Dow Jones & Co., Inc. v. United States Postal Serv.

• Decision Date: 26 July 1974
• Docket Number: Civ. A. No. 74-20.
• Citation: 379 F. Supp. 1167
• Parties: DOW JONES & COMPANY, INC., Plaintiff, v. UNITED STATES POSTAL SERVICE, Defendant.
• Court: U.S. District Court — District of Delaware

379 F. Supp. 1167

DOW JONES & COMPANY, INC., Plaintiff, v. UNITED STATES POSTAL SERVICE, Defendant.

Civ. A. No. 74-20.

United States District Court, D. Delaware.

July 26, 1974.

Edmund N. Carpenter, II, of Richards, Layton & Finger, Wilmington, Del., and D. Robert Owen of Patterson, Belknap & Webb, New York City and Frank C. Breese, III, Dow Jones & Co., Inc., Princeton, N. J., of counsel, for plaintiff.

Ralph F. Keil, U. S. Atty. and Bruce L. Thall, Asst. U. S. Atty., Wilmington, Del., and Arthur S. Cahn, Law Dept., U. S. Postal Service, Washington, D. C., of counsel, for defendant.

OPINION

LATCHUM, Chief Judge.

Dow Jones & Company, Inc. ("Dow Jones") has brought this action for injunctive and declaratory relief against the United States Postal Service¹ ("Postal Service") on the ground that the action of the Director of the Office of Mail Classification of the Postal Service ("the Director") in revoking certain original second class mailing privileges heretofore held by its publication, the Wall Street Journal ("the Journal"), was illegal.

Dow Jones is a corporation organized and existing under the laws of the State of Delaware. Primarily a business news service, it is the publisher of the Journal, a newspaper printed daily, except for Saturdays, Sundays and legal holidays.

The Journal is published in four regional editions. The Eastern Edition is printed in Chicopee, Massachusetts, South Brunswick, New Jersey, and Silver Springs, Maryland. The Midwest Edition is printed in Chicago and Highland, Illinois, and in Cleveland, Ohio. The Southwest Edition is printed in Dallas, Texas, and the Pacific Coast Edition is printed in Palo Alto and Riverside, California.

The Journal has been the beneficiary of second class mailing privileges since 1889. In that year the Journal was granted an original second class entry permit in New York City. In 1929 Dow Jones commenced publication of the Pacific Coast Edition of the Journal in San Francisco,² and the Postal Service granted this edition an original second class entry permit in the same year. In 1948 Dow Jones commenced publishing the Southwest Edition of the Journal in Dallas and was granted an original second class entry permit in that year. In 1951 Dow Jones purchased the Chicago Journal of Commerce and LaSalle Street Journal which was thereafter converted to the Midwest Edition of the Journal. The original second class entry permit held by its predecessor was transferred to the Journal.

Prior to 1967, second class postal rates were identical for qualifying publications³ regardless of whether the entry permit was for original entry or additional entry. In that year the law was changed to restrict the extremely favorable "in county" second class mailing rate to publications granted an original second class entry permit.⁴ "In county" mailings, as the term suggests, occur when a qualifying publication is mailed to an address located in the same county where the publication is entered as second class mail.⁵ In 1971 the Director notified Dow Jones of his intent to revoke the Journal's original second class entry permits for Chicago, Dallas and Palo Alto on the ground that a publication is entitled to only one original second class entry permit, and that a determination had been made that the four regional editions of the Journal are in reality one publication within the meaning of the relevant statutes.

Dow Jones appealed the Director's decision to the Administrative Law Judge, pursuant to 39 CFR § 954.8, who ruled in favor of the Postal Service. An appeal was taken to the Judicial Officer, pursuant to 39 CFR § 954.15, who affirmed the decision of the Administrative Law Judge. Dow Jones then commenced the instant action. Since the decision of the Judicial Officer is deemed final administrative action by 39 CFR § 954.15, Dow Jones has exhausted its administrative remedies and this Court has jurisdiction pursuant to 28 U.S.C. §§ 1339 and 2201, 5 U.S.C. § 702 and 39 U. S.C. § 409. Both parties have moved for summary judgment. Since the issue of whether the administrative findings of fact are supported by substantial evidence presents only a question of law, summary judgment is appropriate. Dredge Corp. v. Penny, 338 F.2d 456 (C.A.9, 1964); Denison v. Udall, 248 F. Supp. 942 (D.Ariz.1965); Henrikson v. Udall, 229 F.Supp. 510 (N.D.Cal.1964), aff'd 350 F.2d 949 (C.A.9, 1965), cert. den. 384 U.S. 940, 86 S.Ct. 1457, 16 L. Ed.2d 538 (1966). Consequently, the Court will now consider each legal issue raised.

1. Do 39 U.S.C. §§ 4352 & 4354 permit a single publication to have more than one original second class entry permit?

Because this issue is essentially a question of statutory interpretation, the Court will substitute its judgment for that of the administrative tribunal. American Ship Building Co. v. N.L.R.B., 380 U.S. 300, 85 S.Ct. 955, 13 L.Ed.2d 855 (1965). In so doing, the Court concludes that the Administrative Law Judge's interpretation was correct and that the statutes contemplate granting only one original second class entry permit per publication.

39 U.S.C. § 4352 provides:

"(a) Upon application in the form prescribed by him the Postmaster General shall enter as second class mail, at the Post Office where the office of publication is maintained, any publication which is entitled under sections 4353-4357 of this title to be classified as second class mail. A publication entered at one post office may also upon application be entered by him at another post office."

The Court concludes that § 4352(a) contemplates limiting a publication to one original second class entry permit "at the Post Office where the office of publication is maintained," and that where a publication is printed in more than one location, the second sentence of § 4352(a) authorizes the Postal Service to grant the publication an additional second class entry permit.

The Court is led to this conclusion by the language of § 4352(a) itself and its predecessor statute, by the relationship between 39 U.S.C. § 4358 and 39 U.S.C. § 4359, and by the Postal Service's long-standing interpretation of those statutes.

First, while the present language of 39 U.S.C. § 4352(a)⁶ suggests, but does not make explicit, that a distinction is made between original and additional second class entry permits, the predecessor statute was more emphatic:

"Each application for entry of a publication as second-class matter shall be accompanied with a fee of $100. . . ., and each request for additional entry of a publication as second-class matter shall be accompanied with a fee of $10; . . . ."⁷

The term "additional entry" necessarily connotes additions to the first, or original, entry and indicates a Congressional awareness of the distinction between the two. Second, 39 U.S.C. § 4359(a) and (b) sets forth the normal second class postage rates while 39 U.S.C. § 4358(b) provides the very favorable postage rates for publications admitted as second class mail when addressed for delivery within the county where they are published and entered, the so-called "in county" rate. However, § 4358(k), added in 1967, limits the "in county" second class postage rate as follows:

"The rates of postage prescribed by subsections (a) and (b) of this section shall apply only to mailings within the county in which the publications have original entry." (Emphasis supplied).

The fact that Congress established a most favorable second class mailing rate for publications mailed to addresses within the county in which published and entered and then limited the application of that favorable rate "to mailings within the county in which the publications have original entry" infers a Congressional intent to limit a single publication to one original second class entry permit regardless of the number of printing locations. Otherwise, the publisher of a single publication eligible for second class mailing rates would apply for and receive an original second class entry permit for each printing facility which would entitle it to the "in county" rate at each location. This would nullify the limitation expressed in § 4358(k). This Court will not assume that Congress added subsection (k) in 1967 intending that its application could be so easily avoided. Therefore the Court concludes that the intent of Congress was to limit a single publication to one original second class entry permit.

Third, long standing interpretations of the statutes by the Postal Service have made clear that a single publication may receive only one original entry permit. The first edition of the Code of Federal Regulations contained the following Postal Regulation:

"When a publisher of a publication entered as second-class matter at any post office desires an additional entry at another post office, an application for such additional entry shall be submitted to the postmaster at the office of original entry. . . . Such application shall show the approximate number and weight of the copies to be mailed at the office at which additional entry is sought and the territory to be served from such office. . . . All copies for delivery at the office of original entry shall be mailed at that office and all copies for delivery at the office of additional entry shall be mailed at the latter office, and postage paid thereon at the rate applicable to copies so mailed."

39 CFR § 5.30(b) (1938 Ed.). See also 39 CFR § 34.29(e) (1949 Ed.); 26 Federal Register 11543 (Dec. 6, 1961); 39 CFR § 132.3(c)(4) (1973 Ed.).

Thus the Postal Service has drawn and has continued to draw a distinction between original and additional second class entry permits for at least 35 years. Regulations of such long-standing effect have the implied acquiescence of Congress and have the effect of law, and should not be overturned absent cogent and persuasive reasons. United States v. Shreveport Grain & Elevator Co., 287 U.S. 77, 84, 53 S.Ct. 42, 77 L. Ed. 175 (1932); Helvering v. Winmill, 305 U.S. 79, 83, 59...