## Facts

- Funeral homes and industry associations (including Andrews Mortuary, Inc.) petitioned for review of an FTC trade regulation rule governing funeral industry practices.
- The FTC conducted a nationwide investigation beginning in 1972 and initiated a Magnuson–Moss rulemaking to address unfair or deceptive funeral practices.
- The rulemaking record was extensive, including voluminous written submissions, empirical materials, consumer complaints, and 52 days of hearings with hundreds of witnesses.
- The FTC found that a significant number of providers engaged in practices such as misrepresenting legal requirements (e.g., claiming embalming or particular caskets were legally required), failing to provide meaningful price disclosures, and tying unwanted goods or services into packages.
- In 1982, the FTC issued the Funeral Rule (16 C.F.R. pt. 453), requiring, among other things, early provision of an itemized General Price List and other disclosures, and prohibiting certain misrepresentations and tying practices.
- Petitioners challenged the rule as procedurally defective, beyond the FTC’s statutory authority, unsupported by substantial evidence, and violative of the First Amendment.

## Issues

1. Whether the FTC’s conduct of the Magnuson–Moss rulemaking afforded petitioners the procedural rights required by § 18 of the FTC Act and due process.
2. Whether the Funeral Rule fell within the FTC’s statutory authority to define and prevent unfair or deceptive acts or practices through trade regulation rules.
3. Whether the FTC’s findings supporting the rule were supported by substantial evidence on the rulemaking record as a whole.
4. Whether the rule’s disclosure requirements and restrictions on certain practices impermissibly compelled or restricted commercial speech in violation of the First Amendment.

## Decision

- The Fourth Circuit denied the petitions for review and affirmed the Funeral Rule in its entirety.
- The court held that the FTC provided petitioners all required procedural protections during the rulemaking.
- The court held that the rule was within the FTC’s rulemaking authority under the FTC Act.
- The court held that the rule was supported by substantial evidence in the record.
- The court held that the rule did not violate the First Amendment rights of funeral providers.

## Legal Principles

- Under Magnuson–Moss rulemaking, an agency may structure participation (including cross-examination and rebuttal) so long as affected parties receive a meaningful opportunity to test adverse evidence and present their positions; procedures need not be limitless in lengthy proceedings.
- The FTC may promulgate trade regulation rules defining and preventing unfair or deceptive acts or practices in or affecting commerce, including prophylactic disclosure and transaction-structure requirements reasonably directed at preventing consumer deception and harm.
- Substantial-evidence review of rulemaking findings requires deference to reasonable agency conclusions drawn from a large record; a court will not reweigh competing evidence when the record supports the agency’s determinations.
- Mandatory disclosure of purely factual, uncontroversial information in commercial transactions may be required to prevent deception and protect consumers, and prohibitions on misrepresentation and coercive tying practices are consistent with permissible regulation of commercial speech.

## Conclusion

The Fourth Circuit upheld the FTC’s Funeral Rule, concluding that the Commission’s extensive rulemaking process satisfied statutory and constitutional procedural requirements, that the FTC acted within its authority to prevent unfair or deceptive funeral practices, that the rule’s predicates were supported by substantial evidence, and that the rule’s disclosure and anti-misrepresentation provisions were permissible regulation of commercial speech.


Harry & Bryant Co. v. Federal Trade Commission, 726 F.2d 993 (4th Cir. 1984)