American Postal Workers Union, Afl-Cio v. United States Postal Service

891 F.2d 304, 282 U.S. App. D.C. 5, 133 L.R.R.M. (BNA) 2130, 1989 U.S. App. LEXIS 18672, 1989 WL 147180
CourtCourt of Appeals for the D.C. Circuit
DecidedDecember 8, 1989
Docket88-5436
StatusPublished
Cited by17 cases

This text of 891 F.2d 304 (American Postal Workers Union, Afl-Cio v. United States Postal Service) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Postal Workers Union, Afl-Cio v. United States Postal Service, 891 F.2d 304, 282 U.S. App. D.C. 5, 133 L.R.R.M. (BNA) 2130, 1989 U.S. App. LEXIS 18672, 1989 WL 147180 (D.C. Cir. 1989).

Opinions

Opinion for the Court filed by Circuit Judge MIKVA.

Concurring opinion filed by Circuit Judge RUTH BADER GINSBURG.

MIKVA, Circuit Judge:

Appellants in this action challenge the district court’s grant of summary judgment for the United States Postal Service (“USPS” or “Postal Service”). The district court found that appellants lacked standing to seek review of a final order of the USPS which suspended the Postal Service’s statutory monopoly to allow private entities to participate in a mail delivery market known as international remailing. On the merits, the district court concluded that the USPS did not act arbitrarily, capriciously or beyond its statutory authority in promulgating the international remailing regulation. Appellants, the American Postal Workers Union, AFL-CIO and the National Association of Letter Carriers, AFL-CIO (collectively, “the Unions”) assert that they are within the “zone of interests” implicated by the Private Express Statutes (“PES”) — the statutes codifying the Postal Service’s historic monopoly on the carriage of letters over postal routes. The Unions challenge the USPS’s wholesale suspension of the international remailing restriction as arbitrary, capricious and not supported by a sufficient factual showing that the “public interest” required such suspension.

We agree. The district court correctly concluded that the Unions satisfy the requisites for article III standing. We find, however, that the district court erred in concluding that the Unions’ interest in preserving employment opportunities bears no reasonable relationship to the purposes of the PES. Because the Private Express Statutes are an integral part of a comprehensive statutory scheme which clearly addresses the welfare and employment of postal employees, we conclude that the Unions are within the zone of interests of the PES. The USPS’s suspension of the PES to allow unrestricted international remail-ing by private entities constitutes arbitrary and capricious agency action because the USPS did not develop a record to project the impact of the suspension on uniform postal rates and service. Consequently, we remand this case to the district court to vacate its order and allow the USPS to reopen its proceedings or take other action consistent with this opinion.

I. Background

The Private Express Statutes historically have granted to the USPS a monopoly over the carriage of letters by prohibiting, with certain exceptions, private competition in conveying letters over postal routes. See 18 U.S.C. §§ 1693-1699, 1729 (1982); 39 U.S.C. §§ 601-606 (1982). The USPS may “suspend [the Private Express restrictions] upon any mail route where the public interest requires the suspension.” 39 U.S.C. § 601(b). In 1979, the Postal Service exercised its authority under § 601(b) to suspend the PES for the carriage of extremely urgent letters, otherwise known as express mail or overnight service. See 44 Fed.Reg. 61,181 (Oct. 24, 1979). As a result, private mail services began to rely on the urgent letter suspension to support the practice of “international remailing,” or carriage of letters overseas for deposit into foreign postal systems — thus allowing users of this service to bypass completely the U.S. Postal Service. In October of 1985, the USPS announced its intention to amend the urgent letter suspension to limit sharply its applicability to international remailing. See 50 Fed.Reg. 41,462 (Oct. 10, 1985). This proposal was greeted with massive opposition from the business community and the disapproval of several members of Congress and senior executives in the Reagan Administration. Opponents argued primarily that preventing private remailers from offering inexpensive, speedy service would jeopardize the ability of American companies to compete for business abroad.

In March of 1986, the Chairman of the Postal Service’s Board of Governors, John McKean, announced the USPS’s intention to initiate another rulemaking proceeding “to remove the cloud that now hangs over [307]*307the international remail services and preserve the benefits of desirable competition between the Postal Service and private companies.” The USPS withdrew its earlier proposal and began considering whether to suspend the PES to allow international remailing. See 51 Fed.Reg. 9652 (March 21, 1986). Two rulemaking notices to this effect and a public meeting produced little additional factual information.

On August 20, 1986, the USPS published a final rule suspending the PES to permit unrestricted international remailing. See 51 Fed.Reg. 29,636. The regulation allows private carriers to deliver mail from the United States directly to foreign postal systems, bypassing the USPS, without meeting certain cost conditions that applied under the urgent letter suspension. See 39 CFR § 320.8 (1988). Responding to the Unions’ complaint that the record was inadequate to support a “public interest” finding, the USPS stated:

The Postal Service ... sought ... to obtain precise and detailed information regarding the level of services provided by remailers, and the benefits which [their] customers ... derive. It may well be, however, that because of the diverse character of the remail industry and the relatively recent development of remail-ing, the comprehensive information we had hoped to receive to supplement the essentially anecdotal information, which was furnished to us, is not available. Nonetheless, the Postal Service has compiled a record which appears to demonstrate the existence of a public benefit and to support the suspension.

51 Fed.Reg. 29,637 (Aug. 20, 1986). Indeed, in its final notice of proposed rule-making the USPS had emphasized the sketchy nature of the factual record, referring to the “anecdotal character” of tables charting relative delivery times, the “imprecision of the data” on the need of U.S. businesses for private international remail-ing, and the presence of “little or no reliable information as to the amount of revenues diverted to date by the activities of remailers.” 51 Fed.Reg. 21,931 (June 17, 1986).

The Unions filed suit in the district court, seeking declaratory and injunctive relief against enforcement of the international remailing regulation. The district courts have original jurisdiction over suits by or against the Postal Service. 39 U.S.C. § 409 (1982). Although the USPS is exempt from the strictures of the Administrative Procedure Act (“APA”), see 39 U.S.C. § 410(a), it has chosen to follow APA procedures when promulgating rules affecting the PES. See 39 CFR § 310.7 (1988). Therefore, the APA provides the appropriate standards for evaluating the procedural and substantive issues in this ease.

Issuing a memorandum opinion, the district court granted the Postal Service’s motion for summary judgment.

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891 F.2d 304, 282 U.S. App. D.C. 5, 133 L.R.R.M. (BNA) 2130, 1989 U.S. App. LEXIS 18672, 1989 WL 147180, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-postal-workers-union-afl-cio-v-united-states-postal-service-cadc-1989.