Air Courier Conference v. US Postal Service, Civ. A. No. 89-557-JRR.
| Citation | 762 F. Supp. 86 |
| Decision Date | 18 April 1991 |
| Docket Number | Civ. A. No. 89-557-JRR. |
| Parties | AIR COURIER CONFERENCE OF AMERICA/INTERNATIONAL COMMITTEE, International Express Carriers Conference, DHL Airways, Inc., Dworkin-Cosell Interair Courier Services, Inc., Federal Express Corp., Intertrade Courier International, Inc., TNT Skypak, Inc., and UPS Air Forwarding, Inc., Plaintiffs, v. UNITED STATES POSTAL SERVICE, Defendant. |
| Court | U.S. District Court — District of Delaware |
Arthur G. Connolly, Jr. and Arthur G. Connolly, III, Connolly Bove, Lodge & Hutz, Wilmington, Del., Robert L. Kendall, Jr., John E. McKeever and Susan Ginsburg, Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., for plaintiffs.
William C. Carpenter, U.S. Atty., D. Del., and Kent Jordan, Asst. U.S. Atty., Wilmington, Del., William T. Alvis and Eric P. Koetting, U.S. Postal Service, Washington, D.C., for defendant.
I am prepared to rule on the motions at this time.
The issue that has been presented by the motions is: Was the United States Postal Service ("Postal Service") within its statutory authority under 39 U.S.C. § 407(a) to establish and change its rates for On-Demand Express Mail International Service, or was the Postal Service required to submit such desired rate changes to the United States Postal Rate Commission ("Commission") for review and recommendations, pursuant to 39 U.S.C. §§ 3621 and 3622?
The Postal Service and Commission are the two agencies that administer the nation's postal system as established under the Postal Reorganization Act of 1970 which is codified as Title 39 of the United States Code. As the administering agencies under this enabling legislation, the interpretation of the Act by these agencies is due deference by the Court as long as the interpretation is not contrary to the express terms of the statute or a clear indication of legislative intent.
Both the Postal Service and Commission have interpreted the Act to provide that the Postal Service may establish rates for international mail without submitting the desired rate changes to the Commission pursuant to §§ 3621 and 3622 of the Act. Both agencies have found that the Commission does not have jurisdiction over the setting of international mail rates. This Court must afford deference to this interpretation of the Act by these agencies since it is not contradicted by clear legislative intent to the contrary.
For these reasons, the defendant Postal Service's motion to dismiss Count 1 of the complaint must be granted, and plaintiffs' motion for summary judgment in their favor on Count 1 must be denied. Count 1 demands that this Court enjoin defendant from continuing with the On-Demand Express Mail International Service at the rate announced on April 25, 1989, until defendant receives a recommendation decision from the Commission pursuant to 39 U.S.C. §§ 3621 through 3641. In contrast, Count 2 of the complaint, which is not addressed by the present motions of the parties, requests this Court to decide whether the challenged rate is appropriate and non-discriminatory.
The Postal Reorganization Act of 1970 created the Postal Service as an independent establishment within the executive branch of the federal government. The Act also created the Postal Rate Commission as a second regulatory body within the postal system. The Commission's role, at least in regard to the setting of rates for domestic mail, is essentially to provide a check on the aggressive financial management of the Postal Service by the Postmaster General and Board of Governors who are charged under the Act with the duty of creating and maintaining a financially self-sustaining Postal Service.
Congress sought through the Reorganization Act to remove a large measure of the political influence and bureaucracy that had severely inhibited the efficient administration of the nation's postal system by establishing the Postal Service as a more aggressive and effective agency for managing the postal system than was the former Post Office Department before the Reorganization Act. Section 3621 of the Act dictates that the Postal Service should be financially self-sustaining, rather than dependent to a great extent upon Congressional appropriations as had the Post Office Department been before the Reorganization. The Act removed congressional oversight of rate setting as part of this streamlining of the postal system. In place of Congress' former role in reviewing the details of the Postal Service's rate setting, the Act established the Postal Rate Commission to provide a check on possibly over-aggressive financial management by the Postal Service. See, e.g., National Ass'n of Greeting Card Publishers v. United States Postal Serv., 462 U.S. 810, 822-23, 103 S.Ct. 2717, 2726, 77 L.Ed.2d 195 (1983).
Under § 3622, the Commission makes recommendations to the Postal Service of rate changes that are warranted in view of the costs of each type of mail service that the Postal Service provides. At least in regard to domestic rate-setting, the Commission thus provides a check against the danger that the Postal Service might succumb to the temptation of solving their revenue short-falls by raising the rates disproportionately for those classes of mail over which the Postal Service enjoys a statutory monopoly. The Commission provides a check against the similar danger that the Postal Service might succumb to the temptation to undertake predatory pricing for domestic mail classes for which the Postal Service must compete with private courier services. See, e.g., National Ass'n of Greeting Card Publishers, 462 U.S. at 823-24, 103 S.Ct. at 2726-27.
This Court must give deference to the interpretation of the Act's provisions by the Postal Service and the Commission, as the agencies charged with administration of the postal system under the Act, unless their interpretation is contrary to the express terms of the Act or would frustrate Congress' intended objectives of the legislation. See, e.g., National Ass'n of Greeting Card Publishers, 462 U.S. at 820-21, 103 S.Ct. at 2725; Newsweek, Inc. v. United States Postal Serv., 663 F.2d 1186, 1196-97 (2d Cir.1981). This due deference is underscored in this case first by the fact that officials of the Postal Department participated in the drafting of the Reorganization Act, see Miller v. Youakim, 440 U.S. 125, 144, 99 S.Ct. 957, 968, 59 L.Ed.2d 194 (1979), and, second, by the unusual circumstance of having two agencies with expertise under the Act that have expressed the same interpretation regarding the scope of § 407(a). See Clarkson Constr. Co. v. Occupational Safety and Health Review Comm'n, 531 F.2d 451, 457 (10th Cir.1976).
Both the Postal Service and the Commission interpret the Act as permitting the Postal Service to set rates for international mail pursuant to § 407(a) of the Act, without utilizing the Commission's review and recommendation procedures set out in §§ 3621 and 3622.
Section 407(a) set forth the Postal Service's authority to enter into international postal agreements and set rates for international mail:
The Postal Service, with the consent of the President, may negotiate and conclude postal treaties and conventions, and may establish the rates of postage or other charges on mail matter conveyed between the United States and other countries. The decisions of the Postal Service construing or interpreting the provisions of any treaty or convention which has been or may be negotiated and concluded shall, if approved by the President, be conclusive upon all officers of the Government of the United States.
39 U.S.C. § 407(a). Section 3621 addresses the Postal Service's authority to establish rates and classes for the mails:
Except as otherwise provided, the Governors of the Postal Service are authorized to establish reasonable and equitable classes of mail and reasonable and equitable rates of postage and fees for postal services in accordance with the provisions of this chapter of Title 39, comprised of §§ 3601-3685.
39 U.S.C. § 3621. Section 3622(a) describes the procedure by which the Postal Service shall request the Commission to provide recommendations for changes in rates or classes of the mails, and § 3622(b) describes the factors the Commission should consider in formulating its recommendations.
The Postal Service interprets these sections of the Act as providing that the Postal Service may set and change rates for international mail under § 407(a), without requesting a recommendation regarding such rates from the Commission pursuant to §§ 3621 and 3622. The Postal Service's position is that this interpretation of the Act is evident from a plain-meaning reading of the terms of §§ 407(a) and 3621. Section 3621's phrase "except as otherwise provided" is viewed by the Postal Service to embrace any pertinent provision within the Act concerning rate-setting authority, and thus as excepting the Postal Service's international rate-making authority under § 407(a) from the Commission review procedures set out in §§ 3601 through 3685, which comprise the "chapter" referred to in § 3621.
The Commission has interpreted the Act in the same manner as the Postal Service. The Commission has stated that:
... Rates of postage and other charges on mail matter conveyed between the United States and other countries are determined through postal treaties or conventions negotiated by the Service with the consent of the President. These services are thus beyond the Commission's jurisdiction. See 39 U.S.C. § 407.
Postal Rate Commission Opinion and Recommended Decision, Docket No. R76-1, App. F at 17 ().
In another Opinion and Recommended Decision, the Commission distinguished between mail services for the military, which are part of the domestic postal system, and international mail, which the Commission deemed to be governed by § 407(a). The Commission described § 407(a) as a provision which "requires the approval of the...
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Air Courier Conference of America/International Committee v. U.S. Postal Service
...to dismiss count one and denied plaintiffs' motion for summary judgment on that count. See Air Courier Conference of Am./Int'l Comm. v. United States Postal Serv., 762 F.Supp. 86, 92 (D.Del.1991). In its ruling in favor of the Postal Service, the district court deferred to the Postal Servic......