778 F.2d 96 (2nd Cir. 1985), 85-4006, Direct Marketing Ass'n, Inc. v. United States Postal Service

Docket Nº:85-4006 and 85-4032.
Citation:778 F.2d 96
Party Name:DIRECT MARKETING ASSOCIATION, INC., American Newspaper Publishers Association, Coalition of Non-Postal Media, and American Postal Workers Union, Alliance of Nonprofit Mailers, Petitioners, v. UNITED STATES POSTAL SERVICE, Respondent, Direct Marketing Association, Inc., Mail Order Association of America, Parcel Shippers Association, Council of Publi
Case Date:December 03, 1985
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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778 F.2d 96 (2nd Cir. 1985)

DIRECT MARKETING ASSOCIATION, INC., American Newspaper

Publishers Association, Coalition of Non-Postal

Media, and American Postal Workers

Union, Alliance of Nonprofit

Mailers, Petitioners,

v.

UNITED STATES POSTAL SERVICE, Respondent,

Direct Marketing Association, Inc., Mail Order Association

of America, Parcel Shippers Association, Council of Public

Utility Mailers, McGraw Hill, Inc., Association of American

Publishers, Inc., Recording Industry Association of America,

Inc., the Reader's Digest Association, Inc., Time Inc.,

Newsweek, Inc., Magazine Publishers Association, Third Class

Mail Association, American Business Press, Advo-System,

Inc., United Parcel Service of America, Inc., American

Newspaper Publishers Association, Dow Jones & Co., Alliance

of Non- Profit Mailers, Reuben H. Donnelley Corp., Intervenors.

Nos. 1219 to 1223, Dockets 84-4176, 85-4002, 85-4004,

85-4006 and 85-4032.

United States Court of Appeals, Second Circuit

December 3, 1985

Argued May 21, 1985.

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[Copyrighted Material Omitted]

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Dana T. Ackerly, Washington, D.C. (James R. Stirn, Covington & Burling, Washington, D.C., Robert L. Sherman, New York City, of counsel) for petitioner and intervenor Direct Marketing Ass'n, Inc.

Toni K. Allen, Washington, D.C. (Joseph J. Simons, Wald, Harkrader & Ross, Washington, D.C., W. Terry Maguire, Tonda F. Rush, Rene P. Brown, American Newspaper Publishers Ass'n, Washington, D.C., of counsel) for petitioner American Newspaper Publishers Ass'n.

David R. Straus, Washington, D.C. (Scott H. Hempling, Spiegel & McDiarmid, Washington, D.C., of counsel) for petitioner Coalition of Non-Postal Media.

Susan L. Catler, Washington, D.C. (Anton G. Hajjar, O'Donnell, Schwartz & Anderson, Washington, D.C., of counsel) for petitioner American Postal Workers Union, AFL-CIO.

David M. Levy, Washington, D.C. (R. Eden Martin, Sidley & Austin, Washington, D.C., Marc J. Gottridge, Sidley & Austin, New York City, of counsel) for petitioner Alliance of Nonprofit Mailers.

Danial J. Foucheaux, Jr., Washington, D.C. (Louis A. Cox, Gen. Counsel, Frances G. Beck, Associate Gen. Counsel, Norma J. Brown, Leslie A. Clark, Richard T. Cooper, Eric P. Koetting, Robert C. Lowry, Scott L. Reiter, Michael T. Tidwell, United States Postal Service, Washington, D.C., of counsel) for respondent U.S. Postal Service.

David C. Todd, Patton, Boggs & Blow, Washington, D.C. for intervenor Mail Order Ass'n of America.

Eugene E. Threadgill, Washington, D.C. (R. Brian Corcoran, Connole and O'Connell, Washington, D.C., of counsel) for intervenor Council of Public Utility Mailers (Ian D. Volner, N. Frank Wiggins, Mark L. Pelesh, Cohn and Marks, Washington, D.C., of counsel) for intervenors Ass'n of American Publishers and Recording Industry Ass'n of America, Inc.

Timothy J. May, Patton, Boggs & Blow, Washington, D.C. for intervenor The Reader's Digest Ass'n, Inc.

John M. Burzio, Hydeman, Mason, Burzio & Lloyd, Washington, D.C., for intervenor Time Inc.

John M. Burzio, Hydeman, Mason, Burzio & Lloyd, Washington, D.C. (Edward Berlin, Robert S. Taylor, Swidler, Berlin & Strelow, Washington, D.C., of counsel), for intervenor Newsweek, Inc.

John M. Burzio, Hydeman, Mason, Burzio & Lloyd, Washington, D.C. (David Minton, Washington, D.C., of counsel), for intervenor Magazine Publishers Ass'n.

Keith R. McCrea, Ann J. LaFrance, Squire, Sanders & Dempsey, Washington, D.C., Howard H. Bachrach, Squire, Sanders & Dempsey, New York City, of counsel for intervenor Third Class Mail Ass'n.

Thomas W. McLaughlin, Washington, D.C. (John M. Burzio, Hydeman, Mason, Burzio & Lloyd, Washington, D.C., of counsel), for intervenor Advo-System, Inc.

Robert L. Kendall, Jr., Philadelphia, Pa. and New York City (John E. McKeever, Schnader, Harrison, Segal & Lewis, Philadelphia,

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Pa., and New York City, of counsel), for intervenor United Parcel Service of America, Inc.

M. Reamy Ancarrow, Washington, D.C., (W. Gilibert Faulk, Jr., Paula A. Jameson, George L. Mahoney, Le Boluf, Lamb, Leiby & Mc Rae, Washington, D.C., of counsel), for intervenor Dow Jones & Co.

Before LUMBARD, VAN GRAAFEILAND and PIERCE, Circuit Judges.

PIERCE, Circuit Judge.

Petition to review an order of the Governors of the United States Postal Service (Governors) which ordered new postal rates and fees to take effect on February 17, 1985 pursuant to the Postal Reorganization Act of 1970, 39 U.S.C. Secs. 101 et seq. (1976) (the Act). Petitioners and intervenors present numerous challenges to the Governors' decision. These challenges include whether certain of the rates implemented are supported by substantial record evidence. The structure of the Postal Service and the procedure by which the Governors approve postal rates have been examined extensively elsewhere, see National Ass'n of Greeting Card Publishers v. United States Postal Service, 462 U.S. 810, 103 S.Ct. 2717, 77 L.Ed.2d 195 (1983); Time, Inc. v. United States Postal Service, 685 F.2d 760 (2d Cir.1982) [hereinafter cited as Time I ]; Newsweek, Inc. v. United States Postal Service, 663 F.2d 1186 (2d Cir.1981), aff'd, National Ass'n of Greeting Card Publishers, 462 U.S. 810, 103 S.Ct. 2717, 77 L.Ed.2d 195 and we will provide only a brief review.

The United States Postal Service was established by the Act as an independent agency under the management of an eleven member Board of Governors (Governors). The Act also established a five member Postal Rate Commission (PRC) which is independent of the Board. See 39 U.S.C. Secs. 201, 202, 3601. When the Board deems it to be in the public interest, it may request the PRC to recommend a new postal rate schedule. Id. Sec. 3622(a). Upon receiving such a request, the PRC holds hearings, id. Sec. 3624(a), and formulates a schedule of rates, id. Sec. 3624(d), in accordance with nine factors listed in Sec. 3622(b). Upon receipt of the PRC's recommended rates, the Governors have several options: they may approve, allow under protest, reject or modify the rates. Id. Sec. 3625(a). Once the Governors order new rates into effect, that decision may be appealed to any Court of Appeals which may affirm the decision or order the entire matter returned for further consideration, but may not modify the decision. Id. Sec. 3628.

BACKGROUND

On November 10, 1983, the Postal Service filed a request for changes in postal rates with the PRC. The PRC then established Docket No. R84-1, the sixth major postal rate proceeding since the Act was enacted in 1970, and held hearings in which some 71 parties intervened. The record of these hearings comprises over 35,000 pages and includes the testimony of over one hundred witnesses. The PRC issued its Opinion and Recommended Decision on September 7, 1984 in accordance with a ten month statutory deadline. The Governors then approved the recommended rates and fees as "consistent with the policies of the Postal Reorganization Act and supported by adequate record evidence." Joint Appendix at 2. The new rates were placed into effect on February 17, 1985.

Petitions for review were filed by five parties. Nine parties intervened in this court in support of the Postal Service's approval of the recommended rates. We now turn to the arguments presented by petitioners in support of their respective contentions.

DISCUSSION

I. The Governors' Decision

The American Newspaper Publishers Association (ANPA) contends that the decision of the Governors cannot be reviewed by this court because the Governors did not make detailed findings and failed to provide a sufficient explanation of the basis for adopting the PRC recommendation. Furthermore, ANPA claims that the Governors did not expressly adopt the PRC recommendation

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and in fact expressed reservations about aspects of the PRC's conclusions.

The Act divides the responsibility for ratemaking between the Governors and the PRC and specifies the procedures by which the Governors approve postal rates. Time, Inc. v. United States Postal Service, 710 F.2d 34, 36 (2d Cir.1983) [hereinafter cited as Time II ]; see 39 U.S.C. Secs. 201-02, 3601. "While the [Governors are] is entrusted with the power 'to establish ... reasonable and equitable rates of postage and fees for postal services,' see 39 U.S.C. Sec. 3621, its actual rate-making authority, with a few exceptions, is limited to approving, rejecting, modifying, or allowing under protest recommendations of the PRC, see 39 U.S.C. Sec. 3625(a)." Newsweek, 663 F.2d at 1190. The Governors decision must include an estimate of anticipated revenue and a statement of explanation and justification, 39 U.S.C. Sec. 3625(e). In addition, postal rates must provide sufficient revenue so that total revenues equal as nearly as practicable total costs of the Postal Service. Id. Sec. 3621; see Time II, 710 F.2d at 36-37. The Governors decision may be set aside only if it is found by a reviewing court to be arbitrary and capricious, an abuse of discretion, not in accordance with law, or unsupported by substantial evidence. 39 U.S.C. Sec. 3628; 5 U.S.C. Sec. 706.

We hold that the Governors decision meets the statutory criteria for approval of the PRC's recommendations. We note that the scope of our review has been limited to determining whether a " 'reasonable mind' [would] find the evidence on which the agency relied to be 'adequate' to support its conclusion." Newsweek, 663 F.2d at 1210. As long as the path by which the agency reached its decision is discernible, see Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286, 95 S.Ct. 438, 442, 42 L.Ed.2d 447 (1974), its decision should be upheld.

In...

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