Alliance Alert – June 11, 2015

Today, the Alliance and many other groups of customers filed a response at the Postal Regulatory Commission to the Postal Service attempt to expand the remand beyond the “count once” methodology. Our response can be read here and begins as follows:

“The undersigned mailer parties submit this response to the June 8 motion of the

United States Postal Service (“USPS” or “Postal Service”) to suspend the exigent

surcharge removal provisions of Order No. 1926 and to establish remand proceedings.

The motion should be denied.

The Postal Service has grossly misstated the proper scope of the case on remand.

The court has remanded the case for the Commission to perform a single task:

recalculate the exigent rate surcharge without the “count once” limitation. Slip op. at 15-

17, 20. The Commission has no obligation to reopen the record for relitigation of any

other issues, and nothing in the court’s opinion suggests otherwise. Indeed, if the

Commission were to reconsider any of the other aspects of Order No. 1926 raised in the

Postal Service motion, constitutional and administrative due process would require that

the record be reopened to consider still other issues that support reducing the maximum

allowed contribution from the exigent surcharge. The Postal Service should not be

allowed to cherry-pick the issues for reopening. The resulting proceeding would likely be

more protracted and costly, and ultimately less profitable for the Postal Service, than a

remand proceeding limited to the “count once” issue.

It is unclear whether the Commission can complete its consideration of the “count

once” issue on remand before the Postal Service reaches the cap on the surcharge that

the Commission adopted and the Court of Appeals carefully reviewed and emphatically

affirmed. It is equally unclear whether reconsideration of the “count once” limitation would

justify an increase in the total allowed surcharge revenue (and, if so, by how much) even

if the Commission ultimately decided to abrogate the limitation. What is clear, however,

is that the Commission must take steps to assure that the Postal Service does not gain

an unjustified windfall if the surcharge is temporarily extended pending remand and all or

part of an extended surcharge is ultimately found unwarranted. The balance of equities

requires this. If the surcharge is not extended pending remand and the USPS ultimately

prevails, the Commission can make the USPS whole by authorizing a renewed surcharge.

By contrast, if the surcharge is extended and the mailers ultimately prevail, they can never

recover any surcharge payments later found unwarranted. If, therefore, the Commission

grants the requested extension, it must condition the extension on the Postal Service’s

agreement that, if the Commission ultimately finds that some or all of the additional

surcharge revenue was unjustified, the Postal Service will make the mailers whole by

making an offsetting reduction in the increases otherwise authorized by the CPI-based

rate adjustment mechanism.”

We will keep you posted.