UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580

Division of Marketing Practices

Craig Tregillus Direct Dial: (202) 326-2970
ctregillus@ftc. gov Facsimile: (202) 326-3395
March 21, 2007
T. Scott Gilligan, Esq.
Gilligan Law Offices
3734 Eastern Avenue

Cincinnati, OH 45226
Re: Requiring Consumer Inspection of Third-Party Caskets
Dear Mr. Gilligan:

You have requested clarification of a staff opinion on the FTC Funeral Rule
(“Funeral Rule” or “Rule”) issued on June 22, 2004, which noted that “it may be a violation of
§ 453.4(b)(1) for funeral providers to refuse to use third-party merchandise in conducting agreed-
upon funeral arrangements until the consumer or his/her representative physically inspects and/or
accepts such merchandise.”

As you know, Section 453.4(b)(1) of the Rule prohibits a funeral provider from “tying” or
conditioning the purchase of any funeral good or service offered by the provider on the purchase
of any other funeral good or service from the provider. The purpose of this prohibition is to
prevent funeral providers from requiring consumers to purchase goods or services from them that
the consumer does not want. Thus, it has been the consistent position of FTC staff since 1988, as
your request recognizes, that the refusal of a funeral provider to sign an acknowledgment of
delivery of a third-party casket is tantamount to a refusal to accept delivery, thereby unreasonably
burdening a consumer’s right to use a third-party casket and effectively preventing its use in
violation of § 453.4(b)(1) of the Rule. Staff Opinions of March 10, 1988, and May 12, 2004.

Ina letter issued on June 22, 2004, FIC staff concluded that the use by funeral providers
of a Receipt of Third Party Merchandise form to acknowledge delivery of third-party caskets
would not violate the Funeral Rule. The form, which was prepared and disseminated by the
National Funeral Directors Association (“NFDA”), states that the funeral provider acknowledges
receipt of the merchandise, but that the acknowledgment does not constitute acceptance of the
merchandise or its condition, which can only be given by the purchaser. The form also provides
a space where the funeral provider can note any visible defects or conditions that were present at
time of delivery.

At the same time, the staff opinion made it clear that we interpret Section 453.4(b)(1) as
prohibiting funeral providers from “unreasonably” burdening a consumer’s choice to purchase an


item from a third-party, such as by refusing to sign for the delivery of a casket or requiring the
consumer to be present when it is delivered. Consequently, the staff’s conclusion that the use of
the NFDA Receipt would not “unreasonably burden” consumer choice was conditioned on the
caveat that the Receipt not be “used as a justification for requiring the consumer to be present
when the merchandise is delivered or for otherwise unreasonably requiring the consumer’s
physical presence to inspect or accept the merchandise.”

Your request for clarification of the staff opinion argues that funeral providers may be
liable if the wrong casket is delivered and then used by the provider without first requiring an
inspection by the purchaser. You state that funeral providers should be allowed to “require a
consumer to inspect the casket prior to placing a body in it,” because once a body is placed in a
casket, it cannot be reused or resold.

In fact, Funeral providers can choose any number of other mechanisms to protect
themselves from liability, but they cannot require consumers to inspect the casket. For example,
they could ask the consumer to provide the make, model and a description of the casket and
telephone the consumer if it appears that the wrong casket has been delivered, or if the casket
appears damaged. Indeed, such a practice would appear to mesh neatly with the NFDA
Guidelines for Handling Third Party Caskets, which advise funeral providers who receive a
defective or damaged third-party casket to “immediately alert the family and indicate to them the
defect or damage noted.”!

Absent clear evidence that funeral providers lack the means to avoid legal liability other
than to require an inspection of third-party caskets or other merchandise by the purchaser, staff is
not inclined to reverse its prior opinion, as your request for clarification would have us do. It
remains staff’s opinion that a funeral provider’s refusal to use third party merchandise until the
consumer has inspected it may place an unreasonable burden on consumer choice, in violation of
Section 453.4(b)(1) of the Rule.

Please note that the views expressed in this letter are those of the FIC staff. They have
not been reviewed, approved, or adopted by the Commission, and they are not binding on the
Commission or any individual Commissioner. However, they do reflect the views of FTC staff

Sincerely,

charged with enforcement of the Funeral Rule.
7D ob
coin hoane

Funeral Rule Coordinator

' This letter does not express an opinion on any portion of the NFDA Guidelines

submitted with your request except to the extent the Guidelines suggest that funeral providers
may require consumers to inspect caskets purchased from third-party dealers, contrary to the
views expressed in this opinion.