FTC Staff Issues Opinion on Third-party Casket Delivery IssuesUniversal Casket Company, which supplies the caskets that are sold by Costco, recently sought guidance from the Federal Trade Commission (FTC) staff about the delivery of third-party caskets to funeral homes. In response to that request, FTC Funeral Rule Coordinator Craig Tregillus issued an opinion letter on April 19, 2010 that addressed several important issues, including whether funeral homes must assist in unloading third-party caskets from delivery trucks and the disposal of packing materials. Highlights from the opinion include the following:
Delivery Time. Funeral homes must accept delivery of third-party caskets during regular business hours (e.g. 8 a.m. to 5 p.m.). However, the opinion has recognized that for a small funeral home that may not be staffed during normal business hours, it may be necessary for the shipper of the third-party casket to make prior arrangements so that funeral home personnel are available to receive the casket. Tregillus also recognized that a small funeral home may not be able to accept a casket during regular business hours if a funeral is currently being conducted at the funeral home and no personnel are available.
Imposing Maximum and Minimum Delivery Requirements. An earlier opinion issued by the FTC staff indicated that funeral homes are not required to store caskets that were purchased on a preneed basis. However, when a death has occurred and an at-need funeral is arranged at the funeral home, the funeral home may not refuse to accept a casket more or less than a specified number of days in advance of its use. For example, a funeral home cannot establish a policy that it will accept a casket no more than 48 hours before a funeral. Nor can it impose a rule that it will not accept a casket that is delivered less than 24 hours before a funeral The FTC believes that this is an unreasonable restraint on a consumer’s right to use a third-party casket party casket. Therefore, when an at-need funeral is planned and a third-party casket will be delivered, the funeral home should accept the casket during normal business hours, anytime prior to the funeral.
While not addressed in the April 19, 2010 opinion letter, funeral homes are within their rights to require a family to have a casket delivered in sufficient time to prepare and place the body in the casket prior to a service. Therefore, if a funeral home wished to impose a requirement on a family that the casket be delivered at least 24 hours prior to a scheduled service, it would be within its rights to do so. If the funeral home has this policy and the casket is not delivered at least 24 hours prior to the service, the funeral home should still accept the casket, but could postpone the service if it does not have sufficient time to casket the body and set up the service.
Unloading a Casket. Universal Casket Company requested a ruling from the FTC staff that funeral homes were required to provide personnel and equipment to assist with unloading third-party caskets being delivered to the funeral home. Mr. Tregillus took a split position on this issue. With regard to personnel, he indicated that the FTC Staff is not prepared to find that the Funeral Rule requires a funeral home to pay the labor costs associated with unloading a third-party casket and removing its packaging. Therefore, funeral homes are not required to help third-party casket companies or shippers, like FedEx, unload caskets from trucks or unpackage crated caskets.
On the other hand, the opinion did indicate that the funeral home should provide church trucks in order to transport the third-party casket from the truck to the funeral home. Under the rationale that the costs of church trucks and other equipment are covered by the funeral home’s basic services fee, Mr. Tregillus concluded that it would be an unreasonable burden to deny the use of that equipment to consumers who are using third-party caskets.
Disposal of Packaging. In a footnote in the Staff Advisory Opinion, Mr. Tregillus provides guidance on the increasingly troublesome issue of third-party casket packaging. Funeral homes have reported that casket shipments that originate from Costco and Wal-Mart often are packaged in crates which require the funeral home to incur labor and disposal cost. The FTC Staff Advisory Opinion indicates that while funeral homes may not charge a consumer for the cost of disposing of the packaging, the Funeral Rule does not prevent a funeral provider from requiring that all casket suppliers take any casket packaging with them and dispose of it after a delivery. In other words, as long as the funeral home requires casket wholesalers from which it purchases caskets to dispose of casket packaging materials, it may also impose the same requirement on third-party casket shippers delivering caskets to the funeral home.
Disparaging Third-party Caskets. On the issue of whether the Funeral Rule prohibits funeral providers from disparaging the quality of third-party caskets, Tregillus emphasized that the disparagement of a competitor’s product is not specifically prohibited by the Funeral Rule. However, material misrepresentations or any misleading or deceptive statements made to consumers by funeral home personnel would violate Section 5 of the Federal Trade Commission Act and could expose the funeral provider to an FTC enforcement action.
More information regarding this opinion and other FTC staff opinions will be discussed during the upcoming NFDA teleconference, “FTC Funeral Rule Coordinator Speaks Out on How to Avoid Findings and Fines” on May 6, 2010. Contact NFDA at 800-228-6332 to sign up for this informational teleconference.
Article By: Scott Gilligan, NFDA general counsel