Federal Express Corporation v. United States Postal Service

151 F.3d 536, 47 U.S.P.Q. 2d (BNA) 1641, 1998 U.S. App. LEXIS 17471, 1998 WL 429097
CourtCourt of Appeals for the Sixth Circuit
DecidedJuly 31, 1998
Docket97-5793
StatusPublished
Cited by19 cases

This text of 151 F.3d 536 (Federal Express Corporation v. United States Postal Service) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Express Corporation v. United States Postal Service, 151 F.3d 536, 47 U.S.P.Q. 2d (BNA) 1641, 1998 U.S. App. LEXIS 17471, 1998 WL 429097 (6th Cir. 1998).

Opinion

OPINION

KRUPANSKY, Circuit Judge.

The defendant-appellant United States Postal Service (“the Postal Service” or “USPS”), on interlocutory appeal certified under 28 U.S.C. § 1292(b), has attacked the district court’s rejection of its motion to dis-

*538 miss, for lack of subject matter jurisdiction, the complaint of plaintiff-appellee Federal Express Corporation (“FedEx”), which alleged that the Postal Service had disseminated false and deceptive commercial advertisements, to the damage of FedEx, in transgression of the Lanham Act, 15 U.S.C. § 1051 et seq.. USPS has supported its motion with two alternate jurisdictional theories, each of which presents a pure question of law. First, USPS has proposed that, as an instrument of the national sovereign, it is immunized against federal tort causes including Lanham Act lawsuits by operation of the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b) & 2671-80. Second, the Postal Service has argued that it is not subject to the strictures of the Lanham Act because it allegedly is not a “person” within that Act’s definition. On review, the appellant has contested the trial forum’s adverse edict that the Postal Service may be directly sued for alleged Lanham Act infractions because Congress statutorily waived the Postal Service’s traditional sovereign immunization against lawsuits including federal tort actions, and thus, as a federal instrumentality capable of being sued, USPS is a Lanham Act “person.” See Federal Express Corp. v. United States Postal Service, 959 F.Supp. 832 (W.D.Tenn.1997).

In 1970, Congress dissolved the cabinet-level United States Post Office Department, legislatively substituting, via the Postal Reorganization Act, 39 U.S.C. § 101 et seq. (“the PRA”), the newly-created United States Postal Service. By statute, the Postal Service retained certain attributes of a government agency. See, e.g., 39 U.S.C. § 201 (stating that USPS is “an independent establishment of the executive branch of the Government of the United States”). However, Congress concurrently invested this hybrid entity with the “status of a private commercial enterprise.” Loeffler v. Frank, 486 U.S. 549, 556, 108 S.Ct. 1965, 100 L.Ed.2d 549 (1988) (citation omitted). The Supreme Court has invoked the economically self-sustaining design of the USPS (see 39 U.S.C. § 3621), as well as the legislative history of the PRA, as mirroring a congressional intent that the Postal Service should “be run more like a business than had its predecessor, the Post Office Department.” Franchise Tax Board of California v. United States Postal Service, 467 U.S. 512, 519-20 & n. 13, 104 S.Ct. 2549, 81 L.Ed.2d 446 (1984); Loefflsr, 486 U.S. at 556-57,108 S.Ct. 1965.

Although the Postal Service, with exceptions, generally possesses a legal monopoly over the commercial carriage of ordinary “letters,” see 18 U.S.C. §§ 1693-99, 39 U.S.C. §§ 601-06, 39 C.F.R. § 310.2, a postal regulation authorized by 39 U.S.C. § 601(b) has, since 1979, permitted private couriers such as FedEx, 1 subject to specified conditions, to carry “extremely urgent letters” for hire. 39 C.F.R. § 320.6. In execution of its congres-sionally-ordained competitive entrepreneurial mission, USPS has, since approximately 1995, pursued an aggressive commercial advertisement campaign targeted against its private sector rivals in the expedited letter delivery market, including FedEx, in a bid to increase its share of that traffic. FedEx has alleged in its instant complaint that certain of USPS’s public representations touting its “Priority Mail” and “Global Priority Mail” delivery services, and its negative comparative characterization of FedEx’s competing “FedEx 2 Day” air courier service, constituted false advertisement and unfair competition violative of the Lanham Act. 2

*539 FedEx has charged that the Postal Service has inaccurately and misleadingly boasted that its priority mail services, though offered at lower cost, are nonetheless comparable or superior in quality to the priority document delivery services offered by FedEx. FedEx has averred that, to the contrary, its express letter delivery system includes superior services and guarantees which are absent from USPS’s priority mail offerings. For instance, the plaintiff has alleged that its “FedEx 2 Day” rash delivery service includes tracking of packages throughout the shipment process, coupled with a money-back guarantee of arrival at the final destination within two days; whereas the Postal Service’s “Priority Mail” and “Global Priority Mail” services promise delivery within two or three days of dispatch but do not guarantee arrival within any number of days, have never afforded cash refunds to dissatisfied customers, and do not include package tracking. Via its Lanham Act complaint, the plaintiff has sought an injunction forbidding future misleading advertisements by USPS, monetary damages, and other relief.

The Lanham Act stipulates, in pertinent portion:

(1) Any person who, on or in connection with any goods or services ... uses in commerce any ... false or misleading description of fact, or false or misleading representation of fact, which ...
(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

15 U.S.C. § 1125(a).

‘ The federal courts may exercise subject matter jurisdiction over a cause prosecuted against a federal agency only if the United States has consented to be sued by waiving sovereign immunity. United States v.'Mitchell, 463 U.S. 206, 212, 103 S.Ct.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
151 F.3d 536, 47 U.S.P.Q. 2d (BNA) 1641, 1998 U.S. App. LEXIS 17471, 1998 WL 429097, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-express-corporation-v-united-states-postal-service-ca6-1998.