Deukmejian v. U.S. Postal Service

• Decision Date: 05 June 1984
• Docket Number: No. 82-6122,82-6122
• Citation: 734 F.2d 460
• Parties: 1984-1 Trade Cases 66,048 George DEUKMEJIAN, Attorney General of the State of California, Plaintiff-Appellant, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee. CA
• Court: U.S. Court of Appeals — Ninth Circuit

Page 460

734 F.2d 460

1984-1 Trade Cases 66,048

George DEUKMEJIAN, Attorney General of the State of

California, Plaintiff-Appellant, v. UNITED STATES POSTAL SERVICE, Defendant-Appellee.

CA No. 82-6122.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Oct. 6, 1983.

Decided June 5, 1984.

Owen Lee Kwong, Deputy Atty. Gen., Los Angeles, Cal., for plaintiff-appellant.

Peter R. Osinoff, Asst. U.S. Atty., Los Angeles, Cal., for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before FARRIS and REINHARDT, Circuit Judges, and MUECKE, ^* District Judge.

PER CURIAM:

The California Attorney General appeals from a summary judgment entered in favor of the United States Postal Service. The district court held that the Postal Service properly denied the Attorney General's application to mail class action cash refund notices at special third class bulk mailing rates. We affirm.

In 1980, the Attorney General and Levi Strauss & Co. settled an antitrust class action for $12.25 million. The AG concluded that direct mailings would be the most effective way to notify the class. To lower the cost of mailing, he applied to the Postal Service for special third class bulk rates under the "philanthropic organization" classification in Domestic Mail Manual (DMM) Sec. 623.234. ¹

The Los Angeles Mail Classification Center rejected the application, stating that the AG (a) was ineligible under DMM Sec. 623.4 ² and (b) failed to meet the standard of "primary purpose" for a non-profit, philanthropic organization as prescribed by DMM Secs. 623.22 and 623.234. The AG's appeal to the Division of Mail Classification in Washington, D.C. was denied in a "final agency decision" in accordance with DMM Sec. 642.3. The AG petitioned the Los Angeles Mail Classification Center for reconsideration, and the Domestic Mail Classification Division Manager affirmed the decision of the Postal Service after reviewing the petition and evidence. While reconsideration was pending, the AG mailed 8,534,477 consumer cash refund notices at a total cost of $571,849.96, paid out of the Levi Settlement Fund.

On December 7, 1981, the AG filed a complaint in the district court, alleging that the Postal Service's denial of its application for special third class bulk rates was arbitrary and capricious, an abuse of discretion and incorrect as a matter of law. He also charged that DMM Secs. 623.2-623.4 were unconstitutional. The complaint requested the district court to declare the denial of the application unlawful and to enjoin the Postal Service from refusing third class bulk rates to the AG. The AG also sought a refund of the amount spent for postage in excess of special third class rates.

When both parties moved for summary judgment, the district court granted the Postal Service's motion, after which the AG filed a timely notice of appeal.

In reviewing a motion for summary judgment, we must determine whether there exist any genuine issues of material fact and whether the district court correctly applied the substantive law in ruling on the motion. Ferguson v. Flying Tiger Line, Inc., 688 F.2d 1320, 1322 (9th Cir.1982). Summary judgment is proper if, after viewing the evidence in the light most favorable to the party opposing the motion, the movant is clearly entitled to prevail as a matter of law. Id. Whether the AG qualified under the applicable provisions is a question of law. There are no disputed questions of fact. The issue is whether the district court interpreted the law correctly.

The Postal Service has discretion regarding an applicant's qualifications for a special mailing rate. Bates & Guild Co. v. Payne, 194 U.S. 106, 24 S.Ct. 595, 48 L.Ed. 894 (1904); Sierra Club, Inc. v. United States Postal Service, 549 F.2d 1199 (9th Cir.1977). A court reviewing the rate determination of the Postal Service should presume that the determination is correct, and should not reverse unless the determination is so arbitrary and capricious as to be an abuse of discretion or unconstitutional. Sierra Club, supra, at 1201. On the other hand, while an agency's interpretation of its own regulations is entitled to considerable deference by the court, the agency's...