Letters to the Court on Exigent

Alliance Alert — May 20, 2015

Three Letters Sent to Court of Appeals Regarding Exigent Surcharge

It has now been 255 days since the oral arguments were held by the D.C. Circuit of the U.S. Court of Appeals in the appeals of the Postal Regulatory Commission (PRC) decision in the exigent rate case. And no decision has been issued by the court. Opposing appeals were made by the U.S. Postal Service (USPS) and the Alliance of Nonprofit Mailers et al., a large group of mailer associations representing all facets of USPS customers. The USPS wants to make the temporary exigent surcharge permanent while the customers do not.

As the court has not issued a decision yet, and the $3.2 billion cap on the 4.3 percent temporary exigent surcharge revenue is set to be reached in early August, and the USPS is required to give 45 days’ notice around mid-June of the rescission date, the USPS decided to write to the Court of Appeals.

Yesterday, the Alliance of Nonprofit Mailers et al. and the PRC also wrote letters to the U.S. Court of Appeals. All three letters are shown below.

USPS Letter

May 19, 2015

Mr. Mark Langer, Clerk of Court
U.S. Court of Appeals for the D.C. Circuit
333 Constitution Avenue, NW
Washington, DC 20001

Re: U.S. Postal Service v. Postal Regulatory Commission, No. 14-1010

Dear Mr. Langer,

Petitioner United States Postal Service (“USPS”) submits this letter under Rule 28(j) to apprise the Court of recent developments in the above-captioned case. The Court granted a motion to expedite this case on March 19, 2014, and held argument on September 9, 2014.

USPS seeks review of Postal Regulatory Commission Order No. 1926, which authorized USPS to recoup only a fraction of its requested rate adjustment for losses suffered “due to” the Great Recession. That order is arbitrary and capricious and contrary to law because it misconstrues the governing statute and grossly underestimates USPS’s actual recession-related losses.

Since January 2014, USPS has been collecting the artificially low amount authorized by the Commission through a 4.3% rate surcharge. As of March 31, 2015, USPS had collected approximately 78% of the authorized amount. See May 15, 2015 Notice of Revenue Collection (Ex. A). USPS expects that it will recoup the entirety of the artificially low amount by early August, at which point it must lift the surcharge. USPS must also provide 45 days’ notice before lifting the surcharge. See PRC Order No. 2319 at 5-6 (Ex. B). Thus, absent a decision or other action by this Court, USPS would need to notify its customers of a prospective rescission as early as mid-June.

USPS very respectfully notes that these timing considerations could have significant practical implications for the parties. Changing postal rates on a nationwide basis is an expensive and complicated process. If USPS is correct that the Commission’s calculation of recession-related losses was too low, it would be far more efficient for the current 4.3% rate surcharge to remain in force for the period necessary to recoup the legally correct amount of the adjustment, rather than be removed in early August only to be re-imposed shortly thereafter.

In light of these timing concerns, the Court may wish to consider issuing the mandate along with its opinion rather than withholding the mandate until 7 days after the expiration of the time for filing a rehearing petition. See D.C. Cir. R. 41(a)(1) (authorizing “immediate issuance” of mandate in “appropriate case[s]”).

Respectfully submitted,
Paul D. Clement
Counsel for Petitioner U.S. Postal Service

Alliance of Nonprofit Mailers et al. Letter

May 21, 2015

Mr. Mark Langer, Clerk
United States Court of Appeals
333 Constitution Avenue, N.W.
Washington DC 20001

Re: Alliance of Nonprofit Mailers et al. v. PRC, No. 14-1009 and
Consolidated No. 14-1010

Dear Mr. Langer:

This responds to the Rule 28(j) letter filed by the USPS on May 19. The
mailers also hope that the Court will issue its decision soon. The USPS assumes,
however, the decision will (1) vacate Commission Order No. 1926 and (2) authorize
the 4.3 percent rate surcharge to remain in effect pending remand. Neither
assumption is warranted.

First, vacatur would be unjustified even assuming arguendo the most
favorable possible outcome for the USPS: grant of its petition for review and denial
of the mailers’. The USPS has not shown that “the agency’s decision is so deficient
as to raise serious doubts about whether the agency can adequately defend its
decision at all,” Verizon v. FCC, 740 F.3d 623, 659 (D.C. Cir. 2014). The USPS
does not contend that any limit on the rate surcharge would be ultra vires, but merely
that the Commission failed to explain adequately the specific limit imposed. The
Commission could “redress” any “failure of explanation on remand while reaching
the same result.” Lilliputian Sys., Inc. v. Pipeline & Haz. Mat. Safety Admin., 741
F.3d 1309, 1313 (D.C. Cir. 2014).

Second, the Commission has exclusive jurisdiction over rates filed by the
USPS; hence, the Court has no authority to prescribe a different, longer-lasting
surcharge pending remand. Burlington Northern Inc. v. United States, 459 U.S. 131

Finally, the equities make judicial ratemaking particularly inappropriate here.
If the USPS ultimately prevails, the Commission can make the USPS whole by
authorizing a renewed surcharge. If the mailers ultimately prevail, they can never
recover any surcharge payments later found unwarranted.  U.S.C. 39§ 3681;
compare Burlington Northern at 141-42 (under the Interstate Commerce Act, “the
shipper may receive reparation for overpayment while the carrier can never be made
whole after underpayment”).

Respectfully submitted,

David M. Levy
Matthew D. Field
Ian D. Volner

Counsel for Alliance of Nonprofit Mailers et al.

PRC Letter

May 21, 2015

Mark J. Langer, Clerk of Court U.S. Court of Appeals for the D.C. Circuit 333 Constitution Avenue, NW Washington, DC 20001

RE: U.S. Postal Serv. v. Postal Regulatory Comm’n, Nos. 14-1009, 14-1010
Oral Argument held on September 9, 2014

Dear Mr. Langer:

We are writing in response to the Postal Service’s letter of May 19, 2015, which suggests that “the Court may wish to consider issuing the mandate along with its opinion rather than withholding the mandate until 7 days after the expiration of the time for filing a rehearing petition.” Letter 2. According to the Postal Service, this action may be warranted (depending on the content of this Court’s opinion) because “absent a decision or other action by this Court, the Postal Service would need to notify its customers . . . as early as mid-June” that the surcharge authorized in the Postal Regulatory Commission order at issue in this case will end in August. Id. at 1.

Whether or not this Court has issued its mandate, if the Postal Service prevails in this litigation, it can ask the Commission to relieve the Postal Service of its obligation to notify its customers that the surcharge is scheduled to end, and can seek review in this Court if such a request is denied. If the Postal Service nevertheless concludes that expedited issuance of the mandate is essential for some reason, it can file a motion for such relief after this Court issues its opinion. But in the absence of a concrete motion based on this Court’s opinion, there is no basis for immediate issuance of the mandate, which would unnecessarily complicate the orderly consideration of whether a petition for rehearing is warranted.


s/ Daniel Tenny
Counsel for the Postal Regulatory Commission