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Anatol Zukerman & Charles Krause reporting, LLC v. U.S. Postal Service

United States District Court, District of Columbia

December 6, 2016

ANATOL ZUKERMAN & CHARLES KRAUSE REPORTING, LLC, Plaintiffs,
v.
U.S. POSTAL SERVICE, Defendants.

          MEMORANDUM OPINION

          CHRISTOPHER R. COOPER, United States District Judge

         The United States Postal Service (“USPS”) permits the use of personalized postage stamps. Believing that a bespoke stamp would help publicize an upcoming gallery exhibition, local artist Anatol Zukerman submitted a proposed design-aimed at critiquing the Supreme Court's Citizens United decision-to a third-party vendor that prints the customized stamps on USPS's behalf. After the vendor rejected Zukerman's rendering as unduly “partisan or political, ” he and the gallery sued, alleging that USPS, through its agent contractor, had engaged in impermissible content and viewpoint discrimination in violation of the First Amendment. Currently before the Court is a motion to dismiss by USPS that raises a threshold jurisdictional question: whether exclusive jurisdiction over the case lies with the Postal Regulatory Commission, an administrative tribunal primarily charged with adjudicating postal rate and service complaints. The Court finds that the relevant authorizing statute vests the Commission with jurisdiction over only a handful of subject matter-specific claims, none of which may fairly be understood to encompass core First Amendment challenges like those presented here. The Court will therefore deny USPS's motion and assert jurisdiction over the case.

         I. Background

         A. Statutory Context

         In 1970, through passage of the Postal Reorganization Act (“PRA”), Congress sought “to improve and modernize the postal service, ” S. Rep. No. 91-12, at 1 (1970), and “to minimize external intrusions on the Postal Service's managerial independence, ” LeMay v. USPS, 450 F.3d 797, 800 (8th Cir. 2006). As part of that effort, the PRA vested jurisdiction over “classic questions of postal rates and services” in the hands of an administrative body called the Postal Rate Commission, LeMay, 450 F.3d at 801; see 39 U.S.C. § 3662 (2006), while nevertheless leaving to U.S. district courts “original . . . jurisdiction over all actions brought by or against the Postal Service, ” 39 U.S.C. § 409(a) (2006).

         The Postal Accountability and Enhancement Act (“PAEA”), passed in 2006, further defined the Commission's jurisdictional boundaries, but it kept the broad contours in place. Now, the renamed Postal Regulatory Commission (“PRC” or the “Commission”) is specifically tasked with hearing complaints alleging violations of “sections 101(d), 401(2), 403(c), 404a, or 601” of Title 39. 39 U.S.C. § 3662(a). Those sections generally pertain to “postal rates and service standards.” Sears, Roebuck & Co. v. U.S. Postal Serv., 134 F.Supp.3d 365, 382 (D.D.C. 2015). At issue here is whether the facts alleged by Mr. Zukerman fall within § 403(c), and are therefore within the jurisdiction of the Commission. That section requires that “[i]n providing services and in establishing classifications, rates, and fees under this title, the Postal Service shall not . . . make any undue or unreasonable discrimination among users of the mails, nor shall it grant any undue or unreasonable preferences to any such user.” B. Factual & Procedural History In July 2013, an art gallery owned by Charles Krause Reporting, LLC, displayed a drawing by Mr. Zukerman depicting Uncle Sam imprisoned by a snake named “Citizens United.” See Am. Compl. ¶ 17. The drawing was part of a collection of Zukerman's work entitled “Truth to Power: Anatol Zukerman's ‘Responsible' Art.” Id. In order to promote an exhibition planned for February 2016 that would feature the drawing, “and to raise awareness about . . . the harm caused by the Citizens United decision, ” the gallery suggested that Zukerman create a custom postage stamp depicting the drawing. Id. ¶¶ 18-19. In early 2015, Zukerman submitted his proposed stamp design to Zazzle, Inc., a third-party vendor that assists USPS in administering its custom-postage program. See id. ¶¶ 13, 20. The design featured an image of the drawing with the caption “Democracy is Not for Sale.” Id. ¶ 20. Zazzle responded with the message that it was unable to process Zukerman's order because the submitted “design[] [was] in conflict with [the applicable] content guidelines.” Id. ¶ 22. In response to Zukerman's request for more information, Zazzle pointed to “special Appropriate Use Guidelines, ” which included a prohibition on “printing . . . any postage with content that is primarily partisan or political in nature.” Id. ¶ 23.

         Plaintiffs brought suit against USPS, initially raising both constitutional challenges and a statutory claim under 39 U.S.C. § 403(c), the material provision discussed above. Compl. ¶ 41. USPS then moved to dismiss, arguing that the Court “lack[ed] subject-matter jurisdiction to adjudicate Plaintiffs' statutory claim” since there was an “exclusive administrative scheme to hear claims under section 403(c), ” and that Plaintiffs' constitutional claims were so inextricably tied to their statutory claim-being based on the same facts-that those claims should be dismissed, too. Defs.' Mem. Supp. First Mot. Dismiss 8-10. After a hearing on the motion, Plaintiffs amended their complaint, this time alleging only constitutional claims. Am. Compl. ¶ 44. In their Amended Complaint, Plaintiffs mainly contend that because Zazzle printed stamps promoting the 2016 presidential campaigns of Jeb Bush, Ted Cruz, and Bernie Sanders, Am. Compl. ¶ 24, its decision not to print Zukerman's Citizens United stamp constituted “content and viewpoint discrimination in violation of Plaintiffs' rights under the First and Fifth Amendments, ” id. ¶ 33; see also id. ¶ 44. Nevertheless, USPS has again moved to dismiss, arguing that because Plaintiffs' allegations are “cognizable under [39 U.S.C.] § 403(c), ” those claims must be “channeled . . . to the PRC for adjudication in the first instance[.]” Defs.' Mem. Supp. Second Mot. Dismiss (“Defs.' MTD”) 2.

         USPS's motion turns on whether Plaintiffs' claims properly fall within the scope of § 403(c), which USPS concedes is the only potentially applicable provision conferring jurisdiction on the Commission. As the text, structure, and legislative history of the PAEA make clear, however, Congress never intended for that provision to sweep in genuine First Amendment claims like these. Accordingly, the Court will deny USPS's dismissal motion.

         II. Legal Standards

         A motion to dismiss under Rule 12(b)(1) “presents a threshold challenge to the court's jurisdiction[.]” Morrow v. United States, 723 F.Supp.2d 71, 75 (D.D.C. 2010) (quoting Haase v. Sessions, 835 F.2d 902, 906 (D.C. Cir. 1987)). A court accepts all factual allegations in the operative complaint as true. Gordon v. Office of the Architect of the Capitol, 750 F.Supp.2d 82, 86 (D.D.C. 2010). And “the plaintiff bears the burden of establishing the [c]ourt's jurisdiction by a preponderance of the evidence.” Morrow, 723 F.Supp.2d at 76 (citing Moore v. Bush, 535 F.Supp.2d 46, 47 (D.D.C. 2008)); see also Arpaio v. Obama, 797 F.3d 11, 19 (D.C. Cir. 2015) (“The plaintiff bears the burden of invoking the court's subject matter jurisdiction[.]”).

         III. Analysis

         Much of USPS's briefing is devoted to applying Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994), and its progeny, cases which develop “a framework for determining when a statutory scheme of administrative and judicial review forecloses parallel district-court jurisdiction, ” where “[t]he ultimate question [at issue] is whether Congress intended exclusivity” by establishing such a scheme. Jarkesy v. SEC, 803 F.3d 9, 12 (D.C. Cir. 2015). But in those cases, the parties did not dispute the agency's jurisdiction-in the first instance-over the relevant claims. Here, before the Court may determine if the PRC's jurisdiction is exclusive, it must first determine if such jurisdiction exists. As Plaintiffs note, and as USPS does not dispute, “whether [an administrative tribunal such as] the PRC has exclusive jurisdiction over certain claims depends first on whether [it] has jurisdiction over those claims at all.” Pls.' Mem. Opp'n Def.'s Mot. Dismiss (“Pls.' Opp'n”) 5. Answering that question requires no peculiar “framework”-only the traditional tools of statutory interpretation.[1] Here, the text, structure, purpose, and legislative history of the relevant statute all point in the same direction: They indicate that Congress did not intend for the PRC to have jurisdiction over the types of claims Plaintiffs here allege.

         As discussed above, the PAEA conferred on the Commission jurisdiction over complaints alleging violations of one of a handful of discrete statutory provisions. See 39 U.S.C. § 3662(a). USPS contends that one, and only one, of those provisions covers the conduct Plaintiffs allege. In particular, USPS argues that the rejection of Zukerman's stamp design may have constituted “undue or unreasonable discrimination among users of the mail” under 39 U.S.C. § 403(c). But to frame that argument is to reveal its first major defect: Zukerman does not allege facts suggesting that USPS discriminated against him or any particular class of “users of the mail.” Complaints sounding in § 403(c) as a general matter allege that certain classes of mail users are being treated differently than other such classes, and that there is no good reason for the disparate treatment. See, e.g., Currier v. Potter, 379 F.3d 716 (9th Cir. 2004) (complaint alleging that USPS's provision of mail service only at a main office, and not at citywide branch offices, unreasonably discriminated against homeless persons); UPS Worldwide Forwarding, Inc. v. U.S. Postal Serv., 66 F.3d 621 (3d Cir. 1995) (complaint alleging that a new USPS international mail service, which permitted certain large-volume mailers to negotiate favorable postage rates, unreasonably discriminated against small-volume mailers). Zukerman's complaint, by contrast, alleges facts suggesting that USPS has unconstitutionally discriminated among various stamp designs. See Am. Compl. ¶ 23 (Zukerman's stamp allegedly rejected because his “proposed design was in conflict with Zazzle's content guidelines”). Even USPS frames Plaintiffs' allegations in these terms. See Def.'s MTD Def.'s Reply 6 (“These allegations form the basis of Plaintiffs' claims, which assert that USPS engaged in discrimination on the basis of content and viewpoint in providing Customized Postage.”). Nothing in the complaint suggests that Zukerman is a member of a class of discriminated-against “users.”

         Nor does Zukerman's complaint appear to fit § 403(c) any better when the lens is widened, so as to consider the PAEA's structure. Section 3662, the provision defining the extent of the PRC's jurisdiction, is titled “[r]ate and service complaints, ”[2] and it permits the PRC to adjudicate alleged violations of five discrete statutory provisions. 39 U.S.C. § 3662. Aside from a provision permitting USPS to promulgate regulations, see 39 U.S.C. § 401(2), all of these provisions expressly govern “postal rates and service standards.” Sears Roebuck, 134 F.Supp.3d at 382. For instance, § 101(d) provides that “[p]ostal service rates shall be established to apportion the costs of all postal operations to all users of the mail on a fair and equitable basis, ” and § 601 prescribes packaging, weight, and postage requirements for deliverable mail. If “a word may be known by the company it keeps” under the noscitur a sociis interpretive maxim, Graham Cty. Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280, 287 (2010) (quoting Russell Motor Car Co. v. United States, 261 U.S. 514, 519 (1923)), then surely so may a statutory provision. And it would be unusual, to say the least, for a provision encompassing First Amendment law to fraternize with a provision stipulating that “[a] letter may . . . be carried out of the mails when [it] weighs at least 12 ½ ounces[.]” 39 U.S.C. § 601(b)(2). Courts have accordingly read § 403(c) in context, as a provision prohibiting run-of-the-mine postal rate and service discrimination. See, e.g., Nat'l Post Office Collaborative v. ...


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