Young v. US Postal Service

• Decision Date: 21 October 1988
• Docket Number: No. 86 Civ. 9492 (RLC).,86 Civ. 9492 (RLC).
• Citation: 698 F. Supp. 1139
• Parties: Vera YOUNG, Plaintiff, v. UNITED STATES POSTAL SERVICE, Defendant.
• Court: U.S. District Court — Southern District of New York

698 F. Supp. 1139

Vera YOUNG, Plaintiff, v. UNITED STATES POSTAL SERVICE, Defendant.

No. 86 Civ. 9492 (RLC).

United States District Court, S.D. New York.

October 21, 1988.

Gladstein, Reif & Meginniss, Brooklyn, N.Y. (Walter M. Meginniss, Jr., of counsel), for plaintiff.

Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City (Bernard W. Bell, Asst. U.S. Atty., of counsel), for the U.S. Postal Service.

OPINION

ROBERT L. CARTER, District Judge.

Plaintiff Vera Young, a former postal clerk, brings this wrongful discharge action for reinstatement and backpay against the United States Postal Service ("Postal Service" or "Service") under Section 1208 of the Postal Reorganization Act ("the Act").¹ 39 U.S.C. §§ 101-6440. She alleges that her termination is in violation of the collective bargaining agreement between the Service and the American Postal Workers Union, and charges the Union with a breach of its duty of fair representation.²

Plaintiff demands a jury trial under Rule 38, F.R.Civ.P.³ She maintains that the Postal Service, by virtue of its authority to "sue and be sued," is a legally independent entity subject to all forms of legal process and liability, including jury trial.

Defendant moves to strike that demand under Rule 39(a) F.R.Civ.P.⁴, alleging that the Service as a federal instrumentality enjoys immunity from suit absent waiver by the Government and that such circumstances plaintiff is not entitled to a jury trial.

Discussion

It is well settled that "the Seventh Amendment right to trial by jury does not apply in actions against the Federal Government" Lehman v. Nakshian, 453 U.S. 156, 160, 101 S.Ct. 2698, 2701, 69 L.Ed. 2d 548 (1981); see also Galloway v. United States, 319 U.S. 372, 388 & n. 17, 63 S.Ct. 1077, 1086 & n. 17, 87 L.Ed. 1458 (1943); Jones-Hailey v. Corporation of Tenn. Valley Authority, 660 F.Supp. 551, 552 (E.D.Tenn.1987); Griffin v. United States Postal Service, 635 F.Supp. 190, 192 (N.D. Ga.1986). The Seventh Amendment preserved the right to trial by jury as it existed in suits at common law. See 9 C. Wright & A. Miller, Federal Practice & Procedure: Civil § 2302, at 14 (1971). "It hardly can be maintained that under the common law of 1791 jury trial was a matter of right for persons asserting claims against the sovereign." Galloway, 319 U.S. at 388, 63 S.Ct. at 1086; see also 9 C. Wright & A. Miller, Federal Practice & Procedure: Civil § 2314, at 68 (1971). Thus, the right to a jury trial in suits against the government exists only pursuant to congressional mandate. "There can be no doubt that Congress has full power to endow a federal instrumentality with the government's immunity from suit or to determine the extent to which it may be subjected to the judicial process." Federal Housing Admin. v. Burr, 309 U.S. 242, 244, 60 S.Ct. 488, 490, 84 L.Ed. 724 (1940); see also Galloway, 319 U.S. at 388-89 & n. 18, 63 S.Ct. at 1086-87 & n. 18; 9 C. Wright & A. Miller, Federal Practice & Procedure: Civil § 2314, at 69.

The right to a jury trial against the United States arises, however, only if Congress, by statute, "clearly and unequivocally" or "affirmatively and unambiguously" grants such right.⁵Lehman, 453 U.S. at 161-162 & n. 9, 168, 101 S.Ct. at 2701-02 & n. 9, 2705; cf. United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1351, 63 L.Ed.2d 607 (1980) (waiver of sovereign immunity "cannot be implied but must be unequivocally expressed," quoting United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 1502, 23 L.Ed.2d 52 (1969)). Such waivers are the exception.⁶ "When Congress has waived the sovereign immunity of the United States, it has almost always conditioned that waiver upon a plaintiff's relinquishing any claim to a jury trial." Lehman, 453 U.S. at 161, 101 S.Ct. at 2701. Congress, however, is not bound by its usual practice. Therefore, the court must determine not only whether plaintiff's claim arises against the United States, but, if so, whether Congress has "affirmatively and unambiguously" rendered the Service amenable to jury trial.

When Congress passed the Postal Reorganization Act of 1970, it responded to a widely acknowledged "need for sweeping reforms in postal policies and operations." H.R.Rep. No. 1104, 91st Cong., 2d Sess. (1970), reprinted in 1970 U.S.Code Cong. & Admin.News 3649, 3652 hereinafter U.S. C.C.A.N.. The Act thoroughly reformed the existing Post Office Department by removing it from the President's Cabinet and recasting it in the form of "an independent establishment of the executive branch of the Government of the United States to be known as the United States Postal Service." Id. at 3654.

The new legislation aimed to insulate the Service from direct political pressure, to remedy chronic inefficiencies in service, to create a framework for satisfactory labor-management relations, and to remove numerous obstacles to the streamlined operation of the nation's postal system. Id. at 3650-54. The overarching goal was to create a Postal Service capable of conducting its affairs "on a business like basis, while retaining the public service character of the Nation's mail system." Id. at 3654. Congress thus empowered the new Service to sue and be sued, to adopt rules and regulations, to enter into and perform contracts, to keep its own system of accounts, to acquire and sell property, to construct and operate buildings and equipment, to accept gifts or donations, to settle and compromise claims by or against it, to exercise the right of eminent domain, and to have all other powers incidental, necessary or appropriate to the carrying on of its functions or powers. See 39 U.S.C. § 401(1)-(10).

The court has no doubt, however, despite defendant's autonomy in managing its own affairs, the Postal Service remains a federal entity. The language and legislative history of the Postal Reorganization Act support this conclusion. Although an independent establishment empowered to sue and be sued, the Service remains nonetheless an "independent establishment of the executive branch of the Government of the United States." 39 U.S.C. § 201 (emphasis added).⁷ In addition, although Congress endeavored to make postal affairs more businesslike, and the Postal Service itself eventually self-sustaining, the Postal Service remains "first, last, and always" a public service, U.S.C.C.A.N. at 3668, whose "broad policy guidelines" are set by Congress. Id. at 3661.

Congress further directed that the Service be "operated as a basic and fundamental service provided to the people by the Government of the United States," 39 U.S. C. § 101(a), whose "basic function" is "to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people." Id. Moreover, the President appoints the nine members of the Postal Service Board of Governors, with the advice and consent of the Senate, 39 U.S.C. § 202; Treasury Department appropriations fund the Service,⁸ 39 U.S.C. § 2401; and employees of the Service are part of the civil service. 39 U.S.C. § 1001(b). These ties between the Service and the federal government suggest that plaintiff's suit, although lodged against a "sue and be sued" instrumentality, arises against the United States.

Plaintiff responds that the Service, by virtue of its authority to "sue and be sued," is legally independent of the sovereign and that all incidents of its immunity must be deemed waived. Plaintiff's Br. at 13. "Sue and be sued" clauses have routinely been interpreted as broad waivers of sovereign immunity.⁹ See, e.g., Reconstruction Finance Corp. v. J.G. Menihan Corp., 312 U.S. 81, 61 S.Ct. 485, 85 L.Ed. 595 (1941) (RFC liable for court costs and allowances); Burr, 309 U.S. at 245, 60 S.Ct. at 490 (FHA subject to garnishment proceedings); Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784 (1939) (Regional Agricultural Credit Corporation subject to tort suits); Active Fire Sprinkler Corp. v. United States Postal Service, 811 F.2d 747, 752 (2d Cir.1987) (government immunity provides no obstacle to equitable claim against USPS); Beneficial Finance Co. v. Dallas, 571 F.2d 125, 127 (2d Cir.1978) (U.S. Postal Service held amenable to garnishment proceedings). Moreover, as plaintiff points out, the Service possesses "powers equivalent to those of a private business enterprise, such as the power to make contracts, keep accounts, and to acquire and lease property." Beneficial Finance Co., 571 F.2d at 128. Furthermore, the Postal Service "competes with private carriers in the delivery of mail." Id. Congress voiced its wish to have "the Postal Service ... run more like a business than ... its predecessor, the Post Office Department." Franchise Tax Board, 467 U.S. at 519-20, 104 S.Ct. at 2553-54 (footnote omitted). Finally, the United States Supreme Court has determined that "by launching `the Postal Service into the commercial world,' and including a sue-and-be-sued clause in its charter, Congress has cast off the Service's `cloak of sovereignty' and given it the `status of a private commercial enterprise.'" Loeffler v. Frank, ___ U.S. ___, 108 S.Ct. 1965, 1970, 100 L.Ed.2d 549 (1988) (holding Postal Service subject to prejudgment interest in Title VII action) (quoting Library of Congress v. Shaw, 478 U.S. 310, 317 n. 5, 106 S.Ct. 2957, 2963 n. 5, 92 L.Ed.2d 250 (1986)).

That defendant's immunity has been waived in broad terms does not alter its identity as a federal entity with respect to those incidents of its immunity that have been retained. As the United States Court of Claims has held, a "sue and be sued" clause does not in itself make defendant a private entity. In Coley Properties Corp. v. United States, 593 F.2d 380, 219 Ct.Cl. 227 (1979), the court held that a contractor's claim against the Postal Service was a claim against the United States:

Although Congress waived the sovereign immunity from suit of the Postal Service in the Act, that

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