Federal Register / Vol. 72, No. 51 / Friday, March 16, 2007 / Notices 12615 

2 Kmart applied a dormancy fee of $2.10 per 

month to the balance of every Kmart gift card that 

went unused for 24 months—both retroactively 

($50.40) and prospectively. Consequently, cards 

worth $50 or less were rendered worthless if 

unused for two years. Imagine stashing a $10, $25 

or $50 gift card in a drawer and then pulling it out 

two years later for a trek to shop at Kmart, only to 

learn at the check-out counter that the card had no 

value. Kmart recently discontinued charging this 

dormancy fee after learning about the FTC’s 

investigation, but only on a prospective basis. 

3Press Release, Nat’l Retail Fed’n, Gift Card 

Spending Surpassed Expectations as Last-Minute 

Shoppers Looked for Quick, Easy Gifts; Most 

Consumers Have Spent Less Than Half of Card 

Values (Jan. 23, 2007). 

4Commission consent orders have required 

advertisers to pay redress, offer refunds, or disgorge 

profits, and it is appropriate to do so here. See, e.g., 

Hi-Health Supermart Corp., FTC Dkt. No. C–4136 

(May 12, 2005) (requiring $450,000 in redress); 

ValueVision Int’l, Inc., FTC Dkt. No. C–4022 (Aug. 

24, 2001) (requiring company to offer refunds to all 

purchasers of the challenged products); Weider 

Nutrition Int’l, Inc., FTC Dkt. No. C–3983 (Nov. 17, 

2000) (requiring $400,000 in redress); Dura Lube, 

Inc., FTC Dkt. No. D–9292 (May 5, 2000) (requiring 

$2 million in redress); Apple Computer, Inc., FTC 

Dkt. No. C–3890 (Aug. 6, 1999) (requiring company 

to honor representation that customers would 

receive free support for as long as they own the 

product); Azrak-Hamway Int’l, Inc., 121 F.T.C. 507 

(1996) (requiring toymaker to offer refunds); L & S 

Research Corp., 118 F.T.C. 896 (1994) (requiring 

$1.45 million in disgorgement). 

5 119 Cong. Rec. 29480 (1973). 

1The comment must be accompanied by an 

explicit request for confidential treatment, 

including the factual and legal basis for the request, 

and must identify the specific portions of the 

comment to be withheld from the public record. 

The request will be granted or denied by the 

Commission’s General Counsel, consistent with 

applicable law and the public interest. See 

Commission Rule 4.9(c), 16 CFR 4.9(c). 

gift cards and failed to disclose that, 

after two years of non-use, Kmart would 

deduct a $50 fee from the gift card and 

a $2.10 monthly fee thereafter. We 

concur in the Commission’s decision to 

bring an action against Kmart, but 

dissent in part from the proposed 

consent agreement because we believe 

the remedy should include 

disgorgement of ill-gotten profits. 

Otherwise, Kmart will remain unjustly 

enriched by a substantial amount of 

buried ‘‘dormancy fees’’ while many 

consumers will have lost the chance for 

reimbursement because they long ago 

threw out their seemingly worthless gift 

cards in frustration.2

Gift cards have become enormously 

popular with consumers and generated 

nearly $28 billion in sales during the 

2006 holiday season.3 Gift card 

dormancy fees and expiration dates are 

material restrictions that affect the value 

of the cards. These restrictions must be 

clearly disclosed so that consumers can 

make informed decisions, whether they 

are purchasing the cards or receiving 

them as a gift. 

The proposed order settles the 

Commission’s allegations that Kmart 

deceptively advertised its gift cards by, 

among other things, misrepresenting the 

existence of any expiration dates or fees 

associated with the cards. Not only did 

Kmart claim that the gift cards could be 

used ‘‘like cash at all Kmart locations,’’

but its Web site also affirmatively 

misled consumers by stating that the 

Kmart gift cards ‘‘never expire.’’ We 

agree that Kmart’s alleged conduct 

justifies the order’s injunctive 

provisions. 

But we believe the order should go 

further. It should require Kmart to 

disgorge the profits of its unlawful 

behavior, provide more complete 

consumer redress, or a combination of 

both.4 More than three decades ago, in 

sponsoring the Magnuson-Moss Act 

extending the Commission’s authority 

under Section 19 to obtain monetary 

remedies, Senator Magnuson explained 

that the Commission cannot ‘‘rely 

merely upon a slap of the violator’s 

wrist to maintain fair play in the 

marketplace’’ and that ‘‘[a] mere ceaseand-desist order has frequently let a 

wrongdoer keep his ill-gotten gains.’’ 5

The same rationale holds true today. 

In this case, Kmart deducted 

dormancy fees from consumers’ gift 

cards. It failed to give adequate notice. 

In many instances, Kmart’s actions 

rendered unused or partially used cards 

valueless, at significant monetary 

benefit to Kmart but considerable 

monetary detriment to consumers. The 

proposed consent order, in our opinion, 

stops the deceptive practices but does 

not completely cure the consumer 

injury or fully excise Kmart’s ill-gotten 

gains. Pursuant to the order, Kmart may 

not assess additional dormancy fees on 

previously activated gift cards and must 

reimburse previously assessed 

dormancy fees if consumers complain 

and can provide the gift card number. 

Many consumers no doubt already have 

thrown out their gift cards and will have 

no remedy under this settlement. 

Moreover, the order does not require 

Kmart automatically to restore 

previously deducted dormancy fees 

(absent consumer inquiries) or disgorge 

the windfall profits it made from these 

fees. Although Kmart’s reimbursement 

practices have been improved by the 

Commission’s efforts, in our opinion the 

refund policy, without additional 

monetary relief, is still too little, too 

late. 

We commend staff for pursuing 

Kmart’s failure to disclose its gift card 

dormancy fees and for challenging 

Kmart’s affirmative misrepresentations 

that its gift cards do not expire. For the 

foregoing reasons, however, we 

respectfully dissent in part from the 

proposed order. 

[FR Doc. E7–4798 Filed 3–15–07; 8:45 am] 

BILLING CODE 6750–01–P 

FEDERAL TRADE COMMISSION 

[File No. 061 0026] 

Missouri Board of Embalmers and 

Funeral Directors; Analysis of 

Agreement Containing Consent Order 

To Aid Public Comment 

AGENCY: Federal Trade Commission. 

ACTION: Proposed consent agreement. 

SUMMARY: The consent agreement in this 

matter settles alleged violations of 

Federal law prohibiting unfair or 

deceptive acts or practices or unfair 

methods of competition. The attached 

Analysis to Aid Public Comment 

describes both the allegations in the 

draft complaint and the terms of the 

consent order—embodied in the consent 

agreement—that would settle these 

allegations. 

DATES: Comments must be received on 

or before April 9, 2007. 

ADDRESSES: Interested parties are 

invited to submit written comments. 

Comments should refer to ‘‘Missouri 

Board of Embalmers and Funeral 

Directors, File No. 061 0026,’’ to 

facilitate the organization of comments. 

A comment filed in paper form should 

include this reference both in the text 

and on the envelope, and should be 

mailed or delivered to the following 

address: Federal Trade Commission/ 

Office of the Secretary, Room 135–H, 

600 Pennsylvania Avenue, NW., 

Washington, DC 20580. Comments 

containing confidential material must be 

filed in paper form, must be clearly 

labeled ‘‘Confidential,’’ and must 

comply with Commission Rule 4.9(c). 

16 CFR 4.9(c) (2005).1 The FTC is 

requesting that any comment filed in 

paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. Comments that do not 

contain any nonpublic information may 

instead be filed in electronic form as 

part of or as an attachment to e-mail 

messages directed to the following email box: consentagreement@ftc.gov. 

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. All timely and responsive 


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12616 Federal Register / Vol. 72, No. 51 / Friday, March 16, 2007 / Notices 

2 4 CSR 120–2.060(18). 

3See Mo. Rev. Stat. § 333.251 (2005). The at-issue 

regulation was revised during the course of the 

investigation and published in 20 CSR 2120–

2.060(18)(C) effective September 2006. 

4The FTC’s Funeral Rule, which was 

promulgated by the Commission in 1982 and 

revised in 1994, requires providers of funeral goods 

and services to give consumers itemized lists of 

funeral goods and services that not only provide 

price and descriptions, but also contain specific 

disclosures. The Funeral Rule removed the primary 

industry restraint on consumer choice (packageonly funeral goods and service pricing) and makes 

clear that consumers may select and purchase only 

the goods and services they want. See 59 FR 1592 

(1994). 

5 59 FR at 1603–04. 

6Pa. Funeral Directors Ass’n, Inc. v. FTC, 41 F.3d 

81, 91 (3d Cir. 1994). See also Memorandum of Law 

of Amicus Curiae The Federal Trade Commission, 

Powers v. Harris, Case No. CIV–01–445–F (W.D. 

Okla. Aug. 29, 2002). 

7Craigmiles v. Giles, 312 F.3d 220, 222, 228 (6th 

Cir. 2002). 

public comments, whether filed in 

paper or electronic form, will be 

considered by the Commission, and will 

be available to the public on the FTC 

Web site, to the extent practicable, at 

http://www.ftc.gov. As a matter of 

discretion, the FTC makes every effort to 

remove home contact information for 

individuals from the public comments it 

receives before placing those comments 

on the FTC Web site. More information, 

including routine uses permitted by the 

Privacy Act, may be found in the FTC’s 

privacy policy, at http://www.ftc.gov/ 

ftc/privacy.htm. 

FOR FURTHER INFORMATION CONTACT: 

Mark D.S. Peterson (202–326–3731), Joel 

Christie (202–326–3297), or Grace Kwon 

(202–326–2560), Bureau of Competition, 

600 Pennsylvania Avenue, NW., 

Washington, DC 20580. 

SUPPLEMENTARY INFORMATION: Pursuant 

to section 6(f) of the Federal Trade 

Commission Act, 38 Stat. 721, 15 U.S.C. 

46(f), and § 2.34 of the Commission 

Rules of Practice, 16 CFR 2.34, notice is 

hereby given that the above-captioned 

consent agreement containing a consent 

order to cease and desist, having been 

filed with and accepted, subject to final 

approval, by the Commission, has been 

placed on the public record for a period 

of thirty (30) days. The following 

Analysis to Aid Public Comment 

describes the terms of the consent 

agreement, and the allegations in the 

complaint. An electronic copy of the 

full text of the consent agreement 

package can be obtained from the FTC 

Home Page (for March 9, 2007), on the 

World Wide Web, at http://www.ftc.gov/ 

os/2007/03/index.htm. A paper copy 

can be obtained from the FTC Public 

Reference Room, Room 130–H, 600 

Pennsylvania Avenue, NW., 

Washington, DC 20580, either in person 

or by calling (202) 326–2222. 

Public comments are invited, and may 

be filed with the Commission in either 

paper or electronic form. All comments 

should be filed as prescribed in the 

ADDRESSES section above, and must be 

received on or before the date specified 

in the DATES section. 

Analysis of Agreement Containing 

Consent Order To Aid Public Comment 

The Federal Trade Commission has 

accepted for public comment an 

Agreement Containing Consent Order 

with the Missouri Board of Embalmers 

and Funeral Directors (‘‘the Board’’ or 

‘‘Respondent’’). The agreement settles 

charges that the Board violated Section 

5 of the Federal Trade Commission Act, 

15 U.S.C. 45, through particular acts and 

practices described below. The 

Agreement has been placed on the 

public record for thirty (30) days for 

receipt of comments from interested 

members of the public. Comments 

received during this period will become 

part of the public record. After thirty 

(30) days, the Commission will review 

the agreement and the comments 

received, and will decide whether it 

should withdraw from the agreement or 

make the proposed Order final. 

The purpose of this analysis is to 

facilitate comment on the proposed 

consent Order. This analysis does not 

constitute an official interpretation of 

the agreement and proposed Order, and 

does not modify the terms in any way. 

Further, the proposed consent Order has 

been entered into for settlement 

purposes only, and does not constitute 

an admission by the proposed 

Respondent that it violated the law or 

that the facts alleged in the Complaint 

against the Respondent (other than 

jurisdictional facts) are true. 

I. The Respondent 

Respondent is the sole licensing 

authority for the practices of funeral 

directing and embalming in the State of 

Missouri. It is authorized to promulgate, 

adopt and enforce rules and regulations 

governing and defining those practices. 

Respondent is able to seek a court order 

to enjoin any person from engaging or 

offering to engage in any act that 

requires a license from the Board. The 

unlicensed practice of funeral directing 

or embalming in Missouri may be 

prosecuted as a class A misdemeanor. 

At the time it adopted the regulation 

at issue in the proposed complaint, the 

Board was composed of five (5) licensed 

funeral directors, all of whom competed 

in the sale of at-need funeral caskets to 

consumers in Missouri. 

II. The Conduct Addressed by the 

Proposed Consent Order 

The proposed Complaint alleges that 

Respondent violated Section 5 of the 

Federal Trade Commission Act by 

unlawfully restraining competition in 

the retail funeral casket market in the 

State of Missouri by promulgating a 

regulation that defined the practice of 

funeral directing to include selling atneed funeral merchandise. 

The at-issue regulation stated: ‘‘No 

person other than a duly licensed and 

registered funeral director may make the 

following at-need arrangements with the 

person having the right to control the 

incidents of burial: * * * (C) sale or 

rental to the public of funeral 

merchandise, services or 

paraphernalia.’’ 2 Under the laws of the 

State of Missouri, however, licensing 

qualifications and conditions for 

persons practicing or offering to practice 

funeral directing and embalming do not 

apply to anyone engaged simply in the 

furnishing of at-need burial receptacles 

to the public.3

The proposed Complaint alleges that 

the Board’s regulation had 

anticompetitive effects by discouraging 

non-licensed persons from selling 

funeral caskets to the public in 

Missouri, depriving consumers of the 

benefits of price competition, and 

reducing consumer choices concerning 

the purchase of funeral caskets. 

The Commission has previously 

found that funeral director conduct that 

limits entry by non-licensed casket 

sellers harms competition. In its 1994 

review of the Funeral Rule,4 the 

Commission found that funeral-directorimposed ‘‘casket handling fees’’

excluded competition from third-party 

casket sellers, and the record evidence 

indicated that the fees ‘‘prevent[ed] 

potential price competition and 

reduce[d] consumer choice.’’ 5 The 

Commission further found that ‘‘the 

long-term effect of [banning these fees] 

will be increased competition in the 

casket market such that prices will 

eventually go down and all consumers 

will pay less.’’ 6

The courts have likewise found that 

state laws prohibiting the sale of caskets 

by non-licensed persons harm 

competition. The Sixth Circuit 

concluded that a Tennessee state law 

forbidding anyone but state licensed 

funeral directors from selling caskets 

imposed ‘‘a significant barrier to 

competition in the casket market’’ and 

‘‘harm[ed] consumers in their 

pocketbooks.’’ 7 A district court in 

Oklahoma found that ‘‘[a]s long as 

independent sellers stay in the market, 

casket sales from independent sources 

* * * place downward pressure on 


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Federal Register / Vol. 72, No. 51 / Friday, March 16, 2007 / Notices 12617 

8Powers v. Harris, 2002 WL 32026155 at *6 (W.D. 

Okla. Dec. 12, 2002). 

9Casket Royale, Inc. v. Mississippi, 124 F.Supp. 

2d 434, 440 (S.D. Miss. 2000). 

10Mo. Rev. Stat. § 333.251 (2005). 

casket prices as a result of increased 

competition.’’ 8 A district court 

reviewing a similar statute in 

Mississippi also concluded that such 

requirements result in less price 

competition and consumer choice in 

selecting a casket.9

The Missouri statute that created the 

Board and grants it the authority to act 

was not intended to displace 

competition in the sale of funeral 

merchandise with regulation. Indeed, it 

appears that Missouri intended to 

preserve price competition with respect 

to the retail sale of funeral caskets by 

excepting from application of the atneed funeral statute ‘‘any person 

engaged simply in the furnishing of 

burial receptacles for the dead.’’ 10

III. Terms of the Proposed Consent 

Order 

The Board has signed a consent 

agreement containing the proposed 

consent Order. The proposed Order 

would prevent the Board from 

prohibiting, restricting, impeding or 

discouraging any person from engaging 

in the sale or rental to the public of 

funeral merchandise or burial 

receptacles for the dead, directly or 

indirectly, or through any rule, 

regulation, policy, or conduct. 

The proposed Order requires the 

Board to publish in the Newsletter of 

the Board of Embalmers and Funeral 

Directors, the full text of Mo. Rev. Stat. 

§ 333.251 (2005), the Order, and an 

accompanying statement that: ‘‘The 

Rules and Regulations of the Board of 

Embalmers and Funeral Directors do not 

prohibit persons not licensed as funeral 

directors or embalmers from selling 

caskets, burial receptacles or other 

funeral merchandise to the public in the 

State of Missouri.’’

The proposed Order also requires the 

Board to display an advisory on its 

public website stating that it has settled 

FTC allegations regarding restrictions 

and prohibitions on the sale of funeral 

merchandise or caskets, and to provide 

a link to the Board’s website that 

contains the full text of Mo. Rev. Stat. 

§ 333.251 (2005), a link to Mo. Code 

Regs. Ann. tit. 20, § 2120–2.060 (2006), 

and a link to this Order. The proposed 

Order further requires the Board to 

publish notice of the Order and 

settlement in three consecutive issues of 

Missouri Funeral Directors’ Association 

Magazine and in the Missouri State 

Board of Embalmers and Funeral 

Directors Rules and Regulations, 

Chapters 333, 436, 193, 194, which shall 

be provided to all licensees within one 

(1) year from the date the Order 

becomes final. 

The proposed Order includes 

requirements that the Board notify the 

Commission at least thirty (30) days 

prior to any filing with the Missouri 

Secretary of State of any Proposed Order 

of Rulemaking concerning the Board’s 

rules or regulations, or prior to 

proposing any change in Respondent 

that may affect compliance obligations. 

The proposed Order contains standard 

provisions requiring the filing of regular 

written reports of the Board’s 

compliance with the terms of the Order 

for each of the next five years. The 

Order will expire in ten (10) years. 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. E7–4799 Filed 3–15–07; 8:45 am] 

BILLING CODE 6750–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

National Institute for Occupational 

Safety and Health; Final Effect of 

Designation of a Class of Employees 

for Addition to the Special Exposure 

Cohort 

AGENCY: National Institute for 

Occupational Safety and Health 

(NIOSH), Department of Health and 

Human Services (HHS). 

ACTION: Notice. 

SUMMARY: The Department of Health and 

Human Services (HHS) gives notice 

concerning the final effect of the HHS 

decision to designate a class of 

employees at the Allied Chemical 

Corporation Plant in Metropolis, 

Illinois, as an addition to the Special 

Exposure Cohort (SEC) under the Energy 

Employees Occupational Illness 

Compensation Program Act of 2000. On 

February 1, 2007, as provided for under 

42 U.S.C. 7384q(b), the Secretary of 

HHS designated the following class of 

employees as an addition to the SEC: 

Atomic Weapons employees who were 

monitored or should have been monitored for 

exposure to ionizing radiation while working 

at Allied Chemical Corporation Plant in 

Metropolis, Illinois, from January 1, 1959 

through December 31, 1976, and who were 

employed for a number of work days 

aggregating at least 250 work days or in 

combination with work days within the 

parameters established for one or more other 

classes of employees in the Special Exposure 

Cohort. 

This designation became effective on 

March 3, 2007, as provided for under 42 

U.S.C. 7384l(14)(C). Hence, beginning 

on March 3, 2007, members of this class 

of employees, defined as reported in 

this notice, became members of the 

Special Exposure Cohort. 

FOR FURTHER INFORMATION CONTACT: 

Larry Elliott, Director, Office of 

Compensation Analysis and Support, 

National Institute for Occupational 

Safety and Health (NIOSH), 4676 

Columbia Parkway, MS C–46, 

Cincinnati, OH 45226, Telephone 513–

533–6800 (this is not a toll-free 

number). Information requests can also 

be submitted by e-mail to 

OCAS@CDC.GOV. 

Dated: March 12, 2007. 

John Howard, 

Director, National Institute for Occupational 

Safety and Health. 

[FR Doc. 07–1274 Filed 3–15–07; 8:45 am] 

BILLING CODE 4163–19–M 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

National Institute for Occupational 

Safety and Health; Final Effect of 

Designation of a Class of Employees 

for Addition to the Special Exposure 

Cohort 

AGENCY: National Institute for 

Occupational Safety and Health 

(NIOSH), Department of Health and 

Human Services (HHS). 

ACTION: Notice. 

SUMMARY: The Department of Health and 

Human Services (HHS) gives notice 

concerning the final effect of the HHS 

decision to designate a class of 

employees at the Harshaw HarvardDenison Plant in Cleveland, Ohio, as an 

addition to the Special Exposure Cohort 

(SEC) under the Energy Employees 

Occupational Illness Compensation 

Program Act of 2000. On February 1, 

2007, as provided for under 42 U.S.C. 

7384q(b), the Secretary of HHS 

designated the following class of 

employees as an addition to the SEC: 

Atomic Weapons employees who were 

monitored or should have been monitored 

while working at the Harshaw HarvardDenison Plant located at 1000 Harvard 

Avenue in Cleveland, Ohio from August 14, 

1942 through November 30, 1949, and who 

were employed for a number of work days 

aggregating at least 250 work days or in 

combination with work days within the 

parameters established for one or more other 

classes of employees in the Special Exposure, 

Cohort. 

This designation became effective on 

March 3, 2007, as provided for under 42 


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