Does State Have Right To Ask Small Business Owners To Jump Higher Than Competition?

NN&V Exclusive

(Lori Piotrowski) – An entrepreneur in St. Paul, Minnesota, has been left scratching his head over state regulations. Verlin Stoll, who owns and operates a funeral parlor in Minnesota’s capital, wants to expand by building a second operation, which would also mean hiring more employees. Government, especially in this economy, should be holding him up as a prime example of entrepreneurship and small business capitalism in action.

Instead, it is forcing him to build an embalming room, which he doesn’t need and won’t be using. (Contrary to what you may believe, embalming is not required by law and many religions prohibit it.)

So, if Mr. Stoll continues with his expansion plans, he must spend $30,000 just to appease Minnesota bureaucrats.

May the government force entrepreneurs to do useless things, such as build extra rooms in their stores that they do not need and will never use, just to prove they are serious about their business?

Today, that issue is at the center of a major lawsuit filed in Minnesota State District Court by the Institute for Justice (IJ) on behalf of Mr. Stoll, the 27-year-old owner of Crescent Tide Funeral Home in Saint Paul. This young entrepreneur has built a successful business by offering low-cost funerals while providing high-quality service. His business also benefits low-income families who cannot afford the high prices of the larger and more well-known funeral-home companies.

Mr. Stoll’s basic services fee is only $250—about 90 percent lower than the $2,500 charged on average by many Twin Cities’ funeral homes. He has built a business model based on minimizing fixed costs, which is why he also does not have a hearse or chapel.

Minnesota’s law penalizes small businesses by forcing them to spend money and thus eliminating healthy competition from, in this case, the funeral home marketplace.

“Minnesota’s law is irrational,” said Katelynn McBride, an IJ-MN attorney. “Embalming is never required just because someone passes away and the state does not require funeral homes to do their own embalming. In fact, it is perfectly legal to outsource embalming to a third-party embalmer. Minnesota’s largest funeral chain has 17 locations with 17 embalming rooms, but actually uses only one of those rooms.”

“To start my business, the government made me take a higher risk and spend more money than I wanted to,” said Mr. Stoll. “I wish the government had just stayed out of the way.”

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

The lawsuit also includes plaintiff Helen Williams, who advocates for low-income funeral consumers in Minneapolis, and the Funeral Consumers Alliance of Minnesota, which advocates for low prices and consumer education in the funeral industry.

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