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Georgia Funeral Directors Prevail in Important Cemetery Case

by: T. Scott Gilligan, NFDA general counsel

Six Georgia funeral homes and several vault companies ("Funeral Home Group") sued the Savannah Cemetery Group, which owns five private cemeteries in Savannah, Ga., when the Savannah Cemetery Group established a rule prohibiting the use of concrete burial vaults in its cemeteries. The Funeral Home Group challenged the cemetery regulation, alleging that it violated the Georgia Cemetery and Funeral Services Act of 2000. That law allows cemeteries to establish reasonable rules and regulations regarding the type and specifications of any and all merchandise to be used and installed in a cemetery. The Funeral Home Group claimed that it was unreasonable for the cemeteries to require the use of polymer or steel vaults instead of concrete vaults.

At trial before a federal district court, funeral directors testified that they had sold hundreds of preneed contracts under which consumers had purchased concrete vaults. They also demonstrated that more than 95% of the vault sales in the area were concrete vaults. The Funeral Home Group argued that the cemetery owner, who was the exclusive retailer of polymer and steel burial vaults in the county, imposed the restriction in a bad faith attempt to corner the market on all vault sales in the cemeteries. The Savannah Cemetery Group defended the regulation on the grounds that the transport of the heavy concrete vaults caused damage to the cemetery grounds.

The trial court held for the Funeral Home Group and granted a permanent injunction against the Savannah Cemetery Group from enforcing the regulation. The trial court found that if the regulation was enforced, the funeral homes would be forced to breach hundreds of existing preneed contracts which called for the purchase of concrete vaults. The court also held that the vault company selling the concrete vault would be forced out of business and that many area consumers would have no choice but to purchase polymer or steel vaults despite the fact that the majority of them preferred concrete vaults. Based on expert testimony, the court also concluded that concrete vaults were better suited than metal or polymer vaults in the area serviced by the cemeteries.

In a decision announced December 8, 2010, the Georgia Court of Appeals upheld the findings of the trial court. Although there was dispute over the factual issues, the appellate court opined that the trial court's findings were reasoned and supported by the evidence. Therefore, the appellate court upheld the injunction against the Savannah Cemetery Group enforcing the prohibition against concrete vaults. No word yet on whether this case will be further appealed to the Georgia Supreme Court.

Although a court would normally defer to a cemetery's judgment regarding regulations on vaults and monuments, in this particular case the courts rejected the cemetery's claim that concrete vaults unduly damaged cemetery grounds. It was apparent to the trial court that the regulation served not as a means to protect the cemetery, but as an attempt by the cemetery ownership to unfairly compel consumers to purchase vaults that were sold by the cemetery owners. Fortunately, for the funeral homes and the hundreds of consumers having existing contracts, the court was willing to see through the "justification" of the cemetery and to declare the concrete vault prohibition as an unreasonable regulation.

As a benefit of membership, NFDA members may contact Gilligan at 513-871-6332 for a free legal consultation.