preferential handling, known as "red-tag" mail, would be charged 2.3 cents more per item than materials receiving regular second class treatment. Such mail is expedited and in the industry is considered as receiving time value service. Reader's Digest is a monthly publication subject to second class mail rates. However, it is not a "red-tag" mailer, and under the new schedule its per item rate would be lower. It argues that the decision of the Board of Governors delaying the implementation of the new rates some 91/2 months-until June 1, 1981-effectively nullifies the new rates, is arbitrary, an abuse of discretion, and outside of the Board's authority.
Defendant Postal Service has opposed the motion for preliminary relief asserting that the Board has properly exercised its authority under the Postal Reorganization Act, 39 U.S.C. § 3625(f). Three large volume "red-tag" mailers, Time, Inc., Newsweek, and Dow Jones, were allowed to intervene as party defendants. They have moved that the Reader's Digest complaint be dismissed and argue that under the statute jurisdiction over rate schedule matters lies exclusively in the United States Courts of Appeals.
After reviewing the parties' points and authorities, and with the benefit of oral argument, the Court concludes that the complaint should be dismissed for lack of jurisdiction.
The Postal Reorganization Act, 39 U.S.C. § 101, et seq., established a three-step process for setting new postal rates. The Postal Service makes any request for a change in permanent rates to the Postal Rate Commission (Commission), an independent five-member body appointed by the President with the advice and consent of the Senate. The Commission considers the request in light of statutory criteria for fixing rates and then submits a recommended decision to the Governors of the Postal Service. The Governors, a nine-member body also appointed by the President with the advice and consent of the Senate, "may approve, allow under protest, reject or modify" the recommended decision of the Commission. Id. at § 3625. Should the Governors determine that new rates are to be put in effect, the Board of Governors a separate body composed of the Governors plus the Postmaster General and his Deputy sets the actual date of implementation. Id. at § 3625(f).
This controversy arose when the Commission recommended that second class mail rates be modified to include a differential between red-tag and non red-tag items. The Commission's action stemmed in large measure from an observation in an opinion of our Court of Appeals, National Association of Greeting Card Publishers v. United States Postal Service, 197 U.S. App. D.C. 78, 607 F.2d 392 (D.C. Cir. 1979), cert. denied, 444 U.S. 1025, 100 S. Ct. 688, 62 L. Ed. 2d 659 (1980) (NAGCP III ) that "the assignment of service related costs to mail not receiving preferential service raises serious concerns of discrimination." 607 F.2d at 411. Reacting to this statement, in January of 1979 the Commission initiated proceedings to consider red-tag rates.
On May 16, 1980, it issued an opinion and decision recommending the adoption of a differential of 2.3 cents between red-tag and non-red-tag mail.
The Commission's opinion concluded that "this discrimination must be remedied now; we cannot defer the matter any longer."
Under the new rates, plaintiff's cost would be 1.1 cents lower per item than under the present schedule. Intervenors would face a 1.2 cents per item increase. On July 1, 1980 the Governors publicly announced that the recommended decision would be approved. It was not until August 15, however, that the Governors issued their written decision approving the new rate. On the same date, the Board approved a resolution providing that the new rates would become effective on June 1, 1981. Neither the Governor's decision nor the Board's resolution mentions the allegedly "illegal" or unduly "discriminatory" nature of the existing flat rate.
Plaintiff shortly thereafter petitioned the District of Columbia Circuit Court of Appeals for review of the Governor's decision pursuant to 39 U.S.C. § 3628. Intervenors also sought review in filings with the Second and Third Circuits.
All of the petitions have since been consolidated in the Third Circuit where the first of the several review petitions was filed. In this proceeding, however, Reader's Digest requests immediate implementation of the new rates by this Court on the grounds that the current schedules are unlawfully discriminatory and require immediate correction.
The Court's first concern must be its jurisdiction to grant the relief plaintiff has requested. Jurisdiction over rate matters generally is covered by 39 U.S.C. § 3628. That section provides:
A decision of the Governors to approve, allow under protest, or modify the recommended decision of the Postal Rate Commission may be appealed to any court of appeals of the United States, within 15 days after its publication by the Public Printer, by an aggrieved party who appeared in the proceedings under section 3624(a) of this title. The court shall review the decision, in accordance with section 706 of title 5, and chapter 158 and section 2112 of title 28, except as otherwise provided in this section, on the basis of the record before the Commission and the Governors. The court may affirm the decision or order that the entire matter be returned for further consideration, but the court may not modify the decision. The court shall make the matter a preferred cause and shall expedite judgment in every way. The court may not suspend the effectiveness of the changes, or otherwise prevent them from taking effect until final disposition of the suit by the court. No court shall have jurisdiction to review a decision made by the Commission or Governors under this chapter except as provided in this section.