b'1186\n\nFEDERAL TRADE COMMISSION DECISIONS\nVOLUME 140\nCommission Advisory Opinion\n\nThe Honorable Dan Flynn\nTexas State Representative\nHouse District 2\nP.O. Box 2910\nAustin, TX 78768-2910\n\nDear Representative Flynn:\nThis responds to your letter dated April 12, 2005, in which you\nrequest a Commission opinion on the lawful construction of the\nterm \xe2\x80\x9ccash advance item\xe2\x80\x9d as used in the FTC\xe2\x80\x99s Funeral Rule, 16\nC.F.R. \xc2\xa7 453.1(b) (\xe2\x80\x9cthe Funeral Rule\xe2\x80\x9d or \xe2\x80\x9cthe Rule\xe2\x80\x9d).\nSpecifically, you question whether a Texas trial court is correct in\nruling that \xe2\x80\x9call goods or services purchased from a third-party\nvendor, even though not included on the contract, are \xe2\x80\x98cash\nadvances\xe2\x80\x99\xe2\x80\x9d under the Funeral Rule.1 Correct interpretation of the\n\n1\n\nIt is our understanding that your request is prompted by the\nMay 2004 decision granting partial summary judgment in Hijar v.\nSCI Texas Funeral Services, Inc., No. 2002-740, Order Granting\nPlaintiff\xe2\x80\x99s Motion for Partial Summary Judgment and Establishing\nIssues Under Rule 166a(e), T.R.C.P. and Denying Defendants\xe2\x80\x99\nSecond Motion for Summary Judgment (County Court at Law No.\n3, El Paso, May 21, 2004), in which the court held that the\ndefendant violated the cash advance disclosure provision of the\nFuneral Rule by failing to disclose each fee charged to the plaintiff\nfor the cost of advancing funds on behalf of the plaintiff for goods\nand services purchased from third parties and resold to plaintiff.\nThe Court in Hijar based its holding on an interpretation of the\nterm \xe2\x80\x9ccash advance item\xe2\x80\x9d that would include the following items,\nwhen purchased from a third party and resold to persons arranging\nfunerals: \xe2\x80\x9cdirect cremation; immediate burial; forwarding\nremains; receiving remains; embalming; refrigeration; other\npreparation; transportation; casket/cremation casket; alternative\ncontainer; outside enclosure; clothing/shroud; memorial booklet;\nservice folders/prayer cards; acknowledgment cards; flowers;\n\n\x0cFEDERAL TRADE COMMISSION DECISIONS\nVOLUME 140\n\n1187\n\nCommission Advisory Opinion\n\nterm \xe2\x80\x9ccash advance item\xe2\x80\x9d is important because it determines the\nbreadth and impact of certain substantive provisions of the\nFuneral Rule that employ that term.\nThe Commission believes that the court is incorrect in ruling\nthat all goods or services purchased from a third-party vendor are\ncash advance items. This interpretation sweeps far too broadly,\npotentially bringing within its scope every component good or\nservice that comprise a funeral. This was not and is not the\nCommission\xe2\x80\x99s intention in the \xe2\x80\x9ccash advance\xe2\x80\x9d provisions of the\nRule. In our opinion, the term \xe2\x80\x9ccash advance item\xe2\x80\x9d in the Rule\napplies only to those items that the funeral provider represents\nexpressly to be \xe2\x80\x9ccash advance items\xe2\x80\x9d or represents by implication\nto be procured on behalf of a particular customer and provided to\nthat customer at the same price the funeral provider paid for them.\nThis conclusion is based on the analysis set forth below.\nAnalysis\nThe Funeral Rule2 defines the term \xe2\x80\x9ccash advance item\xe2\x80\x9d as\nfollows:\n[a]ny item of service or merchandise described to a\n\nshipping container; crematory services; crucifix; escorts; certified\ncopies; public transportation; outside funeral director\xe2\x80\x99s expense;\nvault installation; clergy/religious facility; musicians or singers;\nhairdressing; and permits.\xe2\x80\x9d\n2\n\nThe Commission promulgated the original Funeral Rule on\nSeptember 24, 1982, making it fully effective on April 30, 1984.\n47 Fed. Reg. 42260 (Sept. 24, 1982). The Commission amended\nthe Rule in 1994, following a lengthy review proceeding, and that\n1994 amended Rule continues to be in effect. 59 Fed. Reg. 1592\n(Jan. 11, 1994). All references to \xe2\x80\x9cthe Funeral Rule\xe2\x80\x9d or \xe2\x80\x9cthe\nRule\xe2\x80\x9d are to the 1994 amended Rule, currently in effect.\nReferences to the 1982 Rule are to \xe2\x80\x9cthe original Rule.\xe2\x80\x9d\n\n\x0c1188\n\nFEDERAL TRADE COMMISSION DECISIONS\nVOLUME 140\nCommission Advisory Opinion\n\npurchaser as a \xe2\x80\x9ccash advance,\xe2\x80\x9d \xe2\x80\x9caccommodation,\xe2\x80\x9d \xe2\x80\x9ccash\ndisbursement,\xe2\x80\x9d or similar term. A cash advance item is also\nany item obtained from a third party and paid for by the\nfuneral provider on the purchaser\xe2\x80\x99s behalf. Cash advance\nitems may include, but are not limited to: cemetery or\ncrematory services; pallbearers; public transportation; clergy\nhonoraria; flowers; musicians or singers; nurses; obituary\nnotices; gratuities; and, death certificates. 16 C.F.R.\n\xc2\xa7 453.1(b).\nThe first sentence of this definition quite clearly states that any\nitem a funeral provider describes expressly using the words \xe2\x80\x9ccash\nadvance\xe2\x80\x9d item (or similar words or phrases) is, in fact, a cash\nadvance item for purposes of the Funeral Rule. The second\nsentence broadens the definition to cover situations when a funeral\nprovider purports to act \xe2\x80\x9con behalf\xe2\x80\x9d of a particular customer, more\nas that customer\xe2\x80\x99s procurement agent rather than as a retailer\nserving the general public. The third sentence merely provides an\nillustrative list of the various types of goods or services that\nfuneral providers typically may treat as cash advance items.\nCertain substantive provisions in the Funeral Rule employ the\ndefined term \xe2\x80\x9ccash advance item.\xe2\x80\x9d Specifically, \xc2\xa7\xc2\xa7 453.3(f)(1)(ii)\nand 453.3(f)(2) require a funeral provider who is charging a\ncustomer more for a cash advance item than the funeral director\npaid for it to disclose that material fact (i.e., the existence of a\nmark-up, but not the amount) to the customer on the statement of\nfuneral goods and services selected by the customer.3\n\n3\n\nAlso, the statement of goods and services that the funeral\nprovider must give to the customer at the conclusion of the\ndiscussion of funeral arrangements must itemize any cash advance\nitems that are part of the agreed-upon funeral arrangements, and\nmust state the price, or if not known, the estimated price, of those\nitems. The Rule states: \xe2\x80\x9c(These prices must be given to the\nextent then known or reasonably ascertainable. If the prices are\nnot known or reasonably ascertainable, a good faith estimate shall\n\n\x0cFEDERAL TRADE COMMISSION DECISIONS\nVOLUME 140\n\n1189\n\nCommission Advisory Opinion\n\nThe Commission included these \xe2\x80\x9ccash advance\xe2\x80\x9d disclosure\nprovisions in the Rule to address a practice in the marketplace that\nthe Commission had identified as being harmful to consumers.\nSpecifically, some funeral providers misrepresented that they\nwould obtain goods or services for their customers at cost, when\nin fact these funeral providers profited by marking up the price of\nthe items.4 The Final Staff Report on the original Funeral Rule,\nwhich is part of the rulemaking record on which the Commission\nrelied in adopting the Rule, succinctly describes the problem:\nCash advance charges are completely separate from, and\nadditional to, the funeral director\xe2\x80\x99s own charges. They\nusually appear on the funeral bill under such headings as\n\nbe given and a written statement of the actual charges shall be\nprovided before the final bill is paid.)\xe2\x80\x9d 16 C.F.R.\n\xc2\xa7 453.2(b)(5)(i)(B).\n4\n\nThis mark-up was achieved both directly and indirectly. As\nnoted in the Final Staff Report, \xe2\x80\x9c[s]ometimes, [the mark-up] has\nbeen accomplished by simply inflating the amount of the charge\non the customer\xe2\x80\x99s bill. In other instances, the same effect has\nbeen achieved by the funeral home securing some form of\nkickback or rebate from the supplier of the cash advance item\nafter charging the customer the full price.\xe2\x80\x9d Final Staff Report\n(June 1978) at 249. Marking up cash advance items was not an\nuncommon practice. The Commission noted, in adopting the\noriginal Rule, that \xe2\x80\x9cthe evidence demonstrates that many\nindividual funeral providers do charge mark-ups for cash\nadvances. In a 1976 survey of California funeral directors, 12% of\nthe 291 respondents admitted charging \xe2\x80\x98in excess of the amount\nactually advanced for any items of service labeled as \xe2\x80\x98cash\nadvances\xe2\x80\x99 or \xe2\x80\x98accommodation items.\xe2\x80\x99 [The National Funeral\nDirectors Association\xe2\x80\x99s] annual survey of funeral homes indicates\nthat, on a national level, funeral homes are receiving a 5% markup on cash advance items. . . .\xe2\x80\x9d 47 Fed. Reg. 42279 (Sept. 24,\n1982).\n\n\x0c1190\n\nFEDERAL TRADE COMMISSION DECISIONS\nVOLUME 140\nCommission Advisory Opinion\n\n\xe2\x80\x9caccommodations,\xe2\x80\x9d \xe2\x80\x9ccash disbursements,\xe2\x80\x9d and \xe2\x80\x9ccash\nadvanced for your convenience.\xe2\x80\x9d This terminology clearly\nindicates the basic conception, both by the funeral home and\nthe consumer; that is, that the family is simply reimbursing\nthe funeral director for cash outlays. The traditional use of\nsuch terms, as well as the obvious fact that these items are\nbeing provided by the third party, create the expectation that\nthe amount billed is the same as that paid or owed. . . . Our\ninvestigation revealed, however that some funeral homes\nhave generated extra revenues by charging their customers\nmore for cash advance items than the funeral home actually\npaid out.5\nBased on the record evidence of this problem, as summarized and\nanalyzed in the Final Staff Report, the Commission adopted\n\xc2\xa7 453.3(f) to remedy it. As noted in the Statement of Basis and\nPurpose issued by the Commission when it adopted the original\nRule, \xc2\xa7 453.3(f) is intended to prevent consumers from being led\nto believe, incorrectly, that the cost to the consumer for a\nparticular item is the same as the cost to the funeral provider:\n[C]onsumers believe that items labeled \xe2\x80\x9ccash advances\xe2\x80\x9d . . .\nare being provided at cost. There is an implicit\nrepresentation that the cash advance transaction involves\nmerely a forwarding of cash by the funeral provider and a\nsubsequent dollar-for-dollar reimbursement by the consumer\n. . . . The use of this term in connection with items such as\nflowers, obituary notices, etc., which the consumers could\neasily obtain from a third party, creates the expectation that\nthe amount billed the consumer is the same as the amount\npaid by the funeral provider. Given this expectation, the\nfailure to disclose the existence of a mark-up is a deceptive\npractice.6\n\n5\n\nFinal Staff Report (June 1978) at 249.\n\n6\n\n47 Fed. Reg. 42278-42279 (Sept. 24, 1982).\n\n\x0cFEDERAL TRADE COMMISSION DECISIONS\nVOLUME 140\n\n1191\n\nCommission Advisory Opinion\n\nThe Commission found that, in describing a particular item to a\ncustomer, a funeral provider\xe2\x80\x99s express use of the term \xe2\x80\x9ccash\nadvance item\xe2\x80\x9d (or alternative formulations such as\n\xe2\x80\x9caccommodation\xe2\x80\x9d or \xe2\x80\x9ccash disbursement\xe2\x80\x9d) implies that the cost\nto the customer for that item is the same as the cost to the funeral\nprovider. Thus, in cases where a funeral provider describes an\nitem in this manner, yet charges the customer more for it than the\nfuneral provider paid for it, the Commission requires a corrective\ndisclosure to prevent the customer from being deceived.\nSpecifically, in such a circumstance, the Funeral Rule requires\nthat the following disclosure be placed on the statement of funeral\ngoods and services selected: \xe2\x80\x9cWe charge you for our services in\nobtaining: (specify cash advance items).\xe2\x80\x9d7 This is the scenario\naddressed by the first sentence in the \xe2\x80\x9ccash advance item\xe2\x80\x9d\ndefinition.\nThe second sentence of the definition, indicating that \xe2\x80\x9c[a] cash\nadvance item is also any item obtained from a third party and paid\nfor by the funeral provider on the purchaser\xe2\x80\x99s behalf,\xe2\x80\x9d is in the\nnature of a \xe2\x80\x9cfencing-in\xe2\x80\x9d provision.8 The Commission\xe2\x80\x99s intention\nin including this sentence is to bring within the ambit of \xc2\xa7 453.3(f)\nany situation where a funeral provider might, without using the\nspecific term \xe2\x80\x9ccash advance,\xe2\x80\x9d offer to obtain an item for a\nparticular customer that the customer could obtain on her own \xe2\x80\x93\npurporting to act \xe2\x80\x9con behalf\xe2\x80\x9d of that customer, more as that\ncustomer\xe2\x80\x99s procurement agent than as a retailer serving the\ngeneral public. Specifically, the purpose of this fencing-in aspect\nof the definition is to deter the less scrupulous funeral provider\nfrom evading the Rule by eschewing express description of an\n\n7\n\n16 C.F.R \xc2\xa7 453.3(f)(2). The Rule also specifically prohibits\nthis type of affirmative misrepresentation. 16 C.F.R\n\xc2\xa7 453.3(f)(1)(i).\n8\n\nUnder the \xe2\x80\x9cfencing-in\xe2\x80\x9d doctrine, the FTC may frame a\nremedy which extends beyond the precise illegal conduct found.\nBristol-Myers Co. v. FTC, 738 F.2d 554, 561 (2d Cir. 1984).\n\n\x0c1192\n\nFEDERAL TRADE COMMISSION DECISIONS\nVOLUME 140\nCommission Advisory Opinion\n\nitem as a \xe2\x80\x9ccash advance item\xe2\x80\x9d (or alternative formulations), yet\nnevertheless conveying to a customer acting reasonably under the\ncircumstances that obtaining the item involves merely a\nforwarding of cash by the funeral provider and a subsequent\ndollar-for-dollar reimbursement by the customer. The\nCommission\xe2\x80\x99s intention, in sum, is that this part of the \xe2\x80\x9ccash\nadvance item\xe2\x80\x9d definition function to foreclose funeral providers\nfrom attempting to sidestep the strict letter of the Rule by using\nimplied misrepresentations rather than express ones.\nIn the absence of either the funeral provider\xe2\x80\x99s express\nrepresentation that an item is a \xe2\x80\x9ccash advance item\xe2\x80\x9d or implied\nrepresentations that the item is procured for a particular customer\nat the funeral provider\xe2\x80\x99s cost, a consumer, acting reasonably under\nthe circumstances, would not believe that the amount he or she is\nbilled for an item is the same as the amount the funeral provider\npays its supplier. Indeed, such a belief would be contrary to a\nreasonable consumer\xe2\x80\x99s most elementary experience in the\neveryday marketplace. In these circumstances, the funeral\nprovider is generally acting like any retailer who purchases goods\nor services from third parties for resale to consumers.\nThe Commission believes that reasonable consumers generally\nunderstand that the price charged by a retail seller \xe2\x80\x93 including\nfuneral providers \xe2\x80\x93 includes profit.9 Thus, the corrective\ndisclosure about cash advance items that \xc2\xa7 435.3(f)(2) requires is\nunnecessary when the funeral provider does not mislead the\ncustomer through either express representations that the item is a\n\xe2\x80\x9ccash advance item\xe2\x80\x9d (or alternative formulations), or implied\nrepresentations that the customer is paying no more for an item\nthan the amount the funeral provider paid for it.\n\n9\n\nAs the Commission noted in the Statement of Basis and\nPurpose for the original Rule, \xe2\x80\x9cThe Commission does not suggest\nthat it is improper for funeral providers to profit on items obtained\nfrom third parties. It is clear that it is wholly proper for providers\nto do so.\xe2\x80\x9d 47 Fed. Reg. 42278 (Sept. 24, 1982).\n\n\x0cFEDERAL TRADE COMMISSION DECISIONS\nVOLUME 140\n\n1193\n\nCommission Advisory Opinion\n\nIt is worth noting that the text and structure of the Rule overall\nreflect the fundamental distinction between cash advance items\nand non-cash advance items. For items that are typically non-cash\nadvance items, the Rule requires disclosure of the retail price of\nspecified goods and services offered for sale by a funeral\nprovider.10 An obvious example is the Rule\xe2\x80\x99s treatment of\ncaskets, for which it requires a separate price list containing only\nthe funeral provider\xe2\x80\x99s retail price.11 Therefore, items that must\nappear on a funeral provider\xe2\x80\x99s price list12 would not trigger\n\n10\n\nFuneral providers must \xe2\x80\x9c[i]nclude on the [general] price list,\nin any order, the retail prices (expressed either as the flat fee, or as\nthe price per hour, mile or other unit of computation) and the\nother information specified below for at least each of the\nfollowing items, if offered for sale . . . .\xe2\x80\x9d The rule then lists:\nforwarding of remains to or receiving remains from another\nfuneral home; direct cremation; immediate burial; transferring\nremains to the provider\xe2\x80\x99s premises; embalming and other\npreparation of the body; use of the provider\xe2\x80\x99s facilities and staff\nfor viewing, for a funeral ceremony, or for a memorial service; use\nof the provider\xe2\x80\x99s equipment and staff for a graveside service; the\nuse of the provider\xe2\x80\x99s hearse or limousine; and the provider\xe2\x80\x99s basic\nservices fee. 16 C.F.R. \xc2\xa7 453.2(b)(4). (Emphasis supplied.)\n11\n\n\xe2\x80\x9cThe funeral provider must offer the [casket price] list upon\nbeginning discussion of, but in any event before showing caskets.\nThe list must contain at least the retail prices of all caskets and\nalternative containers offered which do not require special\nordering, enough information to identify each, and the effective\ndate for the price list.\xe2\x80\x9d 16 C.F.R. \xc2\xa7 453.2(b)(2)(i). (Emphasis\nsupplied.)\n12\n\nSection 453.2(b)(4)(i)(C) of the Rule sets forth the\nminimum information that must be included on a funeral\nprovider\xe2\x80\x99s general price list. These items include: caskets; outer\nburial containers; forwarding of remains to or receiving remains\nfrom another funeral home; direct cremation; immediate burial;\n\n\x0c1194\n\nFEDERAL TRADE COMMISSION DECISIONS\nVOLUME 140\nCommission Advisory Opinion\n\nthe cash advance disclosures unless the funeral provider expressly\nrepresents the items as \xe2\x80\x9ccash advance items\xe2\x80\x9d (or alternative\nformulations) or represents by implication that items can be\nprocured on behalf of the particular customer and provided at the\nsame price the funeral provider paid for them.\nAccordingly, the Commission wishes to be clear that the term\n\xe2\x80\x9ccash advance item\xe2\x80\x9d does not apply to every good or service that a\nfuneral provider obtains from a third party. This overbroad\ninterpretation, which potentially brings within its scope every\ncomponent good or service of a funeral, does not comport with the\nCommission\xe2\x80\x99s intention in promulgating the \xe2\x80\x9ccash advance\xe2\x80\x9d\nprovisions of the Rule. Rather, based on a review of the original\nRule and the rulemaking record, the Commission finds that the\nterm \xe2\x80\x9ccash advance item\xe2\x80\x9d in the Rule applies only to those items\nthat the funeral provider represents expressly to be \xe2\x80\x9ccash advance\nitems\xe2\x80\x9d or represents by implication to be procured on behalf of a\nparticular customer and provided to that customer at the same\nprice the funeral provider paid for them.\n\ntransferring remains to the provider\xe2\x80\x99s premises; embalming and\nother preparation of the body; use of the provider\xe2\x80\x99s facilities and\nstaff for viewing, for a funeral ceremony, or for a memorial\nservice; use of the provider\xe2\x80\x99s equipment and staff for a graveside\nservice; the use of the provider\xe2\x80\x99s hearse or limousine; and the\nprovider\xe2\x80\x99s basic services fee.\n\n\x0c'


b'UNITED STATES OF AMERICA\n\nFEDERAL TRADE COMMISSION\nWASHINGTON, D.C. 20580\n\nDivision of Marketing Practices\n\nJuly 22, 2004\nVIA FAX AND FIRST CLASS MAIL\nBrian D. Dautch\nDirector of Government Affairs\nThe Council for Marketing & Opinion Research\n6931 Arlington Road, Suite 308\nBethesda, MD 20814\nDear Mr. Dautch:\nThis letter responds to your request for a staff advisory opinion filed on April 26, 2004,\non behalf of the Council for Marketing & Opinion Research (\xe2\x80\x9cCMOR\xe2\x80\x9d). In your letter, you ask\nvarious questions concerning access to the National Do Not Call Registry by members of the\nmarket or opinion research industry. In summary, your questions concern: (1) the exempt status\nof survey research firms from the Do Not Call provisions of the Telemarketing Sales Rule\n(\xe2\x80\x9cTSR\xe2\x80\x9d), 16 C.F.R. \xc2\xa7 310.4(b)(1)(iii); (2) whether exempt firms may access the National\nRegistry; and (3) the effect such access may have on the exempt status of such firms. This letter\nwill answer each of your questions in turn.\nAs an initial matter, you ask the FTC to reconfirm that the \xe2\x80\x9csurvey research industry as a\nwhole consists of organizations that are Exempt Organizations (\xe2\x80\x9cEOs\xe2\x80\x9d) from the Do Not Call\nlist.\xe2\x80\x9d That is true as a general proposition. Specifically, the Do Not Call provisions of the TSR\napply to \xe2\x80\x9csellers\xe2\x80\x9d and \xe2\x80\x9ctelemarketers\xe2\x80\x9d engaged in \xe2\x80\x9ctelemarketing,\xe2\x80\x9d as those terms are defined in\nthe Rule. \xe2\x80\x9cTelemarketing\xe2\x80\x9d is defined, in part, as \xe2\x80\x9ca plan, program, or campaign which is\nconducted to induce the purchase of goods or services or a charitable contribution. . . .\xe2\x80\x9d\n16 C.F.R. \xc2\xa7 310.2(cc). As a result, survey research firms calling consumers for the sole purpose\nof conducting a survey are not engaged in \xe2\x80\x9ctelemarketing.\xe2\x80\x9d Therefore, such firms are not\nrequired to comply with the Do Not Call provisions of the TSR or access the National Do Not\nCall Registry. On the other hand, callers purporting to take a \xe2\x80\x9csurvey,\xe2\x80\x9d but also calling to induce\nthe purchase of goods or services, are engaged in telemarketing and must comply with the TSR,\nincluding the Do Not Call provisions.\nYour second question concerns whether exempt organizations may access the National\nRegistry. Specifically, you ask for confirmation of the following statement:\nSurvey research organizations may choose to obtain a Subscription Account\nNumber (\xe2\x80\x9cSAN\xe2\x80\x9d), for the purpose of satisfying data vendors who insist that\nmarket and opinion researchers have a SAN. Many data vendors and end users\ndemand this information from our organizations before they will sell our\norganizations any information, or contract for services.\n\n\x0cExempt organizations are allowed to access the National Registry voluntarily in order to\navoid calling consumers who do not want to receive telemarketing calls. However, all\norganizations accessing the National Registry must certify, under penalty of law, that they are\ngaining access solely to comply with the provisions of the TSR \xe2\x80\x9cor to otherwise prevent\ntelephone calls to telephone numbers on the registry.\xe2\x80\x9d 16 C.F.R. \xc2\xa7 310.8(e). As a result, the\nanswer to your query depends on the type of information that survey research organizations\nobtain from data vendors. If survey research organizations want to avoid calling consumers with\nregistered telephone numbers, and they obtain a \xe2\x80\x9cscrubbed\xe2\x80\x9d list of contacts from the data vendor,\ni.e., a list that excludes registered telephone numbers, then the survey research organizations\nmust obtain a SAN prior to being provided that scrubbed list.\nOn the other hand, data vendors have no basis under FTC rules to require exempt\norganizations to obtain a SAN prior to selling telephone lists to those organizations unless those\norganizations, based on their own requirements, ask for lists that are \xe2\x80\x9cscrubbed\xe2\x80\x9d of numbers\nincluded in the National Registry. In other words, if an exempt organization wants to call\nconsumers whose numbers are included in the National Registry, the organization is not\nprohibited by law from doing so.1 Data vendors or list providers should understand that not all\ncompanies that call consumers are required to access the National Do Not Call Registry. As\ndiscussed above, bona fide survey research firms not engaged in \xe2\x80\x9ctelemarketing,\xe2\x80\x9d as defined by\nthe TSR, are exempt entities not required to access the registry. So are firms that call consumers\nsolely to induce charitable contributions, or for political fund raising.2 In addition, firms that call\nonly persons with whom they have an established business relationship as defined by the TSR,\n16 C.F.R. \xc2\xa7 310.2(n), or from whom they have obtained express written agreement to call,\n16 C.F.R. \xc2\xa7 310.4(b)(1)(iii)(B)(i), also do not have to access the National Registry. Thus, data\nvendors may sell \xe2\x80\x9cunscrubbed\xe2\x80\x9d lists to exempt organizations without requiring those\norganizations to obtain a SAN. Data vendors, of course, may choose to sell only lists that are\n\xe2\x80\x9cscrubbed\xe2\x80\x9d of numbers in the National Registry. In that case, an exempt organization that wants\nto obtain an \xe2\x80\x9cunscrubbed\xe2\x80\x9d list likely will seek to employ a data vendor that does not impose such\nrestrictions.\nThe third part of your request for a staff advisory opinion concerns a number of issues\ninvolving the effect accessing the National Registry by an exempt organization may have on the\nexempt status of such entities. For purposes of this portion of this advisory opinion, we will\nassume that the exempt organization is properly accessing the National Registry, i.e., solely to\nprevent telephone calls to telephone numbers on the Registry.\n\n1\n\nIn fact, those organizations that want \xe2\x80\x9cun-scrubbed\xe2\x80\x9d lists may not obtain a SAN,\ngiven the need to complete the certification. As the certification makes clear, the only\npermissible purpose to access the registry is to prevent calls to consumers who have registered.\n2\n\nOn the other hand, for-profit telemarketers calling to solicit charitable\ncontributions are required to comply with the company-specific do not call provisions of the\nTSR, 16 C.F.R. \xc2\xa7 310.4(b)(1)(iii)(A), not the National Registry requirements.\n-2-\n\n\x0cYou ask whether exempt organizations that obtain a SAN may access the National\nRegistry at their discretion, \xe2\x80\x9cas infrequently as they wish,\xe2\x80\x9d without such access having an effect\non their exempt status. That is correct. Exempt organizations are, by definition, not required by\nlaw to abide by the Do Not Call regulations. When they access the National Registry, they can\ndo so only for the purpose of preventing telephone calls to telephone numbers on the registry.\nHowever, if they decide to access the registry to prevent calls to registered consumers only at\ncertain times of year, or only on behalf of some exempt clients but not others, they are free to do\nso. Accessing the National Registry will not require them to continually do so in the future, or on\nbehalf of all clients with which they do business. The choice is entirely up to the exempt\norganization.\nOn the other hand, you ask whether an exempt organization may obtain a SAN but choose\nnever to access the National Registry. If an exempt organization purchases a scrubbed list, it has\naccessed the registry indirectly, and must obtain a SAN. It need not ever access the registry\ndirectly. If the organization purchases an unscrubbed list, it would appear to have no reason to\nobtain a SAN in the first place, other than, possibly, to placate the demands of a data vendor. As\ndiscussed above, that is an improper use of the National Registry, and any such demand by a data\nvendor is unsupported by the TSR. Rather than obtaining a SAN in such a case, an exempt\norganization may instead want to search for another data vendor that will provide the requested\ninformation without demanding a SAN.\nYou also ask if an exempt organization that accesses the National Registry \xe2\x80\x9caccidentally\ncalls someone on the Registry,\xe2\x80\x9d whether such accidental call will subject the exempt entity to\npotential enforcement actions or fines by the FTC. As discussed above, an exempt organization\nis not required to access the National Registry. The FTC has allowed exempt organizations that\nchoose to prevent calls to consumers with registered telephone numbers to access the registry for\nthat purpose. Assuming that an exempt organization\xe2\x80\x99s access was for a proper purpose, that\naccess will not make the exempt organization liable for an \xe2\x80\x9caccidental\xe2\x80\x9d call made to a registered\nnumber. The same is true if the exempt organization is accessing the registry on behalf of an\nexempt client, and the client accidentally calls a registered number.\nPlease be advised that this opinion is based exclusively on all the information furnished\nin your request. This opinion applies only to the extent that actual company practices conform to\nthe material submitted for review. Please be advised further that the views expressed in this\nletter are those of the FTC staff. They have not been reviewed, approved, or adopted by the\nCommission, and they are not binding upon the Commission. However, they do reflect the\nopinions of the staff members charged with enforcement of the Telemarketing Sales Rule.\nSincerely,\n\nDavid M. Torok\nStaff Attorney\n-3-\n\n\x0c'


b"43i\nUNITD STATES OF At\\1ERICA\n\nFEDERAL TRADE COMMSSION\nWASHINGTON, D. C. 20580\n\nJune 22 , 2004\n\nT. Scott Giligan , Esq.\nGilligan Law Offices\n3734 Eastern Avenue\n\nCincinnati , OR 45226\nRe: Receipt for Third- Pary\n\nCaskets\n\nDear Scott:\n\nThis is in response to your letter of June 9 , 2004 , regarding further clarification of the\nFTC's position on providing receipts for third- pary caskets. As you indicate , the FTC staff's\nposition continues to be that which was first stated in 1988: The Funeral Rule requires that\nfuneral homes sign a receipt acknowledging delivery of third- party caskets, Any other action\nwhich would act as a deterrent to a consumer who wishes to purchase goods from another party\nmay violate the Rule s prohibition in Section 453A(b)(1) against conditioning the furnishing of\nany funeral goods or services to a person aranging a funeral upon the purchase of any other\nfuneral good or service,\n\nYou note that the receipt for the third- pary casket that is presented to funeral directors\noften require that the funeral home acknowledge that the casket has been inspected and that the\ncondition of the casket is acceptable. You have advised funeral homes to sign only the receipt\nthat acknowledges delivery and receipt of the casket , but not to sign any receipt that also includes\na representation regarding acceptance of the casket. You indicate that you have provided this\nadvice because the funeral home is not a pary to the contract and , therefore , are not in a position\nto legally accept the merchandise , much less be sure that the merchandise is what the consumer\npurchased, You include a copy of a Receipt of Third Pary Merchandise form which you have\n\nsuggested that the funeral homes provide to third-pary casket companies that are delivering\ncaskets, You ask whether the use of the NFA receipt form would be acceptable under the\nFuneral Rule.\n\nThe NFA' s Receipt of Third Pary Merchandise enclosed with your letter appears to be\nidentical to the one you submitted in 1999 as Appendix B to your comments on the Rule Review,\nThe form states that the funeral director acknowledges receipt of the merchandise , but that the\nacknowledgment does not constitute acceptance of the merchandise or its condition , which may\nonly be given by the purchaser. The form also provides a space where the funeral home can note\nany visible defects or conditions that were present at time of delivery.\n\n\x0cAs you know , Section 453A(b)(I) prohibits funeral providers from requiring consumers\nto purchase goods that they do not want. The Commssion staff has interpreted that provision to\nunreasonablv burden the consumer s choice to\nalso mean that the funeral provider must not\n\npurchase an item from a pary other than the funeral home. Among the practices that may\n453A(b)(I) are requiring the consumer to be present when the casket is delivered and\nviolate\nrefusing to sign for delivery of the casket. It is my opinion that the NFA\n\nReceipt of Third Pary\n\nMerchandise does not constitute an unreasonable burden on the consumer, as long as it is not\nused as a justification for requiring the consumer to be present when the merchandise is delivered\nor for otherwise unreasonably requiring the consumer s physical presence to inspect or accept the\nmerchandise. I\n\nI hope this information is helpful to you. Please note that the views expressed in this\nletter are those of the FTC staff. They have not been reviewed , approved or adopted by the\nCommssion , and they are not binding on the Commission or any individual Commssioner.\nHowever , they reflect the opinions of the staff members who are charged with enforcement of the\n3115 (email\nFuneral Rule. If you have any questions , please feel free to contact me at (202) 326cdanielson 0!ftc. gov\nSincerely,\n\nCarole L Danielson\nSenior Investigator and\nFuneral Rule Coordinator\n\nFor example , it may be a violation on 453A(b)(I) forfuneral providers to refuse\nto use third-pary merchandise in conducting agreed- upon funeral arangements until the\nconsumer or his/heuepresentative physically inspects and/or accepts such merchandise.\n\n\x0c"


b'lJNI1 t V STATES OF AMERICA\n\nFEDERAL TRADE COMMISSION\nWASHINGTON. D C. 20580\n\nJune 17,2004\n\nJonathan L. Kempner\nPresident and Chief Executive Officer\nMortgage Bankers Association\n1919 Pennsylvania Avenue, N.W.\nWashington, D.C. 20006-3404 ,\nRe:\n\nStipulated Final Judgrnent and Order as to Fairbanks Capital Corp. and Fairbanks\nCapital Holding Corp, reached in United States of America v. Fairbanks Capital\nCorp., et al., Civil Action No. 03-12219 (DPW) (D. Mass.)\n\nDear Mr. Kempner:\nThank you for your letter regarding the Comission\'s recent settlement with Fairbanks\nCapital Holding Corp. and Fairbanks Capital Corp. (collectively, "Fairbanks"). You have asked\nfor the Commission\'s position regarding the scope of the Order and the application of the\nprovisions contained therein to other mortgage servicing companies that were not a party to the\nagreement. I am pleased to provide you with the following staff guidance. Please understand\nthat these are the views of the staff and do not constitute a formal Commission opinion.\nThe Federal Trade Commission often enters into consent orders with individuals and\ncompanies that the Commission has reason to believe have violated the FTC Act or other laws\nenforced by the Commission. In general, consent orders enjoin the defendants from violating the\nlaw in the future, for example, by prohibiting the alleged unfair or deceptive practices.\nMoreover, to protect the public from those who have demonstrated a propensity to violate the\nlaw, these orders often contain provisions that place additional constraints upon a wrongdoer that\ndo not necessarily apply to other businesses that have not engaged in violations. See FTC v.\nColgate-Palmolive Co., 380 U.S. 374, 395 (1965) ("The Commission is not limited to\nprohibiting the illegal practices in the precise form in which it is found to have existed in the\npast. Having been caught violating the [FTC] Act, respondents must expect some reasonable\nfencing in."). These "fencing-in" provisions have legal force only against the defendants who\nsigned the order and anyone with whom those defendants act in concert. The Commission\'s\nconsent order with Fairbanks reflects the Commission\'s views of the specific remedies necessary\nto resolve the particular allegations against that company.\n\n\x0cJonathan L. Kempner\nMay 18,2004\nPage 2\n\nBy way of example, Part V of the Fairbanks order enjoins the defendants from assessing\nor collecting certain fees - that may be otherwise authorized and permitted by law - except as\nprovided in the order. This section includes specific conditions and time frames for the\nimposition of such fees. The provision is not intended to impose a Federal rule or standard\nrequiring all mortgage servicers to abide by the enumerated requirements. Rather, it serves the\ndual purposes of protecting consumers from further deception by the defendants, and providing\nspecific guidance to the defendants on complying with the order. It should be noted that this\nprovision expires after five years.\nThank you for your inquiry.\n\nSincerely,\n\nociate Director\nision of Financial Practices\n\n\x0c'


b'May 6, 2004\n\nMr. Joel Winston\nAssociate Director\nDivision of Financial Practices\nFederal Trade Commission\n601 New Jersey Ave., N.W.\nWashington, D.C. 20580\nRE: Stipulated Final Judgment and Order as to Fairbanks Capital Corp. and\nFairbanks Capital Holding Corp. reached in United States of America v.\nFairbanks Capital Corp. et. al.\nDear Mr. Winston:\nSince the Federal Trade Commission\'s November 12, 2003 announcement of its\nsettlement with Fairbanks Capital Holding Corp. and Fairbanks Capital Corp.\n(hereinafter collectively as "Fairbanks"), some advocates have suggested to members\nof the Mortgage Bankers Association ("MBA")1 that the Commission has created federal\nrules relating to the servicing of mortgage loans that are set forth in the Stipulated Final\nJudgment and Order as to Fairbanks Capital Corp. and Fairbanks Capital Holding Corp.\n(hereinafter "the Order"). These advocates suggest that a mortgage servicer that fails\nto follow the rules set forth in the Order will be subject to legal liability.\nMBA and its members have concerns regarding this assertion because several\nprovisions of the Order appear to be either inconsistent with federal regulations, judicial\nopinions, and/or state law or not supported by those regulations, opinions, or state laws.\nWhile a detailed analysis of the Order is beyond the scope of this letter, we would be\nmore than happy to provide you with a detailed analysis of the provisions upon your\nrequest.\n\n1\n\nThe Mortgage Bankers Association (MBA) is the national association representing the real estate finance\nindustry, an industry that employs more than 400,000 people in virtually every community in the country.\nHeadquartered in Washington, D.C., the association works to ensure the continued strength of the nation\xe2\x80\x99s\nresidential and commercial real estate markets; to expand homeownership prospects through increased\naffordability; and to extend access to affordable housing to all Americans. MBA promotes fair and ethical\nlending practices and fosters excellence and technical know-how among real estate finance professionals\nthrough a wide range of educational programs and technical publications. Its membership of approximately\n2,700 companies includes all elements of real estate finance: mortgage companies, mortgage brokers,\ncommercial banks, thrifts, life insurance companies and others in the mortgage lending field. For additional\ninformation, visit MBA\xe2\x80\x99s Web site: www.mortgagebankers.org.\n\n\x0cMr. Joel Winston\nMay 6, 2004\nPage 2\n\nMBA and its members would appreciate you providing us with the Commission\'s\nposition regarding the scope of the Order and the application of the provisions\ncontained therein to other mortgage companies that were not a party to the agreement.\nIf you have any questions, do not hesitate to contact me at (202)557-2701.\nMost sincerely,\n\nJonathan L. Kempner\nPresident and Chief Executive Officer\n\n\x0c'


b'UNITED STATES OF AMERICA\n\nFEDERAL TRADE COMMISSION\nWASHINGTON, D.C. 20580\n\nOffice of the Secretary\n\nPUBLIC RECORD VERSION\nMay 24, 2004\nMr. Richard J. Stark, Esq.\nCravath, Swaine & Moore LLP\nWorldwide Plaza\n825 Eighth Avenue\nNew York, NY 10019-7475\nRe:\n\nIn the Matter of Bristol-Myers Squibb Company, Docket No. C-4076\n\nDear Mr. Stark:\nOn April 12, 2004, Bristol-Myers Squibb Company (\xe2\x80\x9cBMS\xe2\x80\x9d), pursuant to the\nrequirement of the second proviso to Paragraph XII of the above-referenced order (\xe2\x80\x9cOrder\xe2\x80\x9d) that\nit obtain from the Commission an advisory opinion related to specified settlements, submitted its\nproposed agreement with Teva Pharmaceuticals USA, Inc. (\xe2\x80\x9cTeva\xe2\x80\x9d) to settle their litigation over\nthe validity of BMS\xe2\x80\x99s patent for the drug Carboplatin. Specifically, as relevant to the proposed\nsettlement, Paragraph XII and its proviso prohibits BMS from:\n. . . being a party to any Agreement resolving or settling a Patent Infringement Claim in\nwhich:\nA.\n\nAn ANDA Filer receives anything of value; and\n\nB.\n\nThe ANDA Filer agrees not to research, develop, manufacture, market, or\nsell, the ANDA Product for any period of time.\n\nPROVIDED, HOWEVER, that nothing in this Paragraph XII shall prohibit:\n...\n(2)\n\nRespondent BMS from resolving or settling a Patent Infringement\nClaim after the Commission, in response to a request by\nRespondent BMS for an advisory opinion . . . determines that the\nsettlement Agreement would not raise issues under Section 5 of the\nFederal Trade Commission Act.\n\n\x0cIn the Matter of Bristol-Myers Squibb Company, Docket No. C-4076\nAdvisory Opinion of the Commission (Public Record Version)\n\nPage 2\n\nThis Order provision arose from BMS conduct that included an agreement to settle\ncertain patent litigation by paying the alleged infringer millions of dollars for the alleged purpose\nof eliminating competition from a generic drug. Paragraph XII of the Order therefore bars,\nunless an applicable proviso applies, such payments to an ANDA filer in exchange for an\nagreement not to market its product for some period of time.\nAccording to BMS, the proposed settlement with Teva that is the subject of this request\nfor an advisory opinion will be entered into to resolve an ANDA patent litigation concerning the\ndrug Carboplatin and U.S. Patent No. 4,657,927 (the \xe2\x80\x9c\xe2\x80\x98927 patent\xe2\x80\x9d),1 in which the U.S. Court of\nAppeals for the Federal Circuit vacated and remanded a district court determination on summary\njudgement that the \xe2\x80\x98927 patent was not invalid.2 BMS has filed a motion for a rehearing en banc.\nBMS has also informed the Commission that, although the \xe2\x80\x98927 patent expired on April 14,\n2004, the dispute with Teva is not moot, because BMS has filed with the Food and Drug\nAdministration (\xe2\x80\x9cFDA\xe2\x80\x9d) for pediatric exclusivity, which, if granted, would result in an additional\nsix months of exclusivity (\xe2\x80\x9cexclusivity period\xe2\x80\x99) for BMS. No company therefore could enter the\nCarboplatin for Injection market prior to the expiration of the exclusivity period, i.e., until\nOctober 14, 2004. The parties are, however, uncertain whether a final determination that the\n\xe2\x80\x98927 patent is invalid would affect the exclusivity period, and that uncertainty has led the parties\nto reach the proposed settlement.\nThe terms as proposed provide that BMS and Teva agree to dismiss the litigation and that\nas of June 24, 2004, BMS will appoint, and qualify under BMS\xe2\x80\x99s NDAs, Teva (or its designee)\nas a distributor of Carboplatin for Injection.3 Morever, Teva has the option to purchase\n[redacted] its requirements of BMS\xe2\x80\x99s NDA drugs from June 24, 2004, until [redacted], in\nexchange for sharing its profits with BMS. Finally, upon expiration of the exclusivity period, on\nOctober 14, 2004, Teva may begin to sell its ANDA drugs and cease to purchase the BMS NDA\ndrugs.\nUnlike the settlement that led to entry of the Order, in which BMS allegedly paid the\ngeneric challenger to defer entry beyond the date that would represent an otherwise reasonable\n\n1\n\nMemorandum Opinion and Order, Bristol-Myers Squibb Company and Research\nCorporation Technologies, Inc. v. Pharmachemie, B.V., C.A. No. 01-3751 (MLC) (D.N.J. July\n29, 2002).\n2\n\nDecision, Bristol-Myers Squibb Company and Research Corporation\nTechnologies, Inc. v. Pharmachemie B.V., Appeal No. 03-1077 (Fed. Cir. Mar. 17, 2004).\n3\n\nforms)).\n\nSee NDA 20-452 (ready to use forms); NDA 19-880 (lyophilized (freeze-dried\n\n\x0cIn the Matter of Bristol-Myers Squibb Company, Docket No. C-4076\nAdvisory Opinion of the Commission (Public Record Version)\n\nPage 3\n\nlitigation compromise,4 this settlement does not involve a payment to Teva in exchange for\nTeva\xe2\x80\x99s agreement not to enter the market. Thus, we presume that the entry date, three months\nprior to the expiration of the exclusivity period, reflects a reasonable assessment of BMS\xe2\x80\x99s and\nTeva\xe2\x80\x99s respective litigation positions.\nThe settlement agreement provides no mechanism for BMS to share supracompetitive\nprofits with Teva. Teva earns profits only by competing. Because Teva\xe2\x80\x99s payments to BMS\nlikely will reduce Teva\xe2\x80\x99s profits, Teva will have the incentive to bring its ANDA drug products\nto the market as soon as possible after the exclusivity period. Importantly, the settlement\nagreement does not prevent Teva from marketing its own product under its ANDA at any time\nafter October 14, 2004. Even while selling BMS\xe2\x80\x99s products, Teva retains the ability and\nincentive to price independently.\nThe Commission therefore has determined that the proposed agreement between BMS\nand Teva to settle the aforementioned litigation concerning the drug Carboplatin and the \xe2\x80\x98927\npatent does not raise issues under Section 5 of the Federal Trade Commission Act, and\naccordingly, BMS may enter the proposed settlement.\nBy direction of the Commission.\n\nDonald S. Clark\nSecretary\nSEAL:\n\n4\n\nSee also Opinion of the Commission, In the Matter of Schering-Plough\nCorporation et al., Docket No. 9297\n\n\x0c'