Again, in 1974, a similar path was sought by the industry. On April 18, 1974, the National Funeral Directors Association submitted for the Commission's consideration voluntary "Suggested Guides for the Practice of Funeral Service." On April 30, 1974, National Selected Morticians informed the Commission that it endorsed the proposed Guides as submitted. Yet in the interval of twenty months, neither the Commission nor its staff informed either industry group of the reason, if any, why these Guides are not a viable means of achieving compliance in the funeral service field.

In the circumstances of the funeral field, there are major jurisdictional problems implicit in the mandatory Trade Regulation Rule approach. NSM is confident the facts will confirm that the Commission does not have jurisdiction over the vast majority of funeral firms in the United States. The acts and practices enumerated in the proposed Trade Regulation Rule are purely local in nature and character and neither are in nor substantially affect interstate commerce except in a minority of instances in which a funeral firm is so close to a state line that its acts and practices cross that line or where the firm is part of an interstate chain. The mere fact, if true, as asserted in the FTC Staff Memorandum, that many funeral firms have interstate merchandise suppliers would not, as a matter of law, establish that local funeral practices constitute a burden on interstate commerce.

That funeral services are essentially local has been the position of the courts, and significantly, of Congress and even more significantly, of the Federal Trade Commission itself. Nothing has changed in the nature of funeral sales in the last ten years to alter this essentially local attribute and to give the Commission any valid basis to revise its previous conclusion.

As previously pointed out, in 1964, the Commission, because of the local nature of funerals, rejected commencement of a proposed trade practices conference proceeding for the Funeral Service Industry and shelved further consideration of the Trade Practice Rules for the Funeral Service Industry that had been submitted by National Selected Morticians. As noted, in its letter of rejection to National Selected Morticians, the Commission stated that "the problems of the funeral service industry can best be handled at local levels."

Even Congress has underscored that funerals are not involved with and do not substantially affect interstate commerce. In the 1966 report of the Subcommittee on Antitrust and Monopoly of the Senate Judiciary Committee, entitled "Antitrust Aspects of the Funeral Industry" and based on the 1964 Congressional investigation of the funeral industry, Senators Dirksen and Hruska expressed support for the position articulated by Senator Ervin, who stated:

I heartily concur with the subcommittee's decision to refrain from recommending any legislation pertaining to the activities of funeral directors. It is my feeling that if there is any activity which is essentially local in nature that it is the burying of the dead and that it should be regulated at the local level. Ideally, ethical principles should regulate funeral directors but if they are unable to adhere to these principles then they should be regulated by State legislatures and not the Congress. By the same token, it is my feeling that the Congress should not make recommendations with regard to activities which are obviously local and intrastate in nature.

In the period since this Congressional investigation in 1964, and the publication of the Committee's report in 1967, Congress has done nothing to indicate that funeral service now has become an activity for which regulation by Congress is appropriate. If inappropriate for the Congress, mandatory regulation of funerals by a federal agency would also seem inappropriate.

As to the doctrine that funeral services are not in interstate commerce and do not substantially affect interstate commerce, the leading case is John Kalin Funeral Home, Inc. v. Fultz, 313 F. Supp. 435 (W. D. Wash. 1970), aff'd, 442 F. 2d 1342 (9th Cir. 1971), cert. denied, 404 U.S. 881 (1971). There, the lower court held that the business of a funeral establishment does not affect interstate commerce, even though in many instances deceased persons are shipped to it across state lines, even though mortuary supplies are purchased from outside the state, and even though there were business communications to and from other states. The Ninth Circuit affirmed this decision and the Supreme Court has denied certiorari.

In an analogous situation, the court in Lawson v. Woodmere, Inc., 120 F. Supp. 267, 269 (S.D. W.Va. 1954) aff'd, 217 F. 2d 148 (4th Cir. 1954), stated that "[T]he owning and managing of a cemetery is certainly intrastate business." The

court held that, because the sales of metal burial vaults, purchased beyond the borders of the state, were made, except in rare instances, after interstate transportation had ceased, they were also beyond purview of federal authority over interstate commerce. The court further held that as to arrangements for payments of fees involved, the effect on interstate trade, if any, was clearly incidental, indirect, and remote.

In its most recent case that deals with the question of "affect" upon interstate commerce, the Supreme Court in Goldfarb v. Virginia State Bar, 95 S. St. 2004 (1975), pointed out that it has long held that there is an obvious distinction to be drawn between a course of conduct wholly within a state and conduct which is an inseparable element of a larger program dependent for its success upon activity which affects commerce between the states. The Court held that for transactions to affect interstate commerce they must be an integral part of interstate transactions and that transactions which have no nexus with interstate commerce are beyond the reach of the antitrust laws.

It is true, of course, that deceased human bodies are shipped across state lines, but such bodies are not part of the sale of services and goods that comprise a funeral and thus are not part of the act and practices that the Commission is seeking to proscribe. It is true that purchasers of funerals sometimes cross state lines to purchase and attend funerals in other states, but the courts have uniformly held that the mere movement of individuals from one state to another in order to utilize particular services does not transform those services into interstate services or services that thereby substantially affect commerce. United States v. Yellow Cab Co., 332 U.S. 218, 230-233 (1947); Diversified Brokerage Services, Inc. v. Greater Des Moines Board of Realtors, 521 F. 2d 1343, 1346 (8th Cir. 1975); Morton v. Ann Arbor Property Managers (Management) Ass'n, 302 F. Supp. 1276, 1279-1280 (E.D. Mich. 1969), aff'd per curiam, 422 F. 2d 836 (6th Cir. 1970), cert. denied, 399 U.S. 929 (1970); Lieberthal v. North Country Lanes, Inc., 332 F. 2d 269 (2d Cir. 1964); Evanston Cab Co. v. City of Chicago, 325 F. 2d 907 (7th Cir. 1963), cert. denied, 377 U.S. 943 (1964); Hotel Phillips, Inc. v. Journeymen Barbers, 301 F. 2d 443 (8th Cir. 1962); Elizabeth Hospital, Inc. v. Richardson, 269 F. 2d 167 (8th Cir. 1959); Riggall v. Washington County Medical Society, 249 F. 2d 266 (8th Cir. 1957); Spears Free Clinic and Hospital v. Cleere, 197 F. 2d 125 (10th Cir. 1952); Nankin Hospital v. Michigan Hospital Service, 361 F. Supp. 1199, 1210 (E.D. Mich. 1973).

The practices of funeral homes which the FTC staff would like to regulate via a Trade Regulation Rule involve selling methods purportedly used by firms in their local communities and do not, in an overwhelming majority of instances, affect interstate commerce or constitute a burden on such commerce.

2. Congress did not intend for trade regulation rules to preempt State and local laws

When it recently granted expanded jurisdiction and trade regulation rule authority to the Federal Trade Commission, Conngress did not intend that the Commission would thereafter preempt state and local laws. Nor did Congress intend in Magnuson-Moss to delegate to the Commission responsibility for proceeding against all consumer fraud and deceit wherever and whenever found. On the contrary, it intended that the Commission would use its expanded jurisdiction and trade regulation rule authority only where state regulation of the field was nonexistent or where the perpetrators were moving from one state to another before local authorities could act. The House report accompanying the Magnuson-Moss legislation contains the following unequivocal expression of intent:

The expansion of the FTC's jurisdiction made by this section 201 is not intended to occupy the field or in any way to preempt State or local agencies from carrying out consumer protection or other activities within their jurisdiction which are also within the expanded jurisdiction of the Commission. Where cases of consumer fraud of a local nature which affect commerce are being effectively dealt with by States or local government agencies, it is the Committee's intent that the Federal Trade Commission should not introduce H.R. Rept. No. 93-1107, 93d Cong., 2d Sess. 45 (1947). In like manner, the report of the Senate Commerce Committee stated:

In considering certain arguments against expansion of the Commission's jurisdiction, the Committee was mindful of the danger of making the Commission alone responsible for eradicating fraud and deceit in every corner of

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the marketplace. This is not the Committee's intent in expanding the jurisdiction of the Commission. State and local consumer protection efforts are not to be supplanted by this expansion of jurisdiction. In many situations the Commission, through its Consumer Advisory Boards and expanded field office operations would work concurrently with State and local governments to attack in their incipiency flagrant consumer abuses. However, this expansion of jurisdiction, in conjunction with the authority to seek injunctive relief, will enable the Commission to move against local consumer abuses where State or local consumer protection programs are nonexistent or where fly-bynight operators hit one local area and then quickly move on to another before local officials can take action. S. Rep. No. 93-151, 93d Cong., 1st Sess. 27 (1973).

This intent of Congress was reaffirmed by numerous members as recently as November 18, 1975, when three concurrent resolutions, with almost identical texts, were introduced in Congress in opposition to the Commission's assertion of the preemption authority. House Concurrent Resolution 483 with 23 sponsors and House Concurrent Resolution 484 with 7 sponsors read as follows:

Whereas, laws of the United States may preempt, in whole or in part, laws of the States and their political subdivisions;

Whereas, in the absence of a specific delegation of authority, the determination of whether, or to what extent, a law of the United States preempts the laws of the States and their political subdivisions is solely within the power of the Congress, or, if the Congress fails to make such determination, within the power of the courts;

Whereas, the Federal Trade Commission, in connection with the issuance of a proposed trade regulation rule under the Federal Trade Commission Act stated that “. . . it is the Commission's intent in issuing this proposed rule to override contrary State or local law. The rule is an interpretation of the Federal Trade Commission Act (15 U.S.C. 41, et seq.) and constitutes a declaration of Federal law. Under the supremacy clause of the United States Constitution, the rule will become the supreme law of the land on the matters it covers and within the confines of the Commission's jurisdiction, preempting all repugnant State or local laws."; and

Whereas, the reports of the Senate Committee on Commerce (S. Rept. 93–151) and the House Committee on Interstate and Foreign Commerce (H. Rept. 93– 1107) on Magnuson-Moss Warranty-Federal Trade Commission Improvement Act stated that the amendments to the Federal Trade Commission Act made by title II of that Act were not intended to preempt State and local jurisdiction: Now, therefore, be it

Resolved by the House of Representatives (the Senate concurring), That the Congress has not delegated to the Federal Trade Commission any authority to preempt the laws of the States and their political subdivisions.

SEC. 2. The Secretary of the Senate shall transmit copies of this concurrent resolution to the Chairman and members of the Federal Trade Commission.

Senate Concurrent Resolution 77, with 7 present sponsors, contains the same language, except that it substitutes for the resolution "That the Congress has not delegated to the Federal Trade Commission any authority to preempt the laws of the States and their political subdivisions," the following:

That the Congress has not delegated to the Federal Trade Commission any authority to determine whether or to what extent, any rule validly issued under the Federal Trade Commission Act, and particularly sections 5 and 18 thereof, preempts the laws of the States and their political subdivisions. Subsequently, many more members of the House have added themselves to the ranks of sponsors, so that as of March 5, 1976, the House Concurrent Resolution has a total of 75 sponsors.

It is to be noted that these Resolutions point out the state of the law as to who determines whether preemption takes place, namely that Congress has the position of priority either specifically to delegate authority to effectuate preemption or to reserve to itself the power to indicate preemption, and that only when Congress fails to make known in any discernible way its desires, does the role of the courts come into play. "In determining the pre-emptive effect of Federal legislation, the intent of Congress must always control." Chrysler Corp. v. Malloy, 294 F. Supp. 524, 529 (D. Vermont 1968), rev'd on other grounds, 419 F. 2d 499 (2d Cir. 1969). "The purpose of Congress is the ultimate touchstone." Retail Clerks International Ass'n, Local 1625 v. Schermerhorn, 375 U.S. 96, 103 (1963). "In the

area of federal-state jurisdiction covering the same subject matter, by virtue of the supremacy clause of the United States Constitution, it is clear that federal law is paramount if Congress has clearly indicated an intent to preempt the field. On the other hand, before a federal statute or administrative order will be deemed to have preempted a valid state safety regulation, Congress must clearly have manifested such intention." Double-Eagle Lubricants, Inc. v. State of Texas, 248 F. Supp. 515, 517 (N.D. Texas 1965), appeal dismissed, 384 U.S. 434 (1966). "It is clear that since [businesses] engaged in . . . interstate or foreign commerce are in the federal domain, Congress may, if it chooses, take into itself all regulatory authority over them. share the task with the States, or adopt as federal policy the state scheme of regulation. . . . The question in in each case is what the purpose of Congress was... So we start with the assumption that the historic police powers of the States [are] not be superseded by the Federal Act unless that [is] the clear and manifest purpose of Congress." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 229-230 (1947) (emphasis added.)

...

Absent an explicit expression of intent in the statute itself, one turns to its legislative history. For example, in Illinois Natural Gas Co. v. Central Illinois Public Service Co., 314 U.S. 498, 508 (1942), the Court ascertained the intent of Congress by examining the pertinent statutory provisions "read in the light of legislative history." In Interstate Natural Gas Co. v. Federal Power Commission, 331 U.S. 682, 688, 690, (1947), the Court looked to both the terms of the statute involved and to its legislative history for indications of the intent of Congress and relied on the House Committee Report for a statement of the basic purpose of Congress in passing the legislation and for a statement that the scope of authority intended for the federal regulatory agency "is so drawn as to complement and in no manner usurp State regulatory authority." In City of Burbank v. Lockheed Air Terminal, 411 U.S. 624, (1973), since there was no express provision of preemption in the statute involved, the Court made extensive analysis of the legislative history, both congressional reports and debates, to ascertain the preemptive effect of the statute. In Rice v. Santa Fe Elevator Corp., supra, the Court in seeking the purpose of Congress as to preemption, paid heed to "strong language" in the legislative history that "makes unambiguous what was meant." (331 U.S. at 234).

Thus, it is clear that where a statute is silent on the question of preemption, one does not merely resort to the Supremacy Clause of the United States Constitution but rather relies on the legislative history of the statute.

As has been pointed out above, Congress in improving the Federal Trade Commission Act has specifically expressed its intent not to delegate to the Commission the authority to decide whether or to what extent to exercise federal preemption of state and local laws, and by expressly showing its intent, Congress has precluded the necessity for any court to step in to try to divine on its own what Congress must have meant.

3. Mandatory itemization of funeral prices will do the consumer more harm than good

Sections 453.5 (e) and (f) of the proposed FTC Rule require a funeral service industry member to provide each customer with the prices of each of the items that make up the standard or basic funeral service. This method of funeral pricing is known as itemization, in contrast with functional and unit pricing methods.1 Fragmented pricing of this nature-as in the case of most other forms of a la carte pricing inevitably will have the economic effect of eliminating the less expensive offerings.

1 It is important to point out that there is a good deal of confusion about what is meant by unit pricing and what is meant by itemization. Under the unit price method, the components of the unit are the goods and services customarily desired by the purchaser and do not include optional extras. Typically included in the basic unit are the following: (1) Professional and staff services.

(2) Care and custody of the body.

(3) Use of the funeral home.

(4) Specified automotive equipment.
(5) Acknowledgment stationery.

(6) Casket.

In practice, all other services and items of merchandise such as vaults, clothing, additional automotive equipment, newspaper notices, flowers, and cemetery charges are itemized.

Functional pricing is a general term denoting any breaking down of a unit price into two or more prices, with the price of the casket being the price most frequently quoted separately.

NSM supports a requirement that the person making the funeral arrangements should be furnished a written statement disclosing the services and merchandise to be furnished by the funeral firm. Indeed, the Code of Good Funeral Practice of National Selected Morticians requires each member "to quote conspicuously in writing the charges for every funeral offered; to identify clearly the services, facilities, equipment and merchandise included in such quotations;" "to furnish to each family at the time funeral arrangements are made, a written memorandum of charges and to make no additional charge without the approval of the purchaser."

However, NSM opposes the additional requirement of creating a price for each service or item of merchandise that may be part of the basic standard funeral package or unit. While similar price itemization of supplemental items of service or merchandise requested by the purchaser and of cash advances made by the funeral director on behalf of the purchaser is desirable, NSM opposes the necessity of assigning a specific price to each and every service and item of merchandise that is part of the basic funeral unit, for this would have the result of eliminating low priced funerals that are otherwise available as dignified choices that can be freely made by the less fortunate segments of the community without having to ask for outright charity, or for that matter, as choices for anyone who, for whatever reason, wishes to spend a lesser rather than a greater amount for a traditional standard funeral. An explanation of how the price itemization of all standard funeral components leads to higher priced funerals is in order.

When a funeral director has to assign a specific price to each of the individual items of service and merchandise that constitute the traditional standard funeral, he must calculate a price for that item that will recover its cost and the portion of total overhead that can be attributed to the item. This means that there will be a single price for each component of the standard funeral and that every purchaser, rich or poor, of a standard funeral will pay the same total price for the basic funeral package, namely the sum of the itemized separate prices, except of course variations in the casket price due to the quality chosen. Thus under the itemization method of pricing there is no effective way to offer lower prices to the less fortunate purchasers of a standard funeral without making outright charity payments. NSM does not believe anyone would advocate forcing a less fortunate family to have to accept charity in a time of grief if another method of pricing by the funeral director would achieve the same result by giving that family the free choice of a low price funeral.

An analogy may be helpful. Several years ago, Congress enacted motor vehicle legislation requiring disclosure of price information on a sticker attached to new vehicles at the time of purchase. The manufacturer was required to disclose the price of the basic unit and also to disclose the price of each optional extra. The manufacturer was not required to assign a separate price for each component making up the basic unit, such as the price of the wheels, the seats or the carburetor. The theory of that legislation was that a full description of the basic unit, together with its price, constituted adequate disclosure, provided the prices of optional extras were fully itemized.

While the analogy of motor vehicle pricing to funeral pricing perhaps is not a perfect one, it makes the point that it is the optional extras that should be the subject of price itemization and not the basic unit itself.

It has been pointed out that, since in itemization each component has its own specific price, all the services furnished by the funeral director that comprise a standard funeral will cost the same to all purchasers, whether rich or poor, because the prices of the itemized components will add up to the same total price for all purchasers. Therefore, under the itemization method of pricing, the only means that a poor purchaser can utilize to reduce his total bill is by eliminating some of the traditional components ordinarily included in the funeral service. Thus, under the itemization method, a poor family will have to pay the same price for a traditional funeral as will the most affluent family in the community since each component has its own predetermined individual price. Consequently, the only way to adjust the price downward for the poor family, other than the humiliating method of making that family a charity case, is to eliminate some of the essential components.

Another facet of funeral pricing to which NSM wishes to refer is a method which is known as graduated recovery of total costs. It is based on unit pricing, which consists of establishing a range of single total standard funeral prices, correlated to the quality of the casket selected and including the standard or