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DIRECT MAIL/MARKETING ASSN. v. USPS

October 29, 1981

DIRECT MAIL/MARKETING ASSOCIATION, INC., Plaintiff, against UNITED STATES POSTAL SERVICE, Defendant.


The opinion of the court was delivered by: SOFAER

MEMORANDUM OPINION AND ORDER

ABRAHAM D. SOFAER, D.J.:

 Plaintiff Direct Mail/ Marketing Association, Inc. ("DMMA") is an association with approximately 2600 member companies and is the largest organization representing firms involved in marketing by mail. The member companies of DMMA are substantial users, directly or indirectly, of third-class bulk-rate regular mail. DMMA was a party in interest and participated in a postal rate proceeding before the Postal Rate Commission (the "Commission") known as Docket No. R80-1, the proceeding that led to the order under review here. DMMA is incorporated as a not-for-profit corporation under the laws of the State of New York.

 Defendant United States Postal Service (the Postal Service) is an independent establishment of the executive branch of the Government of the United States that provides essential postal services throughout the United States. Invervenor Advertisers Distribution Services, a Division of Consumer Information Enterprises, Inc., is a Minnesota corporation that provides delivery services for publications at various points in eastern Minnesota and western Wisconsin. Intervenor Advertisers Postal Service, Inc. is a Michigan corporation that provides delivery services throughout Michigan. Both these services applications to intervene are granted.

 The Postal Service is directed by an eleven-member Board of Governors ("Board"). The Board consists of nine "Governors" who are appointed by the President with the advice and consent of the Senate, and two postal executive managers, the Postmaster General and Deputy Postmaster General. 39 U.S.C. § 202. The Governors are responsible for establishing postal rates and fees that will be sufficient to enable the Postal Service to serve the needs of the nation. 39 U.S.C. § 3621. Such postal rates and fees must raise sufficient revenues to meet as nearly as possible the costs of the Postal Service. Id.

 On April 21, 1980, the Postal Service requested the Commission to recommend rate changes for virtually all classes of mail and types of mail service. The Postal Service's request was docketed as Commission Docket No. R80-1. On February 19, 1981, the Commission issued and transmitted to the Governors its initial recommended decision in Docket No. R80-1. The Commission recommended numerous rate changes, including an increase to 18 cents in the rate for first-class letter mail. The Commission also recommended that the classification of bulk third-class mail be changed, although the Postal Service had not proposed a change in the existing classification of this mail. The Commission did not recommend rates conforming to the existing classification, but only rates predicated upon its proposed classification change.

 On March 10, 1981, the Governors exercised their option under 39 U.S.C. § 3626(c)(2) to allow most of the Commission's recommendations to take effect, under protest, and to return them to the Commission for reconsideration and a further recommended decision. The Governors rejected the Commission's recommended classification change for third-class bulk mail. The Governors claimed that, since the Commission's recommended third-class rates were predicated upon the Commission's classification change, the Commission had in effect failed to make a "recommended decision," within the time period required by the statute. The Governors therefore purported to exercise their prerogative under 39 U.S.C. § 3641(a) to establish temporary third-class rates, asserting that the Commission had failed to make a recommended decision.

 Several businesses specializing in the delivery of advertising materials sued the Postal Service in the United States District Court for the District of Columbia Circuit to enjoin the temporary bulk third-class rates established by the Governors on March 10, 1981. The District Court denied plaintiffs' motions for a temporary restraining order and a preliminary injunction, finding that the Board of Governors had acted lawfully in implementing the temporary rates. Advertisers Distribution Services v. United States Postal Service, No. 81-0681 (D.D.C. March 26, 1981). Subsequently, the court granted the Postal Service's motion to dismiss for lack of subject matter jurisdiction, noting the pendency of appeals of the Governors' decision in the Court of Appeals, and citing the principle that bifurcated jurisdiction by the District Court and the Court of Appeals over identical litigation is not favored. Advertisers Distribution Services v. United States Postal Service, (D.D.C. July 7, 1981), appeal docketed, No. 81-1859 (D.C. Cir., July 30, 1981).

 Review of the Governors' March 10 decision is also currently pending before the Court of Appeals for the Second Circuit, where oral argument was heard on August 13, 1981. DMMA is a party intervenor to that proceeding. One of the issues before that Court is whether the Governors' treatment of the bulk third-class rates that the Commission had recommended comported with the correct interpretation of 39 U.S.C. § 3625.

 On June 4, 1981, the Commission issued its Recommended Decision Upon Reconsideration in Docket No. R80-1, in which it reaffirmed all but one of the rate recommendations made in its initial recommended decision, including its recommendations that the rate for the first-class letter mail be 18 cents for the first ounce and that new third-class classifications be established.

 On June 30, 1981, the Governors issued their decision concerning the Commission's Recommended Decision Upon Reconsideration in Docket No. R80-1. The Governors stated (at page 16):

 The Postal Rate Commission's Recommended Decision upon Reconsideration dated June 4, 1981, is rejected. The rate, fee and classification changes ordered into effect in the Decision of the Governors of March 10, 1981, will remain in force.

 A review of the Governors' Decision issued June 30, 1981, and dated June 29, 1981, is currently pending before the District of Comumbia Circuit. Advertisers Distribution Services et al. v. United States Postal Service, Docket No. 81-1831 (D.C. Cir., filed July 24, 1981). One of the issues before that Court is whether the Governors' Decision issued June 30 was a valid rejection of all the Commission's rate recommendations, including those for third-class bulk rate regular mail. The Postal Service has moved to dismiss that appeal on the ground that the Governors' decision was a rejection under 39 U.S.C. § 3625 and therefore not subject to review under 39 U.S.C. § 3628.

 On September 17, 1981, the Commission issued its Recommended Decision Upon Further Reconsideration in Docket No. R80-1. The Commission once again reaffirmed the rate recommendations it had made on June 4, including its ...


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