Anatol Zukerman & Charles Krause Reporting, LLC v. U.S. Postal Serv.

• Decision Date: 09 June 2020
• Docket Number: No. 19-5168,19-5168
• Citation: 961 F.3d 431
• Parties: Anatol ZUKERMAN and Charles Krause Reporting, LLC, A D.C. Limited Liability Company, Appellants v. UNITED STATES POSTAL SERVICE, Appellee
• Court: U.S. Court of Appeals — District of Columbia Circuit

961 F.3d 431

Anatol ZUKERMAN and Charles Krause Reporting, LLC, A D.C. Limited Liability Company, Appellants

v.UNITED STATES POSTAL SERVICE, Appellee

No. 19-5168

United States Court of Appeals, District of Columbia Circuit.

Argued February 7, 2020

Decided June 9, 2020

Daniel S. Guarnera, Washington, DC, argued the cause for appellants. With him on the briefs were K. Chris Todd and Geoffrey M. Klineberg, Washington, DC.

Joshua M. Salzman, Attorney, U.S. Department of Justice, argued the cause for appellee. With him on the brief was Daniel Tenny, Attorney.

Before: Griffith and Rao, Circuit Judges, and Edwards, Senior Circuit Judge.

Edwards, Senior Circuit Judge:

In 2015, Plaintiff-Appellants Anatol Zukerman and Charles Krause Reporting, LLC (together "Zukerman"), filed a complaint against the United States Postal Service ("USPS" or "Postal Service") contending that USPS's custom postage program violated the prohibition against viewpoint discrimination under the First Amendment. Zukerman's First Amended Complaint alleged that the Postal Service, through its vendor Zazzle, rejected his custom postage design because it was incompatible with the program's ban on "political" designs, even as it accepted other custom postage designs with obvious political content.

In 2018, as the parties were completing discovery and nearing summary judgment, the Postal Service adopted a new policy (the "2018 Rule") covering custom postage. The 2018 Rule deems custom postage designs acceptable only if they are "commercial" or "social" and exclude any content that is "political." In response to USPS's adoption of this new policy, Zukerman filed an unopposed Supplemental Complaint "incorporat[ing] by reference every allegation" from his First Amended Complaint and further alleging that the 2018 Rule is unconstitutional on its face. The District Court granted the Government's motion to dismiss Zukerman's viewpoint discrimination claim as moot and his challenge to the 2018 Rule for failure to state a claim. On appeal, the Government challenges our jurisdiction to address Zukerman's claims on the ground that they are moot. We disagree. Zukerman's Supplemental Complaint raises two challenges to the Postal Service's current policies covering custom postage and neither claim is moot.

First, Zukerman's Supplemental Complaint incorporates the allegation that he suffers "ongoing" viewpoint discrimination. The complaint alleges that, under the pre-2018 regime, the Postal Service discriminated in selecting certain political designs in the custom postage program. It alleges further that, under the 2018 Rule, the Postal Service now recognizes these already-printed designs as valid custom postage, even as Zukerman's political design is barred from the forum. This aspect of Zukerman's claim is not moot. The challenged conduct continues, its effects persist, relief is possible, and, therefore, the court has jurisdiction.

Second, in a recently filed letter to this court, the Postal Service asserted that it "has determined that the Customized Postage program should be terminated and has taken steps to effectuate that decision." USPS 28(j) Letter (May 4, 2020). The Postal Service claims that this development "bears directly on the continuing justiciability of" Zukerman's challenge to the 2018 Rule. Id. This remains to be seen. At this point, however, the Postal Service has not met its "heavy burden" of making it "absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur." Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc ., 528 U.S. 167, 189, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000). Any claim by the Postal Service that the termination of the custom postage program has "completely and irrevocably eradicated the effects" of the 2018 Rule can be addressed by the District Court on remand. County of Los Angeles v. Davis , 440 U.S. 625, 631, 99 S.Ct. 1379, 59 L.Ed.2d 642 (1979).

Because the District Court dismissed Zukerman's viewpoint discrimination claim as moot, it never reached the merits. We therefore remand this claim to be addressed by the District Court in the first instance. However, we reverse the District Court's dismissal of Zukerman's facial challenge to the 2018 Rule. The rule's blanket ban on "political" content fails the "objective, workable standards" test articulated by the Supreme Court in Minnesota Voters Alliance v. Mansky , ––– U.S. ––––, 138 S. Ct. 1876, 1891, 201 L.Ed.2d 201 (2018). Therefore, we hold that the contested rule is unconstitutional.

I. BACKGROUND

Because the District Court granted the Postal Service's motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), "we construe the complaint ‘liberally,’ granting [Zukerman] ‘the benefit of all inferences that can be derived from the facts alleged.’ " Barr v. Clinton , 370 F.3d 1196, 1199 (D.C. Cir. 2004) (quoting Kowal v. MCI Commc'ns Corp. , 16 F.3d 1271, 1276 (D.C. Cir. 1994) ). The facts recounted here are drawn from Zukerman's Supplemental Complaint, which "incorporate[s] by reference every allegation in [his] First Amended Complaint." Suppl. Compl. ¶ 1, Joint Appendix ("J.A.") 172.

A. The Postal Service's Custom Postage Program

Since about 2005, the Postal Service has offered its customers the opportunity to create customized postage. See Customized Postage, 70 Fed. Reg. 21,821 (Apr. 27, 2005) (continuing a trial program). The basic idea of custom postage is simple and (by now) familiar: You can navigate to a website of an authorized third-party vendor, upload a custom design including text or images, pay a fee, print your custom stamps – which are, strictly speaking, customized evidence of pre-payment, not stamps – and use them to send first class mail and other USPS products. For example, a couple might create a custom design based on their engagement photo and use the postage to send save-the-date cards.

From the outset, the Postal Service sought to use the custom postage program to generate revenue without entangling itself in controversy or exposing itself to legal liability. See, e.g. , Br. for Appellee at 4-6 (summarizing this history). To that end, the Postal Service has adopted policies to regulate the content that customers may include on their custom postage designs. In this case, Zukerman attempted to create custom postage based on his political artwork twice – first in 2015 under a now-superseded policy, and again in 2018 under still-current regulations.

1. The Postal Service's 2015 Policy

In 2015, the Postal Service established content requirements for custom postage by writing them into contracts with vendors. At the time, Zazzle was an authorized third-party vendor. According to a contract between Zazzle and the Postal Service, Zazzle agreed "to establish and maintain an image control process which will ensure that all images appearing in Customized Postage Products ... conform in every respect to the Statement of Purpose and Standardized Image Guidelines" attached to the contract. J.A. 125.

The Postal Service intended these Standardized Image Guidelines to "maintain neutrality on religious, social, political, legal, moral, [and] other public issues" and prevent the custom postage program from becoming a "public forum." J.A. 130. To that end, the Standardized Image Guidelines required Zazzle to reject any content, "regardless of the viewpoint expressed," that was "[p]artisan or political," including "content or images supporting or opposing election of any candidate(s) to any federal ... governmental office." J.A. 130-31.

Zazzle also developed its own content guidelines. See First Am. Compl. ¶¶ 14-16, J.A. 18-19. As a general matter, Zazzle prohibited "names of politicians[,] ... political statements," and any other content that "may be considered offensive or be controversial to others." Id. Ex. I, J.A. 67. For custom stamps in particular, Zazzle prohibited "any content ... that in [its] sole judgment and discretion [it] believe[d] would be controversial or offensive," including any designs that "[i]ncorporate a ... current or former ... politician" or "[a]dvocate or protest any social, political, legal, moral or religious agenda." Id. Ex. J, J.A. 73-74.

2. The Postal Service's 2018 Rule

In December 2017, the Postal Service finalized new regulations to "standardize and formalize [the] requirements" of the custom postage program, and these requirements took effect on May 15, 2018. See Customized Postage Products, 82 Fed. Reg. 60,117, 60,118 (Dec. 19, 2017) (codified at 39 C.F.R. § 501), J.A. 179, 180 ("2018 Rule"). The Postal Service explained that, under the old policy, "the inconsistency of publicly available provider content guidelines ... caused confusion over Customized Postage products." J.A. 180. To address that problem, the 2018 Rule prohibits authorized vendors from using any other eligibility criteria and requires them to make the Postal Service's criteria available to their customers. See 39 C.F.R. § 501.21(c)(1), (2)(i).

The 2018 Rule specifies that "[a]ny content not identified by the Eligibility Criteria is prohibited," id. § 501.21(b), and then sets forth the following requirements:

(1) Images or text must be "commercial" or "social," as defined below:

(i) Commercial means intended for no purpose other than the sale of goods or services in commerce.

(ii) Social means promoting or depicting people, animals, items, or events commonly associated with community relations or companionship and likely to generate invitations, announcements, notices, thank-you notes, RSVPs, or similar correspondence.

(2) Acceptable commercial or social images or text must not contain content that is unsuitable for all-ages audiences, including but not limited to:

....

(iii) Any depiction of political, religious, violent or sexual content ....

39 C.F.R. § 501.21(b)(1)(i)-(ii), (b)(2)(iii).

In sum, the 2018 Rule says that "if proposed content is not a commercial or social image that is suitable for all-ages audiences, it is...