United Parcel Serv. v. United States Postal Serv.

• Decision Date: 11 September 1979
• Docket Number: Civ. A. No. 79-644.
• Parties: UNITED PARCEL SERVICE, INC., et al. v. UNITED STATES POSTAL SERVICE.
• Court: U.S. District Court — Eastern District of Pennsylvania

475 F. Supp. 1158

UNITED PARCEL SERVICE, INC., et al. v. UNITED STATES POSTAL SERVICE.

Civ. A. No. 79-644.

United States District Court, E. D. Pennsylvania.

September 11, 1979.

George P. Williams, III, Robert L. Kendall, Jr., John E. McKeever, Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., for plaintiffs.

Peter F. Vaira, U.S. Atty., Alexander Ewing, Jr., Asst. U.S. Atty., Philadelphia, Pa., Frances G. Beck, Asst. Gen. Counsel, Frank R. Heselton, Jr., U.S. Postal Service, Washington, D. C., for defendant.

OPINION AND ORDER

EDWARD R. BECKER, District Judge.

The United States Postal Service has moved for dissolution of the preliminary injunction entered against it in this action on February 28, 1979. Because we find that the motion does not satisfy the prerequisite for relief under Fed.R.Civ.P. 62(c) and because the Postal Service's timely appeal from that injunction has divested this court of jurisdiction to relief other than that authorized by Rule 62(c), the motion will be denied.

On September 8, 1978, the Postal Service filed with the Postal Rate Commission a request for a recommended decision on certain proposed changes in the rates and classifications applicable to parcel post.¹ In its September 8 filing, the Postal Service proposed that a surcharge of $1.50 be imposed on each parcel defined as "non-machineable." It also proposed sharp cuts in the rates applicable to "bulk" parcel post, as well as some changes in the classification schedule which would expand the number of mailings qualifying for the bulk parcel post rates. On February 15, 1979, the Postal Service published a notice that the proposed changes would be implemented on a temporary basis ten days later. 44 Fed. Reg. 9819.

The plaintiffs (UPS) initiated this action on February 20, 1979, seeking a temporary restraining order and preliminary and permanent injunctive relief against the implementation of the proposed temporary changes. In the first count of its complaint, UPS argued that the proposed changes were subject to, and would violate, 39 U.S.C. §§ 3624(c) and 3641(a). Section 3624(c) provides that the Postal Rate Commission must transmit its recommended decision within ten months after the Postal Service has requested a change in rates or fees pursuant to § 3622, except that the Commission may extend the ten-month period if the Postal Service has unreasonably delayed consideration of its request "by failing to respond within a reasonable time to any lawful order of the Commission." Section 3641(a) permits the Postal Service to implement its recommended changes on a temporary basis only after the Commission has failed to transmit a recommended decision within the time allowed by § 3624(c). Thus, UPS contended, the Postal Service could not legally implement the rate changes included in its September 8, 1978 filing until July 8, 1979, or such later date as might be set by the Commission pursuant to 39 U.S.C. § 3624(c)(2). The Postal Service argued in response that the requested changes were not rate changes subject to §§ 3622, 3624(c), and 3641(a), but only classification changes with "incidental" effects on rates, which would therefore be subject to §§ 3623 and 3641(e), which impose only a 90-day "waiting period" after filing before temporary changes may be implemented.

The second count of the complaint sought relief on the ground that temporary implementation of the proposed change in the classification schedule applicable to the bulk parcel post subclass would violate a settlement agreement entered into by the Postal Service and UPS, among others, in a previous classification proceeding. The third count was similar to the first, but was based on the withdrawal by the Postal Service of certain testimony filed with its request on September 8, 1978, and the substitution of other testimony. The complaint asked that the statutory "waiting period" be determined to have begun only on the date that the substituted testimony was filed.

A hearing was held on February 23, at which time the Postal Service agreed to hold its proposed action in abeyance until March 1. On February 28, we entered the preliminary injunction requested by the plaintiffs. In a contemporaneous oral opinion ("Bench Opinion"), we explained that the grant of the injunction was based on the first count of the complaint. We found that the Postal Service's proposal combined classification aspects with rate aspects which, far from being incidental, were both predominant and inseparable, and we rejected the defense that the Postal Service was able to exempt a rate change request from the statutory strictures applicable thereto by the simple expedient of denoting it a request for a "classification" change in its original filing with the Postal Rate Commission.

Because our grant of relief on the basis of Count One made it unnecessary for us to resolve the issues presented by Counts Two and Three at that time, we did not do so. See Bench Opinion, at 5, 23. We did, however, express our view that Count Two could "go either way. I suppose that that gives the edge to the Postal Service on Count 2 because, after all, the plaintiffs have the burden of proof." Id., at 5. We expressed no view on the merits of Count Three because it involved an issue within the primary jurisdiction of the Postal Rate Commission. We did, however, note the possibility that the passage of time might require resolution of the merits of Count Three:

I will add only that I recognize the possibility that ten months may elapse prior to final determination of this action. In such event the Postal Service of course has leave to move for dissolution of the injunction. Having so stated I intimate no view with respect to the factual issues involved in Count 3.

* * * * * *

I think that my remarks relative to Count 3 during the course of the bench opinion suggests the wisdom of obtaining some interpretation from the Commission as to the effect of the discussion of the Graham/Watts testimony or the Belenky/Kolin testimony as it may impact upon my findings with respect to Count 3.

Id., at 26-27A.²

On March 1, the Postal Service filed a notice of appeal from the entry of the preliminary injunction; that appeal has been docketed as # 79-1359 in the United States Court of Appeals for the Third Circuit. The case was placed on an expedited schedule and briefing was completed in May 1979. We understand that the case will be heard next month (in October 1979).

The Postal Service has now moved for dissolution of the preliminary injunction, citing the foregoing language from the Bench Opinion. The Postal Service's argument is essentially tripartite. First, it contends at length that its request before the Commission is a classification case, and not a rate case, and that we erred in so determining. Second, in light of the Postal Rate Commission's ruling with respect to the effective filing date of the Postal Service's request, see note 2, supra, it asks us to find that the "run date" for that request is September 8, 1978. Finally, the Postal Service calls our attention to those portions of the Commission's Order No. 280 extending the date on which its recommended decision is due by 151 days "in order to demonstrate their invalidity." Therefore, even if we should persist in viewing the matters pending before the Commission as including rate change requests which are subject to §§ 3624(c) and 3641(a), the Service submits that the injunction should be dissolved because the ten-month period which began with the September 8 filing ended on July 8, 1979.

Because we were concerned that the pending appeal might have divested this court of jurisdiction to consider the merits of the Postal Service's motion, we requested supplemental briefs on that issue. After consideration of the jurisdictional question, we find it dispositive, and accordingly do not reach the merits of the motion before us.

In S.E.C. v. Investors Security Corp., 560 F.2d 561, (3d Cir. 1977), the Court of Appeals for this circuit reaffirmed its adherence to the "well settled" doctrine that

filing of a notice of appeal immediately transfers jurisdiction of a case from the District Court to the Court of Appeals. Hovey v. McDonald, 109 U.S. 150, 157, 3 S.Ct. 136, 27 L.Ed. 888 (1883); Plant Economy, Inc. v. Mirror Insulation Co., 308 F.2d 275, 276-77 (3d Cir. 1962). During the pendency of the appeal the District Court retains only the limited authority to take any steps that will assist the Court of Appeals in its determination.

United States v. Lafko, 520 F.2d 622, 627 (3d Cir. 1975).

Id., at 568. See Holton v. Crozer-Chester Medical Center, 560 F.2d 575, 578 (3d Cir. 1977); Hattersley v. Bollt, 512 F.2d 209, 215 & n.17 (3d Cir. 1975); Janousek v. Doyle, 313 F.2d 916, 920 (8th Cir. 1963); Halderman v. Pennhurst State School and Hospital, 452 F.Supp. 867, 869 (E.D.Pa.1978) (Broderick, J.). Cf. Pitts v. Kunsman, 363 F.2d 841, 842 (3d Cir. 1966).

However, cases in which appeals are taken pursuant to 28 U.S.C. § 1292(a)(1) from orders granting or denying interlocutory injunctions form a well-recognized exception to this general rule. In such cases, it is generally held that "the filing of the notice of appeal . . . does not ipso facto divest the district court of jurisdiction to proceed with the cause with respect to any matter not involved in the appeal . . ." Janousek v. Doyle, supra, at 920 (emphasis added). Accord, e. g., DePinto v. Provident Security Life Insurance Co., 374 F.2d 50, 51 n.2 (9th Cir.) cert. denied, 389 U.S. 822, 88 S.Ct. 48, 19 L.Ed.2d 74 (1967); Macon v. Bailar, 428 F.Supp. 182, 184-85 (E.D.Va. 1977); Armstrong v. O'Connell, 416 F.Supp. 1325, 1329 (E.D.Wis.1976); United States v. City of Chicago, 411 F.Supp. 218, 246-47 (N.D.Ill.1976) (Marshall, J.), aff'd in part, rev'd in part, 549 F.2d 415 (7th Cir.) cert. denied, 434 U.S. 875, 98 S.Ct. 225, 54 L.Ed.2d 155 (1977); 9 Moore's Federal Practice ¶ 203.11, at 734, 739 (2d ed. 1975). There...