HomeMy WebLinkAbout01-2912 FX
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Don Bailey
P AID#23786
4311 North 6th Street
Harrisburg, PA 17110
(717) 221-9500
Attorney for Plaintiffs
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYL VANIA
ROBERT RAE AND
COMMONWEALTH FUNERAL
CONSULTANTS INC.,
)
)
)
)
)
)
)
)
)
JOHN W. EIRKSON, THE )
PENNSYL VANIA FUNERAL )
DIRECTORS ASSOCIA nON )
(PFDA), LOUDEN L. CAMPBELL)
ESQUIRE, MARTIN BROWN, )
and JAMES O. PINKERTON, )
)
)
Plaintiffs
vs.
Defendants
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, PA.
NO. 01-';;;' '7/-2- (!;;;'J {,b-
JURY TRIAL DEMANDED
NOTICE
YOU HAVE BEEN SUED IN COURT. If you wish to defend against
the claims set forth in the following pages, you must take action within twenty (20)
days after this Complaint and Notice are served, by entering a written appearance
personally or by attorney and filing in writing with the Court your defenses or
objections to the claims set forth against you. You are warned that if you fail to do
so the case may proceed without you and a judgment may be entered against you by
the Court without ftuther notice for any money claimed in the Complaint or for any
other claim or relief requested by the Plaintiff. You may lose money or property or
other rights important to you,
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YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT
ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO
TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE
YOU CAN GET LEGAL HELP.
CUMBERLAND COUNTY LAWYER REFERRAL SERVICE
CUMBERLAND COUNTY BAR ASSOCIATION
2 LIBERTY AVENUE
CARLISLE, PA 17013
(717) 249-3166
,
,
Don Bailey
P AID# 23786
4311 N. 6th Street
Harrisburg, Pa 17110
(717) 221-9500.
Attorney for Plaintiffs
)
)
)
)
)
)
)
)
)
)
)
DIRECTORS ASSOCIATION )
(PFDA), LOUDEN L. CAMPBELL)
ESQUIRE, MARTIN BROWN, )
and JAMES O. PINKERTON, )
)
)
ROBERT RAE AND
COMMONWEALTH FUNERAL
CONSUL T ANTS INC.,
, Plaintiffs
vs.
JOHN W. EIRKSON, THE
PENNSYLVANIA FUNERAL
Defendants
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, PA.
NO.
JURY TRIAL DEMANDED
NOTICIA
Le han demandado a usted en la corte. Si usted quiere defenderse de estas
demandas expuestas en las paginas siguientes, usted tiene viente (20) dias de plazo
al partir de la fecha de la demanda y la notificacion, Usted debepresentar una
apariencia escrita 0 en persona 0 par abogado y archivar en la corte en fonna escrita
sus defensas 0 sus objeciones alas demandas en contra de su persona. Sea avisado
que si usted no se defiende, la corte tomara medidas y puede entrar una orden contra
usted sin previo aviso 0 notificacion y por cualquier queja 0 alivio que es pedido en
la peticion de demanda. Usted puede perder dinero 0 sus propiedades 0 otros
derechos importantes para usted.
LLEVEESTADEMANDAA UN ABODAGO INMEDIATAMENTE. SINO
TIENE ABOGADO 0 SI NO TIENE EL DINERO SUFICIENTE DE P AGAR TAL
SER VICIO, VA Y A EN PERSONA 0 LLAME POR TELEFONO A LA OFICINA
CUY A DIRECCION SE ENCUENTRA ESCRITA ABAJO PARA A VERIGUAR
DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL.
'~~r'!illll!lJ "<'" __ ''',
CUMBERLAND COUNTY LAWYER REFERRAL SERVICE
CUMBERLAND COUNTY BAR ASSOCIATION
2 LIBERTY AVENUE
CARLISLE, PA 17013
(717) 249-3166
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f:;k
Don Bailey
PAID# 23786
4311 N. 6th Street
Harrisburg, Pa 17110
(717) 221-9500
Attorney for Plaintiffs
ROBERT RAE AND
COMMONWEALTH FUNERAL
CONSULTANTS INC.,
)
)
)
)
)
)
)
)
)
JOHN W. EIRKSON, THE )
PENNSYLVANIA FUNERAL )
DIRECTORS ASSOCIATION )
(PFDA), LOUDEN L. CAMPBELL)
ESQUIRE, MARTIN BROWN, )
and JAMES O. PINKERTON, )
)
)
Plaintiffs
vs.
Defendants
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, PA.
NO. 01- :J. q 1.2. Civil. ~
JURY TRIAL DEMANDED
COMPLAINT - CIVIL ACTIONS
1.) This is a civil action for a number of state claims brought subsequent to a
denial by a federal district court to exercise supplemental jurisdiction pursuant to 28
U.S.c. ~ 1367. The torts identified to date include Tortuous Interference With Business
and Contractual Relations, Interference with Prospective Business and Contractual
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Relations, Conspiracy to injure plaintiffs in Their Profession, Defamation, and Civil
Conspiracy. All misconduct complained of occurred within two years ofN ovember 17,
2000 (when the federal complaint was filed) and of May 12,2001, when this state
action was filed. The federal courts dismissal of the federal claims is on appeal.
PARTIES
2.) Plaintiff Robert Rae is an adult American citizen and is CEO and President
of plaintiff CFC, a licensed Pennsylvania insurance agency.
3.) The defendants' John W. Eirkson, Louden L. Campbell, Martin Brown and
James O. Pinkerton are all adult American citizens. Eirkson is an officer in defendant
PFDA as is the defendant Brown. Pinkerton is a member of the (SBFD) and is also
believed to be a member ofPFDA.
4.) The plaintiff Rae and CFC, on or about 1997, began selling pre-need services
in cooperation with funeral homes and funeral directors.
5.) The defendant PFDA was already in this type of business.
6.) The PFDA and its members utilize both a trust, and insurance carners, to sell
pre-need services to the public. They have done this for years. They have created a
number of entities like "SecurChoice" for this purpose, through which its (PFDA's)
members, market and sell pre-need services to consumers.
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7.) During this same time period, a number of entities like Pennsylvania Funeral
Services Corp., (pFSC) a wholly owned subsidiary of PFDA, started PFDA's
"Unichoice," a Co-op with membership free to PFDAmembers only. Unichoice which
was set up whereby PFDA members could purchase wholesale funeral "products and
services." The Co-op, "Unichoice," offers dividends and credits to members ofPFDA
only. "Secure Choice" and "Unichoice" and "The Pennsylvania Funeral Plan," are
believed to be marketing plans for PFSC which is owned by PFDA. One of its services
is pre-need insurance. Unichoice is designed to create a monopoly and acts in restraint
of trade for PFDAmembers over the funeral industry by offering free memberships to
members and then paying dividends and giving credits to members of the PFDA only.
8.) The PFDA and the individual defendants are direct business competitors of
the plaintiffs, and are unlawfully using the SBFD (State Board of Funeral Directors)
and its badge of authority to unlawfully destroy the plaintiff's business.
9.) As part of this process of cornering the market on pre-need sales, the PFDA
once encouraged and promoted a practice whereby its funeral director members would
become licensed Pennsylvania insurance agents, although it never required its sales
makers to be licensed funeral directors.
10.) The PFDA and the individual defendants did this for two purposes. The first
was to create a relationship between its funeral director members and its pre-need
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entities and businesses so PFSC could market through "SecurChoice and Unichoice"
and the "Pennsylvania Funeral Plan," and the second was to use its direct relationship
with the SBFD, whom it controls politically by virtue of membership on the Board ie
using its position on the Board as a regulatory and controlling state agency to ensure
the security of its members and the defendants personal interest in PFSC and the trusts
and the co-op it governs, and to prevent competitors, such as plaintiffs, from selling
pre-need services in Pennsylvania.
11.) Upon information and belief the plaintiffs allege that the individual
defendants are
a.) members of the PFDA and participate in PFSC, which markets as
"SecurChoicelUnichoice/Pennsylvania Funeral Plan."
b.) Pm1icipate as co-op members in "SecurChoicelUnichoice" which is a part
of the PFDA,
c.) Receive dividends, or are poised to receive dividends (or reinvest dividends)
in the Co-op. ("SecurChoicelUnichoice").
12.) The SBFD, at the direct behest of the defendants, by and through the
PFDA's lawyers, who did the writing for the SBFD, submitted and passed (in
questionable violation of state law and in clear violation of a funeral director's ie. a
certain Mr. Andrew Ferguson's substantive and procedural due process rights) a
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resolution (September 1, 1999) for the sole purpose of targeting and deterring the
plaintiffs' customers from doing business with plaintiffs, and others like them, using
Mr. Ferguson as a tool.
13.) Ironically, while the SBFD was being used as a private political tool by the
defendants to further their own unlawful ends, in the clear absence of any rational
government purpose lacking any reasonable government need, the defendants were
selling pre-need insurance products through many of their members who wore two hats,
funeral director and licensed insurance agent.
14.) Pinkerton and the PFDAmembers of the SBFD have used their access to
the power of the state to set in motion investigations and prosecutions of the PFDA's
competition including CFC. The "PFDA" offers SecurChoice and Unichoice and the
Pennsylvania Funeral Plan to funeral directors and the public.
15.) Pinkerton and the PFDA members of the SBFD have individually used their
official positions improperly to cause investigations and prosecutions of Pennsylvania
funeral directors, and have unlawfully provided information about the Board's
investigatory and prosecutorial activities to non SBFD members including the
individual defendants here, in that they have shared, and, it is believed and alleged,
have coordinated plans to publicize SBFD investigation and prosecutorial policy and
activities among Pennsylvania funeral directors and those in related businesses for the
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sole and intentional purpose of intimidating, threatening, and unlawfully destroying the
contracts, potential contracts, business, business opportunities, and personal and
business reputation, a constitutional property right under Pennsylvania law, of those
persons and entities, including but not limited to, plaintiffs, who are competitors of the
PFDA, its officers, political colleagues, and co-defendants.
16.) The defendants Eirkson and Brown have spoken out on numerous
occaSIOns, before numerous gatherings of funeral directors, and have written
correspondences, and caused news letters to be published, which emphasize SBFD
investigatory and prosecutorial policy against PFDA competitors such as plaintiffs, by
speaking authoritatively for same, by displaying a knowledge of same, and by
employing their knowledge in a targeted way to discourage and intimidate customers
and potential customers of the plainitffs into not doing business with plaintiffs.
17.) On or about the Fall of1997 certain of plaintiffs' customers received phone
calls from the defendant Eirkson about the drop in the PFDA entities' (pFSC)
production of pre-need contracts through their funeral homes, and he questioned the
customers' about their decisions to use CFC programs.
18.) On or about January 1998 the defendant Eirkson told one of plaintiffs'
customers that plaintiffs' programs were illegal. This was totally false. As a result, the
customer asked CFC to indemnify the customer should this turn out to be true.
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19.) Due to the efforts of Eirkson and Brown among others, CFC's business
began to suffer and in February 1998 the plaintiffs sent out their first indemnification
letter to a customer in response to the unlawful misconduct of the defendants.
20.) During the summer of 1998 CFC continued to work hard to add to their
business.
21.) On November 9, 1998, the defendant Pinkerton, wrote to the FTC
expressing his concerns about the "Catholic Funeral Plan." This letter was a poorly
disguised attempt to persuade the FTC to follow policies that would prevent
interference with the defendants' unlawful efforts to control funeral business in
Pennsylvania for personal gain. In this letter Pinkerton raises the spectre of state
interference, even suggesting Attorney Laurie Meelan of the FTC contact SBFD
prosecuting attorney Kathleen Klett Ryan.
"My primary concern is, that, should third-party
marketing organizations be allowed to become a
means to circumvent unwanted rules and regulations,
they will soon become many and make more
difficult the issues of compliance and enforcement
as well as creating a negative environment of
competition. "
22.) In the Winter of1998 the PFDA, by and through Eirkson (and others) made
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several statements that indicated that he, as a PFDA official, was going to have the
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prosecuting attorney for the SBFD pursue CFC and "unlicensed" people. Rae is a
licensed funeral director.
23.) Gnor about the Springofl999 the SBFD, by and through its badge of state
authority, prosecuted the aforementioned Mr. Ferguson 3 years after already having
caused an investigation to be conducted into Mr. Ferguson's business affairs in 1996.
24.) Mr. Ferguson had advertised his services and was working with a group of
licensed insurance agents who were attempting to make pre-need sales of funeral
services and costs. These agents would occasionally reach a tentative agreement with
a consumer of a pre-need insurance contract designed to meet the requirements of
funeral costs at death. In doing so they used Mr. Ferguson's price list as a guide. Each
tentative contract they were able to write was then submitted to Mr. Ferguson for
review, consultation and approval Mr. Ferguson's action were in complete and total
conformity with the FTC "funeral rule" and state law.
25.) Perceiving Mr. Ferguson's activities as an ideal scape goating opportunity
to threaten their competitors, the defendants succeeded in having Mr. Ferguson
prosecuted by the SBFD in a unlawful effort to stem the rising competition with their
own businesses.
26.) To accomplish this end, the defendants unlawfully engaged in state actions
by, through, and with the SBFD using that agency to investigate and prosecute
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competitors of the defendants and discourage businesses and disrupt contracts with the
plaintiffs.
27.) Contemporaneously, the FTC responded to defendant James O. Pinkerton
who at the time was wearing his Vice Chairman of the SBFD Board hat, (Mr. Pinkerton
is now Chairman of the Board), about his inquiry (made as a PFDA member and as a
SBFD Board member) concerning the Catholic Funeral Plan and his desire to have
them investigated. In that letter (see paragraph 32 above) in the sixth paragraph, Mr.
Pinkerton expresses concern about agency relationships and then references the "State
of Pennsylvania laws" and says, in effect, that if the sales people aren't licensed
funeral directors they are "probably in violation of Pennsylvania provisions that prohibit
anyone but a funeral service licensee from making funeral arrangements" (emphasis
added). Pinkerton was aware that:
a.) Pennsylvania law 63 P.S. ~479.13(c) was interpreted adverse to the actions
taken against Ferguson in Pennsylvania Funeral Directors Association v. State Board
of Funeral Directors. 90 Pa. Cmwlth 175, 494 A.2d 67 (1985) and,
b.) that the Pennsylvania Legislative Budget and Finance Committee in a 1994
report had observed that pre-need services had as a matter of practice in Pennsylvania
been executed by funeral directors, cemeteries, and other types of sellers.
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There is no rational economics or other basis consistant with 14th Amendment
due process standards for the state of Pennsylvania and the SBFD to limit pre-need
sales to licensed funeral directors and Pinkerton and the SBFD its members, staff, and
lawyers all know that. Craigmjles v. Giles, U.S. District Court for the Eastern District
ofT ennessee at Chattanooga No. I :99-CV -304 (August 21, 2000) and Casket Royale.
Inc.. v. Mississip'pi, U.S. District Court for the Southern District ofMississippiJ ackson
Division Inc., No. 3:99-CV-737 BN, October 31,2000.
28.) Nevertheless, in an opinion now on appeal to the Pennsylvania Supreme
Court, the Commonwealth Court upheld Mr. Ferguson's prosecution, and so broadly
interpreted funeral director activity that is precludes attorneys and banks from
discussing funeral plans with clients. The above reference letter by Pinkerton was a
euphemistic description by defendants to the FTC hoping to engender a positive
response against the Catholic Funeral Plan, and others, that they could use to protect
the PFDA's unlawful monopolistic practices and thus their own personal financial
interests. Pinkerton claims "unregulated sales persons" another emhemism meaning a
licensed insurance agent who is not a licensed funeral director (ie. does not fit into the
PFDA membership and business practice mold) are making "funeral arrangements"
when discussing pre-need contracts in a context of funeral costs, something any sales
person must do and the FTC requires. But Mr. Pinkerton is playing a word game here.
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There is no requirement that a funeral director is solely authorized to discuss prices
with consumers. Such a view is in direct contradiction of the funeral rule's purpose.
Further, the only difference between a funeral service provider and a licensed funeral
director is that the director is licensed to embahn. There is no other difference.
29.) At no place does Pinkerton offer an explanation as to how, or why, a
licensed funeral director and a licensed insurance agent must be the same person
(although not all PFDA members who engage in PFDA programs such as SecurChoice
and Unichoice use licensed both ways) or why licensed funeral directors and licensed
insurance agents can't work together (as Andrew Ferguson did) just as a person who
is licensed as both can perform both functions. The PFDA, in its aggressive sales mode,
frequently uses unlicensed funeral service providers to sell pre-need services
"unlicensed" means someone who is not a licensed funeral director. The PFDA simply
believes the law does not apply to them.
30.) On April 5, 1999, the FTC, in a staff opinion offered through Mercedes K.
Kelly Esq., responded to Mr. Pinkerton's letter of November 9, 1998.
31.) Kelly's response both directly, and by implication, debunked the irrational
effort by Pinkerton (and the PFDA and others) to solicit some response from the FTC
that only a licensed funeral director can reveal or talk about his or her prices to
consumers. In fact, the FTC staff response takes pains to point out that "funeral
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providers who choose to be involved in a program, such as the Catholic Funeral Plan,
carrv the burden of making sure that the consumers brought to them by the religious
group get the disclosures required under the Federal Rule" (emphasis added).
Pinkerton's efforts to elicit support from the FTC failed. But this did not deter the
defendants from using the SBFD to unlawfully prosecute Mr. Ferguson, and use that
prosecution (on appeal but upheld by the Commonwealth Court in December 2000) as
a Sword ofDamocles to hang over the head of anyone who wished to do business with
plaintiffs and others like them.
32.) This misconduct by the SBFD bears no rational relationship to any
legitimate government interest and is an arbitrary and capricious intrusion upon, and
denial of, the plaintiffs' rights to pursue their chosen occupations.
33.) The action of the SBFD and the private defendants who have been, and
persist in acting, by, through and with them, are unreasonable and are related to no
proper government purpose. The unlawful restrictions are economic in nature, and they
further work a denial of property rights guaranteed by the Penilsylvania Constitution,
namely the right to one's business reputation, let alone the 1 st and 14th Amendment right
to contract free of unreasonable government molestation.
34.) As part of the defendants' unlawful plans the Defendant Brown wrote a
memo which he distributed to all "PFDAMembers" about "unlicensed pre-need sales
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practices." Part of the memo included a letter written by the defendant Campbell to the
defendant Eirkson designed to be used as part of the effort to frighten funeral directors
away from dealing with anyone but the defendants.
35.) The aforementioned practices of the SBFD and the defendants are unlawful,
are violative of the plaintiffs' substantive due process rights, are unlawful actions in
restraint of trade, constitute violations of the plaintiff's rights to the equal protection of
the laws, and violate by and through state action, the plaintiffs' rights to enjoy the
Privileges and hmnunities guaranteed by the U.S. Constitution including the right to
engage in gainful employment and their chosen occupations. Plaintiffs' rights to be free
to contract, a federally guaranteed liberty interest, and their right to be free of tortious
interference with contracts and with potential contractual relations, and of a conspiracy
to injure plaintiffs in their profession, and to be free of defamation under state law
was (and is) being violated by the defendants, although this complaint only addresses
state claims.
36.) The defendants engaged in a prolific policy of threats, intimidations and
even express personal advice to many of the plaintiffs' customers to either not do
business with the plaintiffs, because they would soon be investigated or prosecuted by
the SBFD which is believed to be false, seeking to frighten customers and potential
customers of the plaintiffs away from doing business with them, and to interfere
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directly in existing or contractual relationships.
37.) In doing so the plaintiffs incurred special damages in an amount in excess
of$5,000,000.00 (five million dollars) at the hands of the defendants consisting oflost
sales, lost profits, and incidental costs.
38.) For example the defendant Campbell told one of the plaintiffs customers
that CFC was "going down," meaning CFC was going to be investigated and
prosecuted by the SBFD and that the customers should not do business with CFC
because they might be tainted or even lose their own license.
39.) Meanwhile the SBFD began an "investigation" consisting of asking CFC
questions, so that the private defendants could traffic in the matter as if CFC were
going to be prosecuted, as an item of gossip, designed to destroy CFC's business.
40.) John Eirkson, who is not an actual or official SBFD member or employee,
told one of CFC' s customers that he would give him "immunity from prosecution" if
the client would "testify" against the plaintiff Rae. This is quite improper given
Eirkson's total lack of actual authority to do so (though he may feel, and apparently
does, that he is acting for the SBFD). Its also improper because there is absolutely
nothing to testify against Rae for, and the implication that there is, is an outrageous
violation of Rae rights both federally and as a matter of state tort law.
41.) On or about the Spring of 2000 the defendant John Eirkson told numerous
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clients of the plaintiffs that CFC was "under investigation" and that if they do business
with CFC they "will lose" their funeral director's license.
42.) Staffers at defendant PFDA and its affiliates also told plaintiffs' clients that
CFC was under investigation and if they do business with CFC they will lose their
license.
43.) The defendant Pinkerton personally told the plaintiff Rae that if "we"
meaning the SBFD, can stop CFC from selling services, that they "were going to do
so."
44.) On or aboutJune 2000 the defendantJohn Eirkson, speaking for himself and
the defendant PFDA, announced at a public meeting that "to bring CFC down, I need
your financial support." The implication was that CFC and Robert Rae were acting
unlawfully.
45.) On or about September 2000 Eirkson told one ofCFC's clients that the
Ferguson case will "probably be thrown out," but responded, " I'll be back" in
response to the client's decision to work with CFC, as opposed to PFDA. Erickson was
in error. The Commonwealth Court upheld the Board granting funeral directors
exceptionally broad control over the actions of other professionals.
46.) Eirkson, speaking for PFDA and the SBFD, told a meeting of funeral
directors that CFC was on the top of a list of funeral directors that "they" (meaning the
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coalition of private defendants, the PFDA and SBFD) were "going after" once the
Ferguson case was done thus evidencing an unlawful conspiracy to destroy plaintiffs
business reputation and deter others from doing business with plaintiffs.
47.) The defendants created, through their use of the SBFD' s powers, a plethora of
policies, actions, and threatened actions, designed to instill fear and force reactions
in the Pennsylvania funeral industry that sought the destruction of plaintiffs' lawful
business, appeared to make them subject to investigations and reviews by
government officials as a way to harass and intimidate them, and destroyed their
contracts and potential contracts.
48.) Additionally, Pennsylvania's Constitutionrecogrllzes and protects "business
reputation" not just as a reflection of state tort law, but as a property right. The
defendants violated the plaintiffs' rights to property also because they targeted
successfully some of the customers that plaintiffs had had existing contracts with and
adversely affected those contracts.
49.) The defendants' purpose, and the nature of the government power used,
was meant to be economic in its impact on plaintiffs and was intended and used by the
defendants as a way to limit the plaintiffs' associations or activity in the funeral
industry and to destroy their personal and business reputations and professions.
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50.) The defendants actions were designed and had the effect of singling the
plaintiffs out for purposes of threatening them and intimidating them thus treating
them differently than persons similarly situated, such as the PFDA.
51.) Even though plaintiffs were personally told by SBFD investigators that
there were "no violations here," something which was quite obvious, the defendants
persisted unlawfully in treating plaintiffs as law breakers and referring to them as
such.
52.) The plaintiffs were doing nothing that the PFDA, its subsidiaries, and
members of the SBFD were doing to sell pre-need products yet they were harassed,
intimidated, and investigated, unlike the former.
53.) The individual defendants Eirkson, Brown, Pinkerton, Campbell, and
persons as yet unnamed, all agreed together, unlawfully to pursue the unlawful purpose
of using the investigatory and prosecutorial powers of the state to destroy plaintiffs'
business and in the process violated plaintiffs First, Fourth and Fourteenth Amendment
Rights and plaintiffs rights under the State Constitution, and to agree to work together
to destroy plaintiffs business~ reputations and contracts.
54.) The defendants also conspired to use and did use the powers of the SBFD
to investigate the plaintiffs seeking to learn the depth, and the extent of their business
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and who their customers were.
55.) The defendants acted to restrain and control the market in funeral services
in the state of Pennsylvania through the unlawful use of coercive government powers
and the manipulation of contractual relation through misrepresentation and false
impressions of the plaintiffs.
56.) They used that power to force and encourage others to demand
indemnification agreements of the plaintiffs' customers while the defendants were
doing the very same thing with the government defendants blessings.
57.) They followed their planned course of action intending to force all funeral
directors in Pennsylvania to consummate all pre-need sales and contracts through the
PFDA and its wholly owned subsidiary, PFSC, via The Pennsylvania Funeral Plan,
SecurChoice and the Unichoice marketing schemes.
COUNT I
PLAINTIFFS AGAINST THE DEFENDANTS EIRKSON
AND PFDA FOR DEFAMATION
58.) Paragraphs I through 57 above are incorporated herein by reference.
59.) The above- named defendants in this Count on numerous occasions
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expressly, or in clear and unambiguous terms, described the plaintiffs falsely as law
breakers and placed plaintiffs in a false light as evidenced by the following particulars:
a.) The defendant Campbell told one of plaintiffs' customers that CFC was
going to be investigated and prosecuted by the SBFD knowing any such investigation
was specious and unfounded, and knowing that if he was in possession of such
knowledge, and it was accurate, which it was not, it was confidential and he had no
authority to discuss such information, and further that he knew CFC and Bob Rae had
done nothing wrong. Further, the defendant Campbell used the above infonnation in an
intentional effort to injure the plaintiffs and cause them to incur business losses by
placing the plaintiffs in a false light. This occurred in late November 1999, and,
b.) The defendants' Eirkson and PFDA through its staff, on numerous occasions
beginning in 1997 and continuing to the present day told clients of plaintiffs that CFC
is under investigation and if they do business with CFC they will lose their license
(meaning funeral director's license). Eirkson, in the Spring of 2000 similarly told a
meeting offuneral directors thatthey should not do business with CFC, and, that if they
do, they will lose their license, even though Eirkson and the PFDA knew the
accusations were unfounded. These actions of the PFDA and Eirkson were intended
to harm plaintiffs' business through characterizing them as lawbreakers. This
misconduct cast plaintiffs in a false light, misrepresented them, and was intended to
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cause injury to their business, and in fact did cause plaintiffs to suffer, significant
financial losses. In a particularly vicious attack on plaintiffs the defendant Eirkson in
October 2000, told two persons who are active in funeral industry affairs, that "they"
in reference to the SBFD, the PFDA, and himself, were waiting to see the outcome of
the Ferguson case. Eirkson explained that the PFDA was going to change the law if
Ferguson wins so that only a funeral director can sell pre-need services. Eirkson went
on to say that if Ferguson were found guilty, "they" (meaning the SBFD and the
PFDA) would go after every CFC account and "You will lose your license and be fined
$1000.00 for every contract you made with CFC ."
Wherefore the plaintiffs' demand judgement of the defendants Eirkson and
PFDAjointlyand severally for defamation and false light misrepresentation together
with compensatory and punitive damages, special damages in excess of$5,000,000.00
as yet uncertain amount costs, fees, and such other relief as the Court may deem
appropriate,
COUNT II and III
PLAINTIFFS AGAINST ALL DEFENDANTS FOR TORTIOUS
INTERFERENCE WITH BUSINESS AND CONTRACTUAL
RELATIONS AND (COUNT III) INTERFERENCE WITH
PROSPECTIVE BUSINESS AND CONTRACTUAL RELATIONS
-20-
.
"
60.) Paragraph 1 through paragraph 59 above are incorporated herein by
reference.
61.) The defendants, in a concerted, cooperative effort to destroy the
plaintiffs' business sought to dissuade plaintiffs' customers from doing business
with plaintiffs through false representations and through the unlawful use and
representations, of the state's power to investigate and prosecute which were false.
62) These efforts were intentional and were specifically undertaken by the
defendants to destroy contracts and potential contracts in which plaintiffs were
involved or ready to consummate, in some cases, as aforementioned, targeting
specific customers and contents of plaintiffs.
63.) The defendants succeeded in numerous cases in causing third parties to
withdraw from, alter to plaintiffs' disadvantage, or cease entry into contracts with
plaintiffs to plaintiffs financial disadvantage, so to further the defendants' own
business interests.
Wherefore the plaintiffs demand judgement of the defendants jointly and
severally for the violation of their rights to be free of intentional interference with
contractual relations and prospective contractual relations but not exceeding in sum
total the special damages referred to in Counts above together with punitive
damages, costs, fees, attorneys' fees, compensatory damages, and such other relief
-21-
;,-
..
. '
as the Court may deem appropriate.
COUNT IV
PLAINTIFFS AGAINST THE DEFENDANTS
EIRKSON. BROWN AND PINKERTON AND
THE PFDA MEMBERS OF THE SBFD BOARD
FOR CIVIL CONSPIRACY
64.) Paragraphs 1 through 63 above are incorporated herein by reference.
65.) The above-named defendants, upon infonnation and belief, knew, were
aware of, and unlawfully agreed, whether overtly or tacitly to unlawfully defame
plaintiffs, and to interference with plaintiffs contractual relations and interference
with plaintiffs prospective contractual relations.
66.) These actions were done unlawfully for an unlawful, purpose, and with
the knowing cooperation of each defendant with each other, in various
combinations, from time to time.
Wherefore the plaintiffs demand judgement of the defendants jointly and
severally for Civil Conspiracy in an amount equal to, but not greater in sum, than the
special damages as referenced in the other counts above, together with punitive and
compensatory damages, costs, fees, attorneys fees, and such other relief as the
Court may deem appropriate.
-22-
, .1 ~'
Respectfully Submitted,
\~b'
Don Bailey PAID# 23786
4311 N. 6th Street
Harrisburg, Pa 1711 0
(717) 221-9500
-23-
-to, ~
-,"
.
.
CERTIFICATE OF SERVICE
I hereby certifY that on May 14, 2001 a true and correct copy of the
foregoing COMPLAINT was served upon the following cOlll1sel of record by
United States Mail, postage prepaid.
ECKERT SEAMAN'S CHERIN & MELLOTT, LLC
Bridget Montgomery, Esquire
213 Market Street, 8th Floor
Harrisburg, P A 1710 1
Sarah Yerger, Esquire
Office of Attorney General
1500 Strawberry Square
Harrisburg, PA 17120
Douglas Marcello, Esquire
Thomas, Thomas, Hafer, LLP
305 North Front Street
Harrisburg, P A 17101
BY cf1
Don Bailey ID 23786
4311 N. 6th Street
Harrisburg, P A 17110
(717) 221-9500
. '
Don Bailey
PAID# 23786
4311 N. 6th Street
Harrisburg, Pa 17110
(717) 221-9500
Attorney for Plaintiffs
rn '
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)
)
)
)
)
)
)
)
)
JOHNW. EIRKSON, THE )
PENNSYL VANIA FUNERAL )
DIRECTORS ASSOCIATION )
(PFDA), LOUDEN L. CAMPBELL)
ESQUIRE, MARTIN BROWN, )
and JAMES O. PINKERTON, )
)
)
ROBERT RAE AND
COMMONWEALTH FUNERAL
CONSULTANTS INC.,
Plaintiffs
vs.
Defendants
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, PA.
NO. 0/. ;)..q /;;;.. 0>>u. '/ ~
JURY TRIAL DEMANDED
PRAECIPE
TO:
Prothotary of Cumberland County
FROM:
Don Bailey, Esq. Attorney for Plaintiff Robert Rae and Commonwealth
Funeral Consultants.
INRE:
Memorandum Opinion and Order of the United States District Court
For the Middle District of Pennsylvania
You are directed to file and docket the attached certified copy of the Decision
of Said Court. All correspondence is directed to plaintiffs' counsel Don Bailey at 4311
N. 6th Street, Harrisburg, PA 17110.
Respectfully Submitted,
',,1',-
. .\
. !
AO 72A
(Rev,8182)
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IN THE UNITED STATES DISTRICT COURT
FOR THE MI.DDLE DISTRICT OF PENNSYLVANIA
ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
vs.
CIVIL ACTION NO. 1:CV-OO-2018
JOHN W. EIRKSON,
THE PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION (PFDA),
et al.,
FILED .,.
HARRISBURG. PA
APR 1 2 2001
Defendants
MEMORANDUM
I. Introduction.
The plaintiffs, Commonwealth Funeral Consultants Inc.
("CFC"), an insurance agency, and Robert Rae, CFC's chief
executive officer and president, filed this lawsuit against the
Pennsylvania Funeral Directors Association ("the Association"), a
trade association of funeral directors; its lawyer, Louden L.
Campbell; two of its officers, John W. Eirkson and Martin Brown;
and one of its members, James O. Pinkerton. Pinkerton is also a
member of the State Board of Funeral Directors (Uthe Board") .
The complaint arises from a dispute over the exact role
that insurance companies can play in marketing life insurance
policies that cover the funeral expenses of the insured, what the
Plaintiffs have called pre-need contracts and what the Defendants
funeral services. Among othe~
Certified from the Y'OOOId '
't-~/')- pi
oate~ry E. OlAnd, rea, Clem:
Pal" ' (f1{'~-'"), j,CV2d~
, Deputy Clerk
pre-need sale of
.
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things, the Plaintiffs allege that the Association, through
Eirkson and Martin, has used its influence over the Board to
control the sales of pre-need funeral policies by administrative
prosecutions of those who are not a part of the Association. CFC
itself is alleged to have been the target of a campaign among
funeral directors warning them against doing business with CFC,
thereby causing significant damage to the Plaintiffs' sales.
The Plaintiffs allege violations of their federal
constitutiopal right to substantive due process, their first
amendment right of association in the making of contracts, their
right to equal protection for having been singled out for
investigation, and their Fourteenth Amendment right under the
privileges and immunities clause to pursue an occupation. They
also set forth a claim for violation of the federal anti-trust
laws. Additionally, state-law claims are made for anti-trust
violations, defamation, tortious interference with business and
contractual relationships, and tortious interference with
prospective contractual relationships.
We are considering two motions to dismiss under Fed. R.
Civ. P. 12 (b) (6), one filed by Louden Campbell and the other by
the Association Defendants (the Association, Eirkson, Brown and
Pinkerton). We cannot grant the motions if "under any reasonable
reading of the pleadings, the plaintiffs may be entitled to relief
" Lanqford v. Citv of Atlantic Citv, 235 F.3d 845, 847 (3d
Cir. 2000). In making that decision, we must accept as true all
2
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(Rev,8/82)
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well-pleaded allegations in the complaint, Maio v. Aetna. Inc.,
221 F.3d 472, 481-82 (3d Cir. 2000), and construe any reasonable
inferences to be drawn from the allegations in the Plaintiff's
favor. See United States v. Occidental Chemical Corp., 200 F.3d
143, 147 (3d Cir. 1999). When appropriate, we may also rely on
public records, such as court filings. See Churchill v. Star
Enterprises, 183 F.3d 184, 190 n.S (3d Cir. 1999) (citing Pension
Benefit Guarantv CorP. v. White Consolidated Indus.. Inc., 998
F.2d 1192, 1196 (3d Cir. 1993)). With this standard in mind, we
set forth the background to this litigation, as the Plaintiffs
allege it.
II. Backqround.
In pertinent part, the complaint alleges as follows. In
1997, plaintiffs Rae and CFC, an insurance agency, began selling
life insurance policies that pay for the funeral costs of the
insured, (complaint, ~ 10), described in the complaint as "pre-
need contracts." (Id., ~ 1). The Plaintiff did so "in
cooperation with funeral homes and funeral directors." (Id., ~
10) .
The defendant Association has also been selling pre-need
insurance and has established certain entities to do so. Thus,
Pennsylvania Services Corp., a wholly-owned subsidiary of the
Association, has set up plans called Unichoice, SecureChoice and
3
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the Pennsylvania Funeral Plan, open only to the Association
members that provide pre-need insurance.
(Id., ~ 13).
The Association is allegedly using the Board to control
the market in pre-need insurance policies by causing the
administrative prosecution of those who sell pre-need insurance
but are not affiliated with the Association. The Plaintiffs
present the example of Andrew Ferguson, III, a licensed funeral
director, who they allege the Board prosecuted when he used
insurance agents who were not affiliated with the Association.
(Id., ~~ 18 and 22).
The Association's officers, defendants Eirkson and
Brown, have spoken at many funeral-director meetings and have
published newsletters about the Board's "investigatory and
prosecutorial policy against [Association] competitors" to
discourage funeral director from remaining or becoming the
Plaintiffs' customers. (Id., ~ 29). Specifically, in the fall of
1997, defendant Eirkson telephoned certain customers of the
Plaintiffs, informing them of the drop in the Association's
"production of pre-need contracts" and "question[ing] the
customers about their decisions to use CFC programs." (Id., ~
30). In or about January 1998, Eirkson falsely told a CFC
customer that CFC's programs were illegal. (Id., ~ 31). In
February 1998, as a result of the Defendants' alleged unlawful
conduct, the Plaintiffs had to send out their first
4
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indemnification letter to a client, indemnifying the customer if
the Plaintiffs' plan turned out to be illegal. (Id.,' 32).
In November 1998, defendant Pinkerton, a Board and
Association member, wrote the Federal Trade Commission (FTC)
qu~stioning the legality of the "Catholic Fun~ral Plan," an
attempt to receive an FTC response favorable to the Association's
position.
(Id., " 34 and 41). The FTC's April 1999 response was
not favorable to the Association.
(Id., " 43 and 44).
On September 1, 1999, the Board issued a resolution, "at
the direct behest of the defendants," (id., , 23), and drafted by
defendant Campbell, the Association's lawyer, intended to target
and deter funeral directors from doing business with CFC. The
resolution adopted the allegedly illegal position that, except to
comply with FTC regulations, the showing, distribution or
summarization of any price list was "the practice of funeral
direction by engaging in pre-need sales." (Id.,' 45).
On some unspecified date, defendant Brown, an
Association officer, wrote a memo incorporating a letter written
by defendant Campbell. The memo was distributed to all
Association members and concerned "unlicensed pre-need sales
practices." (Id.,' 48). It was intended "to frighten funeral
directors away from dealing with anyone but the defendants."
(rd.) .
The Defendants took the following actions, designed to
destroy CFC's business. At some point, "defendant Campbell [the
5
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Association's lawyer] told one of the plaintiff's customers that
CFC was going down, meaning CFC was going to be investigated and
prosecuted by the [Board} and that the customers should not do
business with CFC because they might be tainted or even lose their
own license." (Id.,' 53). In the spring of 2000, defendant
Eirkson, an Association officer, told CFC customers "that CFC was
under investigation and that if they do business with CFC they
will lose their funeral director's license.
(Id., , 56). The
(Id., ~ 57).
Association's staffers did the same thing.
The Board began an "'investigation'" consisting of
asking CFC questions" so that the individual defendants could
gossip about it and hurt CFC's business.
(Id., , 54). Defendant
Eirkson, not a member of the Board, told a CFC customer that he
would grant him immunity if he testified against plaintiff Rae.
(Id., ~ 55). Defendant Pinkerton, a Board member, told Rae that
if the Board could stop CFC, it was going to do so.
(Id., , 58) .
Defendant Eirkson also made certain public statements.
In June 2000, he told a "public meeting" that if he was going to
bring CFC down, he needed their financial support.
(Id., , 59).
At some other time, speaking for the Association and the Board, he
told a meeting of funeral directors that the Association and the
Board were going after CFC after the Ferquson case was finished.
(Id., ~ 61) .
The legal backdrop of this controversy is the
Pennsylvania Funeral Director Law, 63 P.S. ~~ 479.1-480.11 (Purdon
6
._~~~" ,~ ~
1996), and implementing regulations dealing with standards and
practices. See 49 Pa. Code ~~ 13.201-13.226. section 479.2 of
the Law defines a "funeral director" as:
any person engaged in the profession of a
funeral director or in the care and
disposition of the human dead . . . The term
"funeral director" shall also mean a person
who makes arrangements for funeral service and
who sells funeral merchandise to the public
incidental to such service or who makes
financial arrangements for the rendering of
such services and the sale of such
merchandise.
(Emphasis added). Section 479.13(a) prohibits anyone from
"practic[ingl as a funeral director" unless they are licensed.
And only a licensed funeral director may "directly or indirectly,
or through an agent, offer or enter into a contract with a living
person to render funeral services to such person when needed." 49
P.S. ~ 479.13 (c).
The Law provides that a funeral director may have his
license suspended "for misconduct in the carrying on of the
profession." 49 P.S. ~ 479.11(a) (5). The regulations provide
that a funeral director commits unprofessional conduct in
assisting "an unlicensed person to engage in an act or practice
for which a license is required." 49 Pa. Code ~ 13.202(1).
In Ferquson v. Pennsvlvania State Board of Funeral
Directors, ___ A.2d ___, 2000 WL 33152028 (pa. Commw. 2001), the
Pennsylvania Commonwealth Court relied on these provisions in
upholding a Board decision that an insurance agent, Faye Morey,
7
AO 72A
(Rev,8/82)
"'"'''W~~~~I'''
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-
had engaged in the unlicensed practice of funeral directing and
that a funeral director, Andrew D. Ferguson, III, the same
Ferguson the Plaintiffs alleg~ has been persecuted by the
Defendants, had unlawfully assisted the agent in that unlicensed
practice.
Ferguson had supplied Morey with his price list for
funeral services and merchandise and had agreed to accept
assignment of pre-need policies she might sell. Holding herself
out as being associated with Ferguson, Morey them met with
potential buyers using "Estimated Worksheets" that listed prices
for funeral services and merchandise. The estimated worksheets
were used to calculate the price of the insurance. Morey signed
the worksheet as a "counselor." After she sold the customer the
insurance, she assigned the policies to Ferguson. At that point,
Ferguson prepared a "Statement of Funeral Goods and Services
without meeting with the insured. He then brought the statement
to the insured for signature.
The commonwealth court concluded that Morey had engaged
in the unlicensed practice of funeral directing because "as a
'counselor'
[she] helped the insureds plan and fund their
funerals." rd. at ___, 2000 WL 33152028 at *5. It followed that
Ferguson had violated the Law by assisting a person in the
unlicensed practice of funeral directing.
Significantly, the court noted that it was not
prohibiting insurance agents from selling policies that covered
8
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(Rev,8/82)
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funeral expenses. It was only preventing them from "usurp[ingJ
the legislatively mandated role of funeral directors." rd. at
___, 2000 WL 33152028 at *7.
III. Discussion.
The Association Defendants have made a number of
objections to the validity of the federal claims, along with
arguments against the state-law claims.
Among other arguments against the federal claims, the
Defendants contend that the Plaintiffs have not made out a
substantive due process claim because they have not alleged a
violation of a constitutionally recognized liberty or property
interest protected by due process, pointing out that the Plaintiff
have not alleged that they, as opposed to Ferguson or others, have
been penalized or even prosecuted.
We agree with the Defendants that in this context the
Plaintiffs have not stated a substantive due process claim because
they have not identified a liberty or property interest
protectable under the clause. See qenerallv Nicholas v.
Pennsylvania State Universitv, 227 F.3d 133 (3d Cir. 2000).
These Defendants also argue that the Plaintiffs have no
claim for a violation of their first amendment right to
association since first amendment associational rights do not
extend to associations created by business transactions. We
agree. See Sanitation and Recvclinq Industry. Inc. v. City of New
9
AO 72A
(Rev.BlB2)
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York, 107 F.3d 985, 996 (2d Cir. 1997). ~ qenerallv pi Lambda
Phi Fraternitv. Inc. v. Universitv of Pittsburqh, 229 F.3d 435 (3d
cir. 2000).
The Defendants also maintain that there is no equal
protection violation made here because, at most, there has only
been an investigation of the Plaintiffs, and because the
Plaintiffs have not alleged the elements of a selective
prosecution claim. See United States v. Schoolcraft, 879 F.2d 64,
68 (3d cir. 1989). We agree. In this regard, while the
Plaintiffs argue they have engaged in the same business practices
as the Defendants, we are mindful of two things: (1) the
Plaintiffs' vigorous defense of Ferguson's practices, practices
that ,the commonwealth court have found to be illegal; and (2) the
Plaintiffs' attack on the Board's position concerning what
constitutes the unlawful practice of funeral directing.
We also reject the Plaintiffs' reliance on the
privileges and immunities clause of the Fourteenth Amendment. The
Plaintiff claim that their right under this clause to pursue an
occupation was violated by the Defendants. However, this is not
the type of claim covered by this clause. See qenerallv
Slauqhter-House Cases, 83 U.S. 36, 21 L.Ed. 394, 16 Wall. 36
(1872) .
Finally, the Defendants argue that the Plaintiffs cannot
assert a federal anti-trust claim because they allege only injury
to themselves and the antitrust laws are intended to protect
10
1,""'I[Il~~~
~ ~*' ',--''''
prices, quantities, and quality of the goods and services, not a
competitor. In support, they cite Mathews v. Lancaster General
Hospital, 87 F.3d 624, 641 (3d Cir. 1996). We agree.
IV. Conclusion.
We see no need to examine defendant Campbell's motion to
dismiss since we can dismiss the case against him on the basis of
our rulings on the Association Defendants' motion. Additionally,
having decided to dismiss all the federal claims, we decline to
exercise jurisdiction over the pendent state-law claims, see 28
U.S.C. ~ 1367(c) (3), and we will dismiss them without prejudice to
filing them in an appropriate state court.
We will issue an appropriate order.
~..
William W. Caldwell
United States District Judge
Date: April 12, 2001
11
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(Rev.8182)
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IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
vs.
CIVIL ACTION NO. 1:CV-OO-2018
JOHN W. EIRKSON,
THE PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION (PFDA),
et al.,
that:
Defendants
FILED
HARRISBURG, fA
APR 1 2 2001
MARY E.~~LERK
PER ,
2001, it is ordered
ORDER
AND NOW, this 12th day of April,
1. The motion to dismiss (doc. 7) filed by
defendant Louden Campbell and the motion to
dismiss (doc. 8) filed by the other defendants
are granted as follows.
2. All federal claims in the complaint
against all defendants are dismissed for
failure to state a claim upon which relief may
be granted.
3. The Plaintiffs' pendent state-law
claims are dismissed under 28 U.S.C. ~
1367(c) (3), without prejudice to filing them
in an appropriate state court.
4. The case management conference
scheduled for Tuesday, April 17, 2001, is
cancelled.
5. The Clerk of Court shall close this
file.
~~
William W. aId ell
United States District Judge
~ ='~n~'
UNITED STATES DISTRICT COURT
FOR THE
MIDDLE DISTRICT OF PENNSYLVANIA
* * MAILING CERTIFICATE OF CLERK * *
April 12, 2001
Re: 1:00-cv-02018
Rae v. Erikson
True and correct copies of the attached were mailed by the clerk
to the following,
Don Bailey, Esq.
4311 N. 6th St.
Harrisburg, PA 17110
Fax No.: 717-221-9600
Samuel C. Stretton, Esq.
301 South High St.
P.O. Box 3231
West Chester, PA 19381
Sarah C. Yerger, Esq.
Office of Attorney General
15th Floor, Strawberry Square
Harrisburg, PA 17120
Douglas B. Marcello, Esq.
Thomas Thomas & Hafer
305 N. Front St.
PO Box 999
Harrisburg, Pa 17108-0999
James K. Thomas, Esq.
Thomas, Thomas & Hafer
305 N. Front Street
P.O. Box 999
Harrisburg, PA 17108-0999
Bridget E. Montgomery, Esq.
Eckert Seamans Cherin & Mellott
One South Market Square Building
213 Market Street
Harrisburg, PA 17101
Joseph D. Shelby, Esq.
Eckert Seamans Cherin & Mellot, LLC
8th Floor
213 Market St
Harrisburg, PA 17101-2132
William B. Mallin, Esq.
-~~l"'i'~J
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Eckert Seamans Cherin & Mellott, LLC
213 Market Street, Eighth Floor
Harrisburg, PA 17101
James K. Thomas II, Esq.
Thomas, Thomas & Hafer
305 N. Front St.
P.O. Box 999
Harrisburg, PA 17108-0999
cc:
Judge
Magistrate Judge
U.S. Marshal
probation
U.S. Attorney
Atty. for Deft.
Defendant
Warden
Bureau of Prisons
Ct Reporter
Ctroom Deputy
Orig-Security
Federal Public Defender
Summons Issued
Standard Order 93-5
Order to Show Cause
Bankruptcy Court
Other
DATE: J-j)/ ';)) 0 I
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to:
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( Jury Clerk
N/C attached to complt. and served by:
Marshal () Pltf's Attorney ( )
Petition attached &
US Atty Gen ( )
DA of County ( )
mailed certified mail
PA Atty Gen ( )
Respondents ( )
MARY E. D'ANDREA, Clerk
BY: 'f57&---
Deputy Clerk
CERTIFICATE OF SERVICE
I hereby certify that on May 14, 2001 a true and correct copy of the
foregoing Document was served upon the following counsel of record by United
States Mail, postage prepaid.
ECKERT SEAMAN'S CHERIN & MELLOTT, LLC
Bridget Montgomery, Esquire
213 Market Street, 8th Floor
Harrisburg, P A 1710 1
Sarah Yerger, Esquire
Office of Attorney General
1500 Strawberry Square
Harrisburg, P A 17120
Douglas Marcello, Esquire
Thomas, Thomas, Hafer, LLP
305 North Front Street
Harrisburg, P A 1710 1
BY cOt
Don Bailey lD# 23786
4311 N. 6th Street
Harrisburg, PA 17110
(717) 221-9500
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PRAECIPE FOR LISTING CASE FOR ARGUMENT
(Must be typewritten and submitted in duplicate)
TO THE PROmONOTARY OF CUMBERLAND COUNTY:
Please list the within matter for the next Argument Court.
ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
v.
JOHN W. EIRKSON, THE
PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION (PFDA),
LOUDEN 1. CAMPBELL, ESQUIRE,
MARTIN BROWN and JAMES O.
PINKERTON,
Defendants
No. 01-2912 Civil
I. State matter to be argued (i.e., plaintiff's motion for new trial,
defendant's demurrer to complaint, etc.):
Defendants, John W. Eirkson, The Pennsylvania Funeral Directors Association
(PFDA), Martin Brown and James O. Pinkerton's Preliminary Objections to
Plaintiffs' Complaint
2. Identify counsel who will argue case:
(a)
For Plaintiff:
Address:
Donald Bailey, Esquire
4311 North 6th St.
Harrisburg, PA 17110
(b) For Defendants: Douglas B. Marcello, Esquire (John W. Eirkson, The
Pennsylvania Funeral Directors Association (PFDA), Martin Brown and
James O. Pinkerton)
Address: 305 North Front Street
P.O. Box 999
Harrisburg, P A 17108
For Defendants:
Bridget E. Montgomery, Esquire (Loudon 1.
Campbell)
213 Market St., 8th FI.
Harrisburg, P A 1710 I
Address:
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argument.
Dated:
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For Defendants:
Sarah Yerger, Esquire (James O. Pinkerton & State
Board of Funeral Directors (SBFD)
Office of Attorney General
15th Fl., Strawberry Square
Harrisburg, PA 17120
Address:
I will notify all parties in writing within two days that this case has been listed for
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Argument Court Date: Ju1pr 25/2001
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I certifY that the foregoing docwnent in within action was served upon the following by
enclosing the same in an envelope addressed as follows, postage prepaid and depositing the same
in the United States Mail, First Class Mail, at Harrisburg, Pennsylvania on the 4th day of June,
2001:
Donald Bailey, Esquire
4311 North 6th St.
Harrisburg, PA 17110
Attorney for Plaintiff
Samuel C. Stretton, Esquire
301 S. High Street
West Chester, PA 19381-3231
Trial Counsel for Plaintiff
Bridget E. Montgomery, Esquire
Eckert, Seamans, Cherin & Mellott, LLC
One South Market Square Building
213 Market Street
Harrisburg, P A 171 0 1
Attorney for Loudon L. Campbell, Esquire
Sarah Yerger, Esquire
Attorney General's Office
1500 Strawberry Square
Torts Litigation Section
Harrisburg, PA 17120
By:
THOMAs, THOMAS & HAFER, LLP
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IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
ROBERT RAE AND
COMMONWEALTH FUNERAL
CONSULTANTS, INC.,
NO. 01-2912 Civil Term
Plaintiffs
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JURY TRIAL DEMANDED
vs.
JOHN W. EIRKSON, THE
PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION
(PFDA), LOUDEN L. CAMPBELL
ESQUIRE, MARTIN BROWN,
And JAMES O. PINKERTON,
Defendants
NOTICE TO PLEAD
To: Donald Bailey, Esquire
4311 North 6th Street
Harrisburg, PA
You are hereby notified to me a written response to Defendant's, Loudon L. Campbell
(hereinafter "Campbell") Preliminary Objections within twenty (20) days from service hereof
or judgment may be entered against you.
Respectfully submitted,
ECKERT SEAMANS CHERIN & MELLOTT, LLC
Date: 6 - v- 0 1
Bridg t . ontg me , Esquire
Supr Ct. I.D. #5 5
213 Market Street, 8th Floor
Harrisburg, PA 17101
(717) 237-6000
Attorneys for Defendant, Loudon L. Campbell, Esquire
{L0238780,l}
.
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
ROBERT RAE AND
COMMONWEALTH FUNERAL
CONSULTANTS, INC.,
Plaintiffs
vs.
JOHN W. EIRKSON, THE
PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION
(PFDA), LOUDEN L. CAMPBELL
ESQUIRE, MARTIN BROWN,
And JAMES O. PINKERTON,
Defendants
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NO. 01-2912 Civil Term
JURY TRIAL DEMANDED
PRELIMINARY OBJECTIONS OF DEFENDANT LOUDON L. CAMPBELL
Loudon L. Campbell, ("Campbell") by and through his undersigned attorneys, Eckert
Seamans Cherin & Mellott, LLC, hereby submits the following Preliminary Objections
pursuant to Pa. R.C.P. 1028, and in support thereof states as follows:
PRELIMINARY STATEMENT
Plaintiffs have filed a civil rights complaint in this Court against the named Defendants,
all of whom Plaintiffs have sued in the United States Court for the Middle District of
Pennsylvania on the same alleged factual and legal grounds. Plaintiff brought federal and state
claims in the federal action, all of which were dismissed by United States District Judge
William W. Caldwell on or about April 12, 2001. Judge Caldwell dismissed the state claims
without prejudice to file them in an appropriate state court. Plaintiffs, however, have appealed
the dismissal of the action in its entirety to the United States Court of Appeals for the Third
{L0238775,l}
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Circuit. After filing the federal appellate action, Plaintiffs then filed a new complaint in this
Court and they served the complaint upon Defendants by mail. With these facts as
background, Defendant Campbell asserts the follow Preliminary Objections to the complaint
filed in this Court:
PA. R.C.P. 1028 (a)(1) and (2): IMPROPER SERVICE
AND IMPROPER FORM OF COMPLAINT
I. Plaintiffs have failed to make proper service upon Campbell in that
Plaintiffs have filed a new complaint in this court and. as an original state action, the complaint
should have been accompanied by a Writ of Summons and served by the Sheriff in accordance
with Pa. R.C.P. 400 and 402.
2. If Plaintiffs' intention was only to preserve the statute of limitations after
dismissal of the federal civil rights action, Plaintiffs should have followed the procedures
proscribed by 42 U.S. C. ~5103, which require that the Plaintiffs file certified transcripts of the
federal court judgment and pleadings, and prohibit the Plaintiffs from filing a new complaint in
state court; Plaintiffs have not filed the required transcripts and have filed a new complaint and
therefore the complaint should be stricken in its entirety.
PA. R.C.P. 1028 (a)(1): IMPROPRER VENUE
3. Venue is improper in the Court of Common Pleas of Cumberland
County, as the alleged cause of action did not arise in Cumberland County, nor did any alleged
transaction or occurrence take place in Cumberland County out of which the cause of action
arose; nor is there any indication that any Defendant may be served in Cumberland County.
{L0238775,! }
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PA. R.C.P. 1028 (a)(6): PENDENCY OF A PRIOR ACTION
4. For the reasons set forth in the foregoing paragraphs and the
Introductory Statement, Defendant Campbell further preliminarily objects to the complaint
based upon pendency of a prior action.
PA. R.C.P. 1028 (a)(4): DEMURRER
5. The Complaint fails to state any claim against Defendant Loudon L.
Campbell.
WHEREFORE, Defendant Loudon L. Campbell respectfully requests that this Court
grant the preliminary objections filed on behalf of Defendant Campbell and dismiss this action
in its entirety as to him.
Respectfully submitted,
ECKERT SEAMANS CHERIN & MELLOTT, LLC
Brid
Sup e Ct. J.D. #56105
213 Market Street
Eighth Floor
Harrisburg, PA 17101
(717) 237-6000
Attorneys Defendant, Loudon L. Campbell, Esquire
Date:
{L0238775,l}
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VERIFICATION
I, Bridget E. Montgomery, Esquire, am attorney for Loudon L. Campbell in this
action and hereby verify that the facts set forth in the foregoing document are true and correct to
the best of my knowledge, information, and belief. I make this verification on behalf of Defendant
Campbell because as attorney of record I am in a position to know the facts alleged herein.
I understand that any false statements herein are made subject to penalties of 18 Pa.
C.S. ~4904, relating to unsworn falsification to authorities,
Dated: June~, 2001
{L0238775,l}
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CERTIFICATE OF SERVICE
I, Bridget E. Montgomery, hereby certify that I am this day serving a copy of the foregoing
documents upon the persons( s) and in the manner indicated below, which service satisfied the
requirements of the Pennsylvania Rules of Civil Procedure, by depositing a coy of the same in the
United States Mail, Harrisburg. Pennsylvania, with first-class postage prepaid, addressed as follows:
Donald Bailey, Esquire
4311 North Sixth Street
Harrisburg, Pennsylvania 17110
Dated: June~, 2001
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IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
v.
JOHN W. EIRKSON, THE PENNSYLVANIA
FUNERAL DIRECTORS ASSOCIATION
(PFDA), LOUDEN L. CAMPBELL, ESQ.,
MARTIN BROWN, JAMES O. PINKERTON,
Individually, and the PFDA MEMBERS OF
THE STATE BOARD OF FUNERAL
DIRECTORS IN THEIR INDIVIDUAL
CAPACITIES,
Defendants
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY,PA
No. 01-2912 Civil
JURY TRIAL DEMANDED
NOTICE TO PLEAD
TO: Don Bailey, Esquire
4311 North 6th Street
Harrisburg, PA 17110
You are hereby notified to file a written response to the enclosed Preliminary Objections,
within twenty (20) days from service hereof or a judgment may be entered against you.
By:
Office of Attorney General
15th Floor, Strawberry Square
Harrisburg, PA 17120
PHONE: (717) 705-2503
FAX: (717) 772-4526
DATE: June 4,2001
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Respectfully submitted,
D. MICHAEL FISHER
Attorney General
SUSAN J. FORNEY
Chief Deputy Attorney General
Chief, Litigation Section
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IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY,PA
v.
No. 01-2912 Civil
JOHN W. EIRKSON, THE PENNSYL VANIA
FUNERAL DIRECTORS ASSOCIATION
(PFDA), LOUDEN L. CAMPBELL, ESQ.,
MARTIN BROWN, JAMES O. PINKERTON,
Individually, and the PFDA MEMBERS OF
THE STATE BOARD OF FUNERAL
DIRECTORS IN THEIR INDIVIDUAL
CAPACITIES,
JURY TRIAL DEMANDED
Defendants
PRELIMINARY OBJECTIONS OF
DEFENDANT JAMES PINKERTON
Defendant, by his attorneys, hereby file the following preliminary objections:
I. PENDENCY OF A PRIOR ACTION
1, Plaintiffs in this case are Robert Rae and Commonwealth Funeral Consultants,
Inc. (CFC); Rae is the President and CEO of CFC, a licensed Pennsylvania
msurance agency.
2. Defendants are John W. Eirkson, Louden Campbell, Martin Brown and James
Pinkerton, and the PFDA
3. Plaintiff alleges in his complaint that defendants violated his rights, and he seeks
damages for allegations of an injury caused by defendants' tortious interference
with business and contractual relations, interference with prospective business and
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contractual relations conspiracy to injure plaintiffs in their profession, defamation,
and civil conspiracy. See Complaint '\11.
4. Plaintiff seeks damages for violations of state tort law.
S. Plaintiffs filed a federal civil rights complaint in this matter alleging violations of
their substantive due process, first amendment right of association in the making
of contracts, right to equal protection, and their Fourteenth Amendment right
under the privileges and immunities clause to pursue an occupation, and a claim
for violation of anti-trust laws. Additionally, plaintiffs made state law claims for
anti-trust violations, defamation, tortious interference with business and
contractual relationships and tortious interference with prospective contractual
relationships.
6. Defendant Louden filed a motion to dismiss, defendants PFDA, Eirkson and
Brown also filed a motion to dismiss and defendants SBFD and Pinkerton
answered the complaint.
7. On April 12, 2001, the federal court granted the motions to dismiss as to all
defendants on the federal claims for failure to state a claim and dismissed the state
law claims for lack of jurisdiction.
8, Plaintiffs filed an appeal to the Third Circuit on April 13, 2001, and that appeal is
still pending.
9. On May 14, 2001, plaintiffs filed with this Court a certified transcript of the final
judgment of the federal court and a new civil complaint.
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10. In the federal case, the parties are identical to the county court case, the plaintiff
asserts the same state rights, and the relief requested is the same.
WHEREFORE, Defendant Pinkerton requests this Court to enter an order staying the
county court action pending the outcome ofthe federal court appeal.
II. IMPROPER FORM OF COMPLAINT! FAILURE OF COMPLAINT TO
CONFORM TO PA.R.C.P.I028(A)(2)
11. Paragraphs 1-10 are incorporated herein by reference.
12. In order to protect the timeliness of an action under 42 PaC.S.A. ~ 5103, a litigant,
upon having his case dismissed in federal court, must promptly file a certified
transcript of the final judgment of the federal court AND at the same time, a
certified transcript of the pleadings from the federal action. The litigant shall
NOT file new pleadings in the state court.
13. Plaintiffs filed a new pleading in this court and did not provide a certified
transcript of the pleadings from the federal action.
14. Under Pa. R.C.P. 1028(a)(2), a party may preliminary object by way of a motion
to strike off a pleading because of a lack of conformity to a rule of court.
15, Because plaintiff failed to include a certified transcript of the pleadings and filed a
new pleading instead, plaintiffs' complaint is not properly filed under Section
5103 and must be stricken.
WHEREFORE, defendant Pinkerton respectfully requests that plaintiffs' complaint be
stricken.
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III. IMPROPER SERVICE OF A COMPLAINT
16. Paragraphs 1-15 are incorporated herein by reference.
17. Pennsylvania Rule of Civil Procedure 400 requires that "original process shall be
served within the Commonwealth only by the Sheriff." Pa.R.Civ.P.400(a).
18. The complaint in this matter was not served by the sheriff.
19. The court lacks personal jurisdiction over defendant Pinkerton,
IV. DEMURRER
20. Paragraphs 1-19 are incorporated herein by reference.
21. Plaintiff seeks damages against Pinkerton for allegations of tortious interference
with business and contractual relations, interference with prospective business and
contractual relations and civil conspiracy.
22. James Pinkerton is a board member of the State Board of Funeral Directors
(SBFD), and is employed by the Commonwealth of Pennsylvania, Department of
State in his capacity as a board member.
23, Since defendant Pinkerton is a Commonwealth employee acting within the scope
of his duties, he is entitled to sovereign immunity pursuant to 42 Pa. C.S,A. S
8502,et seq. Any claim based on Pennsylvania law is barred by sovereign
immunity.
WHEREFORE, the defendant request the Court to dismiss the complaint because it is
barred by sovereign immunity.
V. LACK OF JURISDICTION
24. Paragraphs 1-23 are incorporated herein by reference.
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25. The Commonwealth Court has, with certain exceptions not applicable here,
"original jurisdiction of all civil actions or proceedings. . . [a ]gainst the
Commonwealth government, including any officer thereof, acting in his official
capacity, . . . ." 42 Pa.C.S. g761(a)(I) (emphasis added).
26. The Commonwealth Court's jurisdiction over claims brought against
Commonwealth officers acting in their official capacities is exclusive. 42 Pa.C.S.
g761(b).
27. Pennsylvania law requires a Court that does not have jurisdiction to transfer the
case to the proper tribnnal. 42 Pa.C.S. g5103.
WHEREFORE, the Court should transfer this case to the Commonwealth Court, which
has exclusive original jurisdiction over this case.
VI. IMPROPER VENUE
28. Paragraphs 1-27 are incorporated herein by reference.
29, If jurisdiction does not lie in the Commonwealth Court, proper venue lies in the
Dauphin County Court of Common Pleas.
30. Plaintiff does not live in Cumberland County, nor did the cause of action arise in
Cumberland County.
31. All of the defendants either work or have their principal place of business in
Dauphin County.
32, There is no tie to Cumberland County.
33. Therefore, venue does not lie in Cumberland County, it lies in Dauphin County.
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WHEREFORE, the defendant respectfully requests that, if the Court determines that
jurisdiction does not lie with the Commonwealth Court, that the Court transfer the case to the
Court of Common Pleas of Dauphin County.
VII. DEMURRER
34. Paragraphs 1-29 are incorporated herein as if set forth in full.
35. The complaint fails to state a claim upon which relief may be granted as plaintiffs
have not stated facts which suggest which state law has been violated by
defendant Pinkerton's conduct.
36, The state law claims in the complaint should be dismissed as plaintiff has failed to
aver with particularity the exact and specific actions taken by the defendants
which allegedly deprived him of his rights, and the exact and specific law which
was violated.
WHEREFORE, the defendant respectfully requests the Court to dismiss the complaint
for failing to state a claim on which relief can be granted.
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15th Fl., Strawberry Square
Harrisburg, PA 17120
Direct: (717)705-2503
Date: June 4, 2001
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Respectfully submitted,
D. MICHAEL FISHER
Attorney General
BY:
SARAH C. YERGE
Deputy Attorney Ge
Attorney J.D. # 70357
SUSAN 1. FORNEY
Chief Deputy Attorney General
Litigation Section
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IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, PA
v.
No. 01-2912 Civil
JOHN W. EIRKSON, THE PENNSYL VANIA
FUNERAL DIRECTORS ASSOCIATION
(PFDA), LOUDEN L. CAMPBELL, ESQ.,
MARTIN BROWN, JAMES O. PINKERTON,
Individually, and the PFDA MEMBERS OF
THE STATE BOARD OF FUNERAL
DIRECTORS IN THEm INDIVIDUAL
CAPACITIES,
JURY TRIAL DEMANDED
Defendants
CERTIFICATE OF SERVICE
I, SARAH C. YERGER, Deputy Attorney General for the Commonwealth of
Pennsylvania, Office of Attorney General, hereby certify that on June 4, 2001, I caused to be
served a true and correct copy of the foregoing document entitled Preliminary Objections of
Defendants, by United State Mail, postage prepaid in Harrisburg to the following:
Donald Bailey
4311 North 6th Street
Harrisburg, PA 17110
SARAH C. YE
Deputy Attomey G n r I
Attorney ill #70357
Date: June 4, 2001
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ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
v.
JOHN W. EIRKSON, THE
PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIA nON (PFDA),
LOUDEN L. CAMPBELL, ESQUIRE,
MARTIN BROWN and JAMES 0,
PINKERTON,
Defendants
: IN THE COURT OF CO:MMON PLEAS
; CUMBERLAND COUNTY, PENNSYLVANIA
: No.: 01-2912 CIVIL TERM
: JURY TRIAL DEMANDED
AND NOW, this _ day of , 2001, upon consideration of the
Preliminary Objections of Defendants, John W. Eirkson, The Pennsylvania Funeral Directors
Association (PFDA), Martin Brown and James O. Pinkerton, to Plaintiffs' Complaint, it is
hereby ordered and decreed that Defendants' Preliminary Objections are granted and Plaintiffs'
Complaint is dismissed.
BY THE COURT:
J.
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ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
v.
: IN THE COURT OF COMMON PLEAS
: CUMBERLAND COUNTY, PENNSYL VANIA
: No.: 01-2912 CIVIL TERM
JOHN W. EIRKSON, THE
PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION (PFDA),
LOUDEN L. CAMPBELL, ESQUIRE,
MARTIN BROWN and JAMES O.
PINKERTON,
Defendants
: JURY TRIAL DEMANDED
I. MOTION TO STAY
1. Defendants, John W. Eirkson, The Pennsylvania Funeral Directors Association
(PFDA), Martin Brown and James 0, Pinkerton (hereinafter "PFDA Defendants"), respectfully
request this Honorable Court to stay Plaintiffs' action.
2. On or about November 17, 2000, Plaintiffs, Robert Rae and Commonwealth
Funeral Consultants, Inc., filed an action in the United States District Court for the Middle
District of Pennsylvania at No. 1 :CV 00-2018, a copy of said Complaint is attached hereto and
made a part hereof as if set forth in full as Exhibit "A" (hereinafter "Federal Complaint").
3. The Federal Complaint sought to allege causes of action based upon deprivation
of substantive due process, violation of equal protection, conspiracy, anti-trust violations,
defamation, tortious interference with business and contractual relations and interference with
prospective business and contractual relations, civil conspiracy and deprivation of privileges and
immunities secured by the 14th Amendment.
4. On April 12, 2001, the Federal Court granted Defendants' Motion to dismiss all
Federal claims for failure to state a claim upon which relief may be granted, a copy of said Order
and Memorandwn are attached hereto and made a part hereof as Exhibit "B".
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5. The Federal Court further dismissed Plaintiffs' pendent State Law claims without
prejudice for filing them in an appropriate State Court.
6. On April 13, 2001, Plaintiffs filed a Notice of Appeal of the Federal Court
Decision to the Third Circuit Court of Appeals of the United States, a copy of said appeal is
attached hereto and made a part hereof as Exhibit "C".
7. On May 14, 2001, Plaintiffs filed a Complaint in this Court, a copy of which is
attached hereto and made a part hereof as Exhibit "D".
8. On May 14, 2001, Plaintiffs filed a new, different Complaint in this Court seeking
to allege claims for defamation, tortious interference with business and contractual relations and
interference with prospective business and contractual relations and civil conspiracy.
9. The Complaint filed by Plaintiffs in this Court is a different Complaint and does
not include claims against the PFDA Members of the State Board of Funeral Directors in their
individual capacities as does the Federal Complaint.
10. However, Plaintiffs are currently pursuing an appeal of the dismissal of the same
State law causes of action by the Federal Court as they are now seeking to pursue in the
Complaint in State Court.
11. Defendants request this Honorable Court to stay Plaintiffs' action.
WHEREFORE, Defendants request this Honorable Court to stay Plaintiffs' action.
II. MOTION TO DISMISS
12. The averments of paragraphs 1 through 11 are incorporated herein and made a
part as if set forth in full.
13. On May 14,2001, Plaintiffs filed a "Praecipe" filing a copy of the Memorandum
and Order ofthe Federal Court of April 12, 2001 dismissing the Federal action.
14. It appears that Plaintiffs did this in an attempt to "transfer" the State claims from
Federal Court pursuant to 42 Pa.C.S.A. s5103(b). However, said statute provides that "such
transfer may be effected by filing a certified transcript of the final judgment of the United States
Court and the related pleadings in a Court or Magisterial District of this Commonwealth." 42
Pa.C.S.A.s5103(b )(2).
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15. The Plaintiffs have failed or refused to file certified copies of the related
pleadings from the Federal Court.
16. A litigant is required to file a certified transcript of the pleadings from the Federal
action, rather than a new pleading in State Court. Williamson v. Smithe Machine Companv.
Inc., 395 Pa.Super. 511, 577 A.2d 907 (1990).
17. Plaintiffs have filed a new pleading in State Court and has not filed certified
copies of the Federal pleadings.
18. Accordingly, Plaintiffs have not complied with the requirements of 42 Pa.C.S.A.
S5103(b) and this action should be dismissed.
19. Further, Plaintiffs have failed or refused to effect proper service upon said
Defendants as required by the Rules of Civil Procedure, including but not limited to Pa.R.C.P.
402.
20. Accordingly, Plaintiffs have failed or refused to properly serve the parties with
the new Complaint by which they seek to commence this action.
WHEREFORE, Defendants request this Honorable Court to dismiss Plaintiffs'
Complaint.
III. MOTION TO DISMISS PLAINTIFFS' CLAIMS
21. The averments of paragraphs 1 through 20 are incorporated herein and made a
part as if set forth in full.
22. Defendants request this Honorable Court to dismiss Plaintiffs' claims.
23. Plaintiffs have failed to state a claim or to aver facts in support of their claim for
defamation, tortious interference with a contract or business relationship or prospective contracts
or business relationship or civil conspiracy.
24. Plaintiffs' claims based upon defamation, tortious interference with a contract or
business relationship, or civil conspiracy should be dismissed as a matter oflaw.
25. Plaintiffs have failed to state a claim for punitive damages.
26. Plaintiffs have failed to state a claim for attorney fees.
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27. Plaintiffs' claim for $5,000,000 in damages should be stricken as violative of
Pa.R.C.P, 1021(b) which provides that any pleadant demanding relieffor unliquidated damages
shall not claim any specific sum.
WHEREFORE, Defendants request this Honorable Court dismiss Plaintiffs' Complaint.
IV. LACK OF JURISDICTION AND/OR VENUE
28. The averments of paragraphs 1 through 27 are incorporated herein and made a
part as if set forth in full.
29. Plaintiffs have filed this action in the Court of Common Pleas of Cumberland
County.
30. Plaintiffs fail or refuse to state a basis for jurisdiction in the Court of Common
Pleas of Cumberland County and/or proper venue in said county.
WHEREFORE, Defendants request this Honorable Court to dismiss Plaintiffs' Complaint
for lack of jurisdiction and/or proper venue in this county.
By:
Date: June 4, 2001
:132647,1
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I certify that the foregoing document in within action was served upon the following by
enclosing the same in an envelope addressed as follows, postage prepaid and depositing the same
in the United States Mail, First Class Mail, at Harrisburg, Pennsylvania on the 4th day of June,
2001:
Donald Bailey, Esquire
4311 North 6th St.
Harrisburg, PA 17110
Attorney for Plaintiff
SamueIC.Stretton,Esqurre
301 S. High Street
West Chester, PA 19381-3231
Trial Counsel for Plaintiff
Bridget E. Montgomery, Esquire
Eckert, Seamans, Cherin & Mellott, LLC
One South Market Square Building
213 Market Street
Harrisburg, P A 1710 1
Attorney for Loudon L. Campbell, Esquire
Sarah Yerger, Esquire
Attorney General's Office
1500 Strawberry Square
Torts Litigation Section
Harrisburg, PA 17120
By:
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IN THE UNITED STATES DISTRI :T COURT
FOR THE MIDDLE DISTRICT OF PI NNSYLVANIA
)
)
)
)
)
)
)
)
)
JOlIN W. ElRKSON, THE )
PENNSYLVANIA FUNERAL )
DIRECTORS ASSOCIATION )
(PFDA), LOUDEN L. CAMPBELL)
ESQUIRE, MARTIN BROWN, )
JAMES O. PINKERTON, )
INDIVIDUALLY, AND THE )
PFDA MEMBERS OF THE )
STATE BOARD OF FUNERAL )
DIRECTORS IN THEm )
INDIVIDUAL CAPACITIES )
)
)
ROBERT RAE AND
CO~ONWEALTHFUNERAL
CONSULTANTS INC.,
Plain tifTs
vs.
Defendants
CIVIL A CTION LAW
NO.
l:CV
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1=/LE/)
HARRISBURG
NOV 1 72000
MARY E. O'AN
per_!:~~L.ERK
I.ER/\ -
JURY T UAL DEMANDED
COMPLAINT
~ODUCTORYSTATE~~NT
1.) The plaintiffs are a private individual, Robl rt Rae, and a company of
whom he is CEO and president, Commonwealth Fun :ral Consultants Inc., (CFC)
a licensed insurance agency and a Pennsylvania Corp Iration. CFC is in the
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business of marketing and selling final expense life it lurance to fund funeral and
funeral related expenses upon the death of the insure, ("pre-need contracts). The
pre-need contracts are sold by licensed funeral directc rs. CFC is joined in this
field by a number of other entities who perform simil: r types of services such as
the Catholic Cemeteries Association and the Diocese )fPittsburgh who sell the
"Catholic Funeral Plan." The defendant PFDA is also an aggressive marketer of
these types of services. The proliferation of this type ' If business activity was
largely occasioned by the "Funeral Rule," an FTC (F lderal Trade Commission)
ruling which requires the disclosure of costs of funel'l I services to consumers.
Many ofCFC's employees are funeral directors. Funl ral directors are licensed in
Pennsylvania and are regulated by the defendant Stat, ' Board of Funeral Directors
(SBFD or the "Board"). The defendant Pennsylvania ~uneral Directors
Association (PFDA) is an association which function i as a business and political
organization for its members. Politically very effecti, e, the PFDA controls the
SBFD. The SBFb is composed ofa majority ofPFD" members, and, or, fanner
members and officers. The PFDA who, as aforesaid, s also in the business of
doing exactly what CFC and similar entities do, bYaJ ,d through the hidividual
defendants, Pinkerton, Eirkson, Bro""n, its political, 'omes on the SBFD board,
and others, have created an unlawful association ofiJ ,dividuals and entities who
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have, among other things, used the SBFD as a t€?Ol to 1 arass and intimidate those
who like plaintiffs, pose a threat to the defendants' fit ancial interests. In pursuit
of their unlawful goals, the defendants, in various con binations, at different times
have used the SBFD to investigate, harass, and prosec Ite the plaintiffs'
competitors. They have made public threats and scap' goated innocent persons,
using them as examples hoping to frighten and deter I ennsylvania funeral
directors who don't fall in line with their plans to pre1 ent third persons from
dealing with (in this case) plaintiffs. The defendants t ave caused the SBFD to
issue regulations that are inconsistent with pre-empti, e federal law and with state
law in an attempt to control competitors with the PFI IA. They have, in many
cases, personally interfered with the contractual relati ms, and potential
contractual relations, of the plaintiffs causing them lc;t business, revenues, and
other special damages in exceSS of $5,000,000.00. In lddition to the special
damages they have suffered, the defendants have dep ived the plaintiffs of their
constitutional rights. They have violated plaintiffs 1" 4lb, and 14th Amendment
rights. They have denied them the equal protection c fthe laws, and they have
caused the'plaintiffs an ahidgement of Constitution ,lly guaranteed privileges and
immunities. The impact on plaintiffs' business has t ~en devastating.
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.JURISDICTION AND VEr UE
2.) Jurisdiction is conferred on this Court by 21 V.S.C. S 1331 and
!i1343(a)(3) and (4) and by 42 V.S.C. *1983, a remed al statute.
3.) This Court's supplemental jurisdiction is in roked as per 28 D.S.C.
S 1367.
4.) Punitive damages are requested of the indh idual defendants.
5.) Ajury trial is demanded.
6.) Venue is properly in the Middle District of Pennsylvania because the
parties, witnesses, and many facts are common to Dal phin County.
;PARTIES
7.) Plaintiff Robert Rae is an adult American c tizen and is CEO and
President of plaintiff CFC, a licensed Pennsylvania i lsurance agency.
8.) The defendants' John W. Eirkson. Louden :.. Campbell, Martin Brown
and James O. Pinkerton are all adult American citizel s. Eirkson is an officer in
defendant PFDA as is the defendant Brown. Pinkerto 1 is a member of the (SBFD)
and is also believed to be a member ofPFDA. He, lilc ~ his PFDA colleagues on the
SBFD, is sued in his individual capacity.
9.) The SBPD Board members including Pinl erton, are not sued in their
official capacity, but are sued in their individual cap lcity, as are all SBFD Board
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members who are members of the PFDA.
OPERATIVE FACTS
10.) The plaintiff Rae and CFC, on or about 19' 7, began selling pre-need
services in cooperation with funeral homes and funen l directors.
11.) The defendant PFDA was already in this t) pe of business.
12.) The PFDA and its members utilize both a-\i-ust, and insurance carriers,
to sell pre-need services to the public. They have don, this for years. They have
created a number of entities like "SecurChoice" for tt: ~s purpose, through which its
(PFDA's) members, market and sell pre-need service; to consumers.
13.) During this same time period, a number of entities like Pennsylvania
Funeral Services Corp., (PFSC) a wholly owned subs diary of PFDA, started
PFDA's "Unichoice," a Co-op with membership free :0 PFDAmembers only.
Unichoice which was set up whereby PFDA member: could purchase wholesale
funeral ''products and services." The Co-op, "Unich( ice," offers dividends and
credits to members ofPFDA only. "Secure Choice" 21d "Unichoice" and '''The
Pennsylvania Funeral Plan," are believed to be mark, ring plans for PFSC which is
owned by PFDA. One of its services is pre-need insl ranee. Unicho:ce is designed
to create a monopoly and acts in restraint of trade fOJ PFDA members over the
funeral industry by offering free memberships to me nbers and then paying
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dividends and giving credits to members ofthe PFDA only.
14.) The PFDA and the individual defenc1antsa e direct business
competitors of the plaintiffs, and are unlawfully using the SBFD and its badge of
authority to unlawfully d~troy the plaintiff's busines:.
15.) As part of this process of cornering the ma ket on pre-need sales, the
PFDA once encouraged and promoted a practice whe: eby its funeral director
members would become licensed Pennsylvania inSUtf lce agents, although it never
required its sales makers to be licensed funeral directl 'rs.
16.) The PFDA and the individual defendants ( id this for two purposes. The
first was to create a relationship between its funeral d rector members and its pre-
need entities and businesses so PFSC could market ti rough "SecurChoice and
Unichoice" and the "Pennsylvania Funeral Plan," an( the second was to use .its
direct relationship with the SBFD, whom it controls] olitically by virtue of
membership on the Board ie using its position on the Board as a regulatory and
controlling state agency to ensure the security ofits r lembers and the defendants
personal interest hI PFSC a,nd the trUSts and the co-o: I it governs, and to prevent
competitors, such as plaintiffs, from selling pre-need services in Pennsylvania.
17.) Upon information and belief the plaintiff5 allege that the individual
defendants are
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a.) members of the PFDA and participate in PF: ,C, which markets as
"SecurChoice/Unichoice/Pennsylvania Funeral Plan."
b.) Participate as co-op members in "SecurChc ,ce/Unichoice" which is a
part of the PFDA,
c.) Receive dividends, or are poised to receive iividends (or reinvest
dividends) in the Co-op. ("SecurChoice/Unichoice").
18.) An example of the defendants unlawful be lavior can best be illustrated
by the circumstances evidenced by SBFD harassmen1 and the prosecution of
Andrew D. Ferguson 111, a licensed Pennsylvania FUl eral Director from
Uniontown Pennsylvania.
19.) Mr. Ferguson worked with a group of lice lSed insurance agents who, in
selling their pre-n~ed products, utilized bis prices w111e marketing pre-need sales.
20.) This practice was not only encouraged by :he FTC's "Funeral Rule" but
arguably was mandated by the rule.
21.) While Mr. Ferguson was doing the above, according to the spirit and
the letter 6fFTC regulations, the defendants were ag l1'essively marketing' their
pre-need products through members and others.
:Z2.) But Mr. Ferguson only ran afoul of the S ~FD, and the other
defendants, when he worked with licensed insurance agents who were not
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affiliated with the PFDA. He had in fact been workinj with the PFDA but believes
he was chosen for SBFD action because he broke rani oS and worked with other
vendors such as CFC.
23.) Consequently the SBFD, at the direct behe;t of the defendants by and
through the PFDA's lawyers. who did the writing for :he SBFD, submitted and
passed (in questionable violation of state law and in ( lear violation of Mr.
Ferguson's substantive and procedural due process ri ~ts) a resolution (September
1, 1999) for the sole purpose ofrargeting and deterriI g the plaintiffs' customers
from doing business with plaintiffs and others like th:m, using Mr. Ferguson as a
tool.
24.) Ironically, while the SBFD was being use, I as a private political tool by
the defendants to further their own unlawful ends, in :he clear absence of any
rational government purpose lacking any reasonable ~overnment need, the
defendants were selling pre-need insurance products through many of their
members who wore two hats, funeral director and lie :used insurance agent.
25.) In Ferguson's case the insurance agents \\ ho worked with him never
committed to his prices, but merely used them as gu! lance to structure tentative
pre need sales in full and complete compliance vvith he letter, spirit, intent, and in
furthering the FTC goals of protecting and informin" conSLUIlers.
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26,) Yet the SBFD continues to investigate and )rosecute Ferguson, whose
plight they generated without any proper law enforcer lent purpose, but rather for
the purpose of frightening others into submitting to th: defendants (PFDA's)
unlawful rp.onopolistic practices, which were designee to direct all funeral services
business in Pennsylvania to defendants.
27.) Pinkerton and the PFDA members of the S ~FD have used their access
to the power of the state to set in motion investigation; and prosecutions of the
PFDA's competition including CFC. The "PFDA" oft ~rs SecurChoice and
Unichoice and the Pennsylvania Funeral Plan to funelll directors and the public.
28.) Pinkerton and the PFDA members of the S ~FD have individually used
their official positions improperly to causeinvesQgati >fiS and prosecutions of
Pennsylvania funeral directors, and have~awfully F'ovide~ infonnation about
the Board's investigatory and prosecutorial activities 0 non SBFD members
including the individual defendants here, in that they lave shared, and, it is
believed and alleged, have coordinated plans to publi, ize SBFD investigation and
prosecutorial policy and activities among Pennsylvan a funeral directors and those
in related businesses for the sole and intentional purp Ise of intimidating,
threatening, and unlawfully destroying the contracts, ,otential contracts, business,
business opportunities, and personal and business rep Itation, a constitutional
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property right under Pennsylvania law, of those perso 1S and entities, including but
not limited to, plaintiff's, who are competitors of the F FDA, its officers, political
colleagues. and co-defendants.
29.) The defendants Eirkson and Bro\'ffi have s loken out on numerous
occasions, before numerous gatherings of funeral dire ;tors, and have written
correspondences, and caused news letters to be publi~ ~ed, which emphasize
SBFD investigatory and prosecutorial policy against: 'FDA competitors, by
speaking authoritatively for same, by displaying a kn, .wledge of same, and by
employing their knowledge in a targeted way to discc Jrage and intimidate
customers and potential customers of the Plainitff's in 0 not doing business with
plaintiffs.
30.) On or about the Fall of 1997 certain of pia ntiff's' customers received
phone calls from the defendant Eirkson about the drO) in the PFDA entities'
, (PFSC) production of pre-need contracts through the :r funeral homes, and he
questioned the customers' about their decisions to u~ ~ CFC programs.
31.) On or about January 1998 the defendant E rkson told one of plaintiffs ,
customers that plaintiffs' programs were illegal. This was totally false. As a result
the customer asked CFC to indemnify the customer S lould this turn out to be true.
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32.) Due to the efforts ofEirkson and Brown an ,ong others, CFC's business
began to suffer and in February 1998 the plaintiffs ser t out their first
indenmification letter to a customer in response to the unlawful misconduct of the
defendants.
33.) During the summer of 1998 CFC continuel to work hard to add to their
business.
34.) On November 9, 1998, the defendant Pink, rton, wrote to the FTC
expressing his concerns about the "Catholic Funeral I Ian." This letter was a
poorly disguised attempt to persuade the FTC to folle N policies that would
prevent interference with the defendants' unlawful ef arts to control funeral
business in Pennsylvania for personal gain. In this let ,er Pinkerton raises the
spectre of state interference, even suggestingAttome 'Laurie Meelan of the FTC
contact SBFD prosecuting attorney Kathleen Klett R: 'an.
"My primary concern is, that, should thi: d-party
marketing organizations be allowed to b :come a
means to circumvent unwanted rules anI regulations,
they will soon become many and make I lore
difficult the issues of compliance and er forcement
as well as creating a negative environm. nt of
compethion."
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35.) In the Winter of 1998 the PFDA, by and though Eirkson (and olhers)
made several statements that indicated that he, as a PF DA official, was going to
have the prosecuting attorney for the SBFD pursue CI C and "unlicensed" people.
36.) On or about the Spring of 1999 the SBFD, ,y and through its badge of
state authority, prosecuted Mr. Ferguson 3 years after uready having caused an
investigation to be conducted into Mr. Ferguson's bw iness affairs in 1996.
37.) Mr. Ferguson had advertised his services a Id was working with a group
of licensed insurance agents who were attempting to 1 lake pre-need sales of
funeral services and costs. These agents would occasi mally reach a tentative
, agreement with a consumer of a pre-need insurance c In tract designed to meet the
requirements offuneral costs at death. In doing so thE y used Mr. Ferguson's price
list as a guide. Each tentative contract they 'Yere able to write was then submitted
to Mr. Ferguson for review, consultation and approv! l. Mr. Ferguson's actions
were in complete and total confonnity with the FTC' funeral role" and state law.
38.) Perceiving Mr. Ferguson's activities as an ideal scape goating
opp~rtunity to threaten their competitors, the defenm tIts succeeded in having Mr.
Ferguson prosecuted by the SBFD in a unlawful effo t to stem the rising
competition with their own businesses.
39.) To accomplish this end.. the defendants ur lawfully engaged in state
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actions by, through, and with the SBFD using that agl ncy to investigate and
prosecute competitors of the defendants and discoura ;e businesses and disrupt
contracts with the plaintiffs.
40.) Contemporaneously, the FTC responded t( defendant James O.
Pinkerton who at the time was wearing his Vice Chai man of the SBFD Board hat,
(Mr. Pinkerton is now Chairman of the Board), abom his inquiry (made as a PFDA
member and as a SBFD Board member) concerningt le Catholic Funeral Plan and
his desire to have them investigated. In that letter (se. paragraph 32 above) in the
sixth paragraph, Mr. Pinkerton expresses concern abl ut agency relationships and
then references the "State of Pennsylvania laws" an( says, in effect, that if the
sales people aren't licensed funeral directors they are "probably in violation of
Pennsylvania provisions that prohibit anyone but a 1i neTaI service licensee from
making funeral arrangements" (emphasis added). Pit: certon was aware that:
a.) Pennsylvania law 63 P.S. ~479.13(c) was i lterpreted adverse to the
actions taken against Ferguson in Pennsylvania r..Ym :'al Directors Association v.
State Board of Funeral Directors. 90 Pa. Cmwlth 17:.494 A.2d 67 (1985) and,
b.) that the Pennsylvania Legislative Budget a ld Finance Committee in a
1994 report had observed that pre-need services had :IS a matter of practice in
Pennsylvania been executed by funeral directors, eel leteries, and other types of
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sellers.
There is no rational economics or other basis cc 1sistant with 14'"
Amendment due process standards for the state ofPelllsylvania and the SBFD to
limit pre-need sales to licensed funeral directors and F ,nkerton and the SBFD its
members, staff, and lawyers all know that Craigmiles v. Giles, U.S. District Court
for the Eastern District ofTennessee at Chattanooga l' o. 1:99-CV-304 (August 21,
2000) and Casket Rovale, Inc.. v. MississiP9i, U.~. Di ;trict Court for the Southern
District of Mississippi Jackson Division Inc., No. 3:95 -CV-737 BN, October 31,
2000.
41.) The above reference letter by Pinkerton wa ; a euphemistic description
by defendant'! to the FTC hoping to engender a p<lsiti, e response against the
, Catholic Funeral Plan, and others, that they could use :0 protect the PFDA's
unlawful monopolistic practices and thus their own p< rsonal financial interests.
Pinkerton claims ''unregulated sales persons" another lmhemism meaning a
licensed insurance agent who is not a.licensed funeral director (ie. does not fit into
the PFDA membership and business practice mold) aI l making "funeral
arrangements" when discussing pre-need contracts in I context of funeral costs,
something any sales person must do and the FTC req lires. But Mr. Pinkerton is
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, playing a word game here. There is no requirement th t a funeral director is solely
authorized to discuss prices with consumers. Such a v ew is in direct contradiction
of the funeral rule's purpose. Further, the only differe lce between a funeral
service provider and a licensed funeral director is that the director is licensed to
embalm. There is no other difference.
42.) At no place does Pinkerton offer an expl81 ation as to how, or why, a
licensed funeral director and a licensed insurance age: Lt must be the same person
(although not all PFDA members who engage in PFD \. programs such as
SecurChoice and Unichoice use licensed both ways) (r why licensed funeral
directors and licensed insurance agents can't work to ~ether (as Andrew Ferguson
did) just as a person who is licensed as both can perfe :In both functions. The
PFDA, in its aggressive sales mode, frequently uses u J1icensed funeral service
providers to sell pre-need services,"unJicensed" mean I someone who is not a
licensed funeral director. The PFDA simply believes' b.e law does not apply to
them.
43.) On AprilS, 1999, the FTC, in a staff opini In offered through Mercedes
K. Kelly Esq., responded to Mr. Pinkerton's letter of ~ovember 9, 1998.
44.) Kelly's response both directly, and by imp ication, debunked the
irrational effort by Pinkerton (and the PFDA and Othf ~s) to solicit some response
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from the FTC that only a licensed funeral director car reveal or talk about his or
her prices to consumers. In fact, the FTC staff respon e takes pains to point out
that "funeral providers who choose to be involved in L program. such as the
Catholic Funeral Plan, carrY the burden of makiIjg su e that the consumers brought
to them by the religious group ~et the disclosures req lired under the Federal Rule"
(emphasis added). Pinkerton's efforts to elicit suppa: t from the FTC failed. But
this did not deter the defendants from using the SBFI I to unlawfully prosecute Mr.
Ferguson, and use that prosecution as a Sword ofDaJ locles to hang over the head
, of anyone who wished to do business with plaintj,ffs i nd others like them.
45.) In ex-post facto fashion, on September 1, 999, the SBFD, utilizing a
legal suggestion written by PFDA's counsel, thedeff 1dant Campbell, passed a
resolution prohibiting "the showing, distribution, or I ummarization of any price
list... except as may be specifically necessary to com] ,ly with the regulations of the
"'Federal Trade Commission, for funeral services whl n needed for a person then
living constitutes the practice of funeral directing by mgaging in pre-need sales"
citing Section 13 (c) oftlie aforementioned Penrisylv mia's Funeral Director Law.
This so called resolution is an unlawful pretext desig led to emlender fear in the
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industry and serve the defendant's personal ends. It i j not grounded in law. It also
was passed months after the prosecution of F ergusor had begun and years after he
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had been investigated. Paragraph 40 above is incorpollted herein.
46.) This misconduct by the SBFD bears np rat onal relationship to any
legitimate governm~nt interest and is an arbitraryand :apricious intrusion upon,
and denial of, the plaintiffs' rights to pursue theircho! en occupations.
47.) The action of the SBPD and the private dej mdants who have been, and
persist in acting, by, through and with them, are unrea lonable and are related to no
proper government purpose. The unlawful restrlctiom are economic in nature, and
they further work a denial of property rights guar.lnte ,d by the Pennsylvania
Constitution, namely the right to one's business repuI ation, let alone the ISland
14m Amendment right to contract free ofunreasollabl! government molestation.
48.) As part of the defendants' unlawful pllins t Ie Defendant Brown wrote a
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memo which he distributed to all "PFDA Members" a Jout "unlicensed pre-need
sales practices." Part of the memo included a letter WI ,tten by the defendant
Campbell to the defendant Eirkson designed to be use i as part of the effort to
frighten funeral directors away from dealing with any me but the defendants.
49.) The defendants are engaged in an unl~wfu practice of harassing.
through unjustified investigations and prosecutions, ; nyone except licensed
funeral directors. who disclose their prices even thoul h federal law requires
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funeral directors to disclose to anyone who asks; n is unlawful policy of
persecuting any funeral director who shares his price~ with an insurance agent
(unless that unlicensed insurance agent is one and the same as the funeral director
who is talking to the consumer (or is a PFDA memh ~r is unlawful). An example
of how irrational the defendants actions are can be sh IWTI this way: a licensed
insurance agent could independently call any funllral iirector in a given area (who
would be required to disclose his prices as a matt~r 0: law) and then be free to go
and sell a pre-need contract to any consumer and,use the quoted prices as a guide,
and after consummating an insurance sale for prernee i pUIposes, then go to the
funeral director and offer an assignment of the pqlicy provided the consumer agree
and the funeral director agree between themselve~. U Ider defendants plan and
their prosecution of Ferguson, ifhe discloses his;pric :s to an agent who he knows
might quote them to a customer, subject to Ferg~on' i final review and approval,
then both Ferguson and the uninsured agent have bro ~en the law. Indeed the
Boards next plan is to go after not only CFC but the i lSUI'ance agent who worked
with Ferguson. This is absurd. In one case the COl1sur ler approves orthe
assignment after purchasing the insurance and this is legal. In the second the
consumer doesn't agree to anything until Ferguson re views and approves the
prices and the consumer signs on but this is illeg~l. A t first the reason
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for the SBFD policy might seem difficult to understarl i. But when it becomes
plain that PFDA entities were selling pre-need an~ ot! er services through
unlicensed persons also, it becomes equally clear ,that :he defendants needed a
distinction that would deter anyone but those whQ wo lid buy from PFDA entities
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so the defendants invented a violation for Fergus9n ar d wrote it into their policy
resolutions. They created smoke and mirrors arO\~rd s ate law enforcement to
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destroy competitors even though they were doing::whl t Ferguson and CFC were
doing and even though they knew insurance comJlanil s had been selling pre-need
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contracts in Pennsylvania for years and years.
50.) The aforementioned practices of the S$3FI: and other defendants are
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unlawful, are violative of the plaintiffs' substantiye d le process rights, are
unlawful actions in restraint of trade, constitute vio1al ,ons of the plaintiffs rights
to the equal protection of the laws, and violate by and through state action, the
plaintiffs' rights to enjoy the Privileges and Imm~niti !S guaranteed by the U.S.
Constitution including the right to engage in gamfull mployment and their chosen
occupations. Plaintiffs' rights to be free to contract. a tederally guaranteed liberty
interest, and their right to be free oftortious ir.te~erel ,ce with contracts and with
potential contractual relations and to be free of d~tiur ~tion under state law was
(and is) being violated by the defendants.
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51.) The defendants engaged in a prolific polic; ofthrestS, intimidations
and even express personal advice to many of the plair tiffs' customers to either not
do business with the plaintiffs, because they would se )n be investigated or
pros,ecuted by the SBFD, seeking to frighten custome s and potential customers of
the plaintiffs away from doing business with them, an i to interfere directly in
existing or contractual relationships.
52.) In doing so the plaintiffs incurred special (amages in an amount in
excess of $5,000,000.00 (five million dollars) at the 1: mds of the defendants
consisting of lost sales, lost profits, and incidental co: ts.
53.) For example the defendant Campbell told, 'ne of the plaintiff's
customers that CFC was going down, meaning CFC , 'as going to be in'festigated
and prosecuted by the SBFD and that the customers s I,ould not do business with
CFC because they might be tainted or even lose their lWll license.
i
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54.) Meanwhile the SBFD began an "investig~ tion" consisting of asking
CFC questions, so that the private defendants could t affic in the matter as if CFC
were ,going to be prosecuted, as an item of gossip, d ,signed to destroy CFC's
business.
55.) John Eirkson. who is not an actual or ~ftic ial SBFD member or
employee, told one ofCFC's customers that he wouh give him "immunity from
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prosecution" if the client would "testify" against the IlaintiffRae. This is quite
improper given Eirkson's total lack of actual authorit:' to do so (though he may
feel, and apparently does, that he is acting for the SBl D). Its also improper
because there is absolutely nothing to testify against ~ae for, and the implication
that there is, is an outrageous violation of Rae rights loth federally and as a matter
of state tort law.
56.) On or about the Spring of2000 the defend mt John Eirkson told
numerous clients of the plaintiffs that CFC was unde] investigation and that if they
do business with CFC they will lose their funeral din )tor's license.
57.) Staffers at defendant PFDA and its aft;iliat:s also told plaintiffs' clients
that CFC was under investigation and if they do busll ,ess with CFC they will lose
their license.
58.) The defendant Pinkerton personally tcild tl e plaintiff Rae that if "we"
meaning the SBFD, can stop CFC from selling servic :5, that they were going to do
so.
59.) On or about June 2000 the defendant JOM. Eirkson, speaking for
himself and the defendant PFDA, announced at a pullic meeting that "to 'bring
CFC down, I need your financial support."
60.) On or about September 2000 Eirkson ,told one of CFC' s clients that the
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{"-h, ".,.1", ,." "'_"" ,_,
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Ferguson case will "probably be thrown out," but resp mded, "I'll be back" in
response to the client's decision to work with CFC, as opposed to PFDA.
61.) Eirkson, speaking for PFDA and the SaFI: told a meeting of funeral
directors that CFC was on the top of a list of f}meflll d rectors that "they" (meaning
the coalition of private defendants, the PFDA and, SB; 'D) were going after once
the Ferguson case was done.
COUNT I
PLAINTIFFS AGAINST ALL DEFENDANm )R mE DEPRIVATION
OF THEIR SUBSTANTIVE D~ CESS RIGHTS
62.) Paragraphs I through 61 above are incorp< rated herein by reference.
63.) The defendants all worked by, with, and tl: rough the SBFD and used its
investigatory and prosecutorial powers unlawfully su :h that the non government
defendants were involved in, and were part of, state a :tion and thus for purposes
of 47USCgl983 were acting under color of state law,
64.) The defendants created, through their use If the SBFD's powers, a
plethora of policies, actions, and threatened actions, ,esigned to instill fear and
force reactions in the Pennsylvania funeral indus~ t Lat sought the destruction of
plaintiffs' lawful business, subjected them to investif ations and reviews by
government officials as a way to harass and in~ida e them, and destroyed their
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contracts and potential contracts. Such misconduct vi< lated the plaintiffs' due
process rights through the arbitrary and iIrational ~pp] ,cation of government
powers for no just or reasonable government purpose.
65.) The defendants further used the powe~ ofl:'1e state, lacking any rational
or reasonable basis to do so. State law did not and do~ s not support what they did.
66.) Additionally, pennsylvania's Constitutionecognizes and protects
"business reputation" not just as a reflection of stite t Irt law, but as a property
right. The defendants violated the plaintiffs' righ$ to ,roperty also because they
targeted successfully some of the customers plainpffs had existing contracts with
and adversely affected those contracts.
Wherefore the Plaintiffs demand judgemen~ of he defendants jointly and
, severally for the d~privation of their federally ~. eed rights to substantive due
i
process and to be free of the arbitrary and capricious lestrJction of their interests
in property seeking compensatory damages, and lipec ial damages in an amount in
excess of $5,000,000.00 as aforestated, and for puniti \Ie damages together with
,
fees, costs, attorneys fees, interest, and such oth~r re ief as the court may deem
appropriate.
COUNT II:
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I.RE PLAINTIFFS AGAINST THE DpI NDANTS FOR THE
:
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DEPRIV AnON OF THEIR FIRST AME mMENT RIGHTS
67.) Paragraphs I through 66 above are incorp< rated herein by reference.
68.) The defendants used the powers and influc [ICe of government to destroy
the plaintiffs' rights to associate and contract, a libert I interest.
69.) The defendants' purpose, and the nature 0: the government power used,
was meant to be economic in its impact on plaindffs I [ld was intended and used by
the defendants as a way to limit the plaintiffs' associa :ions or activity in the
funeral industry.
Wherefore the plaintiffs demand judgement of' he defendants jointly and
severally for the deprivation of their First Amemhnen rights to associate and enter
into and form contracts together with compensatOry d unages, punitive damages,
special damages in an amount equal to, but notin,any amount exceeding, in sum
total, the amount of special damages requested in Count I, together with
punitive damages, costs, fees, attorneys' fees, intllrest and such other relief as the
Court may deem appropriate.
COUNT III.
fLAINnFFS AGAINST ALL DEFENDA~S <'OR THE VIOLATION
OF THEIR RIGHTS TO THE EQUAL PRP1] :CnON.oF 1JiE LAW
70.) Paragraphs I through 69 above are incprpc :ated herein by reference.
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71.) The defendants actions were designed and lad the effect of singling the
plaintiffs out for purposes of threatening them and int midating them thus treating
them differently than persons similarly situated, sjlch ~ the PFDA.
71.) The defendants "inyestigated" the plai~tiff . lacking any authority or
proper reason to do so.
73.) Even though plaintiffs were personally tal, , by SBFD investigators that
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there were "no violations here," something whic~ wa: quite obvious, the
, . defendants persisted unlawfully in treating plaintfffs ; s law breakers and referring
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to them as such.
74.) The plaintiffs were doing nothing thatithe ?FDA, its subsidiaries, and
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members of the SBFD were doing to sell pre-nee~ pro ,ducts yet they were
harassed, intimidated, and investigated, unlike J fo mer.
I
Wherefore the plaintiffs demand judgeme4t of the defendants jointly and
,
,
severally fO:"depriving them of the equal protectIon ( fthe laws and for special
I
, damages not to exceed in sum total with all othet Co mts herein $5,000,000.00,
and for compensatory damages, for puni~ve ~age and for costs, attorneys fees,
, and such other relief as the Court may deem ap*op: iate.
!
COUNT IVi
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PLAINTIFFS AGAINST THE DEFEND AN rs FOR CONSPIRING
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TO DEPRIVE THEM OF THEIR FEDERAIj,L" GUARANTEED RIGHTS
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75.) Paragraph 1 through 74 above are in40rp lrated herein by reference.
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76.) The individual defendants Eirkson. Brpwr, Pinkerton, Campbell, and
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persons as yet unnamed, all agreed together, unl~fu Iy to pursue the unlawful
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purpose of using the investigatory and prosecutorall owers of the state to destroy
, plaintiffs' business and in the process violated plfnti Is First, Fourth and
i
Fourteenth Amendment Rights. !
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77.) Plaintiffs have due process rights as a~re! lid which the defendants
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violated. I
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78.) The defendants also conspired to use fd (id use the powers of the
1
SB~D to. investigate ~e p~intiffs seeking to le1 thl depth, and the extent of
theIr busmess and who theIr customers were.
79.) These activities constituted invasions ~fP] lVacy in violation of the
I
plaintiffs' Fourth Amendment rights. l
80.) The defendants additionally. consPireJ to 1 se and did use the powers of
I
the SBFD to violate plaintiffs' First Amendment rgh' 5.
%=fo"." plaintiff; d,m"diudg""'l uf b, d,r"""''';n viol,,"on of
their 1 ",4'\ and 14th Amendment rights and ofth ir ri ~ts not to suffer an
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abridgement of their federally guaranteed Privile~es 2:ld Immunities together with
compensatory and special damages in an amount ~ot. 0 exceed the sum total of the
special damages referred to above together with es, ;osts, attorneys fees,
punitive damages and such other relief as the Co rt IT ay deem appropriate.
COONT V
AINTIFFS
[J)ANTS FOR
81.) Paragraphs 1 through 80 above are in atp' ,rated herein by reference.
82.) The defendants acted to restrain and cl ntr 11 the market in funeral
, services in the state of PelU1Sylvania through the a Nful use of coercive
government powers and the manipulation of con, ct tal relation through
I
misrepresentation and false impressions of the pi 'nt' ffs.
83.) They used that power to force and en aun ge others to demand
indemnification agreements of the plaintiffs' com! rs while the defendants were
doing the very same thing with the government 1efer dants blessings.
84.) They followed their planned course 0 act on intending to force all
funeral directors in Pennsylvania to consummat all: Ire-need sales and contracts
)PSC via The Pennsylvania
through the PFDA and its wholly owned subsidi
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Funeral Plan, SecurChoice and the Unichoice market ng schemes.
85.) By so acting, the defendants interfereq unllwfully with the Commerce
Clause righ1:S of the plaintiffs and violated the an~.tn st laws.
Wherefgre the plaintiffs demandjudgemeI'ft of :he defendants as per the
anti-trust laws of the federal government and Pennsy vania, including double
damages with interest and such other relief not lib-it. d to special damages as
demanded in the Counts above that are incorpo~ted lerem together with fees,
costs. attorneys fees, and such other relief as the' Cm rt may deem appropriate.
SYPPLEMENTAL STATE CLAlMS PURSUANT TO
Z8 D.S.C. 91367
COUNT vIi
PLAINTIFFS AGAlNST THE DEfEl' DANTS EIRKSON
AND PFDA FOR DEFAM ATION
AS A SUPPLEMENTAL $T A fE CLAIM;
86.) Paragraphs 1 through 85 above are mcOJ porated herein by reference.
87.) The above- named defendllllts in thi~ C( unt, on numerous occasions,
expressly, or in clear and unambiguous terms, desc ibed the plaintiffs falsely as
law breakers and placed plaintiffs in a false light a evidenced by the following
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particulars:
a.) The defendant Campbell told one of pl. inti 'Is' customers that CFC was
going to be investigated and prosecuted by the S~FD knowing any such
investigation was specious and unfounded, and !qIow ng that ifhe was in
possession of such knowledge, and it was accura~e, " tIich it was not, it was
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, confidential and he had no authority to discuss s*h i lformation, and further that
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he knew CFC and Bob Rae had done nothing wr~ng. f'urt11er, the defendant
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Campbell used the above information in an inten1ioru I effort to injure the
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plaintiffs and cause them to incur business losse~ by . Ilacing the plaintiffs in a
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false light This occurred in late November 1999~ ant,
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b.) The defendants' Eirkson and PFDA thfou~ 1 its staff, on numerous
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occasions beginning in 1997 and continuing to ~e pI ~sent day told clients of
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plaintiffs that CFC is under investigation and if$ey 10 business with CFC they
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will lose their license (meaning funeral director'~ lic< nse). Eirkson, in the Spring
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of 2000 similarly told a meeting of funeral directprs l1at they should not do
business with CFC, and, that if they do, they wil~ los, their license, even though
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Eirkson and the PFDA knew the accusations we~e ur founded. These actions of the
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PFDA and Eirkson were intended to harm plaintjffs' :lUsiness through
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characterizing them as lawbreakers. This misconcluct :ast plaintiffs in a false light,
,
misrepresented them, and was intended to cause irjur ' to their business, and in
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fact did cause plaintiffs to suffer, significant fm~cial losses. In a particularly
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vicious attack on plaintiffs the defendant Eirksoni in ( 'ctober 2000, told two
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persons who are active in funeral industry affairsi tha "they" in reference to the
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SBFD, the PFDA, and himself, were waiting to s~e tt. ~ outcome of the Ferguson
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case. Eirkson explained that the PFDA was goin1 to l hange the law ifFerguson
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wins so that only a funeral director can sell pre.n~ed ervices. Something which is
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less than a pipe dream as Eirkson knows. Eirksoq we It on to say that if Ferguson
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were found guilty, "they" (meaning the SBFD and ~.e PFDA) would go after
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every CFC account and "You will lose your liceqse a ld be fined $1000.00 for
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every contract you made with CFC ." i
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Wherefore the plaintiffs' demand judgeme~t 0 ' the defendants Eirkson and
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PFDA jointly and severally for defamation and f~lse ight misrepresentation as a
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, supplemental state claim, together with compen*or: ' and punitive damages,
special damages as described above, costs, fees,land such other relief as the Court
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may deem l'/Ppropriate, !
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COUNT VII!
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PLAINTIFFS AGAINST AIL DEFENlMliS FOR TORTIOUS
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~';;;_r~~ "' '1 r'-,'.' ..
INTERFERENCE WITH BUSINESS ANI CONTRACTUAL
&ELA nONS AND INTERFERENCE WI" 'H PROSPECTIVE
BUSINESS AND CONTRACTUAL tl:LA nONS
88.) Paragraph 1 through paragraph 87 above a e incorporated herein by
reference.
89.) The defendants, in a concerted, cooperativ, effort to destroy the
plaintiffs' bu.~iness sought to dissuade plaintiffs'cuSl )mers from doing business
with plaintiffs through false representations and thr01.: ~ the unlawful use of the
state's power to investigate and prosecute.
90.) These efforts were intentional and we~ sp icifically undertaken by the
defendants to destroy contracts and potential contract, in which plaintiffs were
involved or ready to consummate.
.'
91.) The defendants succeeded in numerous ca: es in causing third parties to
withdraw from, alter to plaintiffs' disadvantage, pr CI ase entry into contracts with
plaintiffs to plaintiffs financial disadvantage, so tp fu ther the defendants' own
business interests.
92.) In the case of the Commonwealth defertda: lts, just as they acted
intentionally and outside any governmental, official. ' ,r sovereign immunity, they
also acted under badge of state authority.
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Wherefore the plaintiffs demand judgement of :he defendants jointly and
severally for the violation of their rights to be free of intentional interference with
contractual relations in an amount equal to, and pros! ective contractual relations
but not exceeding in sum total the special damages rc ferred to in previous counts,
together with punitive damages, costs, fees, attomey~ ' fees, compensatory
damages, and such other relief as the Court may deer. l appropriate.
COUNT VIII
PLAINTIFFS AGAINST-THE DE fi'ENDANTS
EIRKSON. BROWN. PINKER1 'ON AND
~ PFDA MEMBERS OF 1'lIE..S BFD BOARD
FOR CIVIL ~ONSPlRA :y
93.) Paragraphs 1 through 92 ahove are incorp Irated herein by reference.
94.) The above named defendants, upon infom ,ation and belief, knew, were
aware of, and unlawfully agreed, whether overtly or 1 acitly to unlawfully use the
power of the State government in the manner, and fo the purposes pled above, all
of which have been incorporated herein.
95.) These actions were done unlawfully for ar unlawful, pU:.-pose, and with
the knowing cooperation of each defendant with ead other, in various
combinations, from time to time.
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Wherefore the plain~iffs demand judgemem of the defendants jointly and
severally for Civil Conspiracy as a supplemental ,tate claim in an amount equal
to, but not greater in sum, than the special damage, as referenced in the other
counts above, together with punitive' and compens Ltoty damages, costs, fees,
attorneys fees, and such other relief as the Court m; y deem appropriate.
COUNT IX
NOyt:L ARTICULA T) em
PLAINTIFFS AGAINST ALL DF;FENDANTS fOR THE DEPRIVATION
OF PRIVILEGES A.l'ffi IMMUNlTIES SEi :uRED BY THE 14Tll
AMENDMENT PURSUANT TO 4;; U.S,C. ~1983
96.) Paragraphs 1 through 95 above are incor lOrated herein by reference.
97.) The defendants by denying the plaintiffs ill pursuit of their chosen
occupation in the manner described above violated rig lts guaranteed to plaintiffs
under the Privileges Immunities Clause of the 14<11 Am mdment to the U.S.
Constitution.
'Wherefore plaintiffs demand judgement of the 'dt fendants for compensatory,
punitive and special damages in an amount not to excee i the sum total of me
amount asked in the couns above together with fees, co, ts, attorneys fees and such
other relief as the Court may deem appropriate for the di privation of rights
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,.",,-, ,-
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secured by the Privileges and Immunities clause oftb : 14'" Amendment to the U.S.
Constitution.
Do alley, ~ ~uire
4311 N. 6'" Strl et
Harrisburg, P A 17110
(717) 221-950l
November 16, 2000
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IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
vs.
CIVIL ACTION NO. 1:CV-00-2018
JOHN W. EIRKSON,
THE PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION (PFDA),
et al.,
FILED .,.
HARRISBURG, fA
APR 1 2 2001
Defendants
MEMORANDUM
CtfAl(
I. Introduction.
The plaintiffs, Commonwealth Funeral Consultants Inc.
(UCFC"), an insurance agency, and Robert Rae, CFC's chief
executive officer and president, filed this lawsuit against the
Pennsylvania Funeral Directors Association (Uthe Association"), a
trade association of funeral directors; its lawyer, Louden L.
Campbell; two of its officers, John W. Eirkson and Martin Brown;
and one of its members, James O. Pinkerton. pinkerton is also a
member of the State Board of Funeral Directors (Uthe Board") .
The complaint arises from a dispute over the exact role
that insurance companies can play in marketing life insurance
policies that cover the funeral expenses of the insured, what the
Plaintiffs have called pre-need contracts and what the Defendants
refer to as the pre-need sale of
funeral services. Among othe~
Cermiad from the recoId '
1j:. ~/,)- c.'/ . ,-
oat6'.:::ry E. D'Andrea, Cieri<
"tnq/ _/, j,CV2d~
PQr -
, n Deputy Clerk
,.".>
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things, the Plaintiffs allege that the Association, through
Eirkson and Martin, has used its influence over the Board to
control the sales of pre-need funeral policies by administrative
prosecutions of those who are not a part of the Association. CFC
itself is alleged to have been the target of a campaign among
funeral directors warning them against doing business with CFC,
thereby causing significant damage to the Plaintiffs' sales.
The Plaintiffs allege violations of their federal
constitutiopal right to substantive due process, their first
amendment right of association in the making of contracts, their
right to equal protection for having been singled out for
investigation, and their Fourteenth Amendment right under the
privileges and immunities cla~se to pursue an occupation. They
also set forth a claim for violation of the federal anti-trust
laws. Additionally, state-law claims are made for anti-trust
violations, defamation, tortious interference with business and
contractual relationships, and tortious interference with
prospective contractual relationships.
We are considering two motions to dismiss under Fed. R.
Civ. P. 12(b) (6), one filed by Louden Campbell and the other by
the Association Defendants (the Association, Eirkson, Brown and
Pinkerton). We cannot grant the motions if "under any reasonable
reading of the pleadings, the plaintiffs may be entitled to relief
" Lanqford v, City of Atlantic City, 235 F.3d 845, 847 (3d
Cir. 2000). In making that decision, we must accept as true all
2
AO 72A
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well-pleaded allegations in the complaint, Maio v. Aetna. Inc.,
221 F.3d 472, 481-82 (3d Cir. 2000), and construe any reasonable
inferences to be drawn from the allegations in the Plaintiff's
favor. See united States v. Occidental Chemical Corp., 200 F.3d
143, 147 (3d Cir. 1999). When appropriate, we may also rely on
public records, such as court filings. See Churchill v. Star
Enterprises, 183 F.3d 184, 190 n.5 (3d Cir. 1999) (citing Pension
Benefit Guaranty Corp. v. White Consolidated Indus.. Inc., 998
F.2d 1192, 1196 (3d Cir. 1993)). With this standard in mind, we
set forth the background to this litigation, as the Plaintiffs
allege it.
II. Backqround.
In pertinent part, the complaint alleges as follows. In
1997, plaintiffs Rae and CFC, an insurance agency, began selling
life insurance policies that pay for the funeral costs of the
insured, (complaint, , 10), described in the complaint as upre-
need contracts." (Id.,' 1). The Plaintiff did so uin
cooperation with funeral homes and funeral directors." (Id.,'
10) .
The defendant Association has also been selling pre-need
insurance and has established certain entities to do so. Thus,
Pennsylvania Services Corp., a wholly-owned subsidiary of the
Association, has set up plans called Unichoice, SecureChoice and
3
AO 72A
(Rev,8/82)
~.
the Pennsylvania Funeral Plan, open only to the Association
members that provide pre-need insurance.
(Id., , 13).
The Association is allegedly using the Board to control
the market in pre-need insurance policies by causing the
administrative prosecution of those who sell pre-need insurance
but are not affiliated with the Association. The Plaintiffs
present the example of Andrew Ferguson, III, a licensed funeral
director, who they allege the Board prosecuted when he used
insurance agents who were not affiliated with the Association.
(Id., " 18 and 22).
The Association's officers, defendants Eirkson and
Brown, have spoken at many funeral-director meetings and have
published newsletters about the Board's "investigatory and
prosecutorial policy against [Association] competitors" to
discourage funeral director from remaining or becoming the
Plaintiffs' customers.
(Id., , 29). Specifically, in the fall of
1997, defendant Eirkson telephoned certain customers of the
Plaintiffs, informing them of the drop in the Association's
"production of pre-need contracts" and "question[ing] the
customers about their decisions to use CFC programs."
(Id., ,
30). In or about January 1998, Eirkson falsely told a CFC
customer that CFC's programs were illegal.
(Id., , 31). In
February 1998, as a result of the Defendants' alleged unlawful
conduct, the Plaintiffs had to send out their first
4
AO 72A
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"~ , "_v" ;"1 ~ry U" ,
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indemnification letter to a client, indemnifying the customer if
the Plaintiffs' plan turned out to be illegal. (Id.,' 32).
In November 1998, defendant Pinkerton, a Board and
Association member, wrote the Federal Trade Commission (FTC)
questioning the legality of the "Catholic Funeral Plan," an
attempt to receive an FTC response favorable to the Association's
position.
(Id., ~, 34 and 41). The FTC's April 1999 response was
not favorable to the Association. (Id.,~' 43 and 44).
On September 1, 1999, the Board issued a resolution, "at
the direct behest of the defendants," (id., , 23), and drafted by
defendant Campbell, the Association's lawyer, intended to target
and deter funeral directors from doing business with CFC. The
resolution adopted the allegedly illegal position that, except to
comply with FTC regulations, the showing, distribution or
summarization of any price list was "the practice of funeral
direction by engaging in pre-need sales." (Id.,' 45).
On some unspecified date, defendant Brown, an
Association officer, wrote a memo incorporating a letter written
by defendant Campbell. The memo was distributed to all
Association members and concerned "unlicensed pre-need sales
practices." (Id.,' 48). It was intended "to frighten funeral
directors away from dealing with anyone but the defendants."
(Id.) .
The Defendants took the following actions, designed to
destroy CFC's business. At some point, "defendant Campbell [the
5
AO 72A
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Association's lawyer] told one of the plaintiff's customers that
CFC was going down, meaning CFC was going to be investigated and
prosecuted by the [Board} and that the customers should not do
business with CFC because they might be tainted or even lose their
own license." (Id,,' 53). In the spring of 2000, defendant
Eirkson, an Association officer, told CFC customers "that CFC was
under investigation and that if they do business with CFC they
will lose their funeral director's license. (Id.,' 56). The
Association's staffers did the same thing. (Id.,' 57).
The Board began an "'investigation'" consisting of
asking CFC questions" so that the individual defendants could
gossip about it and hurt CFC's business.
(rd., ~ 54). Defendant
Eirkson, not a member of the Board, told a CFC customer that he
would grant him immunity if he testified against plaintiff Rae.
(Id., ~ 55). Defendant Pinkerton, a Board member, told Rae that
if the Board could stop CFC, it was going to do so. (Id., ~ 58).
Defendant Eirkson also made certain public statements.
In June 2000, he told a "public meeting" "that if he was going to
bring CFC down, he needed their financial support. (Id., ~ 59).
At some other time, speaking for the Association and the Board, he
told a meeting of funeral directors that the Association and the
Board were going after CFC after the Ferquson case was finished.
(Id., , 61).
The legal backdrop of this controversy is the
Pennsylvania Funeral Director Law, 63 P.S. s~ 479.1-480.11 (Purdon.
6
AO 72A
(Rev,8/82)
i
1996), and implementing regulations dealing with standards and
practices. See 49 Pa. Code ~~ 13.201-13.226. Section 479.2 of
the Law defines a "funeral director" as:
any person engaged in the profession of a
funeral director or in the care and
disposition of the human dead . . . The term
"funeral director" shall also mean a person
who makes arrangements for funeral service and
who sells funeral merchandise to the public
incidental to such service or who makes
financial arrangements for the rendering of
such services and the sale of such
merchandise.
(Emphasis added). Section 479.13(a) prohibits anyone from
"practic[ing] as a funeral director" unless they are licensed.
And only a licensed funeral director may "directly or indirectly,
or through an agent, offer or enter into a contract with a living
person to render funeral services to such person when needed." 49
P.S. ~ 479.13(c).
The Law provides that a funeral director may have his
license suspended "for misconduct in the carrying on of the
profession." 49 P.S. ~ 479.11(a) (5). The regulations provide
that a funeral director commits unprofessional conduct in
assisting "an unlicensed person to engage in an act or practice
for which a license is required." 49 Pa. Code ~ 13.202(1).
In Ferquson v. Pennsylvania State Board of Funeral
Directors, ___ A.2d ___,2000 WL 33152028 (Pa. Cornrnw. 2001), the
Pennsylvania Commonwealth Court relied on these provisions in
upholding a Board decision that an insurance agent, Faye Morey,
7
AO 72A
(Rev,8/82)
i
,
had engaged in the unlicensed practice of funeral directing and
that a funeral director, Andrew D. Ferguson, III, the same
Ferguson the Plaintiffs alleg~ has been persecuted by the
Defendants, had unlawfully assisted the agent in that unlicensed
practice.
Ferguson had supplied Morey with his price list for
funeral services and merchandise and had agreed to accept
assignment of pre-need policies she might sell. Holding herself
out as being associated with Ferguson, Morey them met with
potential buyers using "Estimated Worksheets" that listed prices
for funeral services and merchandise. The estimated worksheets
were used to calculate the price of the insurance. Morey signed
the worksheet as a "counselor." After she sold the customer the
insurance, she assigned the policies to Ferguson. At that point,
Ferguson prepared a "Statement of Funeral Goods and Services
without meeting with the insured. He then brought the statement
to the insured for signature.
The commonwealth court concluded that Morey had engaged
in the unlicensed practice of funeral directing because "as a
'counselor'
[she] helped the insureds plan and fund their
funerals." Id. at ___' 2000 WL 33152028 at *5. It followed that
Ferguson had violated the Law by assisting a person in the
unlicensed practice of funeral directing.
Significantly, the court noted that it was not
prohibiting insurance agents from selling policies that covered
8
",'
AO 72A
(Rev,8/82)
funeral expenses. It was only preventing them from "usurp[ingJ
the legislatively mandated role of funeral directors.n Id. at
___, 2000 WL 33152028 at *7.
III. Discussion.
The Association Defendants have made a number of
objections to the validity of the federal claims, along with
arguments against the state-law claims.
Among other arguments against the federal claims, the
Defendants contend that the Plaintiffs have not made out a
substantive due process claim because they have not alleged a
violation of a constitutionally recognized liberty or property
interest protected by due process, pointing out that the Plaintiff
have not alleged that they, as opposed to Ferguson or others, have
been penalized or even prosecuted.
We agree with the Defendants that in this context the
Plaintiffs have not stated a substantive due process claim because
they have not identified a liberty or property interest
protectable under the clause. See Generally Nicholas v.
Pennsylvania State Universitv, 227 F.3d 133 (3d Cir. 2000).
These Defendants also argue that the Plaintiffs have no
claim for a violation of their first amendment right to
association since first amendment associational rights do not
extend to associations created by business transactions. We
agree. See Sanitation and Recyclina Industry, Inc. v. City of New
9
AO 72A
(Rev,8/82)
( (
York, 107 F.3d 985, 996 (2d Cir. 1997). See qenerallv pi Lambda
phi Fraternitv. Inc. v. University of Pittsburqh, 229 F.3d 435 (3d
Cir. 2000).
The Defendants also maintain that there is no equal
protection violation made here because, at most, there has only
been an investigation of the Plaintiffs, and because the
Plaintiffs have not alleged the elements of a selective
prosecution claim. See United States v. Schoolcraft, 879 F.2d 64,
68 (3d Cir. 1989). We agree. In this regard, while the
Plaintiffs argue they have engaged in the same business practices
as the Defendants, we are mindful of two things: (1) the
Plaintiffs' vigorous defense of Ferguson's practices, practices
that the commonwealth court have found to be illegal; and (2) the
Plaintiffs' attack on the Board's position concerning what
constitutes the unlawful practice of funeral directing.
We also reject the Plaintiffs' reliance on the
privileges and immunities clause of the Fourteenth Amendment. The
Plaintiff claim that their right under this clause to pursue an
occupation was violated by the Defendants. However, this is not
the type of claim covered by this clause. See qenerallv
Slauqhter-House Cases, 83 U.S. 36, 21 L.Ed. 394, 16 Wall. 36
(1872) .
Finally, the Defendants argue that the Plaintiffs cannot
assert a federal anti-trust claim because they allege only injury
to themselves and the antitrust laws are intended to protect
10
AO 72A
(Rev,8/82)
prices, quantities, and quality of the goods and services, not a
competitor. In support, they cite Mathews v. Lancaster General
Hospital, 87 F.3d 624, 641 (3d Cir. 1996). We agree.
IV. Conclusion.
We see no need to examine defendant Campbell's motion to
dismiss since we can dismiss the case against him on the basis of
our rulings on the Association Defendants' motion. Additionally,
having decided to dismiss all the federal claims, we decline to
exercise jurisdiction over the pendent state-law claims, see 28
U.S.C. ~ 1367(c) (3), and we will dismiss them without prejudice to
filing them in an appropriate state court.
We will issue an appropriate order.
~t~+-
William W. Caldwell
United States District Judge
Date: April 12, 2001
11
AO 72A
(Rev,8/82)
(
(
.
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
vs.
CIVIL ACTION NO. 1:CV-00-2018
JOHN W. EIRKSON,
THE PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION (PFDA),
et al.,
ORDER
FILED
HARRISBURG, PA
APR 1 2 2001
MARY Eo ~~ CLERK
PER ,~
2001, it is ordered
Defendants
AND NOW, this 12th day of April,
that:
1. The motion to dismiss (doc. 7) filed by
defendant Louden Campbell and the motion to
dismiss (doc. 8) filed by the other defendants
are granted as follows.
2. All federal claims in the complaint
against all defendants are dismissed for
failure to state a claim upon which relief may
be granted.
3. The Plaintiffs' pendent state-law
claims are dismissed under 28 U.S.C. S
1367(c) (3), without prejudice to filing them
in an appropriate state court.
4. The case management conference
scheduled for Tuesday, April 17, 2001, is
cancelled.
5. The Clerk of Court shall close this
file.
~.~
William W. aId ell
United States District Judge
AO 72A
(Rev.8/82)
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IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYL VANIA
)
)
)
)
)
)
)
)
JOHN W. EIRKSON, THE )
PENNSYL VANIA FUNERAL )
DIRECTORS ASSOCIATION )
(PFDA), LOUDEN L.CAMPBELL )
ESQUIRE, MARTIN BROWN, )
JAMES O. PINKERTON, )
INDIVIDUALLY, AND THE )
PFDA MEMBERS OF THE )
STATE BOARD OF FUNERAL )
DIRECTORS IN THEIR )
INDIVIDUAL CAPACITIES )
)
)
ROBERT RAE AND
COMMONWEALTH FUNERAL
CONSULTANTS INC.,
Plaintiffs
vs.
Defendants
CIVIL ACTION LAW
NO. 1:CV-OO-2018
(Judge Caldwell)
f?ol~@
-~'~;-~ 3 20011
PER I
HARRISBURG, PA. OEPUTY CLERK
JURY TRIAL DEMANDED
NOTICE OF APPEAL
Notice is hereby given that Robert Rae, the above- named plaintiff hereby
appeals to the Third Circuit Court of Appeals of the United States from the Order of
the Honorable Judge William W.Caldwell for the U.S. District Court for the Middle
District of Pennsylvania entered on April 12, 2001, wherein he granted the
defendants' Motion to Dismiss. A copy of the April 12, 2001, Order is attached
hereto.
'.;~1" "n. , I ~.,.. .".. .' '. ',1
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Certified from ~ ~Qrd
Date 0. ~~
,r."_,, r:: f'l'i,,"'('I"'''' !"",I,
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April 13. 2001
'-~'I'I~. ,___
RESPECTFULLY SUBMITTED,
~tb.
'JYV~
DON BAILEY ID#23786
4311 N. 6th Street
Harrisburg, P A 17110
(717) 221-9500
(
CERTIFICATE OF SERVICE
I hereby certifY that on April 13, 2001 a true and correct copy of the
foregoing Notice of Appeal was served upon the following counsel of record by
United States Mail, postage prepaid.
ECKERT SEAMAN'S CHERlN & MELLOTT, LLC
Bridget Montgomery, Esquire
213 Market Street, 8th Floor
Harrisburg, P A 17101
Sarah Yerger, Esquire
Office of Attorney General
1500 Strawberry Square
Harrisburg, PA 17120
Douglas Marcello, Esquire
Thomas, Thomas, Hafer, LLP
305 North Front Street
Harrisburg, PA 17101
/- ,n )'
BY: c~aG~tUU.A-
Don Bailey lD# 23786 U
4311 N. 6th Street
Harrisburg, PA 17110
(717) 221-9500
"''"''\'~'"'''"'"'''''-~'I
" - ~
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
vs.
CIVIL ACTION NO. 1:CV-00-2018
JOHN W. EIRKSON,
THE PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION (PFDA),
et al.,
Defendants
FILED .,
HARRISBURG, FA
APR 1 2 2001
MEMORANDUM
MA"\~JT',' .. 'DREA. CLERK
PeR J cljPUlY Cl.E!lK
1.
Introduction.
The plaintiffs, Commonwealth Funeral Consultants Inc.
(UCFC"), an insurance agency, and Robert Rae, CFC's chief
executive officer and president, filed this lawsuit against the
Pennsylvania Funeral Directors Association (Uthe Association"), a
trade association of funeral directors; its lawyer, Louden L.
Campbell; two of its officers, John W. Eirkson and Martin Brown;
and one of its members, James O. Pinkerton. pinkerton is also a
member of the State Board of Funeral Directors (Uthe Board") .
The complaint arises from a dispute over the exact role
that insurance companies can play in marketing life insurance
policies that cover the funeral expenses of the insured, what the
Plaintiffs have called pre-need contracts and what the Defendants
refer to as the pre-need sale of funeral services. Among other
AD 72A
(Rev,8/82)
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things, the Plaintiffs allege that the Association, through
Eirkson and Martin, has used its influence over the Board to
control the sales of pre-need funeral policies by administrative
prosecutions of those who are ~ot a part of the Association. CFC
itself is alleged to have been the target of a campaign among
funeral directors warning them against doing business with CFC,
thereby causing significant damage to the Plaintiffs' sales.
The Plaintiffs allege violations of their federal
constitutio~al right to substantive due process, their first
amendment right of association in the making of contracts, their
right to equal protection for having been singled out for
investigation, and their Fourteenth Amendment right under the
privileges and immunities clause to pursue an occupation. They
also set forth a claim for violation of the federal anti-trust
laws. Additionally, state-law claims are made for anti-trust
violations, defamation, tortious interference with business and
contractual relationships, and tortious interference with
prospective contractual relationships.
We are considering two motions to dismiss under Fed. R.
Civ. P. 12(b) (6), one filed by Louden Campbell and the other by
the Association Defendants (the Association, Eirkson, Brown and
Pinkerton). We cannot grant the motions if "under any reasonable
reading of the pleadings, the plaintiffs may be entitled to relief
" Lanqford v. Citv of Atlantic Citv, 235 F.3d 845, 847 (3d
Cir. 2000). In making that decision, we must accept as true all
2
AO 72A
(Rev,8/82)
");%. ''''- -~ - , ~.
(
well-pleaded allegations in the complaint, Maio v. Aetna, Inc.,
221 F.3d 472, 481-82 (3d Cir. 2000), and construe any reasonable
inferences to be drawn from the allegations in the Plaintiff's
favor. See United States v. Occidental Chemical Corp., 200 F.3d
143, 147 (3d Cir. 1999). When appropriate, we may also rely on
public records, such as court filings. See Churchill v. Star
Enterprises, 183 F.3d 184, 190 n.5 (3d Cir. 1999) (citing Pension
Benefit Guaranty Corp. v. White Consolidated Indus., Inc., 998
F.2d 1192, 1196 (3d Cir. 1993)). With this standard in mind, we
set forth the background to this litigation, as the Plaintiffs
allege it.
II. Backqround.
In pertinent part, the complaint alleges as follows. In
1997, plaintiffs Rae and CFC, an insurance agency, began selling
life insurance policies that pay for the funeral costs of the
insured, (complaint, , 10), described in the complaint as "pre-
need contracts."
(Id., ~ 1). The Plaintiff did so "in
cooperation with funeral homes and funeral directors."
(Id., ~
10) .
The defendant Association has also been selling pre-need
insurance and has established certain entities to do so. Thus,
pennsylvania Services Corp., a wholly-owned subsidiary of the
Association, has set up plans called Unichoice, SecureChoice and
3
" . ,~~ ~~,
.
AO 72A
(Rev,8/82)
';'?!""'1''''''"'''''1'.."
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the Pennsylvania Funeral Plan, open only to the Association
members that provide pre-need insurance.
(Id., , 13).
The Association is allegedly using the Board to control
the market in pre-need insurance policies by causing the
administrative prosecution of those who sell pre-need insurance
but are not affiliated with the Association. The Plaintiffs
present the example of Andrew Ferguson, III, a licensed funeral
director, who they allege the Board prosecuted when he used
insurance agents who were not affiliated with the Association.
(Id., " 18 and 22).
The Association's officers, defendants Eirkson and
Brown, have spoken at many funeral-director meetings and have
published newsletters about the Board's "investigatory and
prosecutorial policy against [Association] competitors" to
discourage funeral director from remaining or becoming the
Plaintiffs' customers.
(Id., , 29). Specifically, in the fall of
1997, defendant Eirkson telephoned certain customers of the
Plaintiffs, informing them of the drop in the Association's
"production of pre-need contracts" and "question[ing] the
customers about their decisions to use CFC programs."
(Id., ,
30). In or about January 1998, Eirkson falsely told a CFC
customer that CFC's programs were illegal.
(Id., , 31). In
February 1998, as a result of the Defendants' alleged unlawful
conduct, the Plaintiffs had to send out their first
4
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indemnification letter to a client, indemnifying the customer if
the Plaintiffs' plan turned out to be illegal.
(Id., ~ 32).
In November 1998, defendant Pinkerton, a Board and
Association member, wrote the Federal Trade Commission (FTC)
questioning the legality of the "Catholic Funeral Plan," an
attempt to receive an FTC response favorable to the Association's
position.
(Id., ~~ 34 and 41). The FTC's April 1999 response was
not favorable to the Association.
(Id., ~~ 43 and 44).
On September 1, 1999, the Board issued a resolution, "at
the direct behest of the defendants," (id., ~ 23), and drafted by
defendant Campbell, the Association's lawyer, intended to target
and deter funeral directors from doing business with CFC. The
resolution adopted the allegedly illegal position that, except to
comply with FTC regulations, the showing, distribution or
summarization of any price list was "the practice of funeral
direction by engaging in pre-need sales." (Id., ~ 45).
On some unspecified date, defendant Brown, an
Association officer, wrote a memo incorporating a letter written
by defendant Campbell. The memo was distributed to all
Association members and concerned "unlicensed pre-need sales
practices."
(Id., ~ 48). It was intended "to frighten funeral
directors away from dealing with anyone but the defendants."
(Id.) .
The Defendants took the following actions, designed to
destroy CFC's business. At some point, "defendant Campbell [the
5
,
Association's lawyer] told one of the plaintiff's customers that
CFC was going down, meaning CFC was going to be investigated and
prosecuted by the [Board} and that the customers should not do
business with CFC because they might be tainted or even lose their
own license."
(Id., , 53). In the spring of 2000, defendant
Eirkson, an Association officer, told CFC customers ~that CFC was
under investigation and that if they do business with CFC they
will lose their funeral director's license.
(Id., , 56). The
(Id., , 57).
Association's staffers did the same thing.
The Board began an ~'investigation'" consisting of
asking CFC questions" so that the individual defendants could
gossip about it and hurt CFC's business.
(Id., , 54). Defendant
Eirkson, not a member of the Board, told a CFC customer that he
would grant him immunity if he testified against plaintiff Rae.
(Id., , 55). Defendant Pinkerton, a Board member, told Rae that
if the Board could stop CFC, it was going to do so.
(rd., , 58).
Defendant Eirkson also made certain public statements.
In June 2000, he told a ~pub1ic meeting" that if he was going to
bring CFC down, he needed their financial support.
(rd., , 59) .
At some other time, speaking for the Association and the Board, he
told a meeting of funeral directors that the Association and the
Board were going after CFC after the Ferquson case was finished.
(Id., , 61) .
The legal backdrop of this controversy is the
pennsylvania Funeral Director Law, 63 P.S. ~~ 479.1-480.11 (Purdon
6
AO 72A
(Rev,8/82)
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AO 72A
(Rev,8/82)
.
(
1996), and implementing regulations dealing with standards and
practices. See 49 Pa. Code ~~ 13.201-13.226. Section 479.2 of
the Law defines a "funeral director" as:
any person engaged in the profession of a
funeral director or in the care and
disposition of the human dead . . . The term
"funeral director" shall also mean a person
who makes arrangements for funeral service and
who sells funeral merchandise to the public
incidental to such service or who makes
financial arrangements for the rendering of
such services and the sale of such
merchandise.
(Emphasis added). Section 479.13(a) prohibits anyone from
"practicling] as a funeral director" unless they are licensed.
And only a licensed funeral director may "directly or indirectly,
or through an agent, offer or enter into a contract with a living
person to render funeral services to such person when needed." 49
P.S. ~479.13(c).
The Law provides that a funeral director may have his
license suspended "for misconduct in the carrying on of the
profession." 49 P.S. ~ 479.11(a) (5). The regulations provide
that a funeral director commits unprofessional conduct in
assisting "an unlicensed person to engage in an act or practice
for which a license is required." 49 Pa. Code ~ 13.202(1).
In FerGuson v. Pennsylvania State Board of Funeral
Directors, ___ A.2d ___, 2000 WL 33152028 (Pa. Commw. 2001), the
Pennsylvania Commonwealth Court relied on these provisions in
upholding a Board decision that an insurance agent, Faye Morey,
7
'ill' 'iC:lT '''!
had engaged in the unlicensed practice of funeral directing and
that a funeral director, Andrew D. Ferguson, III, the same
Ferguson the Plaintiffs allege has been persecuted by the
Defendants, had unlawfully assisted the agent in that unlicensed
practice.
Ferguson had supplied Morey with his price list for
funeral services and merchandise and had agreed to accept
assignment of pre-need policies she might sell. Holding herself
out as being associated with Ferguson, Morey them met with
potential buyers using "Estimated worksheets" that listed prices
for funeral services and merchandise. The estimated worksheets
were used to calculate the price of the insurance. Morey signed
the worksheet as a "counselor.n After she sold the customer the
insurance, she assigned the policies to Ferguson. At that point,
Ferguson prepared a "Statement of Funeral Goods and Services
without meeting with the insured. He then brought the statement
to the insured for signature.
The commonwealth court concluded that Morey had engaged
in the unlicensed practice of funeral directing because "as a
'counselor'
[she] helped the insureds plan and fund their
funerals.n Id. at ___, 2000 WL 33152028 at *5. It followed that
Ferguson had violated the Law by assisting a person in the
unlicensed practice of funeral directing.
Significantly, the court noted that it was not
prohibiting insurance agents from selling policies that covered
8
AO 72A
(Rev,8/82)
1:"0'" .
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AO 72A
(Rev,8182)
'411'
funeral expenses. It was only preventing them from "usurp[ingJ
the legislatively mandated role of funeral directors." Id. at
, 2000 WL 33152028 at *7.
III. Discussion.
The Association Defendants have made a number of
objections to the validity of the federal claims, along with
arguments against the state-law claims.
Among other arguments against the federal claims, the
Defendants contend that the Plaintiffs have not made out a
substantive due process claim because they have not alleged a
violation of a constitutionally recognized liberty or property
interest protected by due process, pointing out that the Plaintiff
have not alleged that they, as opposed to Ferguson or others, have
been penalized or even prosecuted.
We agree with the Defendants that in this context the
Plaintiffs have not stated a substantive due process claim because
they have not identified a liberty or property interest
protectable under the clause. See qenerally Nicholas v.
Pennsylvania State University, 227 F.3d 133 (3d Cir. 2000).
These Defendants also argue that the Plaintiffs have no
claim for a violation of their first amendment right to
association since first amendment associational rights do not
extend to associations created by business transactions. We
agree. See Sanitation and Recyclinq Industrv. Inc. v. City of New
9
I.
'"
York, 107 F.3d 985, 996 (2d Cir. 1997). See qenerallv Pi Lambda
phi Fraternitv. Inc. v. Universitv of Pittsburqh, 229 F.3d 435 (3d
Cir. 2000).
The Defendants also maintain that there is no equal
protection violation made here because, at most, there has only
been an investigation of the Plaintiffs, and because the
Plaintiffs have not alleged the elements of a selective
prosecution claim. See United States v. Schoolcraft, 879 F.2d 64,
68 (3d Cir. 1989). We agree. In this regard, while the
Plaintiffs argue they have engaged in the same business practices
as the Defendants, we are mindful of two things: (1) the
Plaintiffs' vigorous defense of Ferguson's practices, practices
that the commonwealth court have found to be illegal; and (2) the
Plaintiffs' attack on the Board's position concerning what
constitutes the unlawful practice of funeral directing.
We also reject the Plaintiffs' reliance on the
privileges and immunities clause of the Fourteenth Amendment. The
Plaintiff claim that their right under this clause to pursue an
occupation was violated by the Defendants. However, this is not
the type of claim covered by this clause. See qenerallv
Slauqhter-House Cases, 83 U.S. 36, 21 L.Ed. 394, 16 Wall. 36
(1872) .
Finally, the Defendants argue that the Plaintiffs cannot
assert a federal anti-trust claim because they allege only injury
to themselves and the antitrust laws are intended to protect
10
AO 72A
(Rev,8/82)
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prices, quantities, and quality of the goods and services, not a
competitor. In support, they cite Mathews v. Lancaster General
Hospital, 87 F.3d 624, 641 (3d Cir. 1996). We agree.
IV. Conclusion.
We see no need to examine defendant Campbell's motion to
dismiss since we can dismiss the case against him on the basis of
our rulings on the Association Defendants' motion. Additionally,
having decided to dismiss all the federal claims, we decline to
exercise jurisdiction over the pendent state-law claims, see 28
U.S.C. s 1367(c) (3), and we will dismiss them without prejudice to
filing them in an appropriate state court.
We will issue an appropriate order.
~A'
William W. Caldwell
united States District Judge
Date: April 12, 2001
11
" '"11
(
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
vs.
CIVIL ACTION NO. 1:CV-00-2018
JOHN W. EIRKSON,
THE PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION (PFDA),
et al.,
Defendants
FILED
HARRISBURG. PA
APR 1 2 2001
MARY E. ~~LERK
PER .-lJIlY
AND NOW, this 12th day of April, 2001, it is ordered
o R D E R
that:
1. The motion to dismiss (doc. 7) filed by
defendant Louden Campbell and the motion to
dismiss (doc. 8) filed by the other defendants
are granted as follows.
2. All federal claims in the complaint
against all defendants are dismissed for
failure to state a claim upon which relief may
be granted.
3. The Plaintiffs' pendent state-law
claims are dismissed under 28 U.S.C. ~
1367(c) (3), without prejudice to filing them
in an appropriate state court.
4. The case management conference
scheduled for Tuesday, April 17, 2001, is
cancelled.
5. The Clerk of Court shall close this
file.
~~~4
William W. aId ell . ,
United States District Judge
AO 72A
(Rev,8182)
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Don Bailey
P AID#23786
4311 North 6th Street
Harrisburg, PA 17110
(717) 221-9500
Attorney for Plaintiffs
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IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYL VANIA
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DIRECTORS ASSOCIATION )
(PFDA), LOUDEN L. CAMPBELL)
ESQUIRE, MARTIN BROWN, )
and JAMES O. PINKERTON, )
)
)
ROBERT RAE AND
COMMONWEALTH FUNERAL
CONSULTANTS INC.,
Plaintiffs
vs.
JOHN W. EIRKSON, THE
PENNSYL VANIA FUNERAL
Defendants
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IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, PA.
NO. (!)J- .:2.9/;;' C;;;J
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JURY TRIAL DEMANDED
NOTICE
YOU HAVE BEEN SUED IN COURT. If you wish to defend against
the claims set forth in the following pages, you must take action within twenty (20)
days after this Complaint and Notice are served, by entering a written appearance
personally or by attorney and filing in writing with the Court your defenses or
objections to the claims set forth against you. Yon are warned that if you fail to do
so the case may proceed without you and a judgment may be entered against you by
the Court without further notice for any money claimed in the Complaint or for any
other claim or relief requested by the Plaintiff. You may lose money or property or
other rights important to you.
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YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT
ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO
TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE
YOU CAN GET LEGAL HELP,
CUMBERLAND COUNTY LAWYER REFERRAL SERVICE
CUMBERLAND COUNTY BAR ASSOCIATION
2 LIBERTY AVENUE
CARLISLE, P A 17013
(717) 249-3166
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Don Bailey
P AID# 23786
4311 N. 6th Street
Harrisburg, Pa 17110
(717) 221-9500
Attorney for Plaintiffs
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)
)
)
)
)
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DIRECTORS ASSOCIA nON )
(PFDA), LOUDEN L. CAMPBELL)
ESQUIRE, MARTIN BROWN, )
and JAMES O. PINKERTON, )
)
)
ROBERT RAE AND
COMMONWEAL TH FUNERAL
CONSULTANTS INC.,
Plaintiffs
vs.
JOlIN W. EIRKSON, THE
PENNSYLVANIA FUNERAL
Defendants
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, P A.
NO.
JURY TRIAL DEMANDED
NOTICIA
Le han demandado a usted en la corte. Si usted quiere defenderse de estas
demandas expuestas en las paginas siguientes, usted tiene viente (20) dias de plazo
al partir de la fecha de la demanda y la notificacion. Usted debe presentar una
apariencia escrita 0 en persona 0 por abogado y archivar en la corte en fonna escrita
sus defensas 0 sus objeciones alas demandas en contra de su persona. Sea avisado
que si usted no se defiende, la corte tomara medidas y puede entrar una orden contra
usted sin previo aviso 0 notificacion y por cualquier queja 0 alivio que es pedido en
Ia peticion de demanda. Usted puede perder dinero 0 sus propiedades 0 otros
derechos importantes para usted.
LLEVE ESTADEMANDAA UN ABODAGO INMEDIATAMENTE. S1 NO
TIENE ABOGADO 0 SI NO TlENE EL DINERO SUFIClENTE DE PAGAR TAL
SER VICIO, VA Y A EN PERSONA 0 LLAME POR TELEFONO A LA OFICINA
CUYA DlRECCION SE ENCUENTRA ESCRlTA ABAJO PARA AVERIGUAR
DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL
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CUMBERLAND COUNTY LAWYER REFERRAL SERVICE
CUMBERLAND COUNTY BAR ASSOCIATION
2 LIBERTY AVENUE
CARLISLE, P A 17013
(717) 249-3166
",..",
. "
Don Bailey
PAID# 23786
4311 N. 6th Street
Harrisburg, Pa 17110
(717) 221-9500
Attorney for Plaintiffs
)
)
)
)
)
)
)
)
)
JOHN W. EIRKSON, THE )
PENNSYL VANIA FUNERAL )
DIRECTORS ASSOCIATION )
(PFDA), LOUDEN L. CAMPBELL)
ESQUIRE, MARTIN BROWN, )
and JAMES O. PINKERTON, )
)
)
ROBERT RAE AND
COMMONWEALTH FUNERAL
CONSULTANTS INC.,
Plaintiffs
vs.
Defendants
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, PA.
NO.
JURY TRIAL DEMANDED
COMPLAINT - CIVIL ACTIONS
1.) This is a civil action for a number of state claims brought subsequent to a
denial by a federal district court to exercise supplemental jurisdiction pursuant to 28
u. s, C. S 1367. The torts identified to date include Tortuous Interference With Business
and Contractual Relations, Interference with Prospective Business and Contractual
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Relations, Conspiracy to injure plaintiffs in Their Profession, Defamation, and Civil
Conspiracy. All misconduct complained of occurred within two years of November 17,
2000 (when the federal complaint was filed) and of May 12,2001, when this state
action was filed. The federal courts dismissal of the federal claims is on appeal.
PARTIES
2.) Plaintiff Robert Rae is an adult American citizen and is CEO and President
of plaintiff CFC, a licensed Pennsylvania insurance agency.
3.) The defendants' John W. Eirkson, Louden L. Campbell, Martin Brown and
James O. Pinkerton are all adult American citizens. Eirkson is an officer in defendant
PFDA as is the defendant Brown. Pinkerton is a member of the (SBFD) and is also
believed to be a member ofPFDA.
4.) The plaintiff Rae and CFC, on or about 1997, began selling pre-need services
in cooperation with funeral homes and funeral directors.
5.) The defendant PFDA was already in this type of business.
6.) The PFDA and its members utilize both a trust, and insurance carriers, to sell
pre-need services to the public. They have done this for years. They have created a
number of entities like "SecurChoice" for this purpose, through which its (PFDA's)
members, market and sell pre-need services to consumers.
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7.) During this same time period, a number of entities like Pennsylvania Funeral
Services Corp., (pFSC) a wholly owned subsidiary of PFDA, started PFDA's
"Unichoice," a Co-op with membership free to PFD A members only. Unichoice which
was set up whereby PFDA members could purchase wholesale funeral "products and
services." The Co-op, "Unichoice," offers dividends and credits to members ofPFDA
only. "Secure Choice" and "Unichoice" and "The Pennsylvania Funeral Plan," are
believed to be marketing plans for PFSC which is owned by PFDA. One of its services
is pre-need insurance. Unichoice is designed to create a monopoly and acts in restraint
of trade for PFDA members over the funeral industry by offering free memberships to
members and then paying dividends and giving credits to members of the PFDA only.
8.) The PFDA and the individual defendants are direct business competitors of
the plaintiffs, and are unlawfully using the SBFD (State Board of Funeral Directors)
and its badge of authority to unlawfully destroy the plaintiff s business.
9.) As part of this process of cornering the market on pre-need sales, the PFDA
once encouraged and promoted a practice whereby its funeral director members would
become licensed Pennsylvania insurance agents, although it never required its sales
makers to be licensed funeral directors.
10.) The PFDA and the individual defendants did this for two purposes. The first
was to create a relationship between its funeral director members and its pre-need
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entities and businesses so PFSC could market through "SecurChoice and Unichoice"
and the "Pennsylvania Funeral Plan," and the second was to use its direct relationship
with the SBFD, whom it controls politically by virtue of membership on the Board ie
using its position on the Board as a regulatory and controlling state agency to ensure
the security of its members and the defendants personal interest in PFSC and the trusts
and the co-op it governs, and to prevent competitors, such as plaintiffs, from selling
pre-need services in Pennsylvania.
11.) Upon information and belief the plaintiffs allege that the individual
defendants are
a.) members of the PFDA and participate in PFSC, which markets as
"SecurChoice/Unichoice/Pennsylvania Funeral Plan."
b.) Participate as co-op members in "SecurChoice/Unichoice" which is a part
of the PFDA,
c.) Receive dividends, or are poised to receive dividends (or reinvest dividends)
in the Co-op. ("SecurChoice/Unichoice").
12.) The SBFD, at the direct behest of the defendants, by and through the
PFDA's lawyers, who did the writing for the SBFD, submitted and passed (in
questionable violation of state law and in clear violation of a funeral director's ie. a
certain Mr.Andrew Ferguson's substantive and procedural due process rights) a
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sole and intentional purpose of intimidating, threatening, and unlawfully destroying the
contracts, potential contracts, business, business opportunities, and personal and
business reputation, a constitutional property right under Pennsylvania law, of those
persons and entities, including but not limited to, plaintiffs, who are competitors of the
PFDA, its officers, political colleagues, and co-defendants.
16.) The defendants Eirkson and Brown have spoken out on numerous
occaSIOns, before numerous gatherings of funeral directors, and have written
correspondences, and caused news letters to be published, which emphasize SBFD
investigatory and prosecutorial policy against PFDA competitors such as plaintiffs, by
speaking authoritatively for same, by displaying a knowledge of same, and by
employing their knowledge in a targeted way to discourage and intimidate customers
and potential customers of the plainitffs into not doing business with plaintiffs.
17.) On or about the Fall of 1997 certain of plaintiffs' customers received phone
calls from the defendant Eirkson about the drop in the PFDA entities' (pFSC)
production of pre-need contracts through their funeral homes, and he questioned the
customers' about their decisions to use CFC programs.
18.) On or about January 1998 the defendant Eirkson told one of plaintiffs'
customers that plaintiffs' programs were illegal. This was totally false. As a result, the
customer asked CFC to indemnify the customer should this turn out to be true.
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19.) Due to the efforts of Eirkson and Brown among others, CFC's business
began to suffer and in February 1998 the plaintiffs sent out their first indemnification
letter to a customer in response to the unlawful misconduct of the defendants.
20.) During the summer of 1998 CFC continued to work hard to add to their
business.
21.) On November 9, 1998, the defendant Pinkerton, wrote to the FTC
expressing his concerns about the "Catholic Funeral Plan." This letter was a poorly
disguised attempt to persuade the FTC to follow policies that would prevent
interference with the defendants' unlawful efforts to control funeral business in
Pennsylvania for personal gain. In this letter Pinkerton raises the spectre of state
interference, even suggesting Attomey Laurie Meelan of the FTC contact SBFD
prosecuting attorney Kathleen Klett Ryan.
"My primary concern is, that, should third-party
marketing organizations be allowed to become a
means to circumvent unwanted rules and regulations,
they will soon become many and make more
difficult the issues of compliance and enforcement
as well as creating a negative environment of
competition. "
22.) In the Winter ofl998 thePFDA, by and through Eirkson (and others) made
several statements that indicated that he, as a PFDA official, was going to have the
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prosecuting attorney for the SBFD pursue CFC and "unlicensed" people. Rae is a
licensed funeral director.
23.) On or about the Spring of 1999 the SBFD, by and through its badge of state
authority, prosecuted the aforementioned Mr. Ferguson 3 years after already having
caused an investigation to be conducted into Mr. Ferguson's business affairs in 1996.
24.) Mr. Ferguson had advertised his services and was working with a group of
licensed insurance agents who were attempting to make pre-need sales of funeral
services and costs. These agents would occasionally reach a tentative agreement with
a consumer of a pre-need insurance contract designed to meet the requirements of
funeral costs at death. In doing so they used Mr. Ferguson's price list as a guide. Each
tentative contract they were able to write was then submitted to Mr. Ferguson for
review, consultation and approval Mr. Ferguson's action were in complete and total
conformity with the FTC "funeral rule" and state law.
25.) Perceiving Mr. Ferguson's activities as an ideal scape goating opportunity
to threaten their competitors, the defendants succeeded in having Mr. Ferguson
prosecuted by the SBFD in a unlawful effort to stem the rising competition with their
own businesses.
26.) To accomplish this end, the defendants unlawfully engaged in state actions
by, through, and with the SBFD using that agency to investigate and prosecute
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competitors of the defendants and discourage businesses and disrupt contracts with the
plaintiffs.
27.) Contemporaneously, the FTC responded to defendant James O. Pinkerton
who at the time was wearing his Vice Chairman of the SBFD Board hat, (Mr. Pinkerton
is now Chairman of the Board), about his inquiry (made as a PFDA member and as a
SBFD Board member) concerning the Catholic Funeral Plan and his desire to have
them investigated. In that letter (see paragraph 32 above) in the sixth paragraph, Mr.
Pinkerton expresses concern about agency relationships and then references the "State
of Pennsylvania laws" and says, in effect, that if the sales people aren't licensed
funeral directors they are "probably in violation of Pennsylvania provisions that prohibit
anyone but a funeral service licensee from making funeral arrangements" (emphasis
added). Pinkerton was aware that:
a.) Pennsylvania law 63 P.S. S479.13(c) was interpreted adverse to the actions
taken against Ferguson in Pennsvlvania Funeral Directors Association v. State Board
of Funeral Directors. 90 Pa. Cmwlth 175, 494 A.2d 67 (1985) and,
b.) that the Pennsylvania Legislative Budget and Finance Committee in a 1994
report had observed that pre-need services had as a matter of practice in Pennsylvania
been executed by funeral directors, cemeteries, and other types of sellers.
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There is no rational economics or other basis consistant with 14th Amendment
due process standards for the state of Pennsylvania and the SBFD to limit pre-need
sales to licensed funeral directors and Pinkerton and the SBFD its members, staff, and
lawyers all know that. CrailITIliles v. Giles, U.S. District Court for the Eastern District
ofTennessee at Chattanooga No.1 :99-CY -304 (August 21, 2000) and Casket Rovale.
Inc.. v. Mississippi, U.S. District Court for the Southern District of Mississippi Jackson
Division Inc., No. 3:99-CY-737 BN, October 31, 2000.
28.) Nevertheless, in an opinion now on appeal to the Pennsylvania Supreme
Court, the Commonwealth Court upheld Mr. Ferguson's prosecution, and so broadly
interpreted funeral director activity that is precludes attorneys and banks from
discussing funeral plans with clients. The above reference letter by Pinkerton was a
euphemistic description by defendants to the FTC hoping to engender a positive
response against the Catholic Funeral Plan, and others, that they could use to protect
the PFDA's unlawful monopolistic practices and thus their own personal financial
interests. Pinkerton claims "unregulated sales persons" another emhemisrn meaning a
licensed insurance agent who is not a licensed funeral director (ie. does not fit into the
PFDA membership and business practice mold) are making "funeral arrangements"
when discussing pre-need contracts in a context of funeral costs, something any sales
person must do and the FTC requires. But Mr. Pinkerton is playing a word game here.
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There is no requirement that a funeral director is solely authorized to discuss prices
with consumers. Such a view is in direct contradiction of the funeral rule's purpose.
Further, the only difference between a funeral service provider and a licensed funeral
director is that the director is licensed to embalm. There is no other difference.
29.) At no place does Pinkerton offer an explanation as to how, or why, a
licensed funeral director and a licensed insurance agent must be the same person
(although not all PFDA members who engage in PFDA programs such as SecurChoice
and Unichoice use licensed both ways) or why licensed funeral directors and licensed
insurance agents can't work together (as Andrew Ferguson did) just as a person who
is licensed as both can perform both functions. The PFDA, in its aggressive sales mode,
frequently uses unlicensed funeral service providers to sell pre-need services
"unlicensed" means someone who is not a licensed funeral director. The PFDA simply
believes the law does not apply to them.
30.) On April 5, 1999, the FTC, in a staff opinion offered through Mercedes K.
Kelly Esq., responded to Mr. Pinkerton's letter of November 9, 1998.
31.) Kelly's response both directly, and by implication, debunked the irrational
effort by Pinkerton (and the PFDA and others) to solicit some response from the FTC
that only a licensed funeral director can reveal or talk about his or her prices to
consumers. In fact, the FTC staff response takes pains to point out that "funeral
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providers who choose to be involved in a program, such as the Catholic Funeral Plan,
Carry the burden of making sure that the consumers brought to them by the religious
group get the disclosures reauired under the Federal Rule" (emphasis added).
Pinkerton's efforts to elicit support from the FTC failed. But this did not deter the
defendants from using the SBFD to unlawfully prosecute Mr. Ferguson, and use that
prosecution (on appeal but upheld by the Commonwealth Court in December 2000) as
a Sword ofDamocles to hang over the head of anyone who wished to do business with
plaintiffs and others like them.
32.) This misconduct by the SBFD bears no rational relationship to any
legitimate government interest and is an arbitrary and capricious intrusion upon, and
denial of, the plaintiffs' rights to pursue their chosen occupations.
33.) The action of the SBFD and the private defendants who have been, and
persist in acting, by, through and with them, are unreasonable and are related to no
proper government purpose. The unlawful restrictions are economic in nature, and they
further work a denial of property rights guaranteed by the Pennsylvania Constitution,
namely the right to one's business reputation, let alone the 1 st and 14th Amendment right
to contract free of unreasonable government molestation.
34.) As part of the defendants' unlawful plans the Defendant Brown wrote a
memo which he distributed to all "PFDAMembers" about "unlicensed pre-need sales
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practices." Part of the memo included a letter written by the defendant Campbell to the
defendant Eirkson designed to be used as part of the effort to frighten funeral directors
away from dealing with anyone but the defendants.
35.) The aforementioned practices of the SBFD and the defendants are unlawful,
are violative of the plaintiffs' substantive due process rights, are unlawful actions in
restraint of trade, constitute violations of the plaintiff s rights to the equal protection of
the laws, and violate by and through state action, the plaintiffs' rights to enjoy the
Privileges and Immunities guaranteed by the U.S. Constitution including the right to
engage in gainful employment and their chosen occupations. Plaintiffs' rights to be free
to contract, a federally guaranteed liberty interest, and their right to be free of tortious
interference with contracts and with potential contractual relations, and of a conspiracy
to injure plaintiffs in their profession, and to be free of defamation under state law
was (and is) being violated by the defendants, although this complaint only addresses
state claims.
36.) The defendants engaged in a prolific policy of threats, intimidations and
even express personal advice to many of the plaintiffs' customers to either not do
business with the plaintiffs, because they would soon be investigated or prosecuted by
the SBFD which is believed to be false, seeking to frighten customers and potential
customers of the plaintiffs away from doing business with them, and to interfere .
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directly in existing or contractual relationships.
37.) In doing so the plaintiffs incurred special damages in an amount in excess
of$5,000,000.00 (five million dollars) at the hands of the defendants consisting oflost
sales, lost profits, and incidental costs.
38.) For example the defendant Campbell told one of the plaintiff's customers
that CFC was "going down," meaning CFC was going to be investigated and
prosecuted by the SBFD and th~t the customers should not do business with CFC
because they might be tainted or even lose their own license.
39.) Meanwhile the SBFD began an "investigation" consisting of asking CFC
questions, so that the private defendants could traffic in the matter as if CFC were
going to be prosecuted, as an item of gossip, designed to destroy CFC's business.
40.) John Eirkson, who is not an actual or official SBFD member or employee,
told one of CFC' s customers that he would give him "immunity from prosecution" if
the client would "testify" against the plaintiff Rae. This is quite improper given
Eirkson's tota11ack of actual authority to do so (though he may feel, and apparently
does, that he is acting for the SBFD). Its also improper because there is absolutely
nothing to testify against Rae for, and the implication that there is, is an outrageous
violation of Rae rights both federally and as a matter of state tort law.
41.) On or about the Spring of2000 the defendant John Eirkson told numerous
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clients of the plaintiffs that CFC was "under investigation" and that ifthey do business
with CFC they "will lose" their funeral director's license.
42.) Staffers at defendant PFDA and its affiliates also told plaintiffs' clients that
CFC was under investigation and if they do business with CFC they will lose their
license.
43.) The defendant Pinkerton personally told the plaintiff Rae that if "we"
meaning the SBFD, can stop CFC from selling services, that they "were going to do
so."
44.) On or aboutJune 2000 the defendantJ 000 Eirkson, speaking for himself and
the defendant PFDA, announced at a public meeting that "to bring CFC down, I need
your financial support." The implication was that CFC and Robert Rae were acting
unlawfully.
45.) On or about September 2000 Eirkson told one of CFC's clients that the
Ferguson case will "probably be thrown out," but responded, " rn be back" in
response to the client's decision to work with CFC, as opposed to PFD A. Erickson was
in error. The Commonwealth Court upheld the Board granting funeral directors
exceptionally broad control over the actions of other professionals.
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46.) Eirkson, speaking for PFDA and the SBFD, told a meeting of funeral
directors that CFC was on the top ofa list of funeral directors that "they" (meaning the
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coalition of private defendants, the PFDA and SBPD) were "going after" once the
Ferguson case was done thus evidencing an unlawful conspiracy to destroy plaintiffs
business reputation and deter others from doing business with plaintiffs.
47.) The defendants created, through their use of the SBFD's powers, a plethora of
policies, actions, and threatened actions, designed to instill fear and force reactions
in the Pennsylvania funeral industry that sought the destruction of plaintiffs' lawful
business, appeared to make them subject to investigations and reviews by
government officials as a way to harass and intimidate them, and destroyed their
contracts and potential contracts.
48.) Additionally, Pennsylvania's Constitution recognizes and protects "business
reputation" not just as a reflection of state tort law, but as a property right. The
defendants violated the plaintiffs' rights to property also because they targeted
successfully some of the customers that plaintiffs had had existing contracts with and
adversely affected those contracts.
49.) The defendants' purpose, and the nature of the government power used,
was meant to be economic in its impact on plaintiffs and was intended and used by the
defendants as a way to limit the plaintiffs' associations or activity in the funeral
industry and to destroy their personal and business reputations and professions.
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50.) The defendants actions were designed and had the effect of singling the
plaintiffs out for purposes of threatening them and intimidating them thus treating
them differently than persons similarly situated, such as the PFDA.
51.) Even though plaintiffs were personally told by SBFD investigators that
there were "no violations here," something which was quite obvious, the defendants
persisted unlawfully in treating plaintiffs as law breakers and referring to them as
such.
52.) The plaintiffs were doing nothing that the PFDA,its subsidiaries, and
members of the SBFD were doing to sell pre-need products yet they were harassed,
intimidated, and investigated, unlike the former.
53.) The individual defendants Eirkson, Brown, Pinkerton, Campbell, and
persons as yet unnamed, all agreed together, unlawfully to pursue the unlawful purpose
of using the investigatory and prosecutorial powers of the state to destroy plaintiffs'
business and in the process violated plaintiffs First, Fourth and Fourteenth Amendment
Rights and plaintiffs rights under the State Constitution, and to agree to work together
to destroy plaintiffs business, reputations and contracts.
54.) The defendants also conspired to use and did use the powers of the SBFD
to investigate the plaintiffs seeking to leam the depth, and the extent of their business.
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and who their customers were.
55.) The defendants acted to restrain and control the market in funeral services
in the state of Pennsylvania through the unlawful use of coercive government powers
and the manipulation of contractual relation through misrepresentation and false
impressions of the plaintiffs.
56.) They used that power to force and encourage others to demand
indemnification agreements of the plaintiffs' customers while the defendants were
doing the very same thing with the government defendants blessings.
57.) They followed their planned course of action intending to force all funeral
directors in Pennsylvania to consummate all pre-need sales and contracts through the
PFDA and its wholly owned subsidiary, PFSC, via The Pennsylvania Funeral Plan,
SecurChoice and the Unichoice marketing schemes.
COUNT I
PLAINTIFFS AGAINST THE DEFENDANTS EIRKSON
AND PFDA FOR DEFAMATION
58.) Paragraphs 1 through 57 above are incorporated herein by reference.
59.) The above- named defendants in this Count, on numerous occasions,
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expressly, or in clear and unambiguous terms, described the plaintiffs falsely as law
breakers and placed plaintiffs in a false light as evidenced by the following particulars:
a.) The defendant Campbell told one of plaintiffs' customers that CFC was
going to be investigated and prosecuted by the SBFD knowing any such investigation
was specious and unfounded, and knowing that if he was in possession of such
knowledge, and it was accurate, which it was not, it was confidential and he had no
authority to discuss such information, and further that he knew CFC and Bob Rae had
done nothing wrong. Further, the defendant Campbell used the above information in an
intentional effort to injure the plaintiffs and cause them to incur business losses by
placing the plaintiffs in a false light. This occurred in late November 1999, and,
b.) The defendants' Eirkson and PFDA through its staff, on numerous occasions
beginning in 1997 and continuing to the present day told clients of plaintiffs that CFC
is under investigation and if they do business with CFC they will lose their license
(meaning funeral director's license). Eirkson, in the Spring of 2000 similarly told a
meeting of funeral directors that they should not do business with CFC, and, that if they
do, they will lose their license, even though Eirkson and the PFDA knew the
accusations were unfounded. These actions of the PFDA and Eirkson were intended
to harm plaintiffs' business through characterizing them as lawbreakers. This
misconduct cast plaintiffs in a false light, misrepresented them, and was intended to
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cause injury to their business, and in fact did cause plaintiffs to suffer, significant
financial losses. In a particularly vicious attack on plaintiffs the defendant Eirkson in
October 2000, told two persons who are active in funeral industry affairs, that "they"
in reference to the SBFD, the PFDA, and himself, were waiting to see the outcome of
the Ferguson case. Eirkson explained that the PFDA was going to change the law if
Ferguson wins so that only a funeral director can sell pre-need services. Eirkson went
on to say that if Ferguson were found guilty, "they" (meaning the SBFD and the
PFDA) would go after every CFC account and "You will lose your license and be fined
$1000.00 for every contract you made with CFC ."
Wherefore the plaintiffs' demand judgement of the defendants Eirkson and
PFDAjointly and severally for defamation and false light misrepresentation together
with compensatory and punitive damages, special damages in excess of$5,000,000.OO
as yet uncertain amount costs, fees, and such other relief as the Court may deem
appropriate.
COUNT II and III
PLAINTIFFS AGAINST ALL DEFENDANTS FOR TORTIOUS
INTERFERENCE WITH BUSINESS AND CONTRACTUAL
RELA nONS AND (COUNT III) INTERFERENCE WITH
PROSPECTIVE BUSINESS AND CONTRACTUAL RELA nONS
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.
60.) Paragraph I through paragraph 59 above are incorporated herein by
reference.
61.) The defendants, in a concerted, cooperative effort to destroy the
plaintiffs' business sought to dissuade plaintiffs' customers from doing business
with plaintiffs through false representations and through the unlawful use and
representations, of the state's power to investigate and prosecute which were false.
62) These efforts were intentional and were specifically undertaken by the
defendants to destroy contracts and potential contracts in which plaintiffs were
involved or ready to consummate, in some cases, as aforementioned, targeting
specific customers and contents of plaintiffs.
63.) The defendants succeeded in numerous cases in causing third parties to
withdraw from, alter to plaintiffs' disadvantage, or cease entry into contracts with
plaintiffs to plaintiffs financial disadvantage, so to further the defendants' own
business interests.
Wherefore the plaintiffs demand judgement of the defendants jointly and
severally for the violation of their rights to be free of intentional interference with
contractual relations and prospective contractual relations but not exceeding in sum
total the special damages referred to in Counts above together with punitive
damages, costs, fees, attorneys' fees, compensatory damages, and such other relief
-21-
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as the Court may deem appropriate.
COUNT IV
PLAINTIFFS AGAINST THE DEFENDANTS
EIRKSON. BROWN AND PINKERTON AND
THE PFDA MEMBERS OF THE SBFD BOARD
FOR CIVIL CONSPIRACY
64.) Paragraphs 1 through 63 above are incorporated herein by reference.
65.) The above-named defendants, upon information and belief, knew, were
aware of, and unlawfully agreed, whether overtly or tacitly to unlawfully defame
plaintiffs, and to interference with plaintiffs contractual relations and interference
with plaintiffs prospective contractual relations.
66.) These actions were done unlawfully for an unlawful, purpose, and with
the knowing cooperation of each defendant with each other, in various
combinations, from time to time.
Wherefore the plaintiffs demand judgement of the defendants jointly and
severally for Civil Conspiracy in an amount equal to, but not greater in sum, than the
special damages as referenced in the other counts above, together with punitive and
compensatory damages, costs, fees, attorneys fees, and such other relief as the
Court may deem appropriate.
-22-
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Respectfully Submitted,
Don Bailey P AID# 23786
4311 N. 6th Street
Harrisburg, Pa 17110
(717) 221-9500
-23-
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CERTIFICATE OF SERVICE
I hereby certify that on May 14, 2001 a true and correct copy of the
foregoing COMPLAINT was served upon the following counsel of record by
United States Mail, postage prepaid.
ECKERT SEAMAN'S CHERIN & MELLOTT, LLC
Bridget Montgomery, Esquire
213 Market Street, 8th Floor
Harrisburg, P A 17101
Sarah Yerger, Esquire
Office of Attorney General
1500 Strawberry Square
Harrisburg, PA 17120
Douglas Marcello, Esquire
Thomas, Thomas, Hafer, LLP
305 North Front Street
Harrisburg, P A 17101
ci1~
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BY:' . -
Don Bailey ID 23786 "/)
4311 N. 6th Street U
Harrisburg, P A 17110
(717) 221-9500
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IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
ROBERT RAE AND
COMMONWEALTH FUNERAL
CONSULTANTS, INC.,
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PA
NO. 01-2912 CIVlL TERM
Plaintiffs
v.
JOHN W. EIRKSON, THE
PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION (PFDA),
LOUDEN L. CAMPBELL, ESQUIRE,
MARTIN BROWN and JAMES O.
PINKERTON,
JURY TRIAL DEMANDED
Defendants
PRAECIPE TO DISCONTINUE
To the Prothonotary:
Please mark this action discontinued as to all defendants (upon payment of your costs only).
Dated:
'7 JII3!O/
/ '
DUANE, MORRIS & HECKSCHER LLP
BY~=~~;~
AttorneylD. No. 17145
James J. Kutz, Esquire
Attorney lD. No. 21589
305 North Front Street, 5th Floor
P. O. Box 1003
Harrisburg, P A 17108-1003
(717) 237-5500.
Attorneys for Plaintiffs
HBG\79305,l
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.
ROBERT RAE and COMMONWEALTH
FUNERAL CONSULTANTS, INC.,
Plaintiffs
In the Court of Common Pleas of
Cumberland County, Pennsylvania
v.
No. 01-2912 Civil Term
JOHN W. EIRKSON, THE
PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION (PFDA),
LOUDEN L. CAMPBELL, ESQ.,
MARTIN BROWN, JAMES O.
PINKERTON, Individually,
Defendants
JURY TRIAL DEMANDED
ENTRY OF APPEARANCE
Please enter our appearance on behalf of Plaintiffs Robert Rae and Commonwealth
Funeral Consultants, Inc., in the above referenced matter.
We are authorized to accept service on behalf of said Plaintiffs.
DUANE, MORRIS & HECKSCHER LLP
Dated: (p 1J:::i1 0 (
~~
Allen C. Warshaw
Attorney I.D. No. 17145
James J. Kutz
Attorney I.D. No. 21589
305 North Front Street, 5th Floor
P. O. Box 1003
Harrisburg, PA 17108-1003
(717) 237-5500
Attorneys for Plaintiffs
HBG\78475.l
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.
CERTIFICATE OF SERVICE
::tt....
On this ~ day of (yJ~
,2001, I, Patricia Z. Glusko, a secretary in the
law offices of Duane, Morris & Heckscher LLP, hereby certify that I have served this day true
and correct copies of the attached document in the above-captioned case, by depositing same in
the United States First Class Mail, postage prepaid, in Harrisburg, Pennsylvania, to those persons
and addresses indicated below:
Bridget Montgomery, Esq.
Eckert Seamans Cherin & Mellott, LLC
213 Market Street, gthFloor
Harrisburg, PA 17101
Sarah Yerger, Esq.
Office of the Attorney General
1500 Strawberry Square
Harrisburg, PA 17120
Douglas Marcello, Esq.
Thomas, Thomas & Hafer, ILP
305 North Front Street, 6th Floor
Harrisburg, PA 17101
e~~G~
IN TIlE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
ROBERT RAE AND
COMMONWEALTH FUNERAL
CONSULTANTS, INC.,
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PA
NO. 01-2912 CNIL TERM
Plaintiffs
v.
JOHN W. EIRKSON, THE
PENNSYLVANIA FUNERAL
DIRECTORS ASSOCIATION (PFDA),
LOUDEN L. CAMPBElL, ESQUIRE,
MARTIN BROWN and JAMES O.
PINKERTON,
JURY TRIAL DEMANDED
Defendants
CERTIFICATE OF SERVICE
AND NOW, this 18th day of July, 2001, I, Sharon L. Romig, a secretary in the law offices of
DUANE, MORRIS & HECKSCHER LLP, hereby certify that I have this day served a true and
correct copy of the Praecipe to Discontinue by facsimile and United States First Class Mail to the
following:
Sarah C. Yerger, Deputy Attorney General
Office of Attorney General
Litigation Section
15th Floor, Strawberry Square
Harrisburg, PA 17120
(717) 772-4526 (Fax Number)
Douglas Marcello, Esquire
Thomas, Thomas & Hafer, UP
305 North Front Street
6th Floor
Harrisburg, PA 17101
(717) 237-7105 (Fax Number)
1:,;_,;",,--= ~___:;'I'~c~ _ ,
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~t',i%:~f,;/;1";;;~~I&;?~iifIirS~\'s1{;;rt?i"[(
HBG\79561.1
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Bridget Montgomery, Esquire
Eckert Seaman Cherin & Mellott, LLC
213 Market Street, 8th Floor
Harrisburg, PA 17101
(717) 237-6019 (Fax Number)
r>I~rP ~
Sharon L. Romig
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