S.C. Funeral Board Shuts Lid on Casket-Sale Competition

April 7, 2014

Investigative Reports

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By RICK BRUNDRETT

Caskets

Think twice before you go into the funeral business.

In November, a task force appointed by Gov. Nikki Haley and charged with reviewing business regulations in South Carolina, recommended, among other things, that the state repeal laws dealing with the permitting of retail casket sales.

The report contended that the state Board of Funeral Service (BFS), made up mainly of funeral home directors, has “used and interpreted these regulations in a manner that appears not related to public safety as much as it might be construed as economic protectionism.”

“The repeal of these regulations should ease the burden for small businesses or individuals that wish to make or sell low budget funeral merchandise,” the report said.

The report came out after The Nerve detailed the struggles of Lexington County resident Mike White, who became a target of the state when he was accused of selling $300 “pre-need” wooden caskets without a state permit.

The BFS had pushed White to get a retail sales permit, which would have required, among other things, that he publicly display at least six caskets at his business location and have “clean and accessible” public bathrooms.

Last year, the S.C Department of Consumer Affairs threatened to take White to the state Administrative Law Court, where he faced a maximum $10,000 fine, if he didn’t agree to pay a $750 administrative fine to settle the case. The agency eventually dropped its case against White.

So what happened with the funeral-industry recommendations made in November by Haley’s 10-member Regulatory Review Task Force?

In a little-known, conference-call meeting in January, the Board of Funeral Service, a division of the S.C. Department of Labor, Licensing and Regulation (LLR), which is part of Haley’s Cabinet, rejected the task force’s recommendations, which included repealing the section of state law (Section 40-19-265 (C) of the S.C. Code of Laws) dealing with the issuance of a permit for a funeral “retail sales outlet.”

“At that meeting, the Board voted to continue regulating Retail Sales Outlets,” LLR attorney Holly Beeson said in a letter forwarded last week to Gere Fulton, board president of a not-for-profit consumer advocacy organization known as the Funeral Consumers Alliance of South Carolina.

State law allows the BFS to issue a permit for a retail sales outlet if the applicant “submits to and successfully passes an inspection approved by the board.” The criteria established by the BFS, according to board records, include:

  • Six adult caskets on display;
  • Prices clearly marked on caskets;
  • A casket price list;
  • Clean and accessible public restrooms; and
  • “General conditions” of the facility.

In an interview last week with The Nerve, Fulton said he was never notified of the Jan. 21 BFS meeting, even though he had met earlier with Beeson, another LLR attorney, and Doris Cubitt, the BFS administrator, on Jan. 6. He also said he testified at a Regulatory Review Task Force hearing last July 12.

“I have been working with that board for 14 years, and I have seen no semblance that they’re there to protect the public,” Fulton told The Nerve. “They’re there basically to protect the interests of the funeral industry.”

The Nerve last week left written or phone messages for Cubitt; Thomas Baker II, a licensed funeral director in Kershaw and the BFS president; and Mark Lutz, the Regulatory Review Task Force chairman. None responded.

In a written response last week to The Nerve, LLR spokeswoman Lesia Kudelka said that “it is our understanding that legislation on this issue may be filed as early as next week,” though she provided no specifics.

A legislative source told The Nerve that under one of the bills to be introduced with a package of legislation addressing the task force’s recommendations, those wanting to sell caskets at the retail level would have to register with the state but would not have to go through the more restrictive permitting process.

Any bills filed this week or later, however, will face an uphill battle of passing this year, given a May 1  “crossover” deadline for one chamber to pass legislation to the other chamber. This year is the second of a two-year legislative cycle, which means any legislation not passed this year by the General Assembly would have to be reintroduced next year.

Upon request, Kudelka on Friday provided The Nerve with a copy of the agenda of the Jan. 21 BFS meeting but said she could not immediately provide a copy of the meeting minutes because it had “not yet been approved” by the BFS – more than two months after the meeting in question.

In a follow-up email to Kudelka, The Nerve requested the immediate release of the minutes, pointing out that the state Freedom of Information Act doesn’t require formal approval of minutes for public release. Under the FOIA, meeting minutes “shall be available within a reasonable time after the meeting.”

Kudelka did not respond to The Nerve’s follow-up request by publication of this story.

A computer screen shot of the BFS online meeting calendar on Dec. 30 shows that the Jan. 21 meeting was not listed as a regular 2014 meeting. Online meeting minutes show no meetings in January since 2000.

“The Governor asked certain boards to consider reforms proposed by the Regulatory Review Task Force,” Kudelka said in an email response. “She asked that they do so by January 31st. The Board called a special meeting to do so.”

Fulton, a retired University of Toledo professor who taught law and public health issues, contended that the nine funeral-industry members of the BFS have a vested interest in keeping lower-cost competitors out of the marketplace. A 2012 survey by Fulton’s organization of 26 Columbia-area funeral homes found that the average price of caskets sold by funeral homes ranged from $957 to $11,088, with the highest-priced casket listed at $32,700.

In comparison, caskets advertised this weekend on the website of retail giant Wal-Mart ranged from $899 to $2,998. Fulton said Wal-Mart doesn’t display caskets at its S.C. stores likely because it would have to get state permits to do so.

“The casket is the most expensive item in a funeral,” Fulton said. “The markup (by funeral homes) often is 400 to 600 percent.”

Under state law, the 11 members of the Board of Funeral Service are appointed by the governor for three-year terms; nine members must have been licensed as funeral directors and embalmers for at least five years preceding their appointment and must be “actively employed or actively engaged in the funeral service profession.” The other two board members must be from the “general public not connected with a funeral service establishment.”

The South Carolina Funeral Directors Association and South Carolina Morticians Association may recommend six and three members, respectively, to the BFS, according to the law.

Baker, the BFS president, remains on the board even though his term expired in August 2012, online records show. State law says board members can serve “until their successors are appointed and qualify,” meaning they can be held in “holdover” status.

Besides Baker, five other funeral-industry board members are in “holdover” status, according to online records. One general public seat is vacant.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.