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ASSOCIATED v. USPS

December 16, 1975

ASSOCIATED THIRD CLASS MAIL USERS, Plaintiff, and NATIONAL EASTER SEAL SOCIETY FOR CRIPPLED CHILDREN AND ADULTS, Intervenor,
v.
UNITED STATES POSTAL SERVICE, et al., Defendants



The opinion of the court was delivered by: SIRICA

 SIRICA, District Judge.

 The parties in the above entitled matter are presently before the Court on cross-motions for summary judgment. They have submitted memoranda in support of their respective motions and have orally presented their positions in open court.

 Plaintiff Associated Third Class Mail Users (hereafter "ATCMU") is a nonprofit organization, organized under the corporation laws of the District of Columbia for the purpose of improving the use of third-class mail for its members. Plaintiff-intervenor National Easter Seal Society for Crippled Children and Adults (hereafter "Easter Seals") is a nonprofit corporation organized under the laws of the state of Ohio for the purpose of providing a program of direct service, education and research for physically handicapped persons.

 Defendant United States Postal Service (hereafter "Postal Service") is an independent establishment of the executive branch of the government, created by statute by Congress to provide postal services for the United States of America. Defendant Postal Rate Commission (hereafter "Rate Commission") is an independent establishment of the executive branch of the government of the United States, created by act of Congress. Defendants Clyde S. DuPont (Chairman), Paul A. Miltich, Kieran O'Doherty, Frank P. Saponaro, and Carlos C. Villarreal are members of the Rate Commission.

 MATERIAL FACTS

 On September 4, 1975, a meeting of the Board of Governors of the Postal Service (hereafter "Board") was held. At that meeting the Board was advised by the Assistant Postmasters for Finance and for Rates and Classification that projections of revenues and expenses for fiscal year 1976 showed that the Postal Service would be faced with a deficit if postal rates remained at the current levels.

 Also at the meeting of September 4, 1975, the Board discussed the level of fees for various other services, and agreed that the Postal Service should increase these fees as soon as reasonably possible. Based upon this determination by the Board, on September 19, 1975, the Postal Service published a notice in the Federal Register, soliciting comments on proposed increases in fees for these services.

 Subsequent to the meeting of the Board on September 4, 1975, the Postal Service announced that it would place into effect new "temporary" postal rate increases as of December 28, 1975, and new fees for various other services to become effective on January 3, 1976.

 PLAINTIFF'S CONTENTIONS

 Plaintiff ATCMU challenges the proposed imposition of the new "temporary" rates, contending that such imposition would be illegal. ATCMU alleges that the purported "request" of the Board filed with the Rate Commission on September 18, 1975, is invalid since the Board failed to approve the request as required by the Postal Reorganization Act and the Rules of the Board. Since, plaintiff contends, a valid request having been made to the Commission is a condition precedent to the imposition of temporary changes in postal rates, and there being no valid request before the Commission at this time, the imposition of temporary rates would be illegal.

 Plaintiffs ATCMU and Easter Seals assert that the proposed January 3, 1976 imposition of increased fees for various other services would also be illegal. Plaintiffs contend that it is illegal for the Postal Service to increase fees for special and other services without complying with the procedures set out in Chapter 36 of the Postal Reorganization Act. In particular, plaintiffs state that the Postal Service may not increase such fees without first requesting a recommended decision from the Rate Commission. Since it is uncontested that the Postal Service did not request such a recommendation in this case, plaintiffs argue that the new increases may not legally be imposed.

 CONCLUSIONS OF LAW

 I. Temporary Postal Rate Increases

 The first issue, the legality of the temporary rates scheduled to go into effect on December 28, 1975, centers on plaintiff's contention that the rate request submitted by the Postal Service to the Rate Commission on September 18, 1975, was invalid.

 It is clear to the Court from a careful reading of the Act that both the authority and the power to request recommendations for changes in postal rates lies with the Board of Governors, and no one else.

 Section 202 of the Act, entitled "Board of Governors" states, "(a) The exercise of the power of the Postal Service shall be directed by the Board of Governors . . . ." (emphasis added). This section takes on more specific relevance to the instant case when read with Chapter 4 of the Act which delineates the general authority of the Postal Service which the Board is charged with directing. Specifically Section 404 reads, in pertinent part:

 
§ 404. Specific powers
 
Without limitation on the generality of its powers, the Postal Service shall have the following specific powers, among others:
 
* * *
 
(2) to prescribe, in accordance with this title, the amount of postage and the manner in which it is to be paid; . . . .

 In Chapter 36 of the Act we find even more specific language indicating that the Board is charged with the duty to direct the rate-making process and to request recommended decisions from the Rate Commission:

 
§ 3621. Authority to fix rates and classes
 
Except as otherwise provided, the Governors are authorized to establish reasonable and equitable rates of postage . . . in accordance with the provisions of this chapter. Postal rates and fees shall be reasonable and equitable and sufficient to enable the Postal Service under 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. . . .
 
* * *
 
§ 3622. Rate and fees
 
(a) From time to time the Postal Service shall request the Postal Rate Commission to submit a recommended decision on changes in a rate or rates of postage . . . if the Postal Service determines that such changes would be in the public interest and in accordance with the policies of this title. The Postal ...

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