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United States Postal Service v. Postal Regulatory Commission

United States Court of Appeals, District of Columbia Circuit

November 15, 2016

United States Postal Service, Petitioner
Postal Regulatory Commission, Respondent Alliance of Nonprofit Mailers, et al., Intervenors

          Argued September 20, 2016

         On Petition for Review of an Order of the Postal Regulatory Commission

          David C. Belt, Attorney, United States Postal Service, argued the cause and filed briefs for the petitioner. Stephan J. Boardman, Chief Counsel, United States Postal Service, entered an appearance.

          Daniel Tenny, Attorney, United States Department of Justice, argued the cause for the respondent. Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Michael S. Raab, Attorney, David A. Trissell, General Counsel, Postal Regulatory Commission, Christopher J. Laver and Anne J. Siarnacki, Deputy General Counsels and Elisabeth S. Shellan, Attorney were with him on brief.

          David M. Levy, Matthew D. Field, Ian D. Volner, Jeremiah L. Morgan and William J. Olson were on brief for the mailer intervenors in support of the Postal Regulatory Commission.

          Before: Henderson and Griffith, Circuit Judges, and Williams, Senior Circuit Judge.


          Karen LeCraft Henderson, Circuit Judge.

         The Postal Accountability and Enhancement Act of 2006 authorizes the Postal Regulatory Commission (Commission) to regulate the rates of the United States Postal Service's (Postal Service) market-dominant products. See 39 U.S.C. §§ 3621-29. Although annual price increases for these products are generally capped at the rate of inflation, the Commission is permitted to approve raising rates above this mark "on an expedited basis due to either extraordinary or exceptional circumstances." Id. § 3622(d)(1)(E). In Order No. 1926, [1] the Commission-recognizing that the Great Recession of 2008 was just such an exigent circumstance-allowed for a rate increase but also sought to calculate the extent to which decreased mail volume was "due to" the economic downturn in order to determine how long that rate increase should remain in effect. As part of its inquiry, the Commission created a "new normal" test to determine when the "extraordinary or exceptional circumstances" no longer supported a rate increase. In an earlier case, the Postal Service had petitioned this Court for review of that "new normal" test and we upheld the Commission's approach as "well reasoned and grounded in the evidence before the Commission . . . [and] comfortably pass[ing] deferential APA review." All. of Nonprofit Mailers v. Postal Regulatory Comm'n, 790 F.3d 186, 196 (D.C. Cir. 2015). The Postal Service sought reconsideration, claiming that the Commission "altered its original decision" by "changing the meaning and role of the 'ability to adjust' element of its ['new normal'] test, " Pet'r Reply Br. 7, and, in Order No. 2623, [2] the Commission denied that request. Because the Commission's denial of reconsideration is unreviewable, we dismiss the Postal Service's petition for lack of jurisdiction. Entravision Holdings, LLC v. FCC, 202 F.3d 311, 313 n.2 (D.C. Cir. 2000).


         In enacting the Postal Accountability and Enhancement Act of 2006 (the Act), Pub. L. No. 109-435, 120 Stat. 3198, the Congress directed the Commission to establish a modern system for regulating the rates and classes of the Postal Service's market-dominant products. See 39 U.S.C. §§ 3621- 29. Although the Act affords the Commission some flexibility in carrying out its charge, see id. § 3622 (authorizing Commission to create "modern system for regulating rates" but also mandating that Commission account for certain "factors, " "objectives" and "requirements" in so doing), the Congress set forth a price cap for market-dominant products, generally limiting each price increase to an amount equal to the annual change in the Consumer Price Index for All Urban Consumers (CPI-U). See id. § 3622(d)(1)(A). The Act also provides "procedures whereby rates may be adjusted on an expedited basis due to either extraordinary or exceptional circumstances" without regard to the CPI-U limitation. Id. § 3622(d)(1)(E). Specifically, for this statutory "safety valve" to take effect, the Commission must find

after notice and opportunity for a public hearing and comment, and within 90 days after any request by the Postal Service, that such adjustment is reasonable and equitable and necessary to enable the Postal Service, under best practices of honest, efficient, and economical management, to maintain and continue the development of postal services of the kind and quality adapted to the needs of the United States.


         The Postal Service first requested an above-CPI-U rate increase in July 2010 as it sought to make up for substantial losses resulting from the "dramatic, rapid and unprecedented decline in mail volume" caused by the Great Recession. See U.S. Postal Serv. v. Postal Regulatory Comm'n, 640 F.3d 1263, 1265 (D.C. Cir. 2011) (internal quotation marks omitted). Although the Commission agreed that "the recent recession, and the decline in mail volume experienced during the recession" qualified as an "extraordinary or exceptional circumstance, " it nonetheless denied the Postal Service's request for an above-CPI-U rate increase because it found that the Postal Service had failed to quantify properly its losses "due to" the recession with particularity. See Postal Regulatory Commission, Order Denying Request for Exigent Rate Adjustments, Order No. 547, Docket No. R2010-4, at 3-4 (Sept. 30, 2010). This Court disagreed with the latter portion of the Commission's analysis, finding that, although "the plain meaning of 'due to' mandates a causal relationship between the amount of a requested adjustment and the exigent circumstances' impact on the Postal Service, " the Act is ambiguous as to "how close the relationship must be." 640 F.3d at 1267-68. We remanded the case to the Commission to fill that statutory gap, which it did in Order No. 864. See Postal Regulatory Commission, Order Resolving Issues on Remand, Order No. 864, Dkt. No. R2010-4R, at 25 (Sept. 20, 2011) (noting that "exigent rate adjustments are permitted only if, and to the extent that, they compensate for the net adverse financial impact of the exigent circumstances").

         In September 2013, the Postal Service renewed its request for an above-CPI-U rate increase, seeking a 4.3% price hike for an indefinite period of time. In Order No. 1926, the Commission granted the Postal Service's request in part. Order No. 1926, Docket No. R2013-11. The Commission reaffirmed that the Great Recession constituted an exigent circumstance warranting a rate increase but it still disagreed with the Postal Service on the extent to which mail volume losses had been caused by the economic downturn. See id. at 44. Thus, the Commission ...

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