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Zukerman v. United States Postal Service

United States District Court, District of Columbia

April 26, 2019

ANATOL ZUKERMAN, et al., Plaintiffs,
v.
UNITED STATES POSTAL SERVICE, Defendant.

          MEMORANDUM OPINION

          CHRISTOPHER R. COOPER, UNITED STATES DISTRICT JUDGE

         The United States Postal Service (“USPS”) allows customers to design and print customized postage stamps. We've all seen them: personalized postage for a wedding invitation featuring a photograph of the happy couple, a birth announcement featuring an image of the newborn, or an upcoming sale featuring the company's logo. Artist Anatol Zukerman wanted to create his own personalized postage to promote an upcoming gallery exhibition and submitted a proposed design to a third-party vendor that printed customized postage on USPS's behalf. The vendor rejected Zukerman's design as too “partisan or political” under USPS's then-extant guidelines: aimed at critiquing the Supreme Court's Citizens United decision, the design cautioned that “Democracy is not for sale” and featured the image of a snake-marked with the words “Citizens United” and shaped like a dollar sign-strangling Uncle Sam. Zukerman and the gallery sued, alleging that USPS, through the vendor, had violated the First Amendment. The Court denied a previous motion to dismiss the suit for lack of jurisdiction, and the parties proceeded to discovery. In the meantime, though, USPS promulgated new regulations to govern the customized postage program, redefining and narrowing somewhat the type of content that is permitted. Again, Zukerman submitted proposed designs to a vendor; again, those designs- substantially similar to the previous one-were rejected; and again, Zukerman and the gallery sued, supplementing their original claims with a facial First Amendment challenge to the new regulations.

         USPS has moved to dismiss Plaintiffs' suit. It says that Plaintiffs' original claims are moot because they are based on guidelines that have been superseded by the operative regulations. And it contends that Plaintiffs' supplemental claims challenging those regulations fail to state a claim because the customized postage program is a nonpublic forum and its governing regulations need only be reasonable and viewpoint neutral, which they are. For the reasons that follow, the Court concludes that Plaintiffs' original claims are moot and must be dismissed under Federal Rule of Civil Procedure 12(b)(1). The Court further concludes that Plaintiffs' supplemental claims fail to state a claim and must be dismissed under Rule 12(b)(6).

         I. Background

         A. The Customized Postage Program

         USPS launched its customized postage program in 2004 to allow customers to print at home “evidence of prepayment of postage” using their own images. 39 C.F.R. § 501.1(a). These products are distinct from U.S. postal stamps, which are produced and controlled by USPS. See 18 U.S.C. § 8. Consumers may only use authorized third-party vendors to create customized postage. Since the program's inception, it has been “the Postal Service's declared intent not to allow its Customized Postage program to become a public forum for dissemination, debate, or discussion of public issues.” Customized Postage, 71 Fed. Reg. 12, 718-01, 12, 719 (Mar. 13, 2006). Rather, the program is designed to promote USPS's commercial objectives as set forth in 39 U.S.C. § 3622(b)(5), which directs the Postal Regulatory Commission “[t]o assure adequate revenues, including retained earnings, [and] to maintain financial stability.” See Request of the U.S. Postal Service to Add Postal Products to the Mail Classification Schedule, Attachment D (Statement of Supporting Justification for Customized Postage) at 1, Modification of Mail Classification Schedule Product Lists in Response to Order No. 154, No. MC2009-19 (Postal Regulatory Comm'n Mar. 10, 2009) (hereinafter “USPS Statement of Support, Attachment D”).

         For most of the program's history, USPS restricted the permissible content of customized postage by requiring authorized vendors to abide by Standardized Image Guidelines incorporated in the vendors' authorization agreements. See Proposed Rule, Revisions to the Requirements for Customized Postage Products, 82 Fed. Reg. 1, 294-01, 1, 294 (Jan. 5, 2017). The Guidelines attached to the 2009 agreement of one such vendor, Zazzle, Inc., directed the vendor not to accept, among other categories, “[c]ontent or images actively advocating or disparaging the religious, political, or legal agenda of any person or entity, including but not limited to content or images designed to influence a specific piece of legislation” or “[p]artisan or political content or images, including but not limited to content or images supporting or opposing election of any candidate(s) to any federal/state/local governmental office or supporting or opposing any referendum conducted by federal/state/local government.” Standardized Image Guidelines, Exhibit A to Customized Postage Amended and Restated Authorization between USPS and Zazzle, Inc. (May 7, 2009), ECF No. 43-7, at 9 (Filed Under Seal).[1] In interpreting and applying these Guidelines, Zazzle imposed additional restrictions, which prohibited “the printing of any postage with content that is primarily partisan or political in nature” or that “[a]dvocate[s] or protest[s] any social, political, legal, moral or religious agenda in a way that may appear controversial to others.” Am. Compl. (“FAC”), ECF No. 17-2, ¶¶ 15, 23.

         In January 2017, USPS noticed in the Federal Register a proposed rule that would give “regulatory form” to these content restrictions and remedy any “inconsistency of publicly available provider content guidelines” that “caused confusion over Customized Postage products.” 82 Fed. Reg. at 1, 294. USPS finalized the rule in December 2017. Final Rule, Revisions to the Requirements for Customized Postage Products, 82 Fed. Reg. 60, 117-01, 60, 117-18 (Dec. 19, 2017). The final rule emphasized that although customized postage is a specialized form of evidence of prepayment of postage, there is a possibility that consumers will believe that the images originated with the Postal Service. Accordingly, USPS concluded that it “must limit eligible private content to protect its own business and brand interests against dilution, false attribution, appearances of endorsement, and other potential impacts.” Id. at 60, 117. The new Regulations thus limit the type of content allowed on customized postage to just two categories: “commercial” and “social” content. 39 C.F.R. § 501.21(b)(1). They also require that images be suitable for all ages. Id. § 501.21(b)(2). Finally, the Regulations “exclud[e] entire categories of content, ” 82 Fed. Reg. at 60, 118, including all “political, religious, violent or sexual content”; “[a]ny depiction of controlled substances”; and “[a]ny non-incidental depiction of alcohol, tobacco, gambling, or firearms, ” 39 C.F.R. § 501.21(b)(2). Thus, under the Regulations, which went into effect in May 2018, the “default presumption” is that images are ineligible for printing. 82 Fed. Reg. at 60, 118.

         B. Factual and procedural background

         In July 2013, an art gallery owned by Charles Krause Reporting, LLC, displayed a drawing by Mr. Zukerman depicting Uncle Sam being strangled by a snake marked “Citizens United.” FAC ¶ 17. To promote an exhibition titled “Truth to Power: Anatol Zukerman's ‘Responsible' Art, ” planned for February 2016, the gallery suggested that Zukerman create a custom postage design using the drawing. Id. ¶¶ 18-19. In early 2015, Zukerman submitted a proposed design to Zazzle, Inc., an authorized vendor under the customized postage program. Id. ¶¶ 13, 20. Zazzle rejected the design, saying that applicable content guidelines prohibited “printing [] any postage with content that is primarily partisan or political in nature.” Id. ¶ 23 (quoting Apr. 27, 2015 Email from Zazzle Support to A. Zukerman, Exhibit M to FAC at 91).

         Zukerman and the gallery sued. Their First Amended Complaint alleges that USPS, through Zazzle, engaged in content and viewpoint discrimination in violation of the First Amendment because Zazzle printed postage promoting the campaigns of several 2016 presidential candidates while declining to produce Zukerman's proposed Citizens United design. Id. ¶¶ 24, 33, 44. Zazzle's decision to print postage depicting specific candidates appears to violate both the Standardized Image Guidelines, which barred “[p]artisan or political content or images, including . . . content or images supporting or opposing election of any candidate(s) to any federal[] governmental office, ” Standardized Image Guidelines at 9, as well as Zazzle's own Appropriate Use Guidelines, which prohibited content that “incorporate[s] a . . politician . . or other famous person's name or likeness, ” Exhibit J to FAC at 61.

         In December 2016, the Court denied USPS's motion to dismiss the First Amended Complaint for lack of jurisdiction. See Memorandum Opinion, ECF No. 23. The parties proceeded to discovery. In July 2018, two weeks after Plaintiffs moved for summary judgment, they sought leave to file a supplemental complaint setting forth a facial First Amendment challenge to the 2018 Regulations. See Motion for Leave to File Suppl. Compl., ECF No. 48. The Court granted this request. See July 18, 2018 Minute Order.

         Plaintiffs' Supplemental Complaint alleges that the Regulations violate the First Amendment by barring “political” designs. Plaintiffs aver that they placed two orders for customized postage with Stamps.com, another authorized vendor.[2] The orders were for a “substantively identical” design to that previously submitted to Zazzle in April 2015. Suppl. Compl., ECF No. 52, ¶¶ 5, 6, 8. But in addition to the image of the dollar-sign snake strangling Uncle Sam, the design features the text “Democracy is Not for Sale, But This Artwork Is!”- presumably included to situate the design within USPS's allowance for commercial content- and the name “Charles Krause Reporting Fine Art.” Id. ¶ 6. Both orders were rejected because they “did not meet the ‘content guidelines.'” Id. ¶¶ 7, 9.

         USPS has moved to dismiss Plaintiffs' claims originally set forth in the First Amended Complaint, which challenge the prior Guidelines, and the claims set forth in the Supplemental Complaint, which target the 2018 Regulations. See Mem. Supp. Mot. Dismiss (“MTD”), ECF No. 55-1.[3] The government argues that the original claims are moot because the Regulations replaced the Guidelines and that the supplemental claims fail to state a facial First Amendment challenge to the operative Regulations. Plaintiffs oppose the motion. See Opp'n, ECF No. 56. The Court heard oral argument on April 10, 2019.

         II. Standard of Review

         When evaluating a motion to dismiss, the Court must “treat the complaint's factual allegations as true and must grant [the] plaintiff ‘the benefit of all inferences that can be derived from the facts alleged.'” Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000) (citations omitted); Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011) (citation omitted). The Court need not accept the plaintiff's legal conclusions, however. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). USPS has moved to dismiss the complaint for lack of jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim under Rule 12(b)(6).

         “A motion to dismiss for mootness is properly brought under Rule 12(b)(1) because mootness itself deprives the court of jurisdiction.” Indian River Cty. v. Rogoff, 254 F.Supp.3d 15, 18 (D.D.C. 2017). Unlike some jurisdictional questions such as standing or ripeness, the party asserting mootness-here, USPS-bears the “initial ‘heavy burden'” of establishing that the case is moot. Honeywell Int'l, Inc. v. NRC, 628 F.3d 568, 576 (D.C. Cir. 2010) (citation omitted). This burden remains when the defendant contends that its voluntary action deprives the court of jurisdiction. PETA v. U.S. Dep't of Agric., 918 F.3d 151, 157 (D.C. Cir. 2019) (quoting Friends of the Earth, Inc. v. Laidlaw Envt'l Servs., Inc., 538 U.S. 167, 189 (2000)).

         To survive a 12(b)(6) motion, it is the plaintiff who bears the (relatively light) burden of showing that the complaint contains sufficient facts which, if accepted as true, state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

         III. Analysis

         There are two central issues before the Court. First, whether it has jurisdiction to consider Plaintiffs' claims based on the Standardized Image Guidelines or whether the superseding Regulations render the original claims moot. And second, whether Plaintiffs' Supplemental Complaint states a plausible First Amendment challenge to the 2018 Regulations. For the reasons that follow, the Court concludes that Plaintiffs' challenges to the Guidelines are moot and will therefore dismiss the claims originally set forth in Plaintiffs' First Amended Complaint for lack of jurisdiction. And even if it did have jurisdiction over those claims, both precedent and practicality counsel against passing on the constitutionality of a superseded enforcement regime. The Court further concludes that Plaintiffs have failed to state a facial First Amendment challenge to the Regulations because the customized postage program is a nonpublic forum and the Regulations are both reasonable and viewpoint neutral. The Court will, therefore, also dismiss the claims first advanced in the Supplemental Complaint.

         A. Challenge to the Guidelines

         1. Mootness

         “Federal courts lack jurisdiction to decide moot cases because their constitutional authority extends only to actual cases or controversies.” Conservation Force, Inc. v. Jewell, 733 F.3d 1200, 1204 (D.C. Cir. 2013) (quoting Iron Arrow Honor Soc'y v. Heckler, 464 U.S. 67, 70 (1983)). “A case becomes moot-and therefore no longer a ‘Case' or ‘Controversy' for purposes of Article III-‘when the issues presented are no longer ‘live' or the parties lack a legally cognizable interest in the outcome.'” Already, LLC v. Nike, Inc., 568 U.S. 85, 91 (2013) (quoting Murphy v. Hunt, 455 U.S. 478, 481 (1982) (per curiam)).

         When “intervening events make it impossible to grant the prevailing party effective relief, ” no live controversy remains. Lemon v. Green, 514 F.3d 1312, 1315 (D.C. Cir. 2008) (citation omitted). As relevant here, “when an agency has rescinded and replaced a challenged regulation, litigation over the legality of the original regulation becomes moot.” Akiachak Native Cmty. v. U.S. Dep't of Interior, 827 F.3d 100, 113 (D.C. Cir. 2016) (listing cases); see also Initiative & Referendum Inst. v. USPS (“IRI”), 685 F.3d 1066, 1074 (D.C. Cir. 2012) (“A challenge to a superseded law is rendered moot unless there [is] evidence indicating that the challenged law likely will be reenacted.” (alteration in original) (internal quotation marks, citation omitted)); CREW v. Wheeler, 352 F.Supp.3d 1, 11 (D.D.C. 2019) (“The promulgation of a superseding policy or program can have the power to moot a challenge to the old one.”). The D.C. Circuit has advised that in “such cases, [] if the agency promulgates a new regulation contrary to one party's legal position, that party may ‘cure[] its mootness problem by simply starting over again' by challenging the regulations currently in force.” Akiachak Native Cmty., 827 F.3d at 113 (second alteration in original) (citations omitted).

         USPS argues that is precisely what happened here: issuance of the new Regulations is an intervening event that moots any claim based upon Guidelines no longer in force. Because the customized postage program is now governed by the 2018 Regulations, and Plaintiffs supplemented their complaint to challenge the constitutionality of those regulations, USPS says the Court should dismiss as moot any claims based on the Guidelines. The Court agrees: it is “a perfectly uncontroversial and well-settled principle of law” that rescinding and replacing a challenged regulation moots litigation over the original regulation. Id. at 113. USPS has rescinded and replaced the Guidelines with the Regulations, so any challenge to the constitutionality of the Guidelines is now moot.

         Plaintiffs actually also agree-to a degree. They “concede that some of the relief [originally] sought . . . is now moot in light of the new USPS regulations”: the Court cannot declare that the Guidelines are unconstitutional and cannot enjoin USPS from enforcing Guidelines no longer in effect. Opp'n at 11. Even so, Plaintiffs contend that USPS's adoption of the 2018 Regulations does not moot their original claims because they “continue to suffer ...


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