07/24/2014

Legal Report

By T. Scott Gilligan, OFDA General Counsel

As presented at the July 23, 2014 Board Meeting

1. INDIGENT DISPOSITION LAWSUIT. Turner and Sons Funeral Home in Hillsboro, Ohio challenged a Hillsboro ordinance passed by that city that would cap payments made by the city for indigent dispositions at $750. Hillsboro also sought to escape liability for indigent dispositions in the ordinance by declaring that the surrounding Liberty Township should pay for indigent dispositions instead of the city (countermanding a longstanding Ohio Attorney General’s Opinion). Fortunately, Turner and Sons was triumphant and the Hillsboro Municipal Court not only invalidated the ordinance, but also ordered Hillsboro to pay Turner and Sons for 4 indigent dispositions that Turner had performed, but which Hillsboro refused to pay because of the ordinance. This decision should help other Ohio funeral homes that encounter cities and townships that refuse to comply with their statutory obligations under Section 9.15 of the General Provisions of the Ohio Revised Code.  

2.   PENNSYLVANIA FUNERAL LICENSING CASE. As previously reported, a federal district judge overturned 11 provisions of Pennsylvania’s funeral licensing laws as unconstitutional. That judge’s decision was overturned by the Third Circuit Court of Appeals which reinstated all but one of the Pennsylvania funeral licensing law provisions. The one section of the law that remains overturned is Pennsylvania’s requirement that a funeral home name contain the name of the funeral director who is licensed to operate the funeral home. That provision, which is also found in Ohio’s funeral licensing law, was overturned as a violation of the First Amendment’s right to free speech.

The plaintiffs who lost in the Pennsylvania funeral licensing case are appealing the Third Circuit Court’s decision to the United States Supreme Court. The Supreme Court will decide sometime in the fall whether to accept the appeal of that case. Since the U.S. Supreme Court accepts less than 1% of cases for appeal, it is not likely that the case will be accepted for appeal.          

3. SAME SEX MARRIAGE.   There are currently 19 states that recognize same sex marriage. While federal district courts have found Ohio’s, Indiana’s and Kentucky’s prohibition on same sex marriage to be unconstitutional, those decisions are on hold while the Sixth Circuit Court of Appeals (which covers the states of Ohio, Kentucky, Indiana and Michigan) considers whether to uphold or reverse the federal district courts’ decisions. Ultimately, the case will proceed to the U.S. Supreme Court since there are currently five federal circuits dealing with the constitutionality of state restrictions on same sex marriage. In Ohio, funeral homes should continue to comply with the Ohio Constitution which prohibits the recognition of same sex marriage.

4. ALKALINE HYDROLYSIS. Idaho became the ninth state which legalized alkaline hydrolysis. The procedure is now permitted in Colorado, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Minnesota, and Oregon. In addition, California permits it by body donation programs, but not by funeral homes.  

5. NORTH CAROLINA BOARD OF DENTISTRY v. FTC. This case involves the FTC bringing an antitrust action against the North Carolina Board of Dentistry which licenses dentists in that state. The Board of Dentistry went after teeth whitening services in North Carolina that were not owned by dentists. They essentially drove them out of business. The FTC charged the Board with violations of the antitrust laws. The Board defended itself by arguing that it was a state agency which is immune from antitrust laws. 

The FTC claimed that the Board was acting as a “private actor” in the interest of dentists as business persons and not as an agency protecting the health of the consumer. The Fourth Circuit Court of Appeals agreed with the FTC and found that the Board could be charged with antitrust violations. In making this holding, the Fourth Circuit cited the fact that the Board is directly elected by dentists in the state and that there is no other government agency which supervises the activities of the Board.

This case is currently before the U.S. Supreme Court on the issue of whether the FTC can sue the Board as a private actor. This could be important for state funeral boards around the country, especially if the members of the state boards are elected by funeral directors in the state or if the board’s activities are not supervised by another state agency. It is doubtful that the case would have any direct impact on the Ohio Board of Embalmers and Funeral Directors since its members are appointed by the Governor and the Attorney General represents the Board, and thereby imposes, some control over Board activities.

6. OVERTIME REGULATIONS. Ohio is one of two states that require funeral directors and embalmers to have a bachelor’s degree. As such, Ohio funeral directors and embalmers qualify as “professionals” under Department of Labor regulations and may be paid as salaried employees rather than hourly employees. However, in March President Obama directed the Department of Labor to draft changes to the federal wage and hour regulations to require certain salaried employees that are currently exempt from the overtime rules to be paid overtime. The Department of Labor has indicated that it will be issuing a proposed rulemaking in November, 2014 to carry out the President’s directive. NFDA and OFDA will be reviewing the rulemaking announcement as soon as it is issued to determine whether it proposes to require professionals such as Ohio funeral directors or embalmers to be paid overtime for work in excess of 40 hours per week.