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Washington Report
December 2004
'Cash Advance' Disclosure Litigation
by Robert M. Fells, Esq., general counsel
As previously reported, an El Paso, Texas, county court ruled that certain funeral home defendants owned by Service Corporation International had breached their contracts with a purchaser because they failed to provide disclosures required under Texas state law and under the FTC Funeral Rule.
Specifically, the court interpreted the "cash advance" disclosure provisions of the Funeral Rule as requiring funeral providers not only to disclose if a service charge has been added to the price of the cash advance item or service, but also to disclose the actual amount of the charge. In addition, the court held that anything a funeral provider obtains from a third party, such as caskets or vaults, should be considered a cash advance item and the price markup should therefore be disclosed.
The ICFA quickly decided to file a third-party "friend of the court" brief advising the court that its interpretation of the Funeral Rule was erroneous and that the FTC itself had never interpreted the rule in such manner. (The ICFA brief can be viewed at www.icfa.org/pdf/hijarnationalamicusfinal.pdf.) Additional third-party briefs on behalf of the defendants were also filed by the NFDA, the Alderwoods Group, Stewart Enterprises and Carriage Services, among other interested parties.
On October 12, the court in this case, Hijar v. SCI Texas Funeral Services Inc., ruled on defendants' motion to reconsider its decision and upon the plaintiff's motion to strike the briefs submitted by the ICFA and the other third parties. The court denied the motion to reconsider, which in effect confirms its original decision, and granted plaintiff's motion to strike from the record all third-party "friend of the court" briefs.
The court must still determine the amount of monetary damages awarded to plaintiff before the case can be appealed to the state appellate court for review. The potential consequences of this decision could eventually impact the entire funeral service profession. ICFA members will be kept informed of significant developments.
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Copyright ICFA 2004
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