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By MICHAEL KUNZELMAN / Associated Press

NEW ORLEANS (AP) -- A federal appeals court says the Louisiana Supreme Court should decide whether the state's board of funeral directors has the legal authority to bar an order of Benedictine monks from selling caskets.

In a ruling Tuesday, a three-judge panel from the 5th U.S. Circuit Court of Appeals questioned whether the board's regulatory power extends beyond funeral homes.

But the panel said it's up to the state's highest court to determine how much authority is given to the board under state law.

'Resolution of the statutory uncertainty surrounding the State Board's authority must come at the hand of the Louisiana Supreme Court, whose determination of state law is supreme,' Judge Patrick Higginbotham wrote.

The 5th Circuit panel said it would defer a final decision until after the Supreme Court rules.

The board had taken its case to the appeals court after a federal judge ruled last year in favor of St. Joseph Abbey, a Roman Catholic monastery near Covington.

The abbey's monks have made wooden caskets for generations to bury their dead. After Hurricane Katrina struck in 2005 and destroyed timberlands the monks had harvested for income, the abbey invested $200,000 in a business venture to sell caskets for up to $2,000 apiece.

In 2007, however, the board ordered the abbey to refrain from selling caskets to the public. The abbey sued the board after unsuccessfully lobbying state legislators to change the law to allow nonprofit charitable groups to sell caskets.

The board argues that only state-licensed funeral directors can legally sell caskets in Louisiana. It claims the measure is designed to protect consumers. The 5th Circuit panel, however, expressed doubt that the 'challenged law is rationally related to policing deceptive sales tactics.'

Writing on behalf of the appeals court panel, Higginbotham said Louisiana's rules must 'not be irrational.'

'The great deference due state economic regulation does not demand judicial blindness to the history of a challenged rule or the context of its adoption nor does it require courts to accept nonsensical explanations for naked transfers of wealth,' he wrote.

Scott Bullock, a lawyer for the abbey, said the ruling holds that the board's efforts to prevent the monks from selling caskets were either unconstitutional or weren't allowed under state law.

'In either scenario, our clients are protected,' said Bullock, a senior attorney for the Arlington, Va.-based Institute for Justice. 'It is really a total vindication for the monks and a compete repudiation for the state board.'

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