DC Circuit grants Postal Watchdog’s challenge to PRC’s approval of rate hike on Forever stamps

An introduction to Save the Post Office and Steve Hutkins. I am not quite sure how I got to Steve; but, I do remember chatting with Mark Jamison who also wrote at Save the Post Office and posting his words up at Angry Bear (Asking the Wrong Questions: Reflections on Amazon, the Post Office, and the Greater Good earlier this year. Mark and I still exchange emails and I owe him a trip out to western North Carolina. Steve is the blog owner, a Prof. of Literature teaching “place studies” at the Gallatin School of New York University. Prof. Steve Hutkins has been writing about the Post Office for at least a decade and the attempts of government, UPS, Fedex, etc. to close it down or limit its operations.

“Save The Post Office” has been writing about the last 5 cent increase in First-Class mail earlier this year.

Back in January 2019, the Postal Service raised the price of a First-Class stamp from 50 to 55 cents. Postal watchdog Douglas Carlson filed a petition with the U.S. Court of Appeals for the District of Columbia Circuit (aka the DC Circuit) challenging the Postal Regulatory Commission’s decision to approve this rate hike.

Carlson argued that in approving the rate hike on Forever stamps the Commission had failed to consider the statutory pricing factors and objectives in the Postal Accountability and Enhancement Act (PAEA) and the public comments questioning this increase. He also argued that the Commission did not reasonably explain its decision. Therefore, he claimed, the Commission’s decision was arbitrary and capricious.

Today the court issued a ruling granting Carlson’s petition and vacating the PRC’s approval of the rate increase on First Class postage. (The court’s opinion is here; the order vacating the PRC ruling is here.)

It’s not clear what will happen next. The PRC could file a petition for a hearing en banc, meaning that it will ask the entire DC Circuit to review the case, as opposed to the three-judge panel that issued today’s ruling. Apparently anticipating such a possibility, the DC Circuit today also issued an order “that the Clerk withhold issuance of the mandate herein until seven days after disposition of any timely petition for rehearing or petition for rehearing en banc.”

If such a petition is not granted, the PRC could even appeal to the Supreme Court. (After the DC Circuit ruled against UPS on an unrelated case involving postal rates, UPS took both of those steps, to no avail.)

In the meantime, we don’t know what impacts today’s ruling will have on the rate hike, which has been in effect since January.

Under the PAEA, the Postal Service has the right to request its next inflation-based rate increase this fall, with an effective date in January 2020. How the next increase will interact with today’s court decision is also unclear.

Past the leap is the section of a court determination that reviews the main issues in the case:

“Carlson claims that the stamp price hike is arbitrary and capricious under the APA because the Commission failed to consider the objectives and factors listed in the PAEA. The Commission agrees that these statutory factors and objectives are relevant to rate review, but maintains that it has discretion to defer consideration of those provisions until after approving a rate change, especially given its interpretation that the PAEA requires the Commission to evaluate rate-change proposals quickly.

“We conclude that the Commission’s consideration of this increase fell short of the APA’s requirements for reasoned decision-making because the Commission failed to provide an adequate explanation for the stamp price hike, and, relatedly, failed to respond to public comments challenging the stamp price hike under the PAEA’s statutory factors and objectives. Moreover, the PAEA does not require the Commission to rush to decision. Based on the text and structure of the PAEA, we conclude that the PAEA requires consideration of all relevant statutory objectives and factors as part of the regulatory process and does not authorize the Commission to defer evaluation of those objectives and factors until after it approves a rate change. Finally, the system regulation requires the Commission to determine that proposed rate adjustments are “consistent with applicable law,” 39 C.F.R. §3010.11(e), before issuing a rate approval order. At a minimum, this also required the Commission to comply with the APA and the PAEA by weighing the statutory factors and objectives before adopting the stamp price hike.”

The court’s opinion concludes as follows:

“Although the five-cent stamp price hike may have gone unnoticed by many, the American Revolution was fomented in part by ordinary people who objected to taxation through stamps. Carlson’s objections arise in less fraught times. We conclude that this stamp price hike violated the APA because the Commission failed to consider the relevant policies of the PAEA, particularly those raised in the public comments. We therefore grant Carlson’s petition for review, vacating the part of Order 4875 that includes the stamp price hike and the rate adjustments to the category of first-class mail.”

There’s more about the case in this previous post by Carlson, and there’s more here, including a link to a recording of oral arguments before the court.

DC Circuit grants postal watchdog’s challenge to PRC’s approval of rate hike on Forever stamps, Save the Post Office, Steve Hutkins, September 2019