Whitener v. W. Va. Bd. of Embalmers and Funeral Directors

• Decision Date: 12 March 1982
• Docket Number: No. 14635,14635
• Citation: 169 W.Va. 513,288 S.E.2d 543
• Court: West Virginia Supreme Court
• Parties: David A. WHITENER, et al. v. W. VA. BOARD OF EMBALMERS AND FUNERAL DIRECTORS, etc., et al.

Page 543

288 S.E.2d 543

169 W.Va. 513

David A. WHITENER, et al. v. W. VA. BOARD OF EMBALMERS AND FUNERAL DIRECTORS, etc., et al.

No. 14635.

Supreme Court of Appeals of West Virginia.

March 12, 1982.

Syllabus by the Court

1. We reverse State v. Memorial Gardens, 143 W.Va. 182, 101 S.E.2d 425 (1957), because regulation of how funeral services are purchased in advance of need is within the legitimate scope of state police power.

2. There is no constitutional right to pursue business in a certain way. Regulations about how businesses are conducted must simply bear a rational relationship to a legitimate state goal, to be constitutional. W.Va.Code, 47-14-1, et seq., meets the test.

3. It is the function of legislatures to determine the wisdom and utility of economic legislation, and W.Va.Code, 47-14-1, et seq., is within the scope of the Legislature's regulatory powers. It does not prohibit funeral businesses; it simply regulates one method by which funeral services are bought, and does so to protect purchasers.

Chauncey H. Browning, Atty. Gen. and Gregory W. Bailey, Deputy Atty. Gen., Charleston, for appellants.

Bowles, McDavid, Graff & Love, F. T. Graff, Jr. and P. Nathan Bowles, Jr., Charleston, for appellees.

Jackson, Kelly, Holt & O'Farrell, James R. Snyder and John L. McClaugherty, Charleston, amicus curiae for W. Va. Funeral Directors Ass'n.

HARSHBARGER, Justice:

W.Va.Code, 47-14-2 et seq., ¹ designates a recipient of money paid in advance for funeral-related goods and services, to be a trustee, and requires that such money be deposited in a federally insured bank, trust company or savings and loan association, in a separate account in the name of the trustee held in trust subject to the terms of the contract by which it is paid; and that the fund may be recaptured by the purchaser.

Appellees, a West Virginia embalmer and funeral director, a funeral home, and a potential customer, sought to determine the Act's constitutionality in a declaratory judgment action in Kanawha County Circuit Court. The funeral people argued that engaging in business is a fundamental constitutional right and that this law prohibits them from doing so; and that portions of W.Va.Code, 30-6-7 ² and 30-6-14, ³ do not apply to them, or are unconstitutional.

* * *

* * *

* * *

* * *

State v. Memorial Gardens Development Corp., 143 W.Va. 182, 101 S.E.2d 425 (1957), decided that a predecessor statute to W.Va.Code, 47-14-2 was unconstitutional, an unwarranted exercise of the State's police power. 143 W.Va. 182, 101 S.E.2d 425, Syllabus Point 1.

We reverse State v. Memorial Gardens, because regulation of the funeral business is within the legitimate scope of state police power. See F.T.C., Funeral Industry Practices: Final Staff Report to the F.T.C. and Proposed Trade Regulation Rule (16 C.F.R. Part 453) 79-82 (June, 1978).

Laws affecting constitutional rights must satisfy the difficult compelling state interest test. See Zablocki v. Redhail, 434 U.S. 374, 98 S.Ct. 673, 54 L.Ed.2d 618 (1978) (right to marry); Taylor v. Louisiana, 419 U.S. 522, 95 S.Ct. 692, 42 L.Ed.2d 690 (1975) (women cannot be excluded from jury selection); Skinner v. Oklahoma, 316 U.S. 535, 62 S.Ct. 1110, 86 L.Ed. 1655 (1942) (right to individual privacy prevents the State from forcing sterilization of people convicted of two or more felonies involving moral turpitude); Strauder v. West Virginia, 100 U.S. 303, 25 L.Ed. 664 (1879) (right to have black people in a jury pool).

However, neither this Court nor the United States Supreme Court has ever recognized that a right to pursue one's business in a certain way is fundamental and that laws affecting that right are subject to strict scrutiny. See Exxon v. Governor of Maryland, 437 U.S. 117, 98 S.Ct. 2207, 57 L.Ed.2d 91 (1978); New Orleans v. Dukes, 427 U.S. 297, 96 S.Ct. 2513, 49 L.Ed.2d 511 (1976); Thorne v. Roush, W.Va., 261 S.E.2d 72 (1979); Waite v. Civil Service Commission, W.Va., 241 S.E.2d 164 (1977). See e.g., Jasper v. Commonwealth, 375 S.W.2d 709 (Ky.1964); State of Nevada ex rel. List v. AAA Auto Leasing, 93 Nev. 483, 568 P.2d 1230 (1977); B. Jeselsohn, Inc. v. Atlantic City, 70 N.J. 238, 358 A.2d 797 (1976); Majestic Industries, Inc. v. J. W. St. Clair, 537 S.W.2d 297 (Tex.Civ.App.1976); Steffey v. City of Casper, 357 P.2d 456 (Wyo.1960), modified on other grounds, 358 P.2d 951 (1961). See generally 16 C.J.S. Constitutional Law, § 188 (1956 and 1981 Supp.). Instead, regulations about how businesses are conducted need only satisfy the less stringent standard that they bear a rational relationship to a legitimate state goal. W.Va.Code, 47-14-1, et seq., meets this test.

The United States Supreme Court has, since the 1930's, firmly maintained that it is a function of legislatures to determine the wisdom and utility of economic policy in legislation. See West Coast Hotel Co. v. Parrish, 300 U.S. 379, 57 S.Ct. 578, 81 L.Ed. 703 (1937); Nebbia v. New York, 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940 (1934). In Ferguson v. Skrupa, 372 U.S. 726, 83 S.Ct. 1028, 10 L.Ed.2d 93 (1963), it upheld the constitutionality of a Kansas statute that permitted only lawyers to engage in debt adjustment practice. Justice Black wrote for the majority:

Legislative bodies have broad scope to experiment with economic problems, and this Court does not sit to "subject the State to an intolerable supervision hostile to the basic principles of our Government and wholly beyond the protection which the general clause of the Fourteenth Amendment was intended to secure." [Footnote omitted.] It is now settled that States "have power to legislate against what are found to be injurious practices in their internal commercial and business affairs, so long as their laws do not run afoul of some specific federal constitutional prohibition, or of some valid federal law." [Footnote omitted.] Ferguson v. Strupa, supra 372 U.S., at 730-31, 83 S.Ct. at 1031.

A majority of American jurisdictions agree with us that regulatory legislation such as this neither violates the Constitution nor is beyond the scope of legislative regulatory power. Thirty-two other states have statutes requiring one hundred percent of the payment for a pre-need contract to be placed in a separate trust. ⁴ Twenty-nine states allow a purchaser to withdraw all of his or her payment plus all accrued interest. ⁵ These statutes have generally been upheld. See e.g., Utah Funeral Directors and Embalmers Association v. Memorial Gardens of the Valley, Inc., 17 Utah 2d 227, 408 P.2d 190 (1965); Messerli v. Monarch Memory Gardens, Inc., 88 Idaho 88, 397 P.2d 34 (1964); Reserve Vault Corporation v. Clint Jones, 234 Ark. 1011, 356 S.W.2d 225 (1962); Memorial Gardens Association, Inc. v. Smith, 16 Ill.2d 116, 156 N.E.2d 587, appeal dismissed, 361 U.S. 31, 80 S.Ct. 121, 4 L.Ed.2d 98 (1959); J. M. Falkner v. Memorial Gardens Association, Inc., 298 S.W.2d 934 (Tex.Civ.App.1957). Contra, Arkansas Securities Dept. v. Roller Funeral Home, 263 Ark. 123, 562 S.W.2d 611 (1978) (In Banc); Memorial Trusts, Inc. v. Beery, 144 Colo. 448, 356 P.2d 884 (1960); State v. Gateway Mortuaries, 87 Mont. 223, 287 P. 156 (1930).

We find no reason to disagree with the Legislature's pronouncement about the Act's purposes:

It is hereby determined and declared as a matter of legislative finding (a) that the public has a vital interest in proper disposition of deceased persons; (b) that preneed contracts for furnishing of burial merchandise and services relating to the embalming, cremation or other services associated with the actual interment of dead human bodies, wherein delivery or performance is not immediately required, is a proper subject for the exercise of the police powers of this State; and (c) that the proper exercise of such police powers is regulatory rather than prohibitory. W.Va.Code, 47-14-1.

This statute does not prohibit appellees' business in any manner; it simply regulates how a part of the business income will be handled, to protect the pre-need purchasers of funeral services.

Therefore, we reverse the Circuit Court's ruling about the constitutionality of W.Va.Code, 47-14-1, et seq.

Reversed in part; affirmed in part.

1 Pertinent provisions of Chapter 47, Article 14:

47-14-2: "Any person, association, partnership, firm or corporation who shall receive any money under any agreement, contract or plan entered into after the effective date of this article [June 10, 1965], for the final disposition of a deceased person, or for the embalming, cremation or other services relating to the actual interment of a dead human body, or for funeral or burial services, or for the furnishing of funeral or burial merchandise, including vaults and other outside burial receptacles, wherein the said embalming, cremation or other services or the delivery of funeral or burial merchandise or the furnishing of professional services by a funeral director or embalmer or both is not immediately required but shall be required at an undetermined future time, is hereby declared to be trustee thereof, and shall deposit any and all such money paid thereunder in a bank, trust company, or savings and loan association, insured by an agency of the United States federal government, and which is authorized to do business in this State, and subject to the terms of the said agreement, contract or plan for the benefit of the purchaser of the same, or of a third-party beneficiary of the purchaser's...