ASCOM Hasler Mailing Sys., Inc. v. U.S. Postal Serv.

• Decision Date: 14 August 2012
• Docket Number: Civil Action Nos. 00–1401 (PLF), 00–2089(PLF).
• Citation: 885 F.Supp.2d 156
• Parties: ASCOM HASLER MAILING SYSTEMS, INC., Plaintiff, v. UNITED STATES POSTAL SERVICE, Defendant. Neopost, Inc., Plaintiff, v. United States Postal Service, Defendant.
• Court: U.S. District Court — District of Columbia

885 F.Supp.2d 156

ASCOM HASLER MAILING SYSTEMS, INC., Plaintiff,

v.UNITED STATES POSTAL SERVICE, Defendant.

Neopost, Inc., Plaintiff,

v.United States Postal Service, Defendant.

Civil Action Nos. 00–1401 (PLF), 00–2089(PLF).

United States District Court, District of Columbia.

Aug. 14, 2012.

Michelle Loser Schaefer, Benjamin S. Boyd, DLA Piper U.S. LLP, Syma Mirza, Quarles & Brady LLP, Washington, DC, for Plaintiff.

Carl Ezekiel Ross, Darrell C. Valdez, U.S. Attorney's Office, Washington, DC, for Defendant.

OPINION, FINDINGS OF FACT, AND CONCLUSIONS OF LAW

PAUL L. FRIEDMAN, District Judge.

+-----------------+
                ¦TABLE OF CONTENTS¦
                +-----------------¦
                ¦                 ¦
                +-----------------+
                

+-------------------------------------------------------------------+
                ¦Section                                                     ¦Page  ¦
                +------------------------------------------------------------+------¦
                ¦                                                            ¦      ¦
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+-------------------------------------------------------------------+
                ¦I.  ¦INTRODUCTION                                           ¦161   ¦
                +----+-------------------------------------------------------+------¦
                ¦    ¦                                                       ¦      ¦
                +----+-------------------------------------------------------+------¦
                ¦II. ¦BACKGROUND                                             ¦161   ¦
                +----+-------------------------------------------------------+------¦
                ¦    ¦                                                       ¦      ¦
                +----+-------------------------------------------------------+------¦
                ¦III.¦FINDINGS OF FACT                                       ¦164   ¦
                +-------------------------------------------------------------------+
                

+------------------------------------------+
                ¦  ¦A.¦General Witness Background     ¦164 ¦
                +------------------------------------------+
                

+----------------------------------------------------+
                ¦   ¦   ¦1.¦Plaintiffs' Witnesses               ¦164 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦2.¦USPS' Witnesses                     ¦166 ¦
                +----------------------------------------------------+
                

+----------------------------------------------------------------------------+
                ¦    ¦B.  ¦Pitney Bowes, CMRS, and USPS                              ¦167    ¦
                +----+----+----------------------------------------------------------+-------¦
                ¦    ¦C.  ¦The 1979 CMRS Regulations                                 ¦169    ¦
                +----+----+----------------------------------------------------------+-------¦
                ¦    ¦D.  ¦Neopost, CMRS, and USPS                                   ¦169    ¦
                +----+----+----------------------------------------------------------+-------¦
                ¦    ¦E.  ¦Ascom, CMRS, and USPS                                     ¦171    ¦
                +----+----+----------------------------------------------------------+-------¦
                ¦    ¦F.  ¦The Job Duties of Frederick W. Ganley, Jr. and Francis    ¦173    ¦
                ¦    ¦    ¦Eugene Gardner                                            ¦       ¦
                +----+----+----------------------------------------------------------+-------¦
                ¦    ¦G.  ¦The 1995 CMRS Regulations                                 ¦174    ¦
                +----------------------------------------------------------------------------+
                

+----------------------------------------------------+
                ¦   ¦   ¦1.¦Promulgation and Effect             ¦174 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦2.¦Motivation for the Changes          ¦175 ¦
                +----------------------------------------------------+
                

+-----------------------------------------------------+
                ¦   ¦   ¦  ¦a.¦Cash Management                   ¦175 ¦
                +---+---+--+--+----------------------------------+----¦
                ¦   ¦   ¦  ¦b.¦Customer Service and Security     ¦176 ¦
                +-----------------------------------------------------+
                

+---------------------------------------------------------+
                ¦   ¦H. ¦Implementation of the 1995 CMRS Regulations¦177  ¦
                +---------------------------------------------------------+
                

+----------------------------------------------------+
                ¦   ¦   ¦1.¦Neopost Goes First                  ¦177 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦2.¦Ascom Follows Neopost               ¦179 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦3.¦Pitney Bowes Goes Last              ¦180 ¦
                +----------------------------------------------------+
                

+------------------------------------------------------------------------+
                ¦    ¦I.  ¦I. Lawsuit and Settlement Between Pitney Bowes and USPS¦180   ¦
                +----+----+-------------------------------------------------------+------¦
                ¦    ¦J.  ¦Damages                                                ¦180   ¦
                +------------------------------------------------------------------------+
                

+---------------------------------------------------+
                ¦   ¦                                          ¦    ¦
                +---+------------------------------------------+----¦
                ¦IV.¦CONCLUSIONS OF LAW                        ¦181 ¦
                +---------------------------------------------------+
                

+------------------------------------------+
                ¦  ¦A.¦Standard of Proof              ¦181 ¦
                +--+--+-------------------------------+----¦
                ¦  ¦B.¦Contract Claims (Count III)    ¦181 ¦
                +------------------------------------------+
                

+----------------------------------------------------------------------------+
                ¦    ¦    ¦1. ¦Alleged Oral or Implied–in–Fact Contract Between      ¦182    ¦
                ¦    ¦    ¦   ¦Neopost and USPS Regarding Interest Income            ¦       ¦
                +----+----+---+------------------------------------------------------+-------¦
                ¦    ¦    ¦2. ¦Alleged Implied–in–Fact Contract Between Ascom and    ¦186    ¦
                ¦    ¦    ¦   ¦USPS Regarding Interest Income                        ¦       ¦
                +----+----+---+------------------------------------------------------+-------¦
                ¦    ¦    ¦3. ¦Alleged Oral Contract Between Neopost and USPS for    ¦186    ¦
                ¦    ¦    ¦   ¦Implementing the 1995 CMRS Regulatory Changes         ¦       ¦
                +----------------------------------------------------------------------------+
                

+----------------------------------------------------------------------------+
                ¦    ¦C.  ¦Contract Implied–in–Law Claims (Counts II, III in Part,   ¦187    ¦
                ¦    ¦    ¦VI, and VIII)                                             ¦       ¦
                +----------------------------------------------------------------------------+
                

+----------------------------------------------------------------------------+
                ¦    ¦    ¦   ¦Unjust Enrichment and Quantum Meruit   Under a        ¦       ¦
                ¦    ¦    ¦1. ¦Quasi–Contract Theory (Counts II, III in Part, and    ¦188    ¦
                ¦    ¦    ¦   ¦VIII)                                                 ¦       ¦
                +----------------------------------------------------------------------------+
                

+----------------------------------------------------------------------------+
                ¦    ¦    ¦   ¦a. ¦Development of CMRS—Neopost and Ascom             ¦188    ¦
                +----+----+---+---+--------------------------------------------------+-------¦
                ¦    ¦    ¦   ¦b. ¦Implementation of the 1995 CMRS                   ¦189    ¦
                ¦    ¦    ¦   ¦   ¦Regulations—Neopost Only                          ¦       ¦
                +----------------------------------------------------------------------------+
                

+----------------------------------------------------+
                ¦   ¦   ¦2.¦Promissory Estoppel (Count VI)      ¦189 ¦
                +----------------------------------------------------+
                

+----------------------------------------------------------------------------+
                ¦    ¦    ¦   ¦a. ¦Development of CMRS—Neopost and Ascom             ¦190    ¦
                +----+----+---+---+--------------------------------------------------+-------¦
                ¦    ¦    ¦   ¦b. ¦Implementation of the 1995 CMRS                   ¦192    ¦
                ¦    ¦    ¦   ¦   ¦Regulations—Neopost Only                          ¦       ¦
                +----------------------------------------------------------------------------+
                

+------------------------------------------+
                ¦  ¦D.¦Takings Claims (Count I)       ¦192 ¦
                +------------------------------------------+
                

+-----------------------------------+
                ¦  ¦                            ¦   ¦
                +--+----------------------------+---¦
                ¦V.¦CONCLUSION                  ¦198¦
                +-----------------------------------+
                

I. INTRODUCTION

These consolidated cases came before the Court for a five-day bench trial on plaintiffs' contractual, equitable, and constitutional claims against defendant, the United States Postal Service (“USPS”), arising out of USPS' alleged arrogation of certain interest income that plaintiffs contend rightfully belonged to them. Upon consideration of the evidence presented at trial, the parties' proposed findings of fact and conclusions of law, and the relevant legal authorities, the Court now issues its Findings of Fact and Conclusions of Law in accordance with Rule 52 of the Federal Rules of Civil Procedure.

II. BACKGROUND

The Court previously has described the background of these consolidated cases. See Ascom Hasler Mailing Sys., Inc. v. USPS, 815 F.Supp.2d 148, 151–55 (D.D.C.2011); see also Memorandum Op. & Order at 1–3, Dec. 2, 2011 [Dkt. No. 199].¹ It therefore will limit its discussion accordingly.

In the 1970s, Pitney Bowes, Inc. invented and patented a Computerized Remote Meter Resetting System (“CMRS”) that it marketed under the name “Postage by Phone.” Joint Stipulation of Facts ¶ 1, Mar. 5, 2012 [Dkt. No. 215–1]. CMRS permits postal service customers to use their phones to purchase more postage without having to take their postage meter to the post office to have it reset. Id. ¶ 2. In 1978, USPS and Pitney Bowes entered into a Statement of Understanding that gave Pitney Bowes the right to operate its new CMRS. Ascom Hasler Mailing Sys., Inc. v. USPS, 815 F.Supp.2d at 151. And on April 9, 1979, by publication in the Federal Register, USPS promulgated regulations governing the operation of CMRS for all meter manufacturers. See Joint Stipulation of Facts ¶ 8.

In the 1980s, plain...