U.S. Postal Serv. v. Postal Regulatory Comm'n
| Decision Date | 30 June 2020 |
| Docket Number | No. 19-1155,19-1155 |
| Citation | 963 F.3d 137 |
| Parties | UNITED STATES POSTAL SERVICE, Petitioner v. POSTAL REGULATORY COMMISSION, Respondent Association for Postal Commerce, Intervenor |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Stephan J. Boardman, Attorney, United States Postal Service, argued the cause for petitioner. On the briefs were Redding C. Cates and Morgan E. Rehrig, Attorneys. David C. Belt entered an appearance.
Dennis Fan, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were Daniel Tenny, Attorney, David A. Trissell, General Counsel, Postal Regulatory Commission, Anne J. Siarnacki, Deputy General Counsel, and Lauren A. D'Agostino, Attorney.
Matthew D. Field and Ian D. Volner, Washington, DC, were on the brief for intervenor Association for Postal Commerce in support of respondent.
Daryl L. Joseffer, Michael B. Schon, and Ashley C. Parrish, Washington, DC, were on the brief for amicus curiae Chamber of Commerce of the United States of America in support of respondent.
Before: Rogers, Griffith, and Rao, Circuit Judges.
When foreigners send mail to the United States by "Inbound Letter Post," they pay their local postal carrier, who bears the cost of delivering that mail to our shores. Inside the country, the Postal Service takes over. Although foreign carriers pay dues to the Postal Service to defray the cost of delivery, those dues—which were previously set largely by the Universal Postal Union (UPU), a component of the United Nations—have long undercompensated the Postal Service to the tune of hundreds of millions of dollars per year. Periodic Reporting Requirements, 83 Fed. Reg. 33,879, 33,883 (July 18, 2018). The Postal Regulatory Commission, which oversees the Postal Service's ratemaking, ordered disclosure of certain financial data related to Inbound Letter Post. The Commission hoped to facilitate public participation in discussions of possible reforms and to help the public understand why Inbound Letter Post was so unprofitable. Seeking to keep that data confidential, the Postal Service petitioned for review. Because we hold that the Commission reasonably ordered disclosure, we deny the petition.
The Postal Accountability and Enhancement Act requires the Postal Service to submit an annual compliance report to the Commission. 39 U.S.C. § 3652. The Postal Service may designate information in this report as confidential, id. §§ 410(c)(2), 3652(f)(1), and it bears the "burden of persuasion" that such materials "should be withheld" from the public, 39 C.F.R. § 3007.201(a). In deciding whether the Postal Service has met this burden, the Commission must "balance the nature and extent of the likely commercial injury to the Postal Service against the public interest in maintaining the financial transparency of a government establishment competing in commercial markets." 39 U.S.C. § 504(g)(3)(A).
After reviewing the Postal Service's 2018 compliance report, the Commission voted to disclose revenue, volume, cost, and contribution data for Inbound Letter Post. The Commission reasoned that the public had a "vital" interest in disclosure because Inbound Letter Post "threaten[ed] the financial integrity of the Postal Service." J.A. 649, 651. If foreign mailers didn't pay their fair share, the Postal Service would need to charge domestic mailers more or cannibalize profits from other ventures to make up the difference. Moreover, artificially low rates for Inbound Letter Post "distort[ed] competition" from domestic shipping companies. J.A. 625. Finally, releasing the data would facilitate public participation in discussions over how best to reform the payment structure for Inbound Letter Post. At the time, the UPU set the default rates that applied in the absence of any superseding international agreement. Because the UPU's rates failed to compensate the Postal Service, the President had announced that the United States would withdraw from the UPU unless the UPU allowed it to set its own rates.
As to commercial harm, the Commission asserted that the Postal Service had failed to "explain how competitors, suppliers, or anyone else would be able" to use the data "to identify opportunities to divert business from or extract more favorable terms in negotiations with the Postal Service." J.A. 664. Specifically, the Postal Service "[did] not explain how the aggregated historical data would be useful for a competitor in the rapidly evolving market." J.A. 669. And there were "too many unknown variables" for the data to help with "target[ing] specific customers or markets." Id. Finally, since the data was aggregated by the UPU's four country groups, it did not reveal country-specific information and thus would not be particularly useful to foreign nations negotiating with the United States for rates other than the UPU's default rates.
Two of the five Commissioners concurred in part and dissented in part. They would have disclosed revenue and volume data only, not cost and contribution data, fearing that competitors could use the latter to "undercut the Postal Service in pricing and service offerings" and that foreign nations could leverage this data to gain the upper hand in negotiations, especially if the United States left the UPU. J.A. 694. However, that "worst case scenario," J.A. 695, did not come to pass because after the Commission voted to disclose the data at issue in this case, the UPU agreed to let the United States set rates for "bulky" letters and small parcels weighing up to two kilograms, see Universal Postal Convention art. 28b (2019).
The Postal Service petitioned for review, and the Commission stayed release of the data pending our disposition. The Postal Service argues that the Commission misinterpreted the statutory balancing test and that its order was arbitrary and capricious. We have jurisdiction under 39 U.S.C. § 3663. We review the Commission's statutory interpretations under "the familiar standard of Chevron ," USPS v. Postal Regulatory Comm'n (USPS II ), 886 F.3d 1253, 1255 (D.C. Cir. 2018) (internal quotation marks omitted), and its orders under the Administrative Procedure Act, United Parcel Serv., Inc. v. Postal Regulatory Comm'n , 890 F.3d 1053, 1060-61 (D.C. Cir. 2018).
We deny the petition for review. The Postal Service's statutory argument hinges on a misreading of the Act, and its arguments that the Commission's decision was arbitrary and capricious fail to overcome the deference we owe to the Commission's reasoned decisions.
The Act directs the Commission to consider the "public interest in maintaining the financial transparency of a government establishment competing in commercial markets." 39 U.S.C. § 504(g)(3)(A). Conceding that the Commission's interpretation of the Act is entitled to Chevron deference, the Postal Service nonetheless finds that interpretation unreasonable. See Oral Arg. Tr. 4:14-14:18, 6:25-7:2. Specifically, the Postal Service argues that the phrase "government establishment competing in commercial markets" limits the Commission's consideration of the public interest to "protecting against competitive abuse of a statutory monopoly or of some other incident of governmental status." USPS Br. 20. We disagree.
No such limitation appears in the text of the statute, and as the Commission explained, financial losses to a government establishment such as the Postal Service burden the public. Surely, the public has an interest in understanding why a government establishment is hemorrhaging hundreds of millions of dollars per year. After all, artificially low prices can distort domestic competition and result in Americans paying more than they should for other mail products.
Finding no support in the text, the Postal Service turns to the legislative history. Noting that a draft version of the Act did not include the phrase "competing in commercial markets," the Postal Service argues that its later insertion worked to narrow the Commission's consideration of the public interest. USPS Br. 21 . Perhaps, but it does not follow that Congress intended to cabin the "public interest" to nothing more than preventing government abuse . If it had intended such a significant limitation to the oft-invoked concept of "the public interest," Congress could have easily used those words. The Postal Service also points to a statement in the Senate Report that disclosure should not "serve as an unlimited opportunity to access any and all Postal Service data including that which may be, at best, tangentially-related to evaluating compliance with the rate and service provisions." S. REP. NO . 108-318, at 20 (2004). But the Postal Service does not suggest that the data in this case is merely "tangentially" related to compliance, because it cannot. The data is clearly related to the Act's directive that the Commission review the Postal Service's finances to ensure revenues cover costs. See 39 U.S.C. § 3622(b)(5), (c)(2) ; id. § 3633(a)(2). And if anything, the legislative history bolsters the Commission's understanding of the public interest. The Act "guarantees a higher degree of transparency" than prior legislation to "ensure fair treatment" of customers and competitors. USPS II , 886 F.3d at 1263 ; see also H.R. REP. NO . 109-66, pt. 1, at 46 ().
Shifting to prudential arguments, the Postal Service objects that under the Commission's view the "balance [will] always tilt toward disclosure," USPS Reply 7, preventing the Postal Service from competing with private carriers as Congress intended, USPS Br. 21 . We disagree. Even under the Commission's broader interpretation, a specific risk of commercial harm should...
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