Time, Inc. v. U.S. Postal Service
| Decision Date | 09 July 1982 |
| Docket Number | D,Nos. 893-897,s. 893-897 |
| Citation | 685 F.2d 760 |
| Parties | TIME, INCORPORATED; Newsweek, Inc.; The Reuben H. Donnelley Corporation; Mail Advertising Service Association International; Direct Mail/Marketing Association, Inc.; Mail Order Association of America; National Association of Greeting Card Publishers; American Business Press, Inc.; Associated Third Class Mail Users; American Retail Federation; Council of Public Utility Mailers; United Parcel Service of America, Inc., Petitioners, v. UNITED STATES POSTAL SERVICE, Respondent, Direct Mail/Marketing Association, Inc.; Dow Jones & Company; The National Association of Greeting Card Publishers; Association of American Publishers; The Recording Industry Association of America, Inc.; United Parcel Service of America, Inc.; American Newspaper Publishers Association; Advertisers Distribution Services; Advertisers Postal Service Corp.; Magazine Publishers Association; Classroom Publishers Association; March of Dimes Birth Defects Foundation; National Newspaper Association; Mail Order Association of America; Parcel Shippers Association; Time, Incorporated; Newsweek, Inc.; Council of Public Utility Mailers; American Retail Federation; American Bankers Association, Intervenors. DIRECT MAIL/MARKETING ASSOCIATION, INC. and Associated Third Class Mail Users, Plaintiffs-Appellants, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee. ockets 81-4183, 81-4185, 81-4203, 81-4205 and 81-6216. |
| Court | U.S. Court of Appeals — Second Circuit |
John M. Burzio, Washington, D. C. (Hydeman, Mason, Burzio & Lloyd, Justin R. Wolf, Louise C. Powell, Washington, D. C., Charles M. Waygood, Olwine, Connelly, O'Donnell & Wehyer, New York City, of counsel), for petitioner-intervenor Time, Inc.
Toni K. Allen, Jay A. Resnick, Wald, Harkrader & Ross, Washington, D. C., Diana M. Daniels, New York City, of counsel, for petitioner-intervenor Newsweek, Inc. Robert A. Saltzstein, Stephen Mark Feldman, Wyatt, Saltzstein, Lipsen & Hamberger, Washington, D. C., of counsel, for petitioner American Business Press.
George P. Williams, III, Philadelphia, Pa. (Robert L. Kendall, Jr., John E. McKeever, Margaret S. Woodruff, Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., of counsel), for petitioner-intervenor United Parcel Service.
Richard J. Webber, Washington, D. C. (Matthew S. Perlman, Arent, Fox, Kintner, Plotkin & Kahn, Washington, D. C., of counsel), for petitioner-intervenor Nat. Ass'n of Greeting Card Publishers.
Thomas W. McLaughlin, Washington, D. C. (John M. Burzio, Hydeman, Mason, Burzio & Lloyd, Washington, D. C., of counsel), for petitioner The Reuben H. Donnelley Corp.
Ann J. LaFrance, Washington, D. C. (J. Edward Day, Squire, Sanders & Dempsey, Washington, D. C., Peter R. Stern, Berger, Steingut, Weiner, Fox & Stern, New York City, of counsel), for petitioner Associated Third Class Mail Users.
Dana T. Ackerly, Washington, D. C. (David K. Flynn, Covington & Burling, Washington, D. C., Robert L. Sherman, Weil, Guttman & Davis, Peter R. Stern, Breger, Steingut, Weiner, Fox & Stern, New York City, of counsel), for petitioner-intervenor-appellant Direct Mail/Marketing Ass'n, Inc.
David C. Todd, Washington, D. C. (Steven M. Schneebaum, Patton, Boggs & Blow, Washington, D. C., of counsel), for petitioner-intervenor Mail Order Ass'n of America, Inc.
Eugene E. Threadgill, Washington, D. C. (Connole & O'Connell, Washington, D. C., of counsel), for petitioners American Retail Federation and Council of Public Utility Mailers.
Frances G. Beck, Associate Gen. Counsel, U. S. Postal Service, Washington, D. C. (Louis A. Cox, Gen. Counsel, Daniel J. Foucheaux, Jr., Asst. Gen. Counsel, Richard T. Cooper, Leslie A. Corston, Eric P. Koetting, Gerald J. Robinson, U. S. Postal Service, Washington, D. C., of counsel), for respondent-appellee U. S. Postal Service.
James N. Horwood, Washington, D. C. (David R. Straus, John Michael Adragna, Spiegel & McDiarmid, Washington, D. C., William S. Seeley, Eastlund, Peterson & Solstad, Minneapolis, Minn., of counsel), for intervenors Advertisers Distribution Services and Advertisers Postal Service Corp.
William H. Smith, Gen. Counsel, Michael F. Crotty, Asst. Gen. Counsel, American Bankers Ass'n, Washington, D. C., of counsel, for intervenor American Bankers Ass'n.
Before LUMBARD, MOORE and MESKILL, Circuit Judges.
This is the second matter before this Court arising from the fifth general rate-making proceeding since the enactment of the Postal Reorganization Act of 1970, 39 U.S.C. §§ 101 et seq. (Act). In Newsweek, Inc. v. United States Postal Service, 663 F.2d 1186 (2d Cir. 1981), cert. granted, --- U.S. ----, 102 S.Ct. 1969, 72 L.Ed.2d 439 (1982), we addressed the lawfulness of certain changes in postal rates and fees which took effect on March 22, 1981 under protest by the Board of Governors of the United States Postal Service (Board). Shortly before Newsweek was decided, the rates and fees were modified by the Board pursuant to 39 U.S.C. § 3625(d). Those modifications are the subject of this proceeding.
A variety of challenges have been raised to the Board's modifications. Several parties argue that the Board was without authority to exercise its modification powers in this instance. Others rest on much narrower grounds, contending that the Board offered inadequate explanations for its individual modifications. For purposes of this opinion, we will assume familiarity with
Newsweek and with the structure of the Postal Service, which is discussed therein, id. at 1190-91.
The rate-making proceeding underlying this case, Docket R80-1, commenced on April 21, 1980 when the Postal Service transmitted a request to the Postal Rate Commission (PRC) for a recommended decision on changes in postal rates and fees, see 39 U.S.C. § 3622(a). J.App., Vol. 3 at 1064-68. The request was accompanied by a schedule of rates and fees proposed by the Postal Service supported by testimony of eleven witnesses and thousands of documents. As set forth in greater detail in Newsweek, 663 F.2d at 1191-92, the PRC conducted extensive hearings pursuant to 39 U.S.C. § 3624 and issued a recommended decision on February 19, 1981. Opinion and Recommended Decision of the Postal Rate Commission (Feb. 19, 1981), J.App., Vol. 5 (First Recommended Decision). The Board, however, was dissatisfied with the recommended decision primarily because it considered the proposed rates insufficient to meet the Postal Service's anticipated revenue requirements. 1 Accordingly, for the first time since the Act's enactment in 1970, the Board elected not to accept a rate decision recommended by the PRC. Instead, the Board allowed the recommended rates to take effect under protest and returned the decision to the PRC for reconsideration and a further decision pursuant to 39 U.S.C. § 3625(c). Decision of the Governors of the United States Postal Service on Rates of Postage and Fees for Postal Services (Mar. 10, 1981), J.App., Vol. 1 at 205-323. The Board's order allowing the rates to take effect under protest constituted a decision reviewable by "any court of appeals of the United States," 39 U.S.C. § 3628, and this Court was ultimately asked to scrutinize the new rates in Newsweek.
Meanwhile, the PRC reconsidered its decision and issued a second recommended decision. Opinion and Recommended Decision Upon Reconsideration (June 4, 1981), J.App., Vol. 7 (Second Recommended Decision). The PRC substantially reaffirmed its first recommendation, asserting that the Board had exaggerated the Postal Service's revenue needs. On June 29, the Board rejected the PRC's Second Recommended Decision in its entirety, but left intact the rates which had taken effect under protest on March 22. Decision of the Governors of the United States Postal Service on the Postal Rate Commission's June 4, 1981 Recommended Decision Upon Reconsideration (June 29, 1981), J.App., Vol. 1 at 324-39. The Board returned the matter to the PRC for reconsideration and a third recommended decision, which was issued on September 17, 1981. Opinion and Recommended Decision Upon Further Reconsideration (Sept. 17, 1981), J.App., Vol. 8 (Third Recommended Decision). The September 17 recommendation was identical to the Second Recommended Decision, as the PRC steadfastly clung to its position that the Board had overstated the Service's revenue needs.
On September 29, 1981, the Board issued the order challenged in this proceeding. Decision of the Governors of the United States Postal Service on Rates of Postage and Fees for Postal Services (Sept. 29, 1981), J.App., Vol. 1 at 340-416 (Modification Decision). The Board, pursuant to its modification powers, see 39 U.S.C. § 3625(d), drastically revised the PRC's Third Recommended Decision, in many particulars by simply installing those rates originally proposed by the Postal Service in The rates recommended to us as Governors by the Postal Rate Commission, in its September 17, 1981 Recommended Decision Upon Further Consideration, are patently inadequate. The rates recommended by the Commission, on the basis of the record before the Commission and the Governors, will not provide the Postal Service with sufficient revenues to meet its costs.
commencing the rate proceeding. The Board issued a twenty-seven page statement of justification for the modifications, prefacing its remarks by reiterating the fundamental problem it found in each PRC decision:
Modification Decision at 1, J.App., Vol. 1 at 340. The Board, however, chose not to "address the (PRC's) positions point by point, but instead present(ed) the reasons for (its) modification actions." Id. at 6, J.App., Vol. 1 at 345. The Board did "incorporate by reference" its prior decisions of March 10 and June 29 as rationale for the new rates. Id.
The Board's explanation for the class by class modifications was limited to a seven-page conclusory discussion. While the Board stated that the new...
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