SCI, Funeral Board Make Nice

For most of the last five years, the Texas Funeral Service Commission has been battling with the world's largest funeral services company, Houston-based Service Corporation International, over allegations that the company violated numerous state regulations in the late 1990s. But the commission and SCI are now working on the same side – and their position is not pro-consumer. The TFSC recently filed an amicus curiae brief that could help SCI escape from what could be an enormously expensive class-action lawsuit.

In May, an El Paso judge ruled in favor of plaintiff David Hijar in a case filed against the funeral giant. Hijar paid an SCI-affiliated firm, Martin Funeral Home, to handle the funeral of his son; his suit claims SCI defrauded him by not disclosing that it was paying third-party affiliates for work – such as embalming his son's body. By not doing so, the company may have violated both federal and state laws, which require funeral homes to tell consumers when they are paying a third party for a service or a piece of merchandise on behalf of the consumer.

This "funeral rule" was at the heart of the TFSC's long fight with SCI. In 1999, the agency fired its Executive Director Eliza May, shortly after she launched a wide-ranging investigation into dozens of embalmings that were done by independent contractors working outside of SCI funeral homes. That same year, a group of commissioners recommended that SCI be fined $445,000. In January of this year, under the TFSC's new executive director, Chet Robbins, the agency agreed to let SCI pay administrative penalties of just $21,000 to settle the allegations.

Now, nine months later, the TFSC and the funeral giant are taking a legal position that supports the status quo in the funeral industry – and prevents consumers from seeing how much profit funeral homes are making on certain services, like embalming. Harry Whittington, the longtime chairman of the TFSC (a Bush appointee in 1999), contends that the agency intervened in the lawsuit because it "was in the interest of the industry and the consumer." The judge in the Hijar case has not issued a final decision in the lawsuit.