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HomeMy WebLinkAbout01-2912Don Bailey PAIDO23786 4311 North 6th Street Harrisburg, PA 17110 (717) 221-9500 Attorney for Plaintiffs IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ROBERT RAE AND ) IN THE COURT OF COMMON COMMONWEALTH FUNERAL ) PLEAS OF CUMBERLAND CONSULTANTS INC., ) COUNTY, PA. ) ) Plaintiffs ) ) NO. 0/- ~ ~/,.Z ~ '-f'-.,~-. YSo ) JOHN W. EIRKSON, THE ) PENNSYLVANIA FUNERAL ) DIRECTORS ASSOCIATION ) (PFDA), LOUDEN L. CAMPBELL) ESQUIRE, MARTIN BROWN, ) and JAMES O. PINKERTON, ) ) JURY TRIAL DEMANDED Defendants ) 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 yon. 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 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. 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 ! 7013 (717) 249-3166 Don Bailey PAID~ 23786 4311 N. 6* Street Harrisburg, Pa 17110 (717) 221-9500 Attorney for Plaintiffs ROBERT RAE AND ) IN TIIE COURT OF COMMON COMMONWEALTIl FUNERAL ) PLEAS OF CUMBERLAND CONSULTANTS INC., ) COUNTY, PA. ) ) Plaintiffs ) ) NO. YSo ) JOHN W. EIRKSON, TIlE ) PENNSYLVANIA FUNERAL ) DIRECTORS ASSOCIATION ) (PFDA), LOUDEN L. CAMPBELL) ESQUIRE, MARTIN BROWN, ) and JAMES O. PINKERTON, ) ) JURY TRIAL DEMANDED Defendants ) NOTICIA Le han demandado a usted en la corte. Si usted quiere defenderse de estas emandas ex uestas en las paginas siguientes, usted tiene viente (20) dias de plazo dal partir de ~a~ fecha de ia demanda y la notificacion. Usted debe presentar u.na apariencia escrita o en persona o pot abogado y archivar en la corte en fonna escnta sus defensas o sus objeciones a las demandas en contra de su persona. Sea avisado que si asted no se defiende, la corte tomara medidas y puede entrar una orden contra usted sin previo aviso .o no¢,fic, ac, ion ypor c~lerqU~nreqr~eJ~ ~uals inVi?opqiU~{~ePsedoid~r~ la peticion de demanda, ustea pueae pera derechos importantes para usted. LLEVE ESTA DEMANDA A UN ABODAGO INMEDIATAMENTE' SINO TIENE ABOGADO O SI NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO, VAYA EN PERSONA O LLAME POR TELEFONO A LA OFICINA CUYA DIRECCION SE ENCUENTRA ESCRITA ABA JO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. CUMBERLAND COUNTY LAWYER REFERRAL SERVICE CUMBERLAND COUNTY BAR ASSOCIATION 2 LIBERTY AVENUE CARLISLE, PA 17013 (717) 249-3166 Don Bailey PAID8 23786 4311 N. 6~' Street Harrisburg, Pa 17110 (717) 221-9500 Attorney for Plaintiffs ROBERT RAE AND ) IN THE COURT OF COMMON COMMONWEALTH FUNERAL ) PLEAS OF CUMBERLAND CONSULTANTS INC., ) COUNTY, PA. ) ) Plaintiffs ) ) NO. o/- a ~/.z ~ ~'~ ) JOHN W. EIRKSON, THE ) PENNSYLVANIA FUNERAL ) DIRECTORS ASSOCIATION ) (PFDA), LOUDEN L. CAMPBELL) ESQUIRE, MARTIN BROWN, ) and JAMES O. PINKERTON, ) ) JURY TRIAL DEMANDED Defendants ) 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 Contract~nl Relations, Interference with Prospective Business and Con~'actual -1- 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.) PlainfiffRobert 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 of PFDA. 4.) The plaintiffRae 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 bnsiness. 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. -2- 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 "Unlchoice," a Co-op with membership bee to PFDA members only. Unichoice which was set up whereby PFDA members could purchase wholesale funeral "products and services." The Co-op, "Unlchoice," offers dividends and credits to members of PFDA 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 fxee 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 -3- entities and businesses so PFSC could market through "SecurChoice and Unichoice" and the "Pennsylvania Funeral Plan," and thc 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 regulatoE/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/Pennsyivania Funeral Plan." b.) Participate as co-op members in -SecurCho~ce/Umcholce which ~s a part of the PFDA, c.) Receive dividends, or are poised to receive dividends (or reinvest dividends) in the Co-op. ("SecurChoice/Unichoiee"). 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 ce~oin Mr. Andrew Ferguson's substantive and procedural due process fights) a 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 PFDA members 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 -5- 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 indemnit~Y the customer should this turn out to be true. -6- 19.) Duc to the efforts of Eirkson and Brown among others, CFC's business began to suffer and in Februaxy 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 of 1998 the PFDA, by and through Eirkson (and others) made several statements that indicated that he, as a PFDA official, was going to have the -7- 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 akeady having caused an investigation to be conducted into Mr. Ferguson's business affairs in 1996. 24.) IVir. Ferguson had advertised his son, ices 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 -8- competitors of thc defendants and discourage businesscs 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 inquioj (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 "rop_l_q_~.b~in violation of pennsylvania provisions that prohibit anyone but a foneral 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 ~AIRe&~I~k~ 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. -9- 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. Cri 'les v. Giles, U.S. District Court for the Eastern District of Tennessee at Chattanooga No. 1:99-CV-304 (August 21,2000) and ~ ~, U.S. District Court for the Southern District of Mississippi Jackson 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. -10- 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, f~equently uses unlicensed funeral service providers to sell pre-need services "~mlicensed" 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 f~om 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 providers who choose to be involved in a program, such as the Catholic Funeral Plan, ~axT~ the burden of mal~in~ sure t_hat 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 of Damocles 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 l't and 14~ 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 ali "PFDA Members" about "unlicensed pre-need sales -12- 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 fi.om 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 reslraint 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 flee to contract, a federally guaranteed liberty interest, and their right to be flee oftortious interference with contracts and with potential contractual relations, and of a conspiracy to injure plaintiffs in their profession, and to be fi.ee 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 fi.om doing business with them, and to interfere -13- directly in existing or contractual relationships. 37.) In doing so the plaintiffs incurred special damages in an amount in excess of $$,000,000.00 (five million dollars) at the hands of the defendants consisting of lost 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 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 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 about June 2000 the defendant John 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 Fer~uson 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 ~anting 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 coalition of private defendants, the PFDA and SBFD) were "going after" once the Ferguson case was done thus evidencing an unlawful conspiracy to daslroy 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 govermnent 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. -16- 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. ~J3.) The individ!!al 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 -17- 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 govennnent 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. 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, 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 hm'lii plaintiffs' business through characterizing them as lawbreakers. This misconduct cast plaintiffs in a false light, misrepresented them, and was intended to 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 thc PFDA was going to change the law if Fcrguson wins so that only a funeral director can sell pre-need setwices. 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 $5,000,000.00 as yet uncertain amount costs, fees, and such other relief as the Court may deem appropriate. PLAINTIFFS AGAINST ALL DEFENDANTS FOR TORTIOUS INTERFERENCE WITH BUSINESS AND CONTRACTUAL I~LATIONS AND ~COUNT lib INTERFERENCE WITH PROSPECTIVE BUSINESS AND CONTRACTUAL RELATIONS 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 part/es 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 I 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 contract~l 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 compensatood damages, costs, fees, attorneys fees, and such other relief as the Court may deem appropriate. -22- Respectfully Submitted, Harr/sburg, Pa i 7110 (717) 221-9500 -23 - CERTIFICATE OF SERVICE 1 hereby certify that on May 14, 2001 a tree mid 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, PA 17101 Sarah Yerger, Esquire Office of Attorney General 1500 Strawberry Square Harrisburg, PA 17120 Douglas Marcello, Esquire Thomas, Thomas, Haler, LLP 305 North Front Street Harrisburg, PA 17101 BY: Don Bailey ID# 23786 4311 N. 6'h Street Harrisburg, PA 17110 (717) 221-9500 Don Bailey PAID# 23786 4311 N. 6* Street Harrisburg, Pa 17110 (717) 221-9S00 Attorney for Plaintiffs ROBERT RAE AND ) IN THE COURT OF COMMON COMMONWEALTH FUNERAL ) PLEAS OF CUMBERLAND CONSULTANTS INC., ) COUNTY, PA. ) ) Plaintiffs ) ) NO. o/. VS. ) ) 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: Prothotary of Cumberland County FROM: Don Bailey, Esq. Attorney for Plaintiff Robert Rae and Commonwealth Funeral Consultants. IN RE: Memorandum Opinion and Order of the United States Dis~ict Court For the Middle DisMct 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. 6~ Street, Harrisburg, PA 17110. Respectfully Submitted, Don""'B~ey, ~_~.. -- Attorney for Plamtiff See Attachment 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., De f endant s APR 1 2 2001 M E M O R A N D U M ~MA~~. I. 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 ("the 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 ~~~pre-need sale of · Date (Hey. B/82) 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 constitutional 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. City of Atlantic City, 235 F.3d 845, 847 (3d Cir. 2000). In making that decision, we must accept as true all 2 A07~ (R~.~82) well-pleaded allegations in the complaint, Maiov. 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 CORD., 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 Ente ri~, 183 F.3d 184, 190 n.5 (3d Cir. 1999) (citing Pension Benefit Guaranty CORD. 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. BackGround. In pertinent part, the complaint alleges as follows. 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., ¶ 1o). 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 (Rev.8/82) 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., ¶7 34 and 41). The FTC's April 1999 response was not favorable to the Association. (Id., 77 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., 7 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., 7 48). It was intended ~to frighten funeral directors away from dealing with anyone but the defendants." The Defendants took the following actions, designed to destroy CFC's business. At some point, "defendant Campbell [the 5 AO 72A (Rev. e/S2.) 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 thei! 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. (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 J~ne 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, h~ told a meeting of funeral directors that the Association and the Board were going after CFC after the Ferquson case was finished. (~d., ¶ The legal backdrop of this controversy is the Pennsylvania Funeral Director Law, 63 P.S. §§ 479.1-480.11 (Purdon 6 AO 72A (Rev.~'~.) 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 479.13ia) 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 Fer~uson 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 AO 72A (Rev.8/82) 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 was 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 7~A (Rm,.~e~) funeral expenses. It was only preventing them from ~usurp[ing] 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 ~ 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 Recvclina Industry, Inc. ¥. City of New 9 AO 72A (Rev.8/S2) York, 107 F.3d 985, 996 (2d Cir. 1997). See ~enerallv Pi Lambda Phi Fraternity. Inc. v. University of Pittsburgh, 229 F.3d 435 (3~ 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. S~e generally Slaughter-House Cases, 83 U.S. 36, 21 L.Ed. 394, 16 Wall. 36 (1872). Finally, the Defendants argue that the Plaintiffs cannol 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 Genera] ~, 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, ~e decline to exercise jurisdiction over the pendent state-law claims, sec 28 U.S.C. § 1367(c) (3), and we will dismiss them without prejudice tc filing them in an appropriate state court. We will issue an appropriate order. United States District Judge Date: Agril 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 JO~N W. EIRKSON, : THE PENNSYLVANIA FUNERAL DIRECTORS ASSOCIATION (PFDA), : et al., RLED Defendants : HARRISBURg, ORDER AND NOW, this 12th day of April, 2001, it is ordered 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. United States District Judge AO ~A (Rev.8/82) 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 ~eneral 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. Eckert Seamans Cherin & Mellott, LLC 213 Market Street, Eighth Floor Harrisburg, PA 17101 James K. Thomas II, Esq. Thomas, Thomas & Haler 305 N. Front St. P.O. Box 999 Harrisburg, PA 17108-0999 ce: Judge · ( ) Pro Se Law Clerk Magistrate Judge ( ) INS U.S. Marshal ( ) Jury Clerk Probation U.S. Attorney Atty. for Deft. Defendant Warden Bureau of Prisons Ct Reporter Ctroom Deputy Orig-Security )~ Federal Public Defender Su.u.ons Issued ) with N/C attached to complt, and sez-~ed by: U.S. Marshal ( ) Pltf's Attorney ( ) Standard Order 93-5 ( ) Order to Show Cause ( ) with Petition attached & mailed certified mail to: US Arty Gen ( ) PA Atty Gen( ) DA of County ( ) Respondents ( ) Bankruptcy Court ( ) Other ( ) MARY E. D'ANDREA, Clerk 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, 8~h Floor Harrisburg, PA 17101 Sarah Yerger, Esquire Office of Attorney General 1500 Strawberry Square Hamsburg, PA 17120 Douglas Marcello, Esquire Thomas, Thomas, Haler, LLP 305 North Front Street Harrisburg, PA 17101 ' 4311 N. 6th Street Harrisburg, PA 17110 (717) 221-9500 PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in dut, t~cate) TO THE PROTHONOTARY OF cUMBERLAND COUNTY: Please list the within matter for the next Argument Court. ROBERT RAE and COMMONWEALTH FUNERAL CONSULTANTS, INC., [ Plaintiffs V. JOI~ N W. EIRKSON, THE PE~ FNSYLVANIA FUNERAL · DII~ ECTORS ASSOCIATION (PFDA), LO1JDEN L. CAMPBELL, ESQUIRE, M,~ RTIN BROWN and JAMES O. PII~ KERTON, Defendants No. 01-2912 Civil 1. State matter to be argued (i.e., plaintiffs motion for new lrial, 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: Donald Bailey, Esquire Address: 4311 North 6'h 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 Slxeet P.O. Box 999 Harrisburg, PA 17108 For Defendants: Bridget E. Montgomery, Esquire (Loudon L. Carapbell) Address: 213 Mark~ St., St~ Fl. Harrisburg, PA 17101 For Defendants: Sarah Yerger, Esquire (James O. Pinkerton & State Board of Funeral Directors (SBFD) Address: Office of Attorney General 15m FI., Slxawberry Square Harrisburg, PA 17120 3. I will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: July 25, 2001 Dated: June 4, 2001 ~... Douglas B. Marcello, Esquire 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 4t~ day of June, 2001: Donald Bailey, Esquire 43 i I North 6t~ 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 Eekert, Seamans, Cherin & Meliott, LLC One South Market Square Building 213 Market SUeet Harrisburg, PA 17101 Attorney for Loudon L. Campbell, Esquire Sarah Yerger, Esquire Attorney General's Office 1500 Strawberry Square Torts Litigation Section Harrisburg. PA 17120 THOMAS, T~OMAS & HAFER, LLP By: ·~- · Dongi~s B. Mareello, Esquire IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ROBERT RAE AND ) NO. 01-2912 Civil Term 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, ) JURY TRIAL DEMANDED ) Defendants ) NOTICE TO PLF,~ To: Donald Bailey, Esquire 4311 North 6~ Street Harrisburg, PA You are hereby notified to file 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 Bridget ~lo~tg~me~, Esquire Supr~ Ct. I.D. #5~$ ,~' 213 Market Street. 8~ Floor /'] Harrisburg, PA 17101 (717) 237-6000 Date: {L0238780.1 } IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ROBERT RAE AND ) NO. 01-2912 Civil Term 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, ) JURY TRIAL DEMANDED Defendants ) pRELIMINARY OBJECTIONS OF DEFENDANT LOUI~N L. CAMPBELL Loudon L. Campbell, CCampbell") 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: PREL~[MINARY 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. Caldweil 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 emirety to the United States Court of Appeals for the Third Circuit. At, er 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 Ca)(l~ and (2): LMPROPER SERVICE AND IMPROPER FORM OF COMPLAINT 1. 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 aider 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 (al(l~: 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. {Lo238"~.1} 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 Ca)¢4k DEMURRER $. The Complaint fails to state any claim against Defendant London L. Campbell. WHEREFORE, Defendant London 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 rid"~j~t E'. MoP're Sup~e/ne Ct. I.D. #$~105 ~ 213 Market Street Eighth Floor Harrisburg, PA 17101 (717) 237-6000 Attorneys Defendant, Loudon L. Campbell, Esquire Date: { L0238775.1 } ~ Campbett ~n tb:,s Esquire, em attorney {or Loudon L. 1, Br~dgc~ B. Montgome~' . o~n~ document arc tree and correct to . _:~, ~t the ~actS ~t [o~ m ~e ~oreg _...er~ficaflon on behel[ o~ De[end~t ~[[~s~ of mY knowledge, info~maUOn, an~ u, a pos~t~on ~o knOW the f~ts ~lleg~ hereto. o[ ~eco~d C~mp~ll bec~u~ es attorney statements he~e~n I unders~nd t~t any C.S. ~49~, relaiu~ to uuswo~ falsif~ca~OU ~o Dated; ]u~ ~' {LO21S775.1} 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, Pennsylvnnin 17110 {10238775.1} IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ROBERT RAE aad COMMONWEALTH : IN THE COURT OF COMMON FUNERAL CONSULTANTS, INC., : PLEAS OF CUMBERLAND Plaintiffs : COUNTY, PA ; : No. 01-2912 Civil ¥' ~ JOHN W. EIRKSON, THE PENNSYLVANIA : FUNERAL DIRECTORS ASSOCIATION : (PFDA), LOUDEN L. CAMPBELL, ESQ., :: MARTIN BROWN, JAMBS O. PINKERTON, JURY TRIAL DEMANDED Individually, and the PFDA MEMBERS OF : THE STATE BOARD OF FUNERAL : DIRECTORS IN THEIR INDMDUAL : CAPACITIES, : Defendants : TO: Don Bailey, Esquire 4311 North 6'~ 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. Respectfully submitted, D. MICHAEL FISHER Attorney General Depmy Attorney Attorney I.D. #703~ '~ Office of Attorney General SUSAN J. FORNEY 15'h Floor, Strawberry Square Chief Deputy Attorney General Han-isburg, PA 17120 PHONE: (717) 705-2503 Chief, Litigation Section FAX: (717) 772-4526 DATE: June 4, 2001 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ROBERT RAE and COMMONWEALTH : IN THE COURT OF COMMON FUNERAL CONSULTANTS, INC., : PLEAS OF CUMBERLAND Plaintiffs : COUNTY, PA No. 01-2912 Civil 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 : JURY TRIAL DEMANDED THE STATE BOARD OF FUNERAL : DIRECTORS IN THEIR INDIVIDUAL : CAPACITIES, : 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 insurance 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 contractual relations conspiracy to injure plaintiffs in their profession, defamation, and civil conspiracy. Se~ Complaint ¶ 1. 4. Plaintiff seeks damages for violations of state tort law. 5. Plaintiffs filed a federal civil fights complaint in this matter alleging violations of their substantive due process, first amendment right of association in the making of contracts, fight 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-trnst 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. ?. 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. 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 of the federal court appeal. 1I. IMPROPER FORM OF COMPLAINT/FAILURE OF COMPLAINT TO CONFORM TO PA.R.C.P. 1028(A]~2] ! 1. 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. i 028(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. 4 III. IMPROPER SERVICE OF A COMPLAINT 16. Paragraphs 1- I $ 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. OEMURRER 20. Paragraphs 1-19 are incorporated herein by reference. 2 i. 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. § 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. 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. §761(a)(1) (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. §761(b). 27. Pennsylvania law requires a Court that does not have jurisdiction to transfer the ease to the proper tribunal. 42 Pa.C.S. §5103. WHEREFORE, the Court should transfer this case to the Commonwealth Court, which has exclusive original jurisdiction over this case. vl. 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. 6 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. 34. Paragraphs i-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 plaintiffhas 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. Respectfully submitted, D. MICHAEL FISHER Attorney General t t, SASH c. ¥~.R~.~ /) Deputy Attorney Genial~-'' Attorney I.D. # 70357 SUSAN J'. FOR.NEY Chief Deputy Attomey General Litigation Section Officer of Attorney General 15th FI., Strawberry Square Harrisburg, PA 17120 Direct: (717) 705-2503 Date: June 4, 2001 8 IN TI-IR COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ROBERT RAE and COMMONWEALTH : IN THE COURT OF COMMON FUNERAL CONSULTANTS, INC., : PLEAS OF CUMBERLAND Plaintiffs : COUNTY, PA : v. : No. 01-2912 Civil ; JOHN W. EIRKSON, THE PENNSYLVANIA : FUNERAL DIRECTORS ASSOCIATION : (PFDA), LOUDEN L. CAMPBELL, ESQ., : MARTIN BROWN, JAMES O. PINKERTON, : Individually, and the PFDA MEMBERS OF : JURY TRIAL DEMANDED THE STATE BOARD OF FUNERAL : DIRECTORS IN THEIR INDIVIDUAL : CAPACITIES, : 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 6Lh Street Harrisburg, PA 17110 Attomey ID #70357 Date: June 4, 2001 ROBERT RAE and COMMONWEALTH : IN THE COURT OF COMMON PLEAS FUNERAL CONSULTANTS, INC., : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs : v. : No.: 01-2912 CIVIL TERM : JOHN W. EIRKSON, THE : PENNSYLVANIA FUNERAL : DIRECTORS ASSOCIATION (PFDA), : LOUDEN L. CAMPBELL, ESQUIRE, : MARTIN BROWN and JAMES O. : PINKERTON, : JURY TRIAL DEMANDED Defendants : I. MOTION TO STAY 1. Defendants, John W. Eirkson, The Pennsylvania Funeral Directors Association (PFDA), Martin Brown and James O. Pinker~on (hereinafter "PFDA Defendants"), respectfully request this Honorable Court to stay Plaintiffs' action. 2. On or about November 17, 2000, Plaintiffs, Robert Ran 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 14t~ 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 Memorandum are attached hereto and made a part hereof as Exhibit "B". 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 ! 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 of the 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. §5103(b). However, said statute provides that "such transfer may be effected by filing a certified transcript of thc final judgment of the United States Court and thc related pleadings in a Court or Magisterial District of this Commonwealth." 42 Pa.C.S.A.§$103(b)(2). 2 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 Comnan¥, 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. §5103Co) 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. !ii. MOTION TO DISMISS PLAINTIFFS' CLAIM~ 21. The averments of paragraphs I 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 of law. 25. Plaintiffs have failed to state a claim for punitive damages. 26. Plaintiffs have failed to state a claim for attorney fees. 3 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 relief for 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 I through 27 are incorporated herein and made a part as ifsct forth in full. 29. Plaintiffs have filed this action in the Court of Common Pleas of Cumberland County. 30. Plaintiffs fail or refuse m state a basis for jurisdiction in the Court of Common Pleas of Cumberland County and/or proper venue in said count. WHEREFORE, Defendants request this Honorable Court to dismiss Plaintiffs' Complaint for lack ofjurisdictiun and/or proper venue in this county. Respectfi~ly submitted, TI~OM~8, THOMAS ~IAFER, LLP By: ,/ / ;~5 No~h From S~t ~ost Office Box 999 H~sb~g, PA 17108-0999 (717) 255-7238 Date: June 4, 2001 :132~7.1 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 deporting the same in the United · ' · · 2001: States Mini, First Class Mml, at Hamsburg, Pennsylvania on the 4 day of June, Donald Bailey, Esquire 43 ! 1 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 Eekert, Seamans, Cherin & Mellott, LLC One South Market Square Building 213 Market Street Harrisburg, PA 17101 Attorney for Loudon L. Campbell, Esquire Sarah Yerger, Esquire Attorney General's Office 1500 Strawberry Square Torts Litigation Section H/2 ~ Harrisburg, PA 17120 ,~ T ~THOMA~ THOMAS & FER, L By: i' ?ii""' Ero~l~las B. IV~a/lx-llo,fisquire '/ Exhibit A IN THE UNITED STATES DISTRI ~T COURT FOR THE MIDDLE DISTRICT OF Pt NNSYLVANIA ROBERT RAE AND ) CIVIL ~ CTION LAW COMMONWEALTH FUNERAL ) CONSULTANTS INC. ) ) NO. ) ~o~ w. ~.m~o~, THx ~,E~SVLV~U~, ~X~ ) PILED ~)]3u~cTo~s ASSOCL~T/ON ) H'~$~U~ ~,~)A), LOta)[N L C~S~ ) ~OV Z ~ ~S O. p~TON, ) ~U~Y, ~ ~ ) P~A ~~ OF ~ ) ST A~ BO~ OF ~~ D~O~ ~ ~m ) ~UAL C~A~S ) ~Y T ~ D~ED ) ~endau~ ) ~ODU~ORY STA~ ~ 1.) ~,e pla~ffs ~ a p~vate ~div~d~l, Ro~ ~ ~e, ~d a comply of whom he is CEO ~d p~sid~ C~onweal~ F~. ~ Co~l~s Inc., (CFC) a licensed ins~ce ~ency ~d a pe~ylvania Co~ ~ion. CFC is ~ ~e -1- business of marketing and selling final expense life iz ~urance to fund funeral and funeral rela~ed expenses upon the death of thc insurec ("pra-need conuacts). The pre-need contracts are sold by licensed funeral direcu 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 AssociaIion and the Diocese )f Piusburgh who sell the "Casholic Funeral Plan." The defendant PFDA is also an a/~'essive marketer of r~ese types of services. The pwliferation of th/s type. ,f business activity was largely occasioned by r. he "Funeral Rule," au FTC (F ;deral Trade Commission) rulin§ which requires ~he disclosure of costs of funen I services to consumers. Many of CI~C's employees are funeral direcu)rs. Fur~ ral directors are licensed in Pennsylvania and are rek, ula~ by the defendant Sta~. Board of Funeral Directors (SBlrD orr. he "Board"). The defendant pennsylvania Funeral Directors Association (PFDA) is au associagon which function { as a business and political org, anization for i~s members. Polilically very ¢ffecti~ '., the PFDA coulrols the SBFD. The SBFD is composed of a majority ofPFD,, members, and, or, former members and officers. The PFDA who, as .-,for~aid, s also in the business of doin~ exactly what CFC and similar entities do, By ,, .d through the ihdividual defendant, Pinkcr~on, Eirkson, Bro~i, its political c 'ouies on the SBI:D board, and o~ers, have created au unlawful association ofi~ dividuals and eutkies who have, among othcr things, used the SBFD as a tgol to i arass and intimidate those who like plaintiffs, pose a threat to the defendants' fix ancial interests, la pursuit of their unlawful goals, the defendants, in various co~r binations, at different times have used the SBFD to investigate, harass., and prosec ~te the plaintiffs' competitors. They have made public threats and scap, geared innocent persons, using them as examples hoping to frighten and deter I ennsylvania funeral directors who don't fall in tine with their plans to pre~ ent third persons from dealing with (in this case) plaintiffs. The defev, asnts k ~Ve 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 ~A. They have, in many cases, personally interfered with the contractual relati )ns, and potential contractual relations, of the plaintiffs causing them k ,'t business, revenues, and eviler special dsmages in excess of $5,000,000.00. In u:klition to the special dsmages they have suffered, the defendants have dep ired the plaintiffs of their constitutional rights. They have violated plaintiffs 1~ 4~', and 14~ Amendment rights. They have denied them the equal protection c fthe laws, and they have caused the'plaintiffs an abridgement of Constitution .lly guaranteed privileges and immunities. The impac: on plainTiffs' business has I: :eh devas~aing. ~3'RISDICTION AND VE} I~E 3.) Jurisdiction ~s conferred on this Court by 21 U.S.C. §1331 and § 1343(a)(3) and (4) and by 42 U.S.C. § 1983, a reined al statute. 3.) This Court's supplemental jurisdiction is in/oked as per 25 U.S.C. §1.367. 40 Punitive ~mages are reques~l of the indi~ idual defena~-ts. ~.) A jury wial is demanded. 6.) Venue is properly in the Middle District of ?em~lvania because the parties, wimesses, and many facts are common to Dm phin Counv/. 7.) PlaintiffRobert Rae is an adul~ American c .tizen and is CEO and Presideut of plaln~iffCFC, a licensed Pennsylvania i ~u~nce agency. 8.) The defendants' John W. Eitkson, Loudan [.. Campbell, Martin Brown and James O. Pinkerton are all adul't American cltize~ s. Eirk.son h an officer in defendar~ PFDA as is the defendant Brown. Pinkenc ~ is a member of the (SBFD) and is also believed to be a member of PFDA. He, li~: his PFDA colleagues on the SBFD, is sued iu his individual capaciw.. 9.) The SBFD Board member~ including Pint enon, are not sued in their official capacity, bm are sued in their individual cap ~ciw., as are all SBFD Board members who are members of the PI;DA. OPERATIVI~ FACTS 10.) The plaintiffRae and CFC, on or aboul Ii)' 7, besan sellinff pre-need services in cooperation with funeral homes and funen t directors. 1 I.) The defendant PFDA was already in u',.is ~ pe of business. 12.) The Pt:DA and its members utilize both a'~'ust, and insurance carriers, to sell pre-need services to the public. They have don.. rkis for years. They have crea~d a number of entities like "SecuzChoice" for t :s purpose, throuffh which its (PFDA's) members, market and sell pre-need service i to consumers. 13.) Dmirig this same llme period, a number of enlilies like peansylvanla Funeral Services Corp., (PI:SC) a wholly owued subs diary of PFDA, sm'md PI:DA's "Unichoice," a Co-op with membership free :o PI;DA membem only. Udchoice which was set up whereby pFDA member; could purchase wholesale funeral "products and services.' The Coop, "Unichc ice,' off~rs dividends and credits to members of PFDA only. "Secure Choice' ! .~d 'n, Jnichoice' and "The Pennsylvania Funeral Plan." ar~ believed to be mark¢ ting p]s~s for PF$C which is owned by PFDA. One of its services is pre-need ins~ mc'-. Unicho:.ce is designed to crea~e a monopoly and acts in res~ain~ of trade fo~ PI:DA members over the funeral industry by offering free memberships to me ubers and then paying dividends and $ivin_~ credits to membe~ of the PFDA only. 14.) The PI:DA and the individual defendants a e direct business competitors of the plaintiffs, and arc unlawfully usin~° the SBFD and its badge of authority to unlawfully d .cstroy the plaintiff's busines:. 15.) As pan of this process of cornering the ma ket on pre-need sales, :he PI:DA once encouraged and promoted a practice whe eby its funeral director members would become licensed pennsylvania h~ur~ .~ce agents, although it never required its sales makers to be licensed funeral dire~ .rs. 16.) Thc PI:DA 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 PI:SC could market ~ rough "SecurChoice and Unichoice" and the 'pennsylvania Funeral Plan," ant the second was to use./ts direct relationship with thc SBFD, whom it controls I olitically by virtue of membership on the Board ie using its position on th~ Board as a regulato~ and controlling state agency to e~.trc the security of its z tcmbers and the defendants personal interest i,~ PFSC and the tru. s. ts and the co-ol, k governs, and to prevent competitors, such as plaintiffs, from selling pre-need services in Pennsylvania. 17.) Upon information and belief the plaintiff,' allege that the individual defendants are a.) members of the PFDA and pasr. icipate in PF: ,C, which market~ as · .SecurChoice/Unichoice/Pennsylvenia Funeral Plan." b.) Parliclpa~e as co-op members in "$ecurChc .ce/Unichoice' which is a pan of the PFDA, c.) Receive dividends, or are poised to receive iividends (or reinvesi dividends) in the Co-op. ("Secu~Choice/Unich°ice')' 18.) An e~r'rnple of the defendants ~lawful be ~avior can best be illuminated by the circumstances evidenced by SBFD harassmenl and the prosecution of Andrew D. Ferguson Ill, a licensed Pennsylvauia Ftu erdl Director from Uniontown Pennsylvania. 19.) Mr. Ferguson worked with a group of lice. ~sed insurance agents who, in selling their pre-n?d producu, ulilized his prices wh le marketing pre-need sales. 20.) This practice was not o~ly encouraged by t~e FTC's "Funeral Rule' but arguably was mandated by the rule. 21.) While Mr. Ferguson was doing the above, according to the sphit and the le~er of FTC regulations, the defendants were ag ~ressively marketh~'thei, r pre-need products ~hrough members sad other~. 22.) Bu~ Mr. Fer_~tson only ran afoul of the $ ~FD, and the other defendants, when he worked with licensed insurencc agents who wcre not affiliated with the PFDA. He had in fact been workini with the PFDA but believes he was chosen for SBFD action because he broke rani .s and worked with other vendors such as CFC. 23.) Consequently the SBFD, at the direct behe It of the defendants by and through The PFDA's lawyers, who did the writing for 2ie SBFD, submitted and passed (in questionable violation of sua¢ law and in c tear violation of Mr. Ferguson's substantive and procedural due process ri ,,hts) a resolugon (September 1, 1999) for the sole purpose oflargeting and detari~ g the plaintiffs' customers from doing business with plaintiffs and others like th ~i, using Mr. Fergusen as a tool. 24.) Ironically, while the SBFD was being use t as a private political wol by {he defendants to further their own ,,,lawful ends, in '.he clear ab~nce of any rational government purpose lacking any reasonable ;ovemment need, the defendants were selling pre-need insurance products dxrough many of their members who wore two ha~s, funeral director and lic ;nsed insurance agent. 25.) In F~rguson's case the insurance agents u ho worked with him neve~ committed to his prices, but merely used them as gu! tance to structure ~enmfive pre need sales in full and complete compliance with he leuer, spirit intenT, and in furthering the FTC goals of protecting and informinl, consumers. 26.) Yet the gBFD continues to investigate and ~rosecute Ferguson, whose plight they generated without any proper law enforcer tent purpose, but rather for the purpose of frio~htening others into submitting to th: defendants (PFDA's) unlawful .monopolistic practices, which were designee to direct all funeral services business in Pennsylvania to defendants. 27.) Pinkenon and rite PFDA members of the S ~FD have used their access m the power of the s~ate w set in motion investil/afion ~ and prosecutions of the PFDA's competition including CFC. The "PFDA" off ~rs Se~-urChoice and Unichoice and the Pennsylvanh Funeral Plan to fiinet Il directors and the public. 28.) Pinkimon and the PFDA members of the S ~FD have individually used their official positions improperly to cause investigafi )ns and prosecutions of Pennsylvania funeral directors, and have unlawitily 1~ ~ovided information about the Board's investis~axory and prosecutorial activities o non SBFD members including the individual defendants here, in tha they ~ave shared, and, k is believed and alleged, have coordinated plans to publi, ize SBFD investigation and prosectnorial policy and activities among Permsylvan a funeral directors and those in related businesses for the sole and intentional purp ,se of intimidating, tb_reatenin_~, and unlawfully destroying the contracts, ,otenfial contracts, business, business opportunities, and personal and business rep lmtion, a coustimtional property right under Pennsylvania law, of those pa, sa ~s and entities, including but not limited to, plaintiffs, who are competiwrs of the 1: ~DA, irs officers, political colleagues, and co-defendants. 29.) The defendanrs Eirkson and Bwwn have s ~oken out on numerous occasions, before n-merous gatherin~ of funeral d~ :tots, and have written correspondences, and caused news letters to be publll lied, which emphasize SBFD investigatory and prosectnorial policy against i 'FDA coaxpetitors, by spes_.!drig authoritatively for same, by displaying aim, ,wledge of.~me, and by employing their knowledge in a targeted way to disc¢ irate and intimidate customers and potential customers of the Plalnitffs in o not doing business with plaintiffs. 30.) On or about the Fall of 1997 certain of pla ntiffs' customers received phone calls fi.om the defendant Eirkson about the dro ) in the PFDA entities' (PI;SC) production of pre-need contracts through the z funeral homes, and he questioned the customers' about their decisions to ul., CFC programs. 3 I.) On or about January. 1998 the defendant E rks~n told one of plaintiffs' customers that plaintiffs' programs were illegal. This was totally false. As a result the customer asked CFC to indemni~ the customer s ~ould this turn out to be true. 32.) Due to the efforts of Eirkson ~md Brown a~ .ong other, CFC's business began to suffer and in February 1998 the plaintiffs sert out their first indemnification letter to a customer in response to the unlawful misconduct of the defendants. 33.) During the summer of 1998 CFC continue~ to work hard to add to their business. 34.) On November 9, 1998, the defendant Pink, non, wrote to the FTC expressing his concerns about the "Catholic Funeral ! lan.' This letter was a poorly disguised attempt to persuade the FTC to folk · policies that would prevent interference with thc defendants' unlawful ef brts to control funeral business in Pennsylvania for personal gain. In this Icl er Pinkerton raises the spectre of state interference, even su~estin$ Atmme, Laurie Meelan of the FTC contact SBFD prosecuting attorney Kathleen Klet~ Ri 'an. "My primary coucern is, tha~, should riff: d-party marketinl~ organizations be allowed to b .,come a means to circumvent unwanted roles ar~ regulations, they will soon become many and make ~ ~ore difficult ~he issues of compliance and e~ forcemen~. as well as crestin§ a negative enviroumi ut of competition." -11. 35.) In the Winter of 1991~ the PFDA, by and th ough Eirkson (and others) made several ststemenzs that indicated that he, as a Pf DA official, was going to have the prosecuting attorney t'or the SBFD pursue CI C and "unlicensed" people. 36.) On or about the Spring of 1999 the SBFD, ~y and through its badge of stare authority., prosecuted Mr. Ferguson 3 years after ~lready having caused an investigation m be conducted into Mr. l:ergu.son's btu iness affairs in 1996. 3'/.) Mr. Ferguson had advertised his services a ~d was working with a group of licensed !~urance agents who were at~mpting ~o ! ~ake pre-need sales of funeral services and costs. Thesc agents would occasi )nally reach a tentative · agreement with a consumer of a pre-need insur~,,ee c ~nu-aa designed to meet the requirements of funeral costs at death. In doing so thi y used Mr. Ferguson's price list as a Stride. Each tentative contract they ~ able ro write was then submitted to Mr. Fersuson for review, consultation and approvl [. Mr. Ferguson's actions were in complete and total conformity with the FTC' funeral rule" and state law. 38.) Perceiving Mr. Fer/u.son's activities as an ideal scape goating opportunity, to threaten their competitors, the defend/ars succeeded in having Mr. Ferguson prosecuted by the SBFD in a unlawful afro t to stem the rising competition with their own businesses. 39.) To accomplish this end, the defendants ur [awfully end, aged in slate actions by, throu~,h, and with thc SBFD usin8 that al~, ncy to inves~i§aie and prosecute competitors of the defendants and discoura ,,e businesses and disrupt conu'acts with the plaintiffs. 40.) Con~-mporaneously, the FTC responded tx defen_as_nt James O. Pinkenon who at the time was wearin~ his Vice Chai man oft. he SBFD Board hat, (Mr. Pinkerton is now Chairman of the Board), abou~ his inquiry (made as a PFDA member and as a SBFD Board member) concernin§ tte Catholic Funeral Plan and his desire to have them investi~ed. In that letter (se paragraph 32 above) in the sixth paragraph, Mr. Pinkerton expresses concern ab~ ut agency relationships and then references the "S~ate of Permsylvania laws" an¢ says, in effect, that if the sales people aren't licensed funeral directors they are '~ violation of Pennsylvania provisions that prohibit anyone but a fi llm~t!itt~l~lll~ fi~n making funeral arrar~aments" (emphasis sdded). Pk ~enon was aware that: a.) Pennsylvania law 63 P.S. §479.13(c) was i lterpreted adverse to the actions ',aken against Ferguson in ~ .-al Directors Association v~ State Board of'Funeral Directors. 90 Pa. Onwlth l'?i, 494 A.2d 67 (1985) and, b.) that the Pennsylvania Legislative Budget a ~d Finsnc~ Committee in a 1994 report had observed that pre-need services had ~s a manet or'practice in Pennsylvania been executed by. funeral directors, co ~eteries, and other .types of -13- sellers. There is no rational economics or other basis cc ~sistant with 14" Amendment due process standards for the sr~e ofPe~ ~sylvania 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. ~ v. Giles, U.S. Distric~ Cou~ for the Eastern Di~t~ict of Tennessee at Chattanooga 1~ o. 1:99-CV-304 (August 21, 2000) and C~*ve~ Royale. Inc.. v. Mississinoi. U.S. Di ,-trier Court for the Southern Dist~ic~ of Mississippi Jackson Division Inc., No. 3:9~. -CV-737 BN, Oaober 31, 2000. 41.) The above reference letter by Pinkerton w8 ~ a euphemistic description by defendants to the FTC hoping to engeoder a positi~ e response against the · Catholic Funeral Plan, and others, that they could use :o protect the PFDA's unlawful monopolistic practices and thus the/r own pt :sonal/iruancial interests. Pinke~on claims "~regulated sales persons~ another :mhemism meaning a licensed insurance agent who is not a.licensed funeral director (ie. does not fit into the PFDA membership and business practice mold) ax: making 'Yuneral arrangements" when discussing pre-need contracts in ~ con~ex~ of funeral costs, something any sales person must do and ~he FTC req tires. But Mr. Pinkerton is -14- playing a word game here. There is no requiramen~ th..t a funeral director is solely authorized to discuss prices with consumers. Such a vew is in direct contradiction of the funeral rule's purpose. Further, the only differe tce between a funeral service provider and a licensed funentl director is that the director is licensed to embalm. There is no other difference. 42.) At no place docs Pinkerton offer an expla~ ation as to how, or why, a licensed funeral director and a licensed insurance age Lt must be ~he same person (although not all PFDA members who engage in PFD k progr~m~ such as SecurChoice and Unichoice use licensed both ways) i 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 pcrfc ~n both functions. The PFDA, in its aggressive sale? mode, f~quently uses u ~licensed funeral service providers to sell pre-need services,"unlicensed~ mean ~ someone who is not a licensed funeral director. Thc PFDA simply believes' Ne law does not apply to 43.) On April $, 1999, the FTC, in a staff opini ~n offered through Mercedes K. Kelly Esq., responded to Mr. Pinkerton's letter of .Xlovember 9, 1998. 44.) Kelly's response both direclly, and by imp ica~ion, debunked the irrational effort by Pinkenon (and the PFDA and otht :s) to solick some response -1~- fi-om the FTC that only a licensed funeral director car reveal or talk about his or her prices ~o consumers. In fact, the FTC staffrespon e takes pains to poin! out that "funeral providers who choose to be involved in L program, such as the Catholic Funeral Plan, carry the burden of rnakina sue .that the cQnsumers to them by the religious ~oup tt~.Jli~ai~t~l~ ~ilmll ~,~ler the Federal Rule" (emphasis added). Pinkerton's efforts to elicit supp~ ~ from the FTC ~alled. But this did not deter the defendants from ushlg the SBFI. to unlawfully prosecute Mr. F~rguson, and use that prosecution as a Sword ofDa~ ~ocles to hanS over the head · of anyone who wished to do business with plaintiffs; nd others like them. 45.) In ex=post facto fashion, on Sept~nber 1, 999, the SBFD, utilizin~ a legal suggestion wiitten by PI=DA's counsel, the deft :ldant Canlpbeil, passed a resolution prolu'biti~ "the showing, distribution~ or ~ mnmarization of any price list.., except as may be specifically necessary to ¢oml .ly with the regulations of the 'Federal Trade Commission, for funeral services wh~ n needed for a person then living constitutes the practice of funeral directing by .,ngaging in pre-need sales' citini~ Section 13 (c) of tEe aforementioned Penr/sylv mia's Funeral Director Law. This so called resolution is an unlawful pre~ex~ desit ~ed to en_~ender fear in the industry and serve the det'endant's personal ends. It i i not __orotmded in law. IT also was passed months a~ter the prosecution of Fergusor had begun and years after he .16- lind been investigated. Paragraph 40 above is ineorpo, ned herein. 46.) This misconduct by the SBFD bears no ral onal relationship to any legitimate govemm.ent interest and is an arbiuary and :apricious intrusion upon, and denial oi~, the plaintiffs' rights to pursue their cho~ en occupations. 47.) The action of the SBFD and the private del mdants who have been, and persist in acting, by, though and with them, ate untea ~onable and are related to no proper government purpose. The unlawful reattlclionl are economic in nature, and they further work a denial of property rights guar~nte :d by the Pennsylvania Constitution, namely the right to one's business rep~ ~tion, let alone the 1~ and 14~ Amendment right to contract free of unreasonable government molestation. 48.) As pan of the defendants' unhwful plans tle Defendant B.wwn wrote a memo which he distributed to all 'PFDA Members' a ~out "unlicensed pre-need sales practices." Part of the memo included a letter w~ .tten by the defendant Campbell to the defendant £irkson designed to be use i as part of the effort to frighten funeral direc~t, ors away from dealing with an)' me but the defendants. 49.) The defendants are engaged in an uniawfu practice of haraasing, through unjustified investigations and prosecutio.ns, '. nyone except licensed funeral directors, who disclose their prices even thou: h federal law requires -17- funeral directors m disclose to anyone who asks. Tt is unlawful policy of persecuting any funeral di~ecwr who shares his pricer 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 memb ..r is unlawful). An example of how irrational the defendants actions are can be sh ,wn this wa.v: a licensed insurance agent could independently call any funeral tirectur in a given area (who would be required to disclose his prices az a matl~r o: 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 cons-mmating an insurance sale for pre-nee i purposes, then go to the funeral director and offer an assignment of the POlicy provided the consumer agree and the funeral director agree between themselves. U ~der defendants plan and their prosecution of Fcrgnson, if ha discloses his ~ric .~ to an agent who he knows mi/in quote them to a customer, subject to FergUSon' ~ final review and approval, then both Ferguson and the ,,~insured agent have bro :eh the law. Indeed the Boards next plan is to §o after not only CFC but ~he i muance agent who worked with Ferguson. This is absurd. In one case the co~sur ter approves of the assignment after purchasing the insurance and this is ~agal. In the second the consumer doesn't a~ee to anything until Fergu~on r~ views and approves The prices and The consumer si_°--ns on but chis is illegal. ,~ t first the reason -1S- .; :! for the SBFD policy might seem dii~'lcult to undetStal~ i, But when it becomes plain that PI:DA entities were selling pre-need and ott er services through unlicensed persons also, it becomes equally clear, that ~he defendants needed a distinction that would deter anyone but those who wotld buy ?rom PFDA entities so the defendants invented a violation for Fer~uson -, d wrote it into their policy resolutions. They created smoke and mirrors aro~d s ate law enforcement to destroy competitors even'~hough they were doin~.wiv t Ferguson and CFC were doing and even though they knew insurance com~ani~ s bad been selling pre-need contracts in pennsylvania for years and years. 50.) The aforementioned practices of the S]~FI~ and other def~a~,~s are unlawful, are violative of the plaintiffs' substantive d' te process rights, are ~mlawful actions in restraint of trade, constitute v~olal OhS of the plaintiff's rights to the eq,,nl protection of the laws, and violate by and through state aciion, the plaintiffs' rights to enjoy the Privileges and Imm..~ti .~ guaranteed by the U.S. Constitution including the right to engage in gainful ~ mployment and their chosen occupatiohs. Pln;~iffs' rights to be free to contract, a t'ederally guarantee.d liberty interesL and their ri~t to be free oftortious h'.tm~fer~, .ce with contracts and with potential contractual relations and to be free of d~far~ ilion under state law was (and is) being violated by the defendants. 5 I.) The defendants engaged in a prolific poliel ofthrea~s, intimidations and even express personal advice to many of the plait tiffs' customers to either not do business with the plaintiffs, because they would sc 2n be investigated or prosecuted by the SBFD, seeking to frighten custome s and potential customers of the plaintiffs away from doing business wi& them, an t to interfere directly in existing or conlractual relationships. 52.) In doing so the plaintiffs incur~d special t amages in an amount in excess of $5,000,000.00 (five million dollars) at the 1~ rods of the defendants consisting of lost sales, lost profits, and incidental ¢o~ ts. 53.) For example the defena_*nt Campbell told. ,ne oftbe plaintiff's customers that CFC was going down, meaning CFc x ~s going to be inv,misated and prosecuted by the SBFD and that the customers s l. ould not do business with CFC because thy might be tainted or even lose their :~wn licit, se. 54.) Meanwhile the SBFD began an "investigi lion' consisting of asking CFC questions, so that the private defendants could taffic in the matter as if CFC were .going to be prosecuted, as an item of gnssip, d ,signed to destroy CFC's business. 55.) John Eirkson, who is not an actual or Offic iai SBFD member or employee, told one of CFC's customers that he woull give him "immunity from -20- prosecution" if the client would "testify" ~ainst the [ iaintiff Rae. This is quite improper given liirkson's total lack of actual authoritl -to do so (though he may feel, and apparently does, that he is acting for the SBI D). Its also improper because there is absolutely nothing to testify against Lie for, and the implication that there is, is an outrageous violation of Rae fights 1 oth federally and as a matter of state wrt law. 56.) On or about the Spring of 2000 the defend mt loire Eh'kson told numerous clients of the plaintiffs that CFC was unde~ investigation and that if they do business with CFC they will lose their funeral dire :tot's license. 57.) Staffers at defendant PFDA and its affiliat · also told plaintiffs' clients that CFC was under investigation and ii'they do bush ess with CFC they will lose their license. 58.) The defendant Pinkenon personally told ti e plaintiffRae that if'we" meaning !b~- SBFD, can stop CFC from selling servic :s, that they were going to do SO. 59.) On or about June 2000 the defendant lol~ Eirkson, speaking for himself and the defendant PI:DA, announced at a put [ic mee~in$ 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 -21- Ferguson case will "probably be thrown out," but resl: reded, ~ 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 SBFI2 told a meeting of funeral directors that CFC was on the tod ora lis~ of .fgne/al 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 p~LAINTIFFS AGAINST ,~LL DEI~iiNI)ANT.~ F 3R THE DEPRIVATION OF TI~IR SUBSTANTIVE DUE PR( ~ 62.) Paragraphs 1 through 61 above are in~rpl rated herein by reference. 63.) The defendants all worked by, wide, and ~ ~ough the SBFD and used its investigatory and prosecutorial powers unlawfull~ su :h that the non $overmnont defendants were involved ir. and were part of, state z ,-don and thus for purposes of 47USC§ 1983 were acting under color of state law. 64.) The def~,~,~t~ created, through their use ,fthe SBFD's powers, a plethora of policies, actions, and threatened actions,, e$igned to instill fear and force reactions in the Pennsylvania funeral indusw/t ~at sought the desu'uction of plain,tiffs' lawful business, subjected them to invesfi! ations and reviews by government officials as a way to harass and intimida' ~ them, and destroyed their -')2- contracts and potential contracts. Such misconduc! vii [aled the plaintiffs' due process rights through the arbitrary, and irrational aPP] .cation of government powers for no just or reasonable government purpose. 65.) The defendants further used the powe~ oft ~e state, lacking any rational or reasonable basis to do so. State law did not and doe 5 not support what they did. 66.) Acldilionally, Pennsylvania's Constilmion ecognizes and protects "business reputation' not just as a reflection of stile t ~rt law, but as a propet~y right. The defendants violated the plaintiffs' ti~h~ to ~roperty also because they targeted successfully somc of the customers plaintiffs had existing contracts with and adversely affected those conlxacts. Wherefore the Plaintiffs demand judsement of be defendants jointly and severally for the deprivation of their federally $u~an' -'ed tights to substantive due process and to be free of the arbilxary and capricibus [esu'actiun of their interests in property seeking compensatory damages, and'sPe~ iai damages in an amount in excess of $$,000,000.00 as aforestalect, and for puniti ~e damages together with fees, costs, attorneys fees, interest, and such other re iefas the court may deem appropriate. COI;NT H THE PLAINTIFFS AGAINST THE DEF[ ~ -2~- DEPRIVATION OF THEIR FIRST ANtE ~__M~ 67.) Paragraphs I through 66 above are incorp~ rated herein by reference. 68.) The defendants used the powers and influe ace of govenunem to destroy the plaintiffs' rights to associate and contract, a liben ~ interest. 69.) The defendants' purpose, and the nature o: the govenunent power used, was meant to be economic in itl impact on plaintiffs f nd was intended and used by the defendants as a way to limit the plaintiffs' as~ocia ions or activity in the funeral indusu'y. Wherefore the plaintiffs demand judsement of he defendants jointly and severally for the deprivation oftbeir First Amendmen rights to associate and enter into and form contracts together with compensatory d ramies, punitive damages, special damages in an amount equal to, but not in'~any amount exceeding, in sum total, the amount of special damages requested in £ 0unt I, together with punitive damages, costs, fees, attorneys' fees, interes~ and such other rdief as the Court may deem appropriate. COUNT IH PLAINTIFFS AGAINST ALL DEFENDANTS ?OR THE VIOLATION OF THEIR RIGHTS TO THE £0UAL PRO'Fl '.CTION OF THE LAW 70.) Paragraphs I through 69 above are incorpc rated herein by reference. 71.) The defendants actions were designed and lad the effec~ of singling time plaintiffs out for purposes of dmreatening r.hem and iht initiating them thus lxeating them differently than persons similarly siUlaled, such · the PFDA. 72.) The defendants "in. vesmisa~ed" uae plainfif'f, lacking any authorivy or proper reason ~o do so. 73.) Even thongh plaintiffs wer~ personal] ! tol,. by SBFD investigntors that there were 'no violations here," something ~vhic~ w~ quite obvious, the defendants persisted unlawfully in u-eating plain~,ffs ' s law bre~ers and referring to them as such. ' 74.) The plainliffs were doin$ nothing that!the ?FDA, its subsidiaries, and members ofgae SBFD were doing to sell pre-nee~ pr. ~iucis yet they were harassed, intimidated, and investigated, unlike the fo met. Wherefore the plsi,~tiffs demand judgerae~t of the defendants jointly and severally fo.r. deprivhlg them of the equal protect!on c fthe laws and for special damages not to exceed in sum total with all other Co mis herein $5,000,000.00, · ' dan~ and for compensatory d,ma~_eso for pure, ye age and for costs, attorneys fces, · and such other relief a~ the Court may deem apl~rop: laud. COUNT IV; INT $AGA I AI~AI~ fS FOR CONSPIRING TO DEPRIVE TI:r~.M O1~ THEIR FEDERAl ,L¥ t~UARANTEED RIGHTS 75.) Paragraph 1 through 74 above are in~ :orp ~rated herein by reference. ! 76.) The individual defendaats Eirkson, B~wr. Pinkerton, Campbell, and persons as yet unnamed, all agreed together, unla~ ly to pursue the unlawful purpose of using the investigatory aaa prosecuto ,oa~ Iowers of the state to desu'oy · plaintiffs' business and in the process violated pl~inti .:rs First, Fourth and Four,nth Amendmem Rights. 77.) Plaintiffs have due process rights as aJ bre.~ gd which the defe~a,,~ts violated. 78.) The defendants also conspired to use nd c id use the powen of the SBFD to investigate the plaintiffs seelrl._~ to lear ~ th~ depth, and the extent of their business and who their customers were, 79.) These activities constituted invasions ~fl~ ivacy in violation of the plaintiffs' Four~ Amendment rights. 80.) The defendants addi~ionalllr', conspirec to ~ se and did use the powers of the SBFD to violate plaintiffs' First Amendment: igh' 5. Wherefore the plaintiffs demand judgernen ', of he defendants in violation of their 1'~, 4~', and 14" Amendmen~ righls and of th, ~ir ri ~s not to suffer an abridgement of their federally guaranteed Privileges -~ .~d Immunities together with compt'nsatory and special damages in an amount iot o exceed the sum total of the special damages referred to above together with ~es, :osts, attorneys fees, punitive damages and such other relief as the Co~rt n ay deem appropriate. COUNT ¥ FLAINTIFF$ AGAINST ~ bNTI-TRUST VIOI~ TI( 81.) Paragraphs I through 80 above ate in¢ orp, .rated herein by reference. 82.) The defendants acted to restrain and c )nlr ,1 the market in funeral · services in the state of Pennsylvania th. mush the ,,~la arful use of coercive government powers and the manipulation of con ~act al relation through misrepresentation and false impressions of the pi tint~ Ets. 83.) They used that power to force and en¢ o~ ge others to demand indemnification agreements of the plaintiffs' cus iota, rs while the defendants were doing the very sam~ thi.n§ with the government ~ efeT a~ts blessings. 84.) They followed their planned course o !act on intending to force all funeral directors in Permsylvania To consummat 'all' ~e-need sales and contracts through thc PI:DA and its wholly owned subsidi ry. ~FSC via The Pennsylvania Funeral Plan, SecurChoice and the Unichoice marke~ ng schemes. 1~5.) By so acting, the defendants interfered unl twfully with the Commerce Clause riff. his of the plaintiffs and violated the an~i-~ st laws. Wherefore the plaintiffs demand judgeme~tt of 'he defendants as per the an~i-w, tst laws of the federal government and Pe~msy vania, including double dnmages with in. rest and such other relief not limitt .4 to special damages as demanded in the Counts above that are incorporalzd ~erein together wi~ foes, costs, attorneys fees, and such other relief as theCot rt may deem appropriate. SUP~,L~.MI~NTAL STAT£ CLAIMS ~ PLAINTIFFS AGAINST THE D~-,FF-.b AN~ pI~DA FOR t)K~A~ AS A SIIPPLISMKNT~,L STA a6.) Paragraphs 1 through $5 above are inco~ porated herein by reference. 87.) The above- named defendants in thi~ Cc ~nt, on numerous occasions, expressly, or in clear and u~nmbiguous terms, t:tesc ~bed the plaintiffs falsely as law breakers and placed plaintiffs in a false lio~ht a evidenced by the followiug particulars: a.) The daf~d~t Campbell told one ofpignti Ys' customers that CFC was going to be investigated and pwsecuted by the SSFD knowing any such investigation was specious and unfounded, and k~ow ng that if he was in possession of such knowledge, and it was accuraie, ~ [~ich it was not, it wa~ · confidential and he had no authori~), to discuss st~ch i fformation, and further that he knew CFC and Bob Rae had done nothing wr~n~. Further, the defendant Campbell used the above information in an inten~ion~ 1 effort to injure thc plsin~iffs and cause them to incur business losse~ by · ,lacing the p!Ai,~fiffs in a false light. This occurred in late November 1999, ant. b.) The defendants' Eirkson and PFDA thionl ~ its staff, on numerous occasions be~nuing in 1997 and continuing to ti ie p~ :sent day told clients of plaintiffs that CFC is under investigation and ill .~ey lo business with CFC they will lose their license (meaning funeral director'~ l lic, nse). Eirkson, in the Spring of 2000 similarly told a meeting of funeral direc .~rs 1 ~at they -~bould not do business with CFC, and, that ii'they do, they wi!! lo~ their license, even though Eirl~on and the PFDA knew the accusations were ur founded. These actions of the PFDA and Eirkson were intended to harm plain~ffs' ~usiness through characterizing them as lawbreakers. This miscom uct ~ plaimiffs in a false light, misrepresented them, and was intended to cause s ~jur, to thcir business, and in fac~ did cause plaintiffs to suffer, si~ificant fina..cial loss-~s. In a particularly vicious arrack on plaintiffs the defendant Eirksou!in ( .ctober 2000, told two persons who are active in funeral industry affairsi tha "they." in reference to ~he SBFD, the PFDA, and himself, were waiting to s~e t~ .' outcome of the Ferguson case. Eirkson explained that the PFDA was ffoin~, to ~ hange the law ifFerguson wins so that only a funeral director can sell pre-hied ervices. $omethhtg wMch is less than a pipe dream as Eirkson knows. Eirksog we ~t on to say that ifFerguson were found guilty, "they" (meaning the SBFD ahd ti g PFDA) would go aider every CFC account and "You will lose your lice~ se a Id be fined $1000.00 for ~v~ry contract you made with CFC ." Wherefore the plaintiffs' demand judgem~ ~t o 'the defendants Eirkson and PFDAjointly and severally for defamation and f.ilse ight misrepresentation as a supplemental state claim, together with compens~Ior ' and pure'rive damages, special damages as described above, costs, fees,}and such other relief as the Court may deem appropriate. PLAIN'TIFFS AGAINST ALL DEi;'~N INTERFERENCE WITH BUSINESS ANI ~ IH~.! ATIONS AND INTERI~.RENCE ~' ~ PROSPE~ 9US~g A~ COCA--AL ~ 88.) P~a~aph 1 ~o~h p~ph 87 above · e ~co~d h~in by r~fe~ce. 89.) ~e def~, in a conc~ e~p~tiv effo~ m des~y ~e pl~ntiffs' b~ess ~u~t m ~ss~e pi~fi~'.c~ ~ ~m do~g b~ess ~ pl~n~s ~o~ ~se rep~m~o~ ~d ~ ~ ~e ~law~l ~e of~e s~te's pow~ ~ ~ve~ ~d ~secme. ,. 90.) ~ese effo~ we~ ~t~fi~ ~ ~ ~ ~eifi~lly ~ by &e d~en~ m des~y con~ ~ po~ contact. ~ which p~ntiffs w~ ~volved or ~ndy m cons~te. 9 I.) The defen~ s~ceeded in n~erou ~ es ~ ca. ins ~ p~es m ~&~w ~om, alt~ to pl~tiffs' &~d~ge, ~ c~ ~ ~W ~to c~s ~ pl~fiffs to pl~ffs f~cial di~e, so to ~ &~ &e defm~' o~ b~iness int~sts. 92.) In ~e c~e of~e Co~onw~l~ ~f~ ~, j~ ~ ~ ~ed ~n~o~ly and ou~ide ~y gov~=l, o~cial,, ,r sov~i~ i~F, ~ey also acted ~d~ bn~e of state aurora. -31- Wherefore the plaintiffs denmnd judsemen! of :he defendants jointly and ~everaily for the violation of their rights m 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 n fen'ed to in previous counts, together with punitive damages, costs, fees, attomeyl ' fees, compensatory damages, and such other relief as the Court may d¢~. t appropriate. COUNT VIII PLAINTIFFS AGAINST Tile Dlr EIRK,_qON. BROWN. PINKER'I TI-~ PFDA MEMBERS OF ~ ~ []Fl) BOARD FOR CIVIL CONSPIRA 93.) Paragraphs I through 92 above are incorp ~rated herein by reference. 94.) The above named defendants, upon infor~ .ation and belief, knew, were aware of, and unlawfully agr~d, whether overtly or 1 ~citly to unlawfully use the power of the Sta~e government in the manner, and fo the purposes pled above, all of which have been incorporated herein. 95.) These actions were done unlawfully for a~ unlawful, pm-pose, and with the knowing cooperation of each defendant with eacl other, in various combinations, from time to time. -.~2- Wherefore the plaintiffs demand judgemenl of the defendants joindy and severally for Civil Conspiracy as a supplemental: tare 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 ~ory damages, costs, fees, attorneys fees, and such other relief as the Court rm y deem appropriate. COUNT IX NOV'~L ARTICULAT] I~[ I~LAINTIFI~ AGAINST ALL Dgi~ENDANT$ ~R ~ DI~PI~IVATIO~'; 96.) Peragraph~ 1 ~'ough 95 above ere incor ~orated herein by reference. 97.) The defendan~ by denying thc plaintiffs il ~ pursuk of their chosen occupation in the manner described above violated Hg Its guaranteed to plaintiffs under the PHvileges.immunitie~ Clau~e of the 14a Am adment to the U.S. Cor~imtion. Wherefore plaintiffs demand judgement ofthc'ck fendams for comgensatory, punitive and special damages in en amount not to excee ~ the sum total of the anaoum asked in the courts above together with fees, co: ts, a~torneys fees end such other relief a~ the Court mey deem appropriate for the dc privation of rights secured by ~he Privileges and Immunities clause of~: 14i Amendment to the U.S. Constitution. Lbil~ed, I-IarHsbur_~, PA 17110 (717) ,_2~-95o~ November 16, 2000 -34- Exhibit B See Attachme[' 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 JOFA~W. EIRKSON, : THE p~NNSYLVANIA DIRECTORS ASSOCIATION (PFDA), : et al., FILED Defendants : ~ARRISBURG, PA APR 1 2 2001 MEMORANDUM 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 ("the 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~ ce~ied from ~ 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 constitutional 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. A~ditionally, 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 (Rev.8/62) 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 CORD., 200 F.3d 143, 147 (3d Cir. 1999). When appropriate, we may also rely on public records, such as court filings. See Churchill v. Stat Enterprises, 183 F.3d 184, 190 n.5 (3d Cir. 1999) (citing Pension Benefit Guaranty CorD. 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. BackGround. In pertinent part, the complaint alleges as follows. 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 AO 72A (Rev.8/82) the Pennsylvania Funeral Plan, open only to the Association members that provide pre-need insurance. (Id., 4 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., 44 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., 4 30). In or about January 1998, Eirkson falsely told a CFC customer that CFC's programs were illegal. (Id., 4 31). In February 1998, as a result of the Defendants' alleged unlawful conduct, the Plaintiffs had to send out their first AO72A (Re~8/82) 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., ¶4 34 and 41). The FTC's April 1999 response wa~ not favorable to the Association. (Id., 44 43 and 44). On September 1, 1999, the Board issued a resolution, ~at the direct behest of the defendants," (id., 4 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., 4 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., 4 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 (Ray. B/82) 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 thei: 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. (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, told a meeting of funeral directors that the Association and the Board were going after CFC after the Ferauson case was finished. (~d., ¶ 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) 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 479.13ia) 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." 4~ 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 Fer~uson 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 AO 72A (Rev.8/82) 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." After she sold the customer the insurance, she assigned the policies to Fer~uson. 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 AO 72A (Rev.8/82) funeral expenses. It was only preventing them from "usurp[ing] 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 ~enera!lv 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 Rec¥clin~ Industry, Inc. v. City of New 9 AO72A {Rev.8/82) York, 107 F.3d 985, 996 (2d Cir. 1997). See qenerallv Pi Lambda Phi Fraternity, Inc. v. University of Pittsburgh, 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. Th~ 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 Slauuhter-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 ~, 87 F.3d 624, 641 (3d Cir. 1996). We agree. IV. Conclusion. We see no need to examine defendant Campbell's motion t( dismiss since we can dismiss the case against him on the basis of our rulings on the Association Defendants' motion. A~ditionally, having decided to dismiss all the federal claims, ~e 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 t¢ filing them in an appropriate state court. We will issue an appropriate order. William W. Caldwel United States District Judge Date: April 12, 2001 11 AO 72A (Rev. SI82) 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., ~]L~D Defendants : HARRISBUrG, PA APR 1 2 2001 ORDER AND NOW, this 12th day of April, 2001, it is ordered 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 T~/esday, April 17, 2001, is cancelled. 5. The Clerk of Court shall close this file. United States District Judge AO 72A (Rev. B/82) Exhibit C IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA ROBERT RAE AND COMMONWEALTH FUNERAL ~ CIVIL ACTION LAW CONSULTANTS INC., ) ) NO. I:CV-00-2018 Plaintiffs ) ) ) (Judge Caldwell) JOHN W. EIRKSON, THE ) PENNSYLVANIA FUNERAL ) DIRECTORS ASSOCIATION ) (PFDA), LOUDEN L. CAMPBELL) ESQUIRE, MARTIN BROWN, ) .......... - JAMES O. PINKERTON, ) !~ ~ INDIVIDUALLY, AND THE ) PFDA MEMBERS OF THE ) STATE BO~.~O Or ~ERAL DIRECTORS IN ~m~iR ~IVID,.,ALCAPACmES ) ~YTRIALDEM.~,,DED ) Defendants ) NOTICE OF APPEAl, Notice is hereby ~ven that Robert Rae, the above- named pla~ntffhereby appeals to the Third Circuk Court o~App¢als o~the Un'ted States fi'om the ©rder o£ the Honorable .fudge WiH~am W. Caldw¢ll ~or the U.S. ~is~ct Court ~or the ~iddle Dis~ct &?etmsylvania entered on Ap~l 12, 200l, where~n he ~ted the ~&~n~ts' ~o~on to ~i~m~ss. A copy &the Ap~l 12, 2001, Order ~s Certified from th~ re~ord RESPECTFULLY SUBMITTED, 4311 N. 6'h Street Harrisburg, PA 17110 (717) 221-9500 CERTIFICATE OF SERVICE I hereby ceftin, that on Apr/! 13, 2001 a true and correct copy of the forego/rig Notice of Appeal was served upon the following cotmsel of record by Un/ted States Ma/l, postage prepaid. ECKERT SEAMAN'S CHERIN & MELLOTT, LLC Bridget Montgomery, Esquire 213 Market Street, 84 Floor Harrisburg, PA 17101 Sarah Yerger, Esquire Office of Attorney General 1500 Strawberry Square Harrisburg PA 17120 Douglas Mareello, Esquire Thomas, Thomas, Hafer, LLP 305 North Front Street Harrisburg, PA 17101 Don Bailey ID# 23786 4311 N. 64 Street Harrisburg, PA 17110 (717) 221-9500 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVJ%NIA ROBERT PJ%E and COMMONWEALTH : FUATERAL CONSULTANTS, INC., Plaintiffs : : vs. CIVIL ACTION NO. 1:CV-00-2018 JOb2~ W. EIRKSON, : THE PENNSYLVANIA FUNERAL DIRECTORS ASSOCIATION (PPDA) , : e,~ al . , Defendants : F~L~D - HARRISBURG, PA APR 1 2001 MEMORANDUM I. Introduction. PER j ) r,~'o..~ 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 mew. her of the State Board of Funeral Directors ("the 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 AO 72A (Rev.8/82) 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 constitutional 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 "Lan~ford 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 (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 ~nited States v. Occidental Chemical CorD., 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 CorD. v. White Consolidated Indus., Inc., 998 F.2d 1192, !196 (3d Cir. 1993)). With this standard in mind, we set forth the background to this litigation, as the Plaintiffs allege it. II. Back, round. 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., ¶ 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 AO 72A (Rev.8/82) the Pennsylvania Funeral Plan, open only to the Association members that provide pre-need insurance. (Id., 4 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., 44 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 ~_=uestion[ing] the customers about their decisions to use CFC programs.- (Id., 4 30). In or about January 1998, Eirkson falsely told a CFC customer that CFC's programs were illegal. (Id., 4 31). In February 1998, as a result of the Defendants' alleged unlawful conduct, the Plaintiffs had to send out their first 4 AO 72A (Rev.8/82) indemnification letter to a client, indemnifying the customer if the Plaintiffs' plan turned out to be illegal. (Id., 4 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., 44 34 and 41). The FTC's April 1999 response was not favorable to the Association. (Id., 44 43 and 44). On September 1, 1999, the Board issued a resolution, ~at the direct behest of the defendants,- (id., 4 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." (~d., 4 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., 4 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 (Rev.8/62) 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 ~FC they will lose their funeral director's license. (Id., ¶ 56). The Association's staffers did the same thing. (~d., ¶ 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. (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 Ferauson case was finished. (Id., ¶ 61). The legal backdrop of this controversy is the Perm. sylvania Funeral Director Law, 63 P.S. §§ 479.1-480.11 (Purdon 6 AO72A (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 sez~ice 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. A_nd 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. 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 Fercuson 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 AO 72A (Rev.~/82) 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 si~ned the worksheet as a "counselor.~ After she sold the customer the insurance, she assigned the policies to Fer~uson. 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 AO 72A (Rev. 8/82) funeral expenses. It was only preventing them from "usurp[lng] 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 aenerallv 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 Recvclina Industry, Inc. v. City of New 9 AO 72A (Rev.8/82) York, 107 F.3d 985, 996 (2d Cir. 1997). See ~enerall¥ Pi Lambda Phi Fraternity, Inc. v. University of Pittsburoh, 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 pradtices 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 concer~.ing 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 oenera!lv Slaughter-House Cases, 83 U.S. 36, 21 L.Ed. 394, !6 Wall. 36 (1872). Finally, the Defendants argue that the Plaintiffs cannot assert a federal anti-trust claim because they allege only injury to chemse!ves 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. William W. ~Caldwell k United States District Judge Date: April 12, 2001 ll AO 72A (Rev.8/82) IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA ROBERT R/rE and COMMON-WEALTH : FUNERAL CONSULTANTS, INC. , Plaintiffs : vs. : CIVIL ACTION NO. 1:CV-00o2018 JO~N W. EIRKSON, : THE PENNSYLVANIA FUNERAL DIRECTORS ASSOCIATION (PFDA) , : et al. , ~) De f endant s : HARRISBURG, PA APR 1 2 ZI]I]I ORDER ~.~ A-ND NOW, this 12th day of April, 2001, it is ordered 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. Ail 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. ~Cald%~ell t United States District Judge AO 72A (Rev.8/82) Exhibit Don Bailey -.:~:'~ -.: PAID#23786 ,~' :.; . -: 4311 North 6 Harrisburg, PA 17110 ..,:: ._ . :.. (717) 221-9500 '"'. ._ ..~.~. Attorney for Plaintiffs ~-!:'::o ...,. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ROBERT RAE AND ) IN THE COURT OF COMMON COMMONWEALTH FUNERAL ) PLEAS OF CUMBERLAND CONSULTANTS INC., ) COUNTY, PA. ) ) Plaintiffs ) -"' ) NO. VS. ) ) JOHN W. EIRKSON, THE ) PENNSYLVANIA FUNERAL ) DIRECTORS ASSOCIATION ) (PFDA), LOUDEN L. CAMPBELL) ESQUIRE, MARTIN BROWN, ) and JAMES O. PINKERTON, ) ) JURY TRIAL DEMANDED Defendants ) 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 CoLtrt your defenses or objections to the claims set forth against you. You are warned that ifyov fail to do so the case may proceed without you and ajud~mnent may be entered against you by thc 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. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CAN'NOT 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 PAID# 23786 4311 N. 6'~' Street Harrisburg, Pa 17110 (717) 221-9500 Attorney for Plaintiffs ROBERT RAE AND ) IN THE COURT OF COMMON COMMONWEALTH FUNERAL ) PLEAS OF CUMBERLAND CONSULTANTS INC., ) COUNTY, PA. ) ) Plaintiffs ) ) NO. ) JOHN W. EIRKSON, THE ) PENNSYLVANIA FUNERAL ) DIRECTORS ASSOCIATION ) (PFDA), LOUDEN L. CAMPBELL) ESQUIRE, MARTIN BROWN, ) and JAMES O. PINKERTON, ) ) JURY TRIAL DEMANDED Defendants ) NOTICIA Le ban demandado a usted en la corte. Si usted quiere defenderse de estas demandas expuestas en las patinas siguientes, usted tiene viente (20) dias de plazo al partir de la fecha de la demanda y la notifica¢ion. Usted debe presentar una aparien¢ia escrita o en persona o pot abo§ado y archivar en {a torte en forma escrita sus defensas o sus objeciones .', las demandas en conu'a de su persona. Sea avisado que si usted no se defiende, la ¢orte tomara mcdidas y puede entrar t,na orden contra usted sin previo aviso o notificacion y por cua{quier queja o alivio que es pedido en la peti¢ion de demanda. Usted puede perder dinero o sus propiedades o otros derechos importantes para usted. LLEVE ESTA DEMANDA A UN ABODAGO INMEDIATAMENTE. SI NO TIENE ABOGADO O SI NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO, VAYA EN PERSONA O LLAME POR TELEFONO A LA OFICINA CUYA DIRECCION SE ENCUENTRA ESCRITA ABA JO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. CUM]3ERLAND COUNTY LAWYER REFERRAL SERVICE CUM]3ERLAND COUNTY BAR ASSOCIATION 2 LIBERTY AVENUE CARLISLE, PA 17013 (7 ! 7) 249-3166 Don Bailey PAID# 23786 4311 N. 6* Street Harrisburg, Pa 17110 (717) 221=9500 Attorney for Plaintiffs ROBERT RAE AND ) IN THE COURT OF COMMON COMMONWEALTH FUNERAL ) PLEAS OF CUMBERLAND CONSULTANTS INC., ) COUNTY, PA. ) ) Plaintiffs ) ) NO. VSo ) ) JOHN W. EIRKSON, THE ) PENNSYLVANIA FUNERAL ) DIRECTORS ASSOCIATION ) (PFDA), LOUDEN L. CAMPBELL) ESQUIRE, MARTIN BROWN, ) and JAMES O. PINKERTON, ) ) JURY TRIAL DEMANDED Defendants ) 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 supplememal 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 -1- 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.) PlaintiffRobert 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 of PFDA. 4.) The plaintiffRae and CFC, on or about 1997, began selling pre-need services in cooperation with funeral homes and funeral directors. 5.) The defendant PFDA was akeady 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 &FDA's) members, market and sell pre-need services to consumers. -2- 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 "Uniehoice," a Co-op with membership free to PFDA 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 of PFDA 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. Uniehoice 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 individ~al 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 1/censed 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 -3- 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 i¢ using its position on the Board as a regulato~' and controlling state agency to ensure the security of its members and tho 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/IJnichoicefPennsylvania Funeral Plan." b.) Participate as co-op members in "SecurChoice/Unichoico" 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 Mt. Andrew Ferguson's substantive and procedural due process rights) a resolution (September I, 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 PFDA members 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 -5- 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 proseeutorial 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 fi.om the defendant Eirksnn 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. -6- 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, 1991g, 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' unlawCml 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 of 1998 the PFDA, by and through Eirkson (and others) made several statements that indicated that he, as a PFDA official, was going to have the -7- prosecuting attomey 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. Fergnson's activities as an ideal scape goating oppommity 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 -8- 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"probablv in violation of Pennsylvania provisions that prohibit anyone but a funeral service licensee fi.om 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 Peansvlvania Ftmeral Directors Association v. State Board of Fnneral Directors. 90 Pa. Cmwlth 175, 494 A.2d 67 (1985) and, b.) that the Pennsylvania Le~slative 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. -9- There is no rational economics or other basis consistant with 14'h 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. Cra_rgigmiles v. Giles, U.S. District Court for the Eastern District of Tennessee at Chattanooga No. 1:99-CV-304 (August 21, 2000) and Casket Royale. Inc., v. Mississiuni, U.S. Dislrict Court for the Southern District of Mississippi Jackson 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. -10- 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 ~mlicensed funeral service providers to sell pre-need services "~mlicensed" me~n; 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 staffopinion 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 -11- providers who choose to be involved in a program, such as the Catholic Funeral Plan, carry the burden of makin~ sure that the consumers brought to them by the religious group _~et 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 of Damocles 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 uny 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 govemment 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 "~ and 14~h 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 "PFDA Members" about "unlicensed pre-need sales -12- 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 Im. tnunities guaranteed by the U.S. Constitution including the right to engage in gainful employment and their chosen occupations. Plaintiffs' rights to be flee to contract, a federally guaranteed liberty interest, and their right to be free oftortious 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 fi.om doing business with them, and to interfere -13- 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 of lost 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..at the customers should not do business with CFC because they might be minted or even lose their own license. 39.) Meanwhile the SBFD began an "investigation" consisting of asldng 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 -14- 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 bom selling services, that they "were going to do SO." 44.) On or about.lune 2000 the defendant.loire 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 £irkson told one of CFC'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 ora list of funeral directors that "they" (meaning the -15- 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 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. 500 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,/ts 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 F/rst, 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 -17- 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, -18- 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 ha,m plaintiffs' business through characterizing them as lawbreakers. This misconduct cast plaintiffs in a false light, misrepresented them, and was intended to -19- 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 PFI)A) 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 PFI)A jointly and 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 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 fi.om doing business with plaintiffs through false represeatations 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 eases, as aforementioned, targeting specific customers and contents of plaintiffs. 63.) The defendants succeeded in numerous eases in causing third parties to withdraw fi'om, alter to plaintiffs' disadvantage, or cease enlxy 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 fights to be flee 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 BOARn 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 plzintiffs, and to interference with plaintiffs contractual relations and interference with plaintiffs prospective contractual relations. 66.) These actions were done ~mlawfully for an unlawful, purpose, and with the knowing cooperation of each defendant with each other, in various comb/nations, t~om 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- Respectfully Submitted, Hanisburg, Pa 17110 (717) 221-9500 -23- -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 Ma/l, postage prepaid. ECKERT SEAMAN'S CHER1N & MELLOTT, LLC Bridget Montgomery, Esquire 213 Market Street, 84 Floor Harrisburg, PA 17101 Sarah Yerger, Esquire Office of Attorney General 1500 Strawberry Square HanSsburg, PA 17120 Douglas Marcello, Esquire Thomas, Thomas, Hat'er, LLP 305 North Front Street Harr/sburg, PA 17101 4311 N. 6 h Street (,~] Harrisburg, PA 17110 (717) 221-9500 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA ROBERT RAE AND : IN THE COURT OF COMMON PLEAS COMMONWEALTH FUNERAL : CUMBERLAND COUNTY, PA CONSULTANTS, INC., : : NO. 01-2912 CIVIL 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). DUANE, MORRIS & HECKSCHER LLp Dated:. lien C. Warshaw, Esquire Attorney I.D. No. 17145 James J. Kutz, Esquire Attorney I.D. No. 21589 305 North Front Street, yh Floor P. O. Box 1003 Harrisburg, PA 17108-1003 (717) 237-5500 Attorneys for Plaintiffs ROBERT RAE and COMMONWEALTH : In the Court of Common Pleas of FUNI~RAL CONSULTANTS, INC., Cumberland County, Pennsylvania Plaintiffs : 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 E_E_E~NTRY 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 LIP Allen C. Warshaw Attorney I.D. No. 17145 James L Kutz Attorney I.D. blo. 21589 305 North Front Street, 5~ Floor P. O. Box 1003 Harrisburg, PA 17108-1003 (717) 237-5500 Attorneys for Plaintiffs D ed: / o LAW OFFICES OF DUANE, MORRIS ~ HECKSCHER LLP ~O.~ NORTH FRONT STREET. P.O. BOX IOO3 CERTIFICATE OF SERVICE ~ ~'~.,~._~ ,2001, I, Patricia Z. Glusko, a secretary in the On this Hc~ day of law offices of Duane, Morris & Heckacher LLP, hereby certify that I have served this day true and correct copies of the attached document in the above-captioned case, by depositing saree in the United States First Class Mail, postage prepaid, in Harrisburg, Pennsylvania, to those persons and addresses indicated below: Bridget Montgomery, Esq. Eckcrt Seareans Cherin & Mellott, LLC 213 Market Street, 8a Floor Harrisburg, PA 17101 Sarah Yergcr, Esq. Office of the Attorney General i 500 Strawber~ Square Harrisburg, PA 17120 Douglas Marcelio, Esq. Thomas, Thomas & Haler, LLP 305 North Front Street, 6~ Floor Harrisburg, PA 17101 PatriciadZ~. Glusko -v,~ co,~ _...~,~s~ co~~s ~c.. ~ E~s°~'~ ~o~ · ....~ ~ · o~O~ ~o~- ~uD~ L C~LL' ~fcnd~ __. ~.. ~NOW,~s ~o ,~ ' day ~ed ae ~d DU~E' MORRIS & ~cKsC~R ~P' he.bY ce~iY fha I have this _ .--:,~ ~d Unimd S~mS First Cl~s tl to the co. Ct copy of the p~ecipe to Di~on~Ue by following; AttOrneY S~ G. yerge~, D~utY Offl~ Litiga6on S~tion 15~ ~oor, Suaw~ Squ~ ~sburg. PA ~u0~ M~ello' ~squi~ 305 No~ Front St~t 6· ~oor ~sburg, PA 17101 (717) 237-7105 (F~ Numar)