02/24/2014

Pennsylvania Case May Impact Ohio Law on Funeral Home Names

By T. Scott Gilligan, OFDA General Counsel

            Nearly five years ago, a group of Pennsylvania funeral homes and cemeteries launched a federal court challenge to a dozen key provisions of Pennsylvania’s funeral licensing law. They were initially successful when a federal district court invalidated 11 of the 12 provisions as unconstitutional. However, that victory was short-lived as the United States Third Circuit Court of Appeals issued an opinion on February 19, 2014 that reversed nearly all of the district court’s ruling. As a result, most of Pennsylvania funeral licensing law will be reinstated.

            Although the Third Circuit reversed most of the district court’s original holdings, it did uphold one ruling from the trial court. It agreed with the district court that Pennsylvania’s prohibition against funeral homes utilizing trade names violates the right of free speech provided by the First Amendment.

            While the ruling from the Third Circuit Court of Appeals (which covers the states of Pennsylvania, New Jersey and Delaware) would not be binding on Ohio, the decision would carry substantial weight if a similar constitutional challenge is brought against Sections 4717.06(B)(3) and 4717.11(B) of the Ohio Revised Code which governs the names of Ohio funeral homes. Ohio, like Pennsylvania and eight other states, requires that the funeral home only be operated under the name of the funeral director actually in charge and ultimately responsible for the funeral home. In addition, Section 4717.11(B) of the Revised Code allows a funeral home to retain the name of former licensees who have died or who are no longer associated with the funeral home as long as the name of the current licensee is added to the funeral home name within a two-year period.

            In the Pennsylvania challenge, the state defended its funeral home name law by arguing that it protects consumers against deception and being misled as to who owns the funeral home. By restricting the name of the funeral home to the funeral director actually in charge, Pennsylvania argued that the consumer knows with whom he or she is dealing with and who is accountable.

            The Third Circuit, in its analysis of the Pennsylvania’s funeral licensing law, first recited the standard by which it would review this limitation on the freedom of speech. For the Pennsylvania law to survive constitutional challenge, the State had to demonstrate that the law alleviated the cited harm to a material degree.

            The Third Circuit found Pennsylvania’s claim that the law was necessary so that consumers knew with whom they were dealing to be undercut by the provision in Pennsylvania law which allowed predecessors’ names to be used in the funeral home name. By permitting the retention of a predecessor’s name in the funeral home name, the consumer would be unaware of with whom he or she is dealing. The Court also questioned why the use of trade names in the funeral industry would mislead or deceive consumers. It concluded that Pennsylvania’s rationale for the law was insufficient and that the law constituted an unconstitutional infringement on the freedom of speech.  

            While, as noted above, the Third Circuit’s ruling is not binding in Ohio, it is a persuasive argument that will carry weight if a constitutional challenge is brought against Sections 4717.06 and 4717.11 of the Ohio Revised Code. Since Ohio, like Pennsylvania, allows a former licensee’s name to appear in the name of the funeral home, Ohio would be hard pressed to defend the law by arguing that Ohio consumers need to know with whom they are dealing.

            The Third Circuit’s opinion will certainly be studied by the Ohio Board of Embalmers and Funeral Directors. Whether the Board seeks a change in Sections 4717.06(B)(2) and 4717.11(B) based on the ruling remains to be seen. Likewise, whether the Board will be able to enforce Ohio’s funeral home name requirements against a funeral home owner that wants to use a trade name is an open question. OFDA will continue to monitor the situation and keep members updated.