In a September 13 decision, the US Court of Appeals for the DC Circuit granted a petition for review of the Postal Regulatory Commission’s November 13, 2018, order approving the postage price increase, later implemented on January 27, 2019. In doing so, the court also vacated that portion of the commission’s order pertaining to the rates for First-Class Mail.
The petition was filed on December 11, 2018, by Douglas Carlson, a San Francisco lawyer and self-appointed monitor of the Postal Service.
During the course of the PRC’s review of the Postal Service’s proposed prices for its market-dominant products, Carlson filed comments taking issue with the agency’s proposed rates for First-Class Mail – small increases for commercial mail but a five-cent jump in the price of a stamp. Though the commission acknowledged the relatively large increase in the retail price, it ultimately approved it and the other prices proposed by the USPS.
In his appeal of the PRC’s decision, Carlson focused on the increase in the price of a stamp but, from a legal perspective, his issues were more about whether the USPS adequately justified its proposed retail rate, whether the PRC properly considered relevant statutory standards when reviewing the USPS request, and whether the commission’s approval of the increase was “in accordance with law.”
In its analysis, the court focused on provisions of the 2006 Postal Accountability and Enhancement Act (PAEA) that established the current rate-setting process and, in particular, how the PRC’s order comported with them. In explaining its decision, the court noted that the statutory process for establishing market-dominant rates “‘shall be designed’ to achieve nine statutory objectives and ‘shall take into account’ fourteen statutory factors.”
Accordingly, the court concluded that the commission didn’t comply with the statutory requirement for “reasoned decision-making” because it did not adequately consider the stamp price hike’s compliance with all of the PAEA’s objectives and factors, particularly as reflected in public comments, and therefore failed to comply with the PAEA’s rate-setting process.
The court did not find a reason to fault those parts of the commission’s 2018 order about the Postal Service’s other proposed rates, and so vacated only that portion concerning First-Class Mail.
The court’s decision does not mean the commission was wrong to approve the USPS-proposed rates for First-Class Mail, but it didn’t address whether vacating them means reverting to pre-January 2019 rates, either. Seven-and-a-half months of mailing activity (and postage payment) can’t simply be rewound.
In reworking its order, the PRC must reconsider more carefully the comments it received during its late-2018 review of the proposed First-Class Mail prices, demonstrate that it fully considered all the statutory objectives and factors, and issue an amended order showing that its conclusion was reached through “reasoned decision-making.” In doing so, it could again approve the prices proposed by the USPS, including the 55-cent stamp.
Meanwhile, anticipating that the PRC would seek an en banc review (by the entire Appeals Court) of the three-judge panel’s decision, the court issued a second order delaying the effect of its first order “… until seven days after disposition of any timely petition for rehearing or petition for rehearing en banc...”
As a practical matter, it’s questionable whether the average citizen shares Carlson’s outrage over the nickel increase, and he’s only succeeded in defeating the legal arguments of the PRC lawyers who wrote the commission’s order. Ultimately, all he may have accomplished was making the parties consume resources; even after the commission redoes its work to satisfy Carlson’s critique, the price of a stamp could still be $0.55.
Leo Raymond is the owner and managing director of Mailers Hub, which is dedicated to providing information, resources, training, and expert advice to support mailing service providers and help them succeed. He can be reached at lraymond@mailershub.com.
