Washington Report 122007

Date Published: 
Original Author: 
Robert M. Fells
Original Publication: 
ICCFA Magazine

Survey finds fewer funeral complaints submitted to Federal Trade Commission 

by ICCFA General Counsel Robert M. Fells, Esq.
The ICCFA has published the results of its survey of funeral-related consumer complaints filed with the Federal Trade Commission from January 1, 2005, through December 31, 2006. A total of 522 complaints were submitted to the FTC during this two-year period, compared to a total of 571 complaints filed during 2003-2004.
These figures represent a drop in complaints of close to 10 percent in the comparable time frames. The decrease is especially surprising considering that more people have gone online in the past two years, making the filing of FTC complaints through e-mail (and toll-free phone numbers) more convenient.
In addition, 331 inquiries were submitted (for a combined total of 853), primarily requests for FTC publications on funerals and on the Funeral Rule.
Three hundred and fifty-eight complaints, or 68.5 percent, involved funeral homes. Most complaints alleged violations of the Funeral Rule, such as not providing a general price list, charging a casket handling fee or refusing to accept a third-party casket. Third parties, including casket retailers and monument companies, comprised the second largest group, with 80 complaints, or 15.3 percent of the total. Seventy-six complaints (14.5 percent of the total number) were filed against cemeteries. Five complaints were filed against combination operations, and three against crematories. The commission staff said the complaints "have not necessarily been verified by the FTC. Therefore, you should make your own judgment about relying on the information provided."
The ICCFA survey report contains brief descriptions of each complaint and identifies the state where each originated. As in past years, a number of complaints were filed by businesses against their competitors; that information is noted in the description. Also, the FTC internal reference number specifically identifies each complaint and inquiry.
The survey is useful in determining areas of concern for consumer protection and whether new issues are emerging.

Court's Maryland funeral decision confusing 

On October 17, the U.S. District Court for Maryland issued its decision in Brown v. Hovatter, a case involving Maryland's longtime prohibition on the corporate ownership of funeral homes. The only exceptions to this prohibition are 58 corporate licenses that were grandfathered into the law in 1945. The ICCFA submitted a friend of the court brief last spring stating that the existing law is anti-competitive and anti-consumer.
The court's 31-page opinion may have confused the issue more than anything else. The court ruled that the section of the Morticians Act "which prohibits corporate ownership in Maryland with indefinite exemptions for corporations holding licenses existing as of June 1, 1945, violate the dormant Commerce Clause of the United States Constitution. Defendants and their successors are hereby enjoined from prohibiting or limiting the corporate ownership of funeral homes in Maryland."
However, the court upheld the section of the Morticians Act "which establishes a licensing scheme for the operation of funeral homes in Maryland, [because it] is rationally related to a legitimate state interest and does not violate the Due Process and Equal Protection Clauses of the Fourteenth Amendment. The licensing requirement may be imposed upon corporate and non-corporate owners of funeral homes in Maryland."
It is interesting to note that the court refers twice to the Pennsylvania corporate licensing statute for funeral homes that allows corporations to own mortuaries, but requires that all shareholders of the corporation must be licensed funeral directors or members of the immediate family of a licensed funeral director. The court may be hinting that Maryland should look at Pennsylvania's approach to enacting a restrictive corporate licensing statute.
The Institute for Justice, which represented the plaintiffs in this case, is planning to file a motion asking the court to clarify its decision. It is also possible that the state of Maryland will file an appeal to reverse the decision.

New ICCFA benefit: Cremation legal advice 

The ICCFA has retained Poul H. Lemasters, Esq., Rosenacker & Associates Ltd., Cincinnati, Ohio, an attorney and licensed funeral director, to serve as our special cremation legal counsel.
This member benefit, which is already in effect, is being made available courtesy of the ICCFA Government and Legal Fund.
ICCFA members in good standing may telephone Lemasters at 1.800.221.2889 to discuss cremation-related legal issues for up to 20 minutes at no charge to the member. The association pays for this service via a retainer.
The association also offers legal help on human resources and management questions from attorney Michael Pepperman and advice on tax issues from attorney and CPA Leslie Schneider.