art I, § 10, cl. 1. To 

show a Contract Clause violation, a plaintiff must demonstrate that a change in 

state law effectively altered a contractual obligation. Gen. Motors Corp. v. 

Romein, 503 U.S. 181, 186 (1992). Our Contract Clause inquiry must consider 

“[(1)] whether there is a contractual relationship, [(2)] whether a change in law 

impairs that contractual relationship, and [(3)] whether the impairment is 

substantial.” Id. If all three questions are answered affirmatively, we must then 

“inquire whether the law at issue has a legitimate and important public purpose 

and whether the adjustment of the rights to the contractual relationship was

reasonable and appropriate in light of that purpose.” Transp. Workers Union 

Local 290 v. SEPTA, 145 F.3d 619, 621 (3d Cir. 1998).

The premise for the Plaintiffs’ Contract Clause 

argument is that the post-PFDA regime, whereby funeral 

directors who receive money in the sale of pre-need

merchandise may trust funds at the FIA rate of 70% if their 

operations are separate from those of a funeral establishment,

is not the actual state of the law. According to the Plaintiffs, 

the Board has recently reversed its stated position and 

currently requires 100% of all pre-need sales of merchandise 

to be held in trust if the corporation selling the goods is 

owned in whole or in part by a licensed funeral director. The 

Plaintiffs largely base their claim on a regulation that the 

Board proposed in August 2007 but later withdrew and never 

enacted. See 37 Pa. Bull. 4643, 4646 (Aug. 25, 2007) (“A 

preneed funeral contract may not incorporate a contract for 

funeral merchandise entered into by a person or entity other 

than a funeral director.”).

The Plaintiffs argue that the Board’s proposed interpretation requiring 

100% trust of all funds paid as compensation for pre-need funeral services be 

put in trust impaired the Plaintiffs’ contractual obligations with existing 

consumers. The Board initially allowed licensed funeral directors to own 

corporations that sold pre-need merchandise as long as those corporations were

wholly separate from funeral homes. The Plaintiffs claim that they relied on that 

interpretation only to have their expectations frustrated when the Board 

proposed a regulation banning this practice in August 2007.

The Plaintiffs’ Contract Clause arguments fail as a matter of law for 

two obvious reasons. First, the Plaintiffs have not even shown that there was a 

change in state law. Just as we discussed earlier, the Plaintiffs’ articulation of 

the current state of the law in Pennsylvania is based on a proposed regulation 
48

that the Board never formally prescribed. See 37 Pa. Bull. 4643, 4646 (Aug. 25, 

2007). Indeed, the record shows—and the Plaintiffs concede—that the Board 

withdrew this proposal in December 2009, and it never took effect. Thus, the 

Plaintiffs have not shown even a threshold action that could be characterized as 

a burden on their contractual obligations with consumers.

Second, even if the Plaintiffs could show that the Board’s proposed 

regulation had the force of law, the Board’s reinterpretation of the FDL would 

not implicate the Contract Clause. “The Supreme Court has made clear that the 

language of the Contract Clause (i.e., “pass any . . . law”) means that the clause 

applies only to exercises of legislative power.” Mabey Bridge & Shore, Inc. v. 

Schoch, 666 F.3d 862, 874 (3d Cir. 2012). While the Clause’s application is by 

no means limited to the formal enactments of a State’s legislature,33 “[t]he 

Supreme Court has rejected the argument that the Contract Clause is violated 

when there is a new interpretation of an antecedent state statute.” Id. at 875.

Here, the Plaintiffs accuse the Board of reversing its own interpretation 

and application of longstanding FDL provisions. Such a reversal is simply not 

the kind of “exercise of legislative authority” that the Contract Clause 

proscribes. See id. (holding Pennsylvania Department of Transportation’s 

interpretation and application of law that had been in force for over 30 years

“did not exercise legislative authority subject to scrutiny under the Contract 

Clause”).

III. Conclusion

For the foregoing reasons, we reverse the District Court’s judgment 

striking down the FDL’s warrantless inspection scheme on Fourth Amendment 

grounds. We also reverse the District Court’s judgments concerning the 

Plaintiffs’ dormant Commerce Clause challenges to certain provisions of the 

FDL. We reverse as well the District Court’s conclusions that the disputed FDL 

provisions violate the substantive component of the Due Process Clause. We 

also reverse the District Court’s ruling that the Board’s actions 

unconstitutionally impair the Plaintiffs’ private contractual relations with third 

parties in violation of the Constitution’s Contract Clause. We will affirm the 

District Court’s ruling that Pennsylvania’s ban on the use of trade names in the 

funeral industry runs afoul of First Amendment protections, but reverse its 

ruling that the ban on the payment of commissions to unlicensed salespeople 

violates the Constitution. Finally, we remand to the District Court to modify its 

order in accordance with this opinion. 

 33 We recently explained that “[t]here is no simple formula for determining 

whether a government act is an exercise of legislative authority.” Mabey Bridge 

& Shore, Inc., 666 F.3d at 874. However, Supreme Court cases offer some 

guidance. A government act will “bear[] the hallmarks of legislative authority 

when it ‘changes existing conditions by making a new rule to be applied 

thereafter to all or some part of those subject to its power.’” Id. (quoting Ross v. 

State of Oregon, 227 U.S. 150, 163 (1913)). Conversely, “an act is likely not

legislative when ‘its purpose was not to prescribe a new law for the future, but 

only to apply to a completed transaction laws which were in force at the time.’” 

Id. (quoting Ross, 227 U.S. at 163).