Standard Rate & Data Service, Inc. v. U.S. Postal Service, No. 77-1848

• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)
• Writing for the Court: Before McGOWAN, TAMM and LEVENTHAL; Opinion for the court filed by TAMM; Concurring opinion filed by LEVENTHAL; TAMM; LEVENTHAL
• Citation: 584 F.2d 473,189 U.S.App.D.C. 315
• Parties: , 4 Media L. Rep. 1102 STANDARD RATE AND DATA SERVICE, INC., Appellant, v. UNITED STATES POSTAL SERVICE et al.
• Docket Number: No. 77-1848
• Decision Date: 14 July 1978

Page 473

584 F.2d 473 189 U.S.App.D.C. 315, 4 Media L. Rep. 1102 STANDARD RATE AND DATA SERVICE, INC., Appellant,
v.
UNITED STATES POSTAL SERVICE et al. No. 77-1848. United States Court of Appeals,
District of Columbia Circuit. Argued Feb. 27, 1978.
Decided July 14, 1978.

Timothy J. May, Washington, D. C., with whom David B. Robinson and John L. Oberdorfer, Washington, D. C., were on brief, for appellant.

Kenneth M. Raisler, Asst. U. S. Atty., Washington, D. C., with whom Earl J. Silbert, U. S. Atty. and John A. Terry, Peter E. George, William H. Briggs, Jr., Asst. U. S. Attys., Washington, D. C., were on brief, for appellees.

Roger A. Clark and George C. Smith, Washington, D. C., were on brief for amicus curiae, The Hearst Corporation, urging reversal.

Before McGOWAN, TAMM and LEVENTHAL, Circuit Judges.

Opinion for the court filed by TAMM, Circuit Judge.

Concurring opinion filed by LEVENTHAL, Circuit Judge.

TAMM, Circuit Judge:

Appellant, Standard Rate and Data Service, Inc. (SRDS), seeks review of a decision ¹ of the United States District Court for the District of Columbia upholding the revocation by the United States Postal Service (USPS) of the second-class mailing privileges of seven of appellant's publications.

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² We vacate the district court's grant of summary judgment, and remand with instructions to remand to USPS for further proceedings.

I. BACKGROUND

The district court stated that SRDS publications

present detailed information for prospective buyers of advertising in newspapers and magazines, or by radio and television. Data are presented under standardized headings in tabular form broken down by states, cities, towns, or other categories to aid the prospective buyer readily to determine rates, coverage, requirements for placement, and the like. The publications issue periodically and reflect expertise, care, and editorial analysis in their preparation. The tabulated material is accompanied by very brief editorial comment. Some advertising appears with the data. ³

The postal authorities granted the first SRDS publication entry into the second-class mails in 1919, and, between 1919 and 1970, granted SRDS publications or their predecessors a total of thirty-seven entries, additional entries, or reentries ⁴ into the second-class mails in twelve different years: 1919, 1922, 1931, 1943, 1951, 1952, 1954, 1956, 1960, 1966, 1967 and 1970. ⁵ On January 3, 1975, the Director of the Office of Mail Classification, Rates and Classification Department, USPS, informed SRDS that its second-class privileges were to be annulled because the publications were not "newspapers (or) other periodical publications." ⁶ We have not been directed to any record of a revocation or refusal to grant to SRDS the privileges of second-class entry on similar grounds prior to 1975. Thus, "(t) hese publications had long enjoyed (second-class) privileges, some for over fifty years." ⁷

SRDS contested the revocation action pursuant to the procedures of the Rules of Practice in Proceedings Relative to the Denial, Suspension, or Revocation of Second-Class Mail Privileges, 39 C.F.R. § 954 (1977). After an evidentiary hearing, an administrative law judge (ALJ) held against appellant, ⁸ finding that its publications do not contain "articles", and, therefore, are not "periodical publications" entitled to second-class mailing privileges. ⁹ SRDS appealed the Initial Decision. The judicial officer of USPS affirmed the ALJ. ¹⁰

Having lost at the administrative level, appellant filed suit in the district court seeking a declaration that its publications are "periodical publications" and an injunction reinstating the second-class entries of its publications. ¹¹ Both sides moved for summary judgment, and the district court granted the USPS motion. ¹² This appeal ensued.

II. THE LEGAL FRAMEWORK

In 1879, Congress provided for mailable matter to be divided into four classes. ¹³

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Second-class mail was to include "newspapers and other periodical publications." ¹⁴ This descriptive language existed for years, surviving a 1960 congressional revision in the law governing postal matters, ¹⁵ and was brought forward in statutory form until 1970 in 39 U.S.C. § 4351 (1964).

In 1970, Congress, in an effort to improve the postal system, passed the Postal Reorganization Act (Act), Pub.L.No.91-375, 84 Stat. 719 (codified at 39 U.S.C. §§ 101-5605 (1970 & Supp. V 1975) and in other scattered sections of United States Code ). Section 4351 was not reenacted into the statute, but, pursuant to the Act, ¹⁶ the language of section 4351 was carried forward in a regulation of the Postal Service, where it remains to date. ¹⁷

The leading case interpreting the term "periodical publication" is Houghton v. Payne, 194 U.S. 88, 24 S.Ct. 590, 48 L.Ed. 888 (1904). In that case, the Supreme Court ruled that books that were complete in themselves and had no connection between them were not "periodicals" entitled to second-class mailing privileges just because they issued periodically in a series and were numbered accordingly. 194 U.S. at 98-100, 24 S.Ct. at 593. In its opinion, the Court remarked:

(T)he publication must be a "periodical publication," which means, we think, that it shall not only have the feature of periodicity, but that it shall be a periodical in the ordinary meaning of the term. . . . A few other nondescript publications, such as railway guides, appearing at stated intervals, have been treated as periodicals and entitled to the privileges of

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second class mail matter. Payne v. Railway Pub. Co., 20 D.C.App. 581.

A periodical, as ordinarily understood, is a publication appearing at stated intervals, Each number of which contains a variety of original articles by different authors, devoted either to general literature of some special branch of learning or to a special class of subjects. Ordinarily each number is incomplete in itself, and indicates a relation with prior or subsequent numbers of the same series. It implies a continuity of literary character, a connection between the different numbers of the series in the nature of the articles appearing in them, whether they be successive chapters of the same story or novel or essays upon subjects pertaining to general literature. If, for instance, one number were devoted to law, another to medicine, another to religion, another to music, another to painting, etc., the publication could not be considered as a periodical, as there is no connection between the subjects and no literary continuity. ¹⁸

The issue in the case at bar concerns the effect of the "variety of original articles" phrase upon modern interpretation of the "periodical" requirement. More specifically, the issue is whether we may uphold the Postal Service's revocation of appellant's second-class mailing privileges when, in the administrative proceedings, it regarded the Houghton "variety of original articles" language as having established an immutable legal standard. ¹⁹ Thus, we must determine whether this language in Houghton established a legal standard binding in this proceeding requiring the presence of "articles," and, if not, whether we may uphold the Postal Service on a ground other than that upon which the administrative action was apparently predicated.

III. DISCUSSION

At the outset, we note that the scope of review is wider than the " clearly wrong . . . 'arbitrary,' 'capricious,' (or) 'an abuse of discretion' " test advanced by appellee from Dell Publishing Co. v. Day, 113 U.S.App.D.C. 1, 303 F.2d 766 (1962) (per curiam). Appellee fails to distinguish between a situation in which we are called

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upon to review a Postal Service determination that a particular publication does not meet an established set of criteria and one, as is presented by the case at bar, in which we are called upon to review a determination that certain criteria must be met to qualify for second-class mailing privileges. In departing from American Bible Society v. Blount, 446 F.2d 588, 596-98 (3d Cir. 1971), a case relied upon by appellee, the Third Circuit embraces a wider scope of review, when, as in this case, "the administrator's legal decision is based upon his interpretation of a judicial opinion that in turn construes a statute." Institute For Scientific Information, Inc. v. United States Postal Service, 555 F.2d 128, 132 (3d Cir. 1977). What is involved in this case is both the meaning and the effect of the language of a Supreme Court opinion. We agree with the Third Circuit that the resolution of this type of question does not require the same type and degree of deference to administrative discretion as was involved in American Bible Society v. Blount.

The fact that Houghton v. Payne does not establish a rule binding in this proceeding is evident from an examination of the text of Mr. Justice Brown's opinion in Houghton v. Payne, subsequent Supreme Court interpretation, subsequent lower court interpretation, and administrative practice.

Commencing our analysis with Houghton v. Payne itself, it is plain that the Supreme Court was making the distinction between periodicals and a series of books published periodically. In the words of Mr. Justice Brown, what was involved in Houghton was the "line of demarkation between periodicals and books." Houghton v. Payne, 194 U.S. at 97, 24 S.Ct. at 592. The limits of the "articles" language are fixed by its purpose. The Court was not called upon, nor did it intend, to give a definition of "periodical" binding for all time, for all future statutes and regulations, for all publications, for all circumstances, and, in giving a narrow definition to the issue, Id., it implicitly so recognized.

The very sentence containing the "variety of original articles" language, however insightful an observation it may contain, does not itself purport to be more than a mere observation. The sentence limits its own application by stating that "as ordinarily understood," a...