National Ass'n of Greeting Card Publishers v. U.S. Postal Service

• Decision Date: 28 December 1976
• Docket Number: 75-2228 and 75-2238,75-1857,75-2227,Nos. 75-1856,s. 75-1856
• Citation: 569 F.2d 570,186 U.S.App.D.C. 331
• Parties: NATIONAL ASSOCIATION OF GREETING CARD PUBLISHERS, Appellant, v. The UNITED STATES POSTAL SERVICE, Appellee, United Parcel Service of America, Inc., et al., Intervenors. NATIONAL ASSOCIATION OF GREETING CARD PUBLISHERS, Petitioner, v. UNITED STATES POSTAL SERVICE, Respondent, United Parcel Service of America, Inc., et al., Intervenors. ASSOCIATED THIRD CLASS MAIL USERS and National Easter Seal Society for Crippled Children and Adults v. UNITED STATES POSTAL SERVICE, Appellant, Postal Rate Commission et al., Intervenors. STATE OF MAINE et al., Appellants, v. UNITED STATES POSTAL SERVICE, Appellee. District of Columbia Circuit
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 570

569 F.2d 570

186 U.S.App.D.C. 331

NATIONAL ASSOCIATION OF GREETING CARD PUBLISHERS, Appellant, v. The UNITED STATES POSTAL SERVICE, Appellee, United Parcel Service of America, Inc., et al., Intervenors.

NATIONAL ASSOCIATION OF GREETING CARD PUBLISHERS, Petitioner, v. UNITED STATES POSTAL SERVICE, Respondent, United Parcel Service of America, Inc., et al., Intervenors.

ASSOCIATED THIRD CLASS MAIL USERS and National Easter Seal

Society for Crippled Children and Adults v. UNITED STATES POSTAL SERVICE, Appellant, Postal Rate Commission et al., Intervenors.

STATE OF MAINE et al., Appellants, v. UNITED STATES POSTAL SERVICE, Appellee.

Nos. 75-1856, 75-1857, 75-2227, 75-2228 and 75-2238.

United States Court of Appeals,District of Columbia Circuit.

Argued Feb. 20, 1976.

Decided Dec. 28, 1976.

Judgment Vacated in Nos. 75-2227 and 75-2228 Oct. 11, 1977.

See 98 S.Ct. 253.

Matthew S. Perlman, Washington, D. C., with whom Douglas G. Green, Washington, D. C., was on the brief for appellant in No. 75-1856 and petitioner in No. 75-1857.

James R. Adams, Asst. Atty. Gen., Commonwealth of Massachusetts, Boston, Mass., with whom Francis X. Bellotti, Atty. Gen., Commonwealth of Massachusetts, Boston, Mass., was on the brief for appellants in No. 75-2238, also filed a brief as amici curiae in Nos. 75-1856 and 75-1857.

James H. Finch, Jr., Associate Gen. Counsel, U. S. Postal Service, and Ronald R. Glancz, Atty., Civ. Div., Appellate Section U. S. Dept. of Justice, Washington, D. C., with whom Rex E. Lee, Asst. Atty. Gen., Louis A. Cox, Gen. Counsel, U. S. Postal Service, Earl J. Silbert, U. S. Atty., and John L. DeWeerdt, Atty., U. S. Postal Service and Paul M. Tschirhart, Asst. U. S. Atty., Washington, D. C., were on the brief for appellee in Nos. 75-1856 and 75-2238 and respondent in No. 75-1857. Neil H. Koslowe, Atty., Civ. Div., Appellate Section, Dept. of Justice, Washington, D. C., was on the brief for appellants in Nos. 75-2227 and 75-2228. Donald J. Engleman, Atty., U. S. Postal Service, and Thomas G. Wilson, Atty., Dept. of Justice, Washington, D. C., entered appearances for appellee in No. 75-1856 and respondent in No. 75-1857. Eugene R. Sullivan, Atty., Dept. of Justice, and Paul M. Tschirhart, Asst. U. S. Atty., Washington, D. C., also entered appearances for appellants in Nos. 75-2227 and 75-2228.

J. Edward Day, Washington, D. C., with whom William F. Taylor, Washington, D. C., was on the brief, for appellee, Associated Third Class Mail Users. William D. Kramer, Washington, D. C., also entered an appearance for appellee, Associated Third Class Mail Users. J. Edward Day, Washington, D. C., entered an appearance for Associated Third Class Mail Users in No. 75-1856.

Nicholas S. McConnell, with whom Kenneth Wells Parkinson, Washington, D. C., was on the brief, for appellee National Easter Seal Society for Crippled Children and Adults.

David M. Kendall, Jr., First Asst. Atty. Gen., State of Texas and William C. Bednar, Jr., Asst. Atty. Gen., State of Texas, Austin, Tex., were on the brief for appellant in No. 75-2238.

Bernard G. Segal, Robert L. Kendall, Jr., Philadelphia, Pa., and Frederick C. Belen, Washington, D. C., were on the brief for intervenor, United Parcel Service of America, Inc.

Robert A. Saltzstein and William L. Fallon, Washington, D. C., were on the brief for intervenor, American Business Press, Inc.

William G. Mullen, Washington, D. C., was on the brief for intervenor National Newspaper Association.

Richard M. Schmidt, Jr., and Ian D. Volner, Washington, D. C., entered appearances for intervenor, Association of American Publishers.

Daniel B. Jordan, Washington, D. C., filed a brief on behalf of American Postal Workers as amicus curiae urging affirmance in Nos. 75-2227 and 75-2228.

David C. Todd, Washington, D. C., entered an appearance for intervenor Parcel Post Association.

Before BAZELON, Chief Judge, ROBINSON and MacKINNON, Circuit Judges.

Opinion PER CURIAM.

Concurring Opinion filed by Circuit Judge MacKINNON.

PER CURIAM:

These three cases, consolidated for consideration on the merits, raise a full range of substantive and procedural challenges to a series of orders of the United States Postal Service ("Postal Service" or "USPS") issued pursuant to the Postal Reorganization Act of 1970 ("Act"), 39 U.S.C. § 101 et seq., for the purpose of implementing certain increases in postal rates and fees, either temporarily or on a permanent basis. ¹ In Nos. 75-1856, 75-1857 the National Association of Greeting Card Publishers ("NAGCP") case we review the permanent rates that were in effect from September to December, 1975. In Nos. 75-2227, 75-2228 and No. 75-2238 the Associated Third Class Mail Users ("ATCMU") and State of Maine cases, respectively we review the temporary rates that were in effect from December, 1975 to July 18, 1976. Viewed together these cases prompt us not only to decide the individual merits of each claim but also to consider the Postal Service's overall progress to date in adapting to the Act's special, and quite demanding, ratemaking requirements. We bring to this task our prior experience in interpreting the complex procedures by which postal rates and fees are set under the Act. ²

I. BACKGROUND

While each case before us offers its own unique theory for invalidating the rates or fees it challenges, all three cases require an understanding of the ratemaking procedure prescribed in the Act.

A. Legislative Requirements

Briefly put the Act created the Postal Service, "an independent establishment of the executive branch of the Government of the United States," ³ which is directed by an eleven member Board of Governors ("Board") composed as follows: nine presidentially appointed "Governors"; the Postmaster General, who is the "chief executive officer of the Postal Service" ⁴ and is appointed by the Governors; and the Deputy Postmaster General, who is appointed by the Governors and the Postmaster General. ⁵ Some powers are conferred on the Governors as distinct from the Board. ⁶ The Act also created the independent, five member Postal Rate Commission ("Commission") which is charged with submitting to the Governors, upon request, "recommended decision(s) on changes in a rate or rates of postage or in a fee or fees for postal services." ⁷

The ratemaking procedure prescribed by the Act may be summarized as follows. The Postal Service submits to the Commission a formal request for new rates or fees, which request may be accompanied by suggestions for rate adjustments which the Postal Service deems suitable. ⁸ The Commission must provide an opportunity for a hearing on the record and, at the conclusion of this proceeding, must transmit its recommended decision to the Governors. ⁹ The Governors then may approve the decision and order it into effect, or allow it to take effect under protest while seeking judicial review or Commission reconsideration, or reject it and have the Postal Service resubmit the request for reconsideration and a further recommended decision in which event the further recommended decision may, under limited circumstances, be modified by the Governors and put into effect as modified. ¹⁰ An aggrieved party who appeared in the Commission proceedings may appeal the "decision of the Governors to approve, allow under protest, or modify the recommended decision," and the reviewing court "may affirm the decision or order that the entire matter be returned for further consideration, but the court may not modify the decision." ¹¹

To avoid any prolonged disruption to the Postal Service's financial integrity which compliance with this elaborate procedure might cause, the Act also provides for the implementation of temporary increases in rates or fees. If the Commission "does not transmit to the Governors within 90 days after the Postal Service has submitted, or within 30 days after the Postal Service has resubmitted, to the Commission a request for a recommended decision . . . the Postal Service, upon 10 days' notice in the Federal Register, may place into effect temporary changes in rates of postage (or) in fees for postal service." ¹² A temporary rate or fee, however,

may not exceed the lesser of (1) the rate or fee requested for such class or service, or (2) a rate or fee which is more than one-third greater than the permanent rate or fee in effect for that class or service at the time a permanent change in the rate or fee of such class or service is requested under section 3622 of this title. ¹³

In addition, if upon judicial review of a decision of the Governors on permanent rates, taken pursuant to 39 U.S.C. § 3628, the court "orders a matter returned to the Commission for further consideration, the Postal Service, with the consent of the Commission, may place into effect temporary (rates or fees)." ¹⁴ Finally, judicial review of temporary rates or fees may be sought in the district court. ¹⁵

B. Prior Ratemaking Proceedings

To date three ratemaking proceedings have been initiated under the Act. The first proceeding (docket no. R71-1), which may be identified by its establishment of permanent 8 cent first class rates, began when the Postal Service submitted a request on February 1, 1971. Temporary rates were put into effect May 16, 1971, and on June 29, 1972, the Governors approved the Commission's recommended decision and ordered permanent rates put into effect. On appeal pursuant to 39 U.S.C. § 3628 this Court affirmed the Governor's order. Association of American Publishers, Inc. v. Governors of the United States Postal Service, 157 U.S.App.D.C. 397, 485 F.2d 768 (1973) (hereafter cited as American Publishers ).

The second proceeding (docket no. R74-1) established 10 cent first class rates. It was initiated with a request on September 25, 1973; temporary rates were put into effect March 2, 1974; and permanent rates were ordered September 4, 1975, after nearly two years of Commission proceedings. The NAGCP case seeks judicial review of this...