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Class Action Challenges Casket Prices

May 5, 2005
A lawsuit charges the leading U.S. casket manufacturer and three large funeral home chains with blocking casket discounters from the marketplace and conspiring to drive casket prices up.

The lawsuit charges that funeral homes routinely sell caskets for as much as six times their wholesale cost. Filed in San Francisco federal court, the suit seeks to be certified as a class-action, representing millions of Americans who bought caskets since 2001.

The suit names Service Corporation International; Alderwoods Group Inc., and Stewart Enterprises Inc., the nation's largest funeral-home chains. It also names Hillenbrand Industries Inc.'s Batesville Casket Co., which makes nearly half the caskets sold in the United States.

Funeral homes routinely ignore federal consumer protection rules that permit families to buy caskets from anyone and that prohibit funeral homes from charging a premium for those who buy or build their own, the suit charges. It alleges that funeral homes routinely use sham discounts to drive up the cost of not buying a casket as part of the funeral package.

The lawsuit, filed on behalf of six families who say they were overcharged for caskets, could be a major blow to the funeral industry. The suit does not name a damage figure but says it would be in the "hundreds of millions." Under antitrust law, actual damages extending back to 2001 would be tripled.

Funeral costs now average about $6,000 despite attempts by consumer groups and government agencies to hold prices down. Under federal rules meant to encourage competition, discount caskets are easier to find. Costco, for example, has a model that sells for $950, about half what the cheapest casket would cost at most funeral homes.

Costco and other discount casket outlets promise quick delivery directly to funeral homes once consumers place their order.

The plaintiffs in the lawsuit say they were charged from $2,200 to $7.395 for caskets. Also a plaintiff in the suit is the Funeral Consumers Alliance, a nonprofit organization.

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