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Northern Air Cargo, et al v. United States Postal Service

June 10, 2011

NORTHERN AIR CARGO, ET AL., PLAINTIFFS,
v.
UNITED STATES POSTAL SERVICE,
DEFENDANT, AND PENINSULA AIRWAYS, INC., DEFENDANT-INTERVENOR.



The opinion of the court was delivered by: Emmet G. Sullivan United States District Judge

MEMORANDUM OPINION

On December 3, 2010, the United States Postal Service (the "Postal Service") granted an equitable tender of non-priority mainline bypass mail to Peninsula Airways, Inc. ("PenAir") on five mainline routes in rural Alaska pursuant to 39 U.S.C. § 5402(g)(5)(c) ("§ 5402(g)(5)(C)"). This equitable tender is now being challenged by three mainline carriers -- Northern Air Cargo ("NAC"), Tatonduk Outfitters Ltd d/b/a Everts Air Cargo ("Everts"), and Lynden Air Cargo LLC ("Lynden") (collectively, "plaintiffs"). Specifically, plaintiffs challenge the Postal Service's purportedly ultra vires determination that PenAir had satisfied the "Prior Service and Capacity Requirement" of 39 U.S.C. § 5402(g)(1)(A)(iv)(II) ("§ 5402(g)(1)(A)(iv)(II)") as of December 3, 2010.*fn1 Plaintiffs seek both declaratory and injunctive relief. See generally Compl.

Pending before the Court is plaintiffs' motion for summary judgment, as well as the cross-motions for summary judgment filed by Defendant Postal Service and Defendant-Intervenor PenAir (collectively, "defendants"). Upon consideration of the motions, the responses and replies thereto, the applicable law, the entire record, and for the following reasons, the Court hereby DENIES plaintiffs' motion for summary judgment and GRANTS defendants' cross-motions for summary judgment.

I. BACKGROUND

This is the second action that plaintiffs have filed with respect to the Postal Service's purportedly unlawful tender of non-priority mainline bypass mail to PenAir in five rural Alaskan communities.*fn2 The first action, (hereinafter, the "2009 Action"), challenged the Postal Service's August 2009 and September 2009 determinations that PenAir was eligible for the equitable tender of non-priority mainline bypass mail on five mainline routes: Anchorage-Dillingham, Anchorage-King Salmon, Anchorage-Aniak, Anchorage-McGrath, and Anchorage-Unalakleet. See Northern Air Cargo v. United States Postal Serv., 741 F. Supp. 2d 41 (D.D.C. 2010) (hereinafter, Northern Air Cargo I); see also Pls.' SMF ¶ 33. On September 23, 2010, this Court issued an opinion granting in part and denying in part the parties' cross-motions for summary judgment. Northern Air Cargo I, 741 F. Supp. 2d 41. The Court held, among other things, that the Postal Service had exceeded its statutory authority in determining that PenAir was not required to satisfy the Prior Service and Capacity Requirement of § 5402(g)(1)(A)(iv)(II) in order to be tendered non-priority mainline bypass mail pursuant to § 5402(g)(5)(C). Id. at 52-53. The Court therefore enjoined the Postal Service from tendering non-priority mainline bypass mail to PenAir until the airline satisfied the Prior Service and Capacity Requirement of the RSIA. See Civil Action No. 09-2065, Order dated Sept. 23, 2010 at 2.*fn3 Accordingly, on September 24, 2010, the Postal Service ceased tendering non-priority mainline bypass mail to PenAir. Pls.' SMF ¶ 36.

On October 12, 2010, PenAir submitted a request to the Postal Service under § 5402(g)(5)(C) to receive an equitable tender of non-priority mainline bypass mail in the same five rural Alaskan markets that it had previously carried non-priority mainline bypass mail: Dillingham, King Salmon, Aniak, McGrath, and Unalakleet. Pls.' SMF ¶ 37. By letter dated October 21, 2010, the Postal Service informed PenAir that it believed PenAir had satisfied the Prior Service and Capacity Requirement of § 5402(g)(1)(A)(iv)(II) as required by § 5402(g)(5)(C) and was, therefore, eligible to receive non-priority mainline bypass mail. Postal Service's SMF ¶ 30. The letter also stated, however, that because "[t]he district court did not address whether PenAir should receive credit for the past 13 months in which it has been providing mainline service in Alaska . . . the actual tender of mail to PenAir may violate the court's injunction." Postal Service Opp'n to Pls.' Mot. for Prelim. Inj., Attachment 1, Ex. B (hereinafter, "Postal Service Ex. B"). The Postal Service explained to PenAir that it needed clarification from the Court regarding whether its proposed equitable tender would violate the Court's injunction. See Postal Service Ex. B ("[T]he Postal Service will immediately begin tendering mail to PenAir upon the occurrence of either of the following events: (1) the court lifts the injunction; [or] (2) PenAir obtains an appropriate clarification of (or modification to) the injunction, which, in the sole judgment of the Postal Service, makes it clear that tendering mail will not violate the court's injunction.").

Accordingly, on November 17, 2010, the Postal Service filed a motion pursuant to Federal Rule of Civil Procedure 60 seeking "clarification" as to whether it would be in violation of the Court's September 23, 2010 injunction if it tendered non-priority mainline bypass mail to PenAir pursuant to the airline's October 12, 2010 application. Postal Service's SMF ¶ 31; see also Civil Action No. 09-2065, Docket No. 38. On December 2, 2010, the Court denied the Postal Service's motion. The Court explained that "the issue on which defendant seeks clarification - 'whether PenAir should receive credit for the past 13 months during which it has been providing mainline service to Alaskans' - [was] not properly before the Court. Specifically, the Court [found] that the issue presented by defendant would require the Court to entertain new factual and legal issues beyond the scope of the Court's Memorandum Opinion and Order." See Civil Action No. 09-2065, Minute Order dated Dec. 2, 2010 (internal citations omitted).

By letter dated December 3, 2010, the Postal Service concluded that PenAir had satisfied the Prior Service and Capacity Requirement and authorized the issuance of non-priority mainline bypass mail to PenAir on the five requested mainline routes. See Postal Service Opp'n to Pls.' Mot. for Prelim. Inj., Attachment 1, Ex. F (hereinafter, "Postal Service Ex. F").*fn4

Shortly thereafter, on December 6, 2010, the Postal Service began tendering non-priority mainline bypass mail to PenAir. See PenAir's SMF ¶ 22.*fn5

On December 8, 2010, plaintiffs filed an emergency motion for an order to show cause why the Postal Service should not be found in contempt in the 2009 Action, arguing that the Postal Service had violated the Court's injunction by resuming tender of non-priority mainline bypass mail to PenAir. See Civil Action No. 09-2065, Docket No. 47. On that same date, plaintiffs also filed the instant action, in which it requested a temporary restraining order and preliminary injunction. The Court denied plaintiff's request for emergency injunctive relief on December 23, 2010. See Northern Air Cargo v. United States Postal Serv., 756 F.

Supp. 2d 116 (D.D.C. 2010) (hereinafter, "Northern Air Cargo II"). Thereafter, plaintiffs filed a motion for summary judgment, and defendants filed cross-motions for summary judgment. These motions are now ripe for determination by the Court.

II. STANDARDS OF REVIEW

A. Summary Judgment

Summary judgment should be granted only if the moving party has shown that there are no genuine issues of material fact and that the moving party is entitled to a judgment as a matter of law. See Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); Waterhouse v. Dist. of Columbia, 298 F.3d 989, 991 (D.C. Cir. 2002). "A fact is material if it 'might affect the outcome of the suit under the governing law,' and a dispute about a material fact is genuine 'if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Steele v. Schafer, 535 F.3d 689, 692 (D.C. Cir. 2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The party seeking summary judgment bears the initial burden of demonstrating an absence of genuine issues of material fact. Celotex, 477 U.S. at 322. In determining whether a genuine issue of material facts exists, the Court must view all facts in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 597 (1986); Keyes v. Dist. of Columbia, 372 F.3d 434, 436 (D.C. Cir. 2004). Likewise, in ruling on cross-motions for summary judgment, ...


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