The Archdiocese of Newark boasts a population of more than 3 million parishioners (as of 2010) spread out over 219 parishes. The Archdiocese also operates 11 private cemeteries, part of what it calls "a 2,000-year-old tradition of the Church, honoring the bodies of those who have died, providing a final resting place on sacred ground, and supporting their family and friends who want to honor them and pray for them." The Archdiocese reports that there are nearly 1,000,000 people interred in these cemeteries with approximately 5,800 decedents added each year.
As part of the central mission of its cemeteries, Archdiocese must care for the cemeteries in perpetuity. That is, of course, a fairly significant financial challenge. To ensure that there are adequate funds to care for the cemeteries forever, the Archdiocese sets aside at least 15% of the price of an interment to help maintain those cemeteries.
In 2006, the Archdiocese began an "inscription-rights program" where it provided a private mausoleum at an additional cost and performed the inscription for parishioners. As part of the program, the Archdiocese retained ownership over the monument - that's distinct from a private headstone installation where the families retained ownership over the monument. Whereas under the private ownership model, the Archdiocese had no legal right to maintain or repair the monument, under the "inscription-rights program," the Archdiocese agreed to maintain the monument in perpetuity. This, the Archdiocese says, is convenient and efficient for parishioners who have loved ones buried in the private cemeteries. Parishioners appeared to agree and the program was successful.
In 2013, the Archdiocese expanded the program from mausoleums to headstones. And that's when trouble started. That same year, the Monument Builders Association of New Jersey (MBANJ) sued the Archdiocese in state court, arguing that it was "unfair" for private religious cemeteries to sell headstones. The MBANJ lost the lawsuit and the Archdiocese was allowed to continue to sell headstones for those decedents being buried in its cemeteries. An appellate court confirmed the ruling.
Not content with the rulings, the MBANJ next went to to the legislature. There, the trade association found a sympathetic ear and New Jersey Assembly Bill 3840 barring any "religious corporation, association, organization or society" that owns, controls or manages a cemetery from selling memorials, vaults, or mausoleums was signed into law by New Jersey Gov. Chris Christie on March 23, 2015. While the statute is quite broad on its face, it's important to note that the Archdiocese was the only religious cemetery in the State of New Jersey selling headstones: the law was clearly targeted to the Archdiocese.
On July 21, 2015, the Archdiocese of Newark, together with parishioners Emilio Mazza, and Dennis Flynn, Sr., fired back, filing a federal lawsuit against the State of New Jersey under the Due Process, Equal Protection and Privileges or Immunities Clauses of the 14th Amendment, and the Contracts Clause of the U.S. Constitution. The sole question, according to Jeff Rowes, a senior attorney from the Institute of Justice (IJ) representing the Archdiocese is whether government can pass anti-competition laws that serve merely to protect an economic interest. Or put another way, the case asks the court, "Is private economic protectionism a legitimate government interest?"
What is the argument for keeping the Archdiocese out of the headstone game? Wilson Beebe, the executive director of the New Jersey State Funeral Directors Association, claims the Archdiocese has an unfair advantage because of its tax status. Noting that the Archdiocese could have cornered as much as 50% of the Catholic monument market at the rate it was going, he says, "They’re carrying on essentially a for-profit enterprise. Given their income- and property-tax exempt status, there’s no way that the monument builders can compete with them."
Rowes, however, says that the argument has never been about tax equality. That argument is, he says, a "smokescreen," adding that you can't equate the obligations of a nonprofit with that of a private business: they are very different. More importantly, he says, if the central issue had really just been about tax status, that could have easily been addressed in the law. Rather than restrict the Archdiocese (and similar organizations) from selling monuments, the state could have addressed the perceived tax disparity rather than ending sales. That didn't happen, he notes, saying that tax has "never been a real issue." The real issue, he says, is that the legislature took action at the behest of a trade organization in order to protect private financial interests. That is, he says, not allowable. He's hopeful the courts will agree.
So what happens next? The matter will wind its way through the court system. After a series of procedural maneuvers, it's likely there will be answer in spring or summer of 2016. It won't, however, be a final answer. Rowes said, pretty confidently, that no matter the answer, the matter won't end at the Third Circuit. Federal courts have split on the central question of economic protection which means this matter will probably find its way to the U.S. Supreme Court. That would be just fine so far as Rowes is concerned. It's an important issue, he says, for entrepreneurs and consumers across the country.
Rowes' employer, the Institute for Justice (IJ), is a national law firm focusing on four pillars of litigation: private property, economic liberty, free speech and school choice. If the name rings a bell, you're right: Dan Alban of the IJ successfully took on the Internal Revenue Service - and won - in the fight against regulating tax preparers in Loving et al v. Commissioner.
