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Sears, Roebuck and Co. v. U.S. Postal Serv.

United States District Court, D. Columbia.

July 30, 2015

SEARS, ROEBUCK AND CO., et al., Plaintiff,
v.
U.S. POSTAL SERVICE, Defendant

For SEARS, ROEBUCK & CO., SEGERDAHL GRAPHICS, INC., ASPEN MARKETING SERVICES, LLC, Plaintiffs, Counter Defendants: David Matthew Levy, John F. Cooney, LEAD ATTORNEYS, Moxila A. Upadhyaya, VENABLE LLP, Washington, DC.

For UNITED STATES POSTAL SERVICE, Defendant: Peter C. Pfaffenroth, LEAD ATTORNEY, U.S. ATTORNEY'S OFFICE, Civil Division, Washington, DC.

For UNITED STATES POSTAL SERVICE, Counter Claimant: Peter C. Pfaffenroth, LEAD ATTORNEY, U.S. ATTORNEY'S OFFICE, Civil Division, Washington, DC.

OPINION

Page 245

ROSEMARY M. COLLYER, United States District Judge.

In this suit brought under the Administrative Procedure Act, 5 U.S.C. § § 701 et seq., Plaintiffs seek to supplement the administrative record. The documents that Plaintiffs seek to include were not before, or considered by, the decision-makers when they made the final agency decisions challenged here. Further, the documents

Page 246

are not " adverse" to the agency. Thus, the motion will be denied.

I. FACTS

Three mailings by the Plaintiffs--Sears, Roebuck and Co.; Segerdahl Graphics, Inc.; and Aspen Marketing Services, LLC--resulted in three assessments by the U.S. Postal Service's Pricing Classification Service Center for revenue deficiencies. Plaintiffs mailed oblong folded self-mailers at a discounted automation rate. U.S. Postal Service (USPS) rules require such self-mailers to be sealed on the top and bottom edges with glue or adhesive tabs. Because Plaintiffs' pieces were sealed only at their corners, the Pricing Classification Service Center rendered three separate decisions, in June and September 2011, disqualifying them for the lower automation rate and assessing deficiencies totaling over $1.25 million. Plaintiffs filed this suit against USPS challenging the Pricing Center's decisions as both ultra vires and arbitrary and capricious under Administrative Procedure Act, 5 U.S.C. § § 701 et seq. (APA). The parties have filed cross motions for summary judgment that are now fully briefed.

Plaintiffs now move to supplement the administrative record with three documents: (1) a November 21, 2011 letter from Plaintiffs' counsel to counsel for USPS; and (2) a December 7, 2011 response letter from USPS counsel to Plaintiffs' counsel; and (3) a May 12, 2010 Report of the USPS Office of Inspector General (OIG Report). See Mot. to Supplement [Dkt. 35], Exs. A-C [Dkts. 35-1-35-3]. The November 21, 2011 letter from Plaintiffs' attorney requested reconsideration of the three final agency decisions challenged in this suit, and the December 7, 2011 USPS letter is a response to the request for reconsideration. The OIG Report concerns an audit and investigation regarding the Postal Service's " Move Update Program," which requires bulk mailers to update their address lists with address changes of customers who have moved or face deficiency assessments. See OIG Report.

II. LEGAL STANDARD

The Administrative Procedure Act requires reviewing courts to " set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706. In reviewing agency rulemakings, the APA requires courts to " review the whole record or those parts of it cited by a party." Id. " If a court is to review an agency's action fairly, it should have before it neither more nor less information than did the agency when it made its decision." Walter O. Boswell Mem'l Hosp. v. Heckler, 749 F.2d 788, 792, 242 U.S. App.D.C. 110 (D.C. Cir. 1984). The " whole" administrative record consists of all materials directly or indirectly considered by agency decision-makers, including evidence contrary to the agency's position, not merely the materials that the agency relied on. Stainback v. Sec'y of Navy, 520 F.Supp.2d 181, 185-86 (D.D.C. 2007). An " agency may not skew the record by excluding unfavorable information but must produce the full record that was before the agency at the time the decision was made." Blue Ocean Inst. v. Gutierrez, 503 F.Supp.2d 366, 369 (D.D.C. 2007). On the other hand, an agency may exclude information that is not contained in the agency's files and " generally may exclude material that reflects internal deliberations." Fund for Animals v. Williams, 391 F.Supp.2d 191, 197 (D.D.C. 2005).

" [A]n agency is entitled to a strong presumption of regularity that it properly designated the administrative record." Pacific Shores ...


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