Petition for Writ of Certiorari — Air Courier Conference of America v. American Postal Workers Union

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No. 89- :

IN THE

Supreme Court Of The United States

October Term, 1989

AIR COURIER CONFERENCE OF AMERICA,

Petitioner,

Vv.

AMERICAN POSTAL WORKERS UNION,

AFL-CIO, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

L. Peter Farkas

Lyon & Lyon

1225 Eye Street, N. W.

Washington, D. C. 20005

(202) 842-8400

Attorneys for Petitioner

March 8, 1990

ne ee

QUESTIONS PRESENTED

1. Are postal employees within the “zone of interest” of

the statutes that establish and allow the United States Postal

Service to suspend the postal monopoly when “the public inter-

est requires?”

2. Did the court of appeals err in rejecting the Postal

Service’s interpretation of the “public interest” standard for

suspending its monopoly by requiring the Postal Service to

make specific determinations of potential revenue losses and

their effects on the costs and service to all postal patrons in

addition to finding benefits to the general public, competition

and users of remail services?

LIST OF PARTIES

In addition to the parties named in the caption, the parties

below included the United States Postal Service and the National

Association of Letter Carriers, AFL-CIO. The Air Courier

Conference of America is a trade association with approximate-

ly 150 members.

Interpret the 39 U.S.C. § 601 7

il.

Public Interest Standard ...-------

TABLE OF AUTHORITIES

Cases: Page:

American Postal Workers Union v. React Postal Ser-

vices, Inc., 771 F.2d 1375 (10th Cir. 1985) . . 9

American Postal Workers Union, AFL-CIO, v.

United States Postal Service, 701 F.Supp.

(D.D.C. 1988), reversed 891 F.2d 304 (D.C.

OR ee 2

American Postal Workers Union, AFL-CIO, Detroit

Local v. Independent Postal System of America,

Inc., 481 F.2d 90 (6th Cir. 1973),

cert. dismissed, 415 U.S. 901 (1974) ..... 9

Association of Data Processing Service Organiza-

tions v. Camp, 397 U.S. 150 (1970) ...... 10, 12

Bryant v. Yellen, 447 U.S. 352 (1980) ....... 2

Chevron USA, Inc. v. Natural Resources Defense

Council, 467 U.S. 837 (1984) ......... 17

City of Chicago v. Atchison, Topeka & Santa Fe Ry.

Ci es PE on ccc cee 3

Clarke v. Securities Industry Ass'n,

CS 10-12, 15-16

Community Nutrition Institute v. Block, 698 F.2d

1239 (D.C. Cir. 1983), reversed 467 U.S.

TE ard 6 ow 6 GRE M O16 05% 0 0 @ « 10-12, 16

Department of Treasury v. Federal Labor Relations

Authority, cert. granted, US.___,110S.

Ct. 47, 107 LEd.2d 16(1989) ........ 17

Diamond v. Charles, 476 U.S. 54 (1986) . ..... 2-3

Hunt v. Washington Apple Advertising Comm'n,

Oe 3

ional Union, UAW v. Brock,

477 US. 274 7 3

Maine v. Taylor, 477 U.S. 131 (1986) ....... 2

National Association of Letter Carriers, AFL-CIO v.

Independent Postal System of America, Inc.,

470 F.2d 265 (10th Cir. 1972) ........ 8-9

People Gas, Light & Coke Co. v. United States Post-

al Service, 658 F.2d 1182 (7th Cir.1981) .. 13,14

Schneider v. Dumbarton Developers, Inc.,

767 F.2d 1007 (D.C. Cir. 1985) ........ 2

Tax Analysts and Advocates v. Blum

566 F.2d 130 (D.C. Cir. 1977), cert. denied.

434 U.S. 1086(1978) ............. 10, 12

United Transportation Union v. Interstate

Commerce Commission, 891 F.2d 908

EE 16

Valley Forge Christian College v. Americans United

for Separation of Church and State, Inc.,

Ns 6 6 a win 6 ai 0 0 0 0. 11

Statutes and Regulations:

18 U.S.C. §§ 1693-1699, 1729(1982) .... passim

—— rr 2

ee 7, 16

DTT’, « «0 6 « 6 © 002 6

§ 601-606(1982) ......... 3, 4, 7,17

$§ 3601, 3621-27(1970) ...... 16

ee ee 3

Is Gos 6 66s 6 a 3

50 Fed. Reg. 41,462(1985) .......... -

51 Fed. Reg. 9652 (1986) ........... 5

31 Fed. Reg. 21,929 (1986) .......... 6

51 Fed. Reg. 29,636 (1986) .......... 2, 6

Legislative:

H. R. Rep. No. 91-1104 (May 19,1970) ......

Report of House Committee on Post Office and

Civil Service, Postal Reorganization and

Salary Adjustment Act of 1970,

H. R. Rep. No. 91-1104, 91st Cong.

2d Sess. (May 19,1970) ........----

Repent of PeiaetoCeunea. se Feast Cope

Gune 1968), House Comm. on Post Office

and Civil Service, 94th Cong. 2d Sess., Comm.

Print No. 94-25 (November 24, 1976)

Senate Comm. on Governmental Affairs, Postal

Service Amendments Act of 1978,

S. Rep. No. 95-1191, 95th Cong., 2d Sess.,

at 17-21 (September 13,1978) ......-.

Special Joint Comm. on the Revision of the Laws,

Revision and Codification of Law, Etc., S. Rep.

No. 10, 60th Cong., Ist Sess. (1908) .....

House Comm. on Post Office and Civil Service,

98th Cong., Ist Sess., (13 November 1979) . .

Other:

G. L. Priest, The History of the Postal Monopoly

in the United States, 13 J. Law and Economics,

de el

Managing the Public’s Business (1981) .

No. 89-

IN THE

Supreme Court Of The United States

OCTOBER TERM, 1989

AIR COURIER CONFERENCE OF AMERICA,

Petitioner,

AMERICAN POSTAL WORKERS UNION,

AFL-CIO, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT Oi COLUMBIA CIRCUIT

The Air Courier Conference of America (ACCA), inter-

venor below, petitions the Court to grant a writ of certiorari to

review the decision of the Court of Appeals for the District of

Columbia Circuit which vacated summary judgment dismissing

a suit by the American Postal Workers Union, AFL-CIO and the

National Association of Letter Carrier, AFL-CIO (referred to

(Postal Service).

OPINIONS BELOW

1. Restrictions on Private Carriage of Letters; Suspension

of the Private Express Statutes; International Remailing, Final

Rule, United States Postal Service, 51 Fed. Reg. 29,636 (August

20, 1986), see Appendix (App.) 19a to 26a.

2. American Postal Workers Union, AFL-CIO v. United

States Postal Service, Civil Action No. 87-3199 (D.D.C.), Order

granting Air Courier Conference of America’s motion to inter-

vene (February 26, 1988), see App. 27a.

3. American Postal Workers Union, AFL-CIO v. United

States Postal Service, 701 F.Supp. 880 (D.D.C. 1988), see App.

28a to 38a.

4. American Postal Workers Union, AFL-CIO v. United

States Postal Service, 891 F.2d 304 (D.C. Cir. December 8,

1989), see App. 1a to 18a.

JURISDICTION

The order of the court of appeals was entered on December

8, 1989. This Court has jurisdiction pursuant to 28 U.S.C.

§1254(1). The Air Courier Conference of America (ACCA)

was a party below. See district court order granting ACCA’s

motion to intervene (February 26, 1988), App. 27a; ACCA’s

Entry of Appearance in the court of appeals (February 6, 1990).

ACCA is bound by the court of appeals’ decision. Schneider v.

Dumbarton Developers, Inc., 767 F.2d 1007 (D.C. Cir. 1985).

This Court “recognize[s] that intervenors in lower federal

courts may seek review in this Court on their own, so long as

they have ’a sufficient stake in the outcome of the controversy’

to satisfy the constitutional requirement of genuine adversity.”

Maine v. Taylor, 477 U.S. 131, 136 (1986); citing Bryant v.

Yellen, 447 U.S. 352, 368 (1980); Diamond v. Charles, 476 U.S.

54, 68 (1986); see City of Chicago v. Atchison, Topeka & Santa

Fe Ry. Co., 357 U.S. 77, 83-84 (1958).

ACCA members engage in remail pursuant to the Postal

Service regulation at issue, 39 C.F.R. § 320.8. ACCA has

standing pursuant to Hunt v. Washington Apple Advertising

Comm’n, 432 U.S. 333, 343 (1977); International Union, VAW

v. Brock, 477 U.S. 274, 288-290 (1986).

RELEVANT STATUTES AND REGULATIONS

The Private Express Statutes (PES), 18 U.S.C. §§1693-

1699, 1729 (1982), 39 U.S.C. §§601-606 (1982); provide in

pertinent part as follows:

18 U.S.C. §1696. Private express for letters and packets

(a) Whoever establishes any private express for

the conveyance of letters or packets, or in any

manner causes or provides for the conveyance of

the same by regular trips or at stated periods over

any post route which is or may be established by

law, or from any city, town or place to any other

city, town or place, between which mail is regular-

ly carried, shall be fined not more than $500 or

imprisoned not more than six months, or both.

39 U.S.C. §601. Letters carried out of the mail

(b) The Postal Service may suspend the operation

of any part of this section upon any mail route

where the public interest requires the suspension.

The Postal Service’s International Remail Rule, 39 C.F.R.

§320.8 (Aug. 20, 1986), provides in pertinent part:

§320.8 Suspension for international remailing.

(a) The operation of 39 U.S.C. §601(a)(1)

through (6) and §310.2(b)(1) through (6) of this

chapter is suspen@ed on all post routes to permit

the wainterrupted carriage of letters from a point

within the United States to a foreign country for

deposit in its domestic or international mails for

delivery to an ultimate destination outside the

United States.

STATEMENT OF THE CASE

1. Administrative Proceedings

After years of threatening private air couriers with action

under the Private Express Statutes, 18 U.S.C. §§1693-1699,

1729 (1982), 39 U.S.C. §§601-606 (1982) (PES), that embody

the postal monopoly, the Postal Service in 1979 preempted

impending Congressional action ! to legitimize the air courier

industry by suspending the postal monopoly for “extremely

urgent letters.” 39 C.F.R. §320.6, 44 Fed. Reg. 61,181 (October

24, 1979). In the years following adoption of the urgent letter

rule, air couriers and others began offering a service that came

to be known as international remail. Remail involves the ex-

press shipment of multiple letters or printed papers to a foreign

post office for delivery in that country or third countries.

Purporting to “clarify” the 1979 urgent letter rule, the

Postal Service in 1985 proposed a rule banning international

remail. 50 Fed. Reg. 41,462 (October 10, 1985). That proposal

drew nearly universal opposition from the highest levels of the

Reagan Administration, Congress, the remail industry, and

mailers. The grounds for opposition included: (1) questions as

See Senate Comm. on Governmental Affairs, Postal Service Amend-

ments Act of 1978, S. Rep. No. 95-1191, 95th Cong., 2d Sess., at 17-21

(September 13, 1978) (reporting favorably an amendment to exempt urgent

letters from the postal monopoly); Subcomm. on Postal Operations and

Services of the House Comm. on Post Office and Civil Service, Hearings on

the Private Express Statutes, 98th Cong., 1st Sess., (13 November 1979)

(House committee members expressing frustration with resistance to an

exemption for urgent letters from the Postmaster General).

to whether the domestic postal monopoly extended to interna-

tional mail (Justice Department); economic and competition

policy (Office of Management and Budget, Justice Department,

Department of Commerce); the public interest (Justice Depart-

ment); and international competitiveness of American firms

doing business abroad (users, Justice Department).

Responding to this opposition, the Postal Service in March

1986 withdrew the proposed anti-remail rule and announced its

intention to propose an alternative pro-remail rule. 51 Fed. Reg.

9652 (March 21, 1986). The withdrawal announcement in-

cluded a statement by John R. McKean, Chairman of the Postal

Service Board of Governors which emphasized that:

Congress entrusted us with this monopoly not

for our own benefit but in order to let us better

serve the American people. The critical question

raised by this rulemaking is whether enforcement

of the monopoly in this context would advance or

retard consumer welfare and the interests of this

nation.

It is the sense of the Board that private sector

competition with the Postal Service in the

provision of international remail services can -

and already does - produce significant benefits to

the public. Ultimately even the Postal Service

itself can benefit from this kind of competition.

The Board of Governors does not believe that

any attempt to suppress this kind of competition

would advance the long-term objectives of the

Postal Reorganization Act or otherwise enhance

the welfare of our customers and the American

people.

51 Fed. Reg. at 9853.

On June 17, 1986 the Postal Service proposed a new rule

suspending the PES “to permit the uninterrupted carriage of

letters from a point within the United States to a foreign country

for deposit in its domestic or international mails for delivery to

an ultimate destination outside the United States.” 51 Fed. Reg.

21,929 (June 17, 1986). The Department of Justice “strongly

endorsed” the proposed regulation as “based on an ample factual

record that demonstrates that competition in international remail

is in the public interest.” 2

The only opposition to the new remail rule came from the

postal employees’ Unions. However, apart from allegations that

“APWU and NALC members are directly affected in their

employment opportunities, and as members of the public and

users of the mails,” the Unions confined their comments to legal

arguments regarding the PES, the public interest requirement in

the suspension provision and the quality of the administrative

record. Rather than offer evidence of harm to the public interest,

the Unions sought delay for further study by the Postal Service.>

The remail rule issued on August 20, 1986 substantially as

proposed. 51 Fed. Reg. 29,636.

2. Decisions Below

On November 25, 1987 the Unions filed suit in district

court for declaratory and injunctive relief against enforcement

of the international remail rule on grounds that the Postal Service

had acted arbitrarily and capriciously in adopting it. The district

courts have original jurisdiction over suits against the Postal

Service under 39 U.S.C. §409 (1982).

? Comments of the United States Department of Justice at 3, 6 (July 17,

1986).

> The record before the Postal Service included a detailed, and unrebutted,

analysis by the International Remail Committee that suggested the net loss

of postal revenue from international remail was insignificant, amounting to

no more than $3 million per year in 1985. Comments of International Remail

Committee, pp. 38-45 (December 12, 1985).

On December 20, 1988 the district court granted the Postal

Service’s motion for summary judgment in which intervenor

ACCA had joined, App. 28a. Judge Richey held that, while the

Unions had Article III standing, they nonetheless lacked stand-

ing to sue because they were not within the “zone of interest” of

the PES. On the merits, the district court held that even if the

Unions had standing, (1) the Postal Service had not exceeded its

suspension authority under the Union’s “heightened interpreta-

tion” of the 39 U.S.C. §601(b) “public interest requires” stand-

ard and (2) the remail rule was not arbitrary, capricious nor an

abuse of discretion because the Service had “identified the

factors supporting its decision, drawn rational inferences where

detailed facts did not exist, and drawn a rational connection

between the facts and the decision made.” App. 37a. The

Unions appealed.

On December 8, 1989, the court of appeals vacated sum-

mary judgment for the Postal Service. The District of Columbia

Circuit held that the zone of interest of the PES, though dating

back to 1792, had to be viewed in the context of the entire

statutory framework of the 1970 Postal Reorganization Act

(PRA). 39 U.S.C. 101 et seq., Pub. L. 91-375 (August 12,

1970). The court then found that “a key impetus for the PRA

appears to have been a nationwide work stoppage by postal

employees which occurred in March 1970” and “[t}herefore a

principal purpose of the PRA was to implement various labor

reforms that would improve pay, working conditions and labor-

management relations for postal employees.” App. 8a. This

“interplay” between the PES and PRA persuaded the court “that

there is an ’arguable’ or plausible’ relationship” between the

PES’s goal of universal postal service and the employment

interests of the Unions. App. 8a-9a.

Alternatively, the court held that even without the interplay

between the PES and PRA, the Unions would be in the zone of

interest of the PES because “the revenue protective purposes of

the PES, standing alone, plausibly relate to the Unions’ interest

in preventing the reduction of employment opportunities.” Jd.

Therefore, the court concluded, the Unions have standing be-

cause their “interests are largely congruent with the purposes of

the PES.” App. 10a.

The court of appeals then found that the Postal Service

applied too narrow an interpretation of the §601(b) public

interest test by considering only the benefits of the international

remail rule and only to the segment of the Postal Service’s

consumer base that engaged in international commerce. The

court held that the Postal Service’s “interpretation of the ’public

interest’ is not reasonable because it did not give sufficient

attention to how revenue losses might affect cost and service of

other postal patrons.” App. 14a.

REASONS FOR GRANTING THE WRIT

This petition should be granted: (1) to resolve a specific

conflict among the circuits as to the standing of postal

employees’ unions under the PES; (2) to clarify the controversy

and confusion surrounding the “zone of interest” test that the

decision below will exacerbate and that the concurring and

lower court opinions of four current members of the Court have

suggested should be clarified; and (3) because the interpretation

of the public interest standard of the suspension provision of the

PES presents an important issue of administrative law and

procedure.

CONFLICT AMONG CIRCUITS

There is conflict among the circuits on the issue of whether

the Unions are within the zone of interest of the PES. The

District of Columbia Circuit below and the Tenth Circuit have

held yes, National Association of Letter Carriers, AFL-CIO v.

Independent Postal System of America, Inc., 470 F.2d 265 (10th

Cir. 1972); American Postal Workers Union v. React Postal

Services, Inc., 771 F.2d 1375 (10th Cir. 1985); the Sixth Circuit

It cannot be seriously contended that the Private

Express Statutes was enacted for the protection of

a class which included the postal employees or a

union representing them.

American Postal Workers Union, AFL-CIO, Detroit Local v.

Independent Postal System of America, Inc., 481 F.2d 90, 93

(6th Cir. 1973), cert. dismiss2d, 415 U.S. 901 (1974).

The Union’s standing under the PES is an importan

tion of federal law because the interests of the Unions are

increasingly at odds with those of the Postal Service, postal

. od because the Unions will always be able to challenge such

Postal Service suspensions in the District of Columbia Circuit.

Before the Postal Service proposed its 1985 anti-remail

rule it had sought Justice Department action against remailers.‘

The Justice Department declined to prosecute. Interpretation of

tho FES op pemeeting employment eppectuniiios can only leat

to additiona between the Unions and legitimate

private competition that either has Postal Service approval or is

S aeeuiiiaiieedeaeeteiaiemans lilies ont to vinkite the

postal monopoly laws. Allowing the Unions to litigate where

the government abstains, based on sound legal and competition

policy considerations, will only serve to make lawful private

serve the interests of consumers.

“ Statement of Walter Duka, Assistant Postmaster General, Int"! Postal

Affairs.. to Postal Service Board of Governors, Tr. 49-50 (September 6,

1985).

cy rulings: (Ga “taey aa uneneiemmmindes

that they will be injured by the agency action in order to assure

the courts that a real justiciable controversy exists under Article

III of the Constitution, and (2) the zone of interest test, a

“prudential” limitation, requires plaintiffs to show that they are

among the class protected by the statute under which they sued

to insure that Congress intended them to be “private attorneys

general” to challenge agency action. Not everyone injure¢

a right to complain. The zone of interest test has generatec

substantial confusion and controversy .®

Some courts have limited the zone of interest to that definec

on the face of the statutory provision under which suit was

brought.’ This Court has permitted reference to expressions of

Congressional intent contained elsewhere. In Association of

Data Processing Service Organizations, Inc. v. Camp, 397 U.S.

150, 154 (1970) it looked to the iegislative history of a later

Statute. In Clarke v. Securities Industry Ass’n., 479 U.S. 388

(1987), the Court looked to the legislative history of an earlier

statute. In both Data Processing and Clarke, the Court looked

to related statutes that clarified the Congressional intent to limit

competition and held that competitors were within the zone of

interest to challenge agency actions that the plaintiffs contended

would permit unlawful competition with them. Clarke, 479

U.S. at 403. In spite of Clarke’s narrow holding, the Court

engaged in what three of the eight participating Justices referred

> See Community Nutrition Institute v. Block, 698 F 2d 1239, 1256 (D.C.

Cir. 1983) (Scalia, J. concurring in part and dissenting in part), reversed 467

U.S. 340 (1984).

® Clarke v. Securities Industry Ass’n., 479 U.S. 388, 396 fn 11 (1987).

See ez. Tax Analysts and Advocates v. Blumenthal, 566 F 2d 130, 140

(D.C. Cir. 1977), cert. denied, 434 U.S. 1086, (1978).

zone of interest "

The court of appeals’ reliance upon the “sweeping discus-

sion” of the zone of interest test in Clarke raises three important

issues concerning the application of the test that urge review and

clarification by this Court: (1) when may the courts look beyond

the statute under which suit to determine whether

Congress “arguably”® intended that “a particular plaintiff

should be heard to complain of a particular agency decision,”

479 U.S. at 399; (2) what limits are there to the consideration of

other statutes and other factors that the courts can look to for

“all indicators helpful in discerning that intent,” id. at 400; and

(3) how remote may the plaintiff be from those directly affected

and yet permit an inference that Congress intended such plaintiff

to be within the zone of interest.

First, there was no need here for the court of appeals to look

beyond the PES to discern its zone of interest. The district court

quite properly noted “the ‘interest’ created by the PES is in

permit the Service to serve the totality of the mail delivery

market in the United States.” App. 32a, fn 2. The court of

appeals did not disagree. The D. C. Circuit articulated no need,

let alone one based on legitimate concerns about ambiguity or

change in statutory purpose, to look beyond the PES. The 1970

PRA revised Title 39 of the U.S. Code, but did not reenact, or

8 There is some question whether “arguably” remains part of the test. In

his concurrence and dissent in Community Nutrition, Justice Scalia noted that

in Valley Forge Christian College v. Americans United for Separation of

Church and State, Inc., 454 U.S. 464, 475 (1982), then the Supreme Court's

most recent recitation in a non-APA case, the Court omits the word “arguab-

ly” from the zone of interest formula. 698 F.2d at 1256. The Clarke majority

relegates “arguably” to quotes of earlier formulations of the test and doubts

the possibility of formulating a single inquiry. 479 U.S. at 400 fn. 16.

of letters, which have been located in Title 18 since 1909. See

H. R. Rep. No. 91-1104 at 44 (May 19, 1970).

Second, even if there were reason to look beyond the PES,

there are limits to what the lower courts may look to for

indications of Congressional intent. While Clarke states that

weighed,” 479 U.S. at 400, it refers elsewhere to “a relevant

Statute,” id. at 396, and does not relax the requirement that such

“relevant” statute have “an identity of purpose”? or “a single

unified purpose.”!© See Data Processing, 397 U.S. at 155. The

sweeping language in Clarke confused the court of appeals

below into ignoring the limitations on the indicators it could

consider to discern the zone of interest of the PES. The court

erred in looking to the PRA, looking beyond the PRA to the

“impetus” for it, and concluding that the uadefined “interplay”

protected zone of the PES.

The labor reforms of the PRA, upon which the court relied

for finding an “interplay” between the statutes, were enacted

reasons.'! As the district court noted, the PES were intended to

* Community Nutrition Institute v. Block, 698 F.2d 1239, 1250 (1983),

reversed on other grounds, 467 U.S. 340 (1984).

"© Tax Analysts, supra., 566 F.2d at 141.

"" 4 postal monopoly law was first enacted by the Continental Congress

in 1782. See G. L. Priest, The History of the Postal Monopoly in the United

States, 13 J. Law and Economics 33, 48 (1974). The current version of the

postal monopoly law was first enacted in Act of June 8, 1872, ch. 335, 17

Stat. 283. No legislative materia] has been found to explain the particular

monopoly language adopted. Since 1872, the prohibition against the private

carriage of letters (18 U.S.C. §1896) has been reenacted twice, as part of

general codifications of the Criminal Code. The first occasion was the

Criminal Code of 1909, ch. 321, §§181, 183, 186, 35 Stat. 1124-25, in which

(footnote continued)

maintain sufficient postal revenues to allow nationwide service

at uniform rates. The PRA’s labor reforms, on the other hand,

were enacted to increase productivity by eliminating the politi-

of postal employees.'* Lack ‘ag a unity of purpose, the PRA is

neither helpful nor relevant to discerning the zone of interest of

the PES.

Moreover, the court below went beyond even the legisla-

tive history of the PRA to the “impetus” for the statute to

broaden the zone of interest of the PRA to inject the Unions into

the zone of interest of the PES. The court found that because “a

key impetus for the PRA appears to have been a nationwide

work stoppage by postal employees ...., a principal purpose of

the PRA was to implement various labor reforms that would

improve pay, working conditions and labor-management rela-

tions ....” App. 8a. Even if the court were correct in ascribing

the “impetus” for the PRA, such judicially noticed impetus falls

far short of any Congressional statement of legislative intent. In

any event, while the contention that the purported impetus for

the labor reforms was a work stoppage might arguably support

the Unions’ claims of standing to enforce those labor reforms,

it begs the question of how enactment of the labor reforms bring

the Unions within the zone of interest of the PES.

the prohibition was moved from the postal laws to the new criminal code.

The only changes from prior law were alterations in style and the addition of

the imprisonment penalty. See Special Joint Comm. on the Revision of the

Laws, Revision and Codification of Law, Etc., S. Rep. No. 10, 60th Cong.

ist Sess., pt. 1. at 14-15, 20 (1908). The second codification was 18 U.S.C.

$1696, ch. 645, 62 Stat. 777, in which only minor stylistic changes were

made.

12 See Report of House Committee on Post Office and Civil Service,

Postal Reorganization and Salary Adjustment Act of 1970, H. R. Rep. No.

91-1104, 91st Cong. 2d Sess. (May 19, 1970) at 1-2; People Gas, Light &

Coke Co. v. United States Postal Service, 658 F.2d 1182, 1196 (7th Cir.

1981).

The only “interplay” between the statutes that the court

relies upon for merging their zones of interest appears to be the

recodification of the civil code parts of the PES in the PRA. That

is at best coincidental or ministerial. There is simply no “inter-

play” between the PES and the PRA that is “relevant” to

shedding light on the Congressional intent underlying the PES.

Neither the PRA nor its legislative history reveals any Congres-

sional consciousness of any benefits of the PES to postal

employees or any strategy to inject labor into the preservation

of the postal monopoly.!>

Indeed, the real “impetus” for, the legislative intent be-

hind, and statutory scheme embodied in, the PRA, if anything,

distances postal employees from any arguable zone of interest

of the PES. The key impetus for the PRA was the 1968 Kappel

Commission Report'* which recommended removing the Post

Office from politics and operating it in an efficient, businesslike

fashion. The opening lines of the report:

The United States Post Office faces a crisis. Each

year it slips further behind the rest of the economy

in service, in efficiency and in meeting its respon-

sibilities as an employer. Each year it operates at

a huge financial loss.

Kappel Report at 1. The Commission secognined the need for

ST Id. at 3-6. As

put it: “In the labor intensive Postal Service,

8 See also, People Gas, fn 12, supra., 658 F.2d at 1196, ("Only the

consumer interest in postal services is arguably within the zone of interest

protected by the [Postal Reorganization} Act”).

'* Report of the President’s Commission on Postal Organization —

entitled Toward Postal Excellence (June 1968), House Committee on Post

Office and Civil Service, 94th Cong. 2d Sess., Comm. Print No. 94-25

(November 24, 1976) (Kappel Report).

controlling costs is synonymous with controlling labor

costs....“!5 Not surprisingly, “[t}he most powerful and con-

centrated opposition [to the PRA] came from postal employee

unions.” Tierney at 15.

In short, the D. C. Circuit erred in reading the PRA, a statute

opposed by plaintiffs as limiting postal employment, to confer

standing under the PES to protect or increase such employment.

Third, the court of appeals has gone beyond the holding in

Clarke that competitors will have standing under the zone of

interest test to enforce statutes limiting competition. The Clarke

decision does not support extending the zone of interest to

emgitgets E'cengeeee, © Sy anting of exphyes of

creased competition. Nevertheless, afer straining to find in-

direct standing under its “interplay” test, the court concluded

that the Unions would be within the zone of interest even without

the interplay between the PES and PRA. App. 8a. That con-

clusion raises three questions: (1) why consult the purposes of

the PRA, if the Unions were so clearly within the zone of interest

of the PES? (2) why create an unnecessary, undefined new

“interplay” test? and (3) how do postal employees, who are

neither competitors, nor representatives of remote areas

threatened with curtailed service come within the zone of inter-

est of either the PES provisions designed to protect service to

remote areas or the suspension provision which protects the

—

‘cies tena on The court of appeals

answers the third question by resorting to an injury in fact

analysis:

'S | T. Tierney, Postal Reorganization — Managing the Public's Busi-

ness, Auburn House (1981) at 51 (Tierney).

[C]ongressional intent to benefit the Unions is not

required. That postal workers benefit from the

PES’s function in ensuring a sufficient revenue

base, however, is scarcely deniable. Thus the

Unions’ interests arguably are within the zone of

interests contemplated by the PES even when

considered in isolation.

App. 9a. The court by defining the zone of interest, not by who

Congress intended to enforce the statute or even intended to

benefit, but instead by who is conceivably benefitted by the

Statute, reduced the zone of interest test to an inquiry into injury

in fact.!© This interpretation of the zone of interest test bears no

resemblance to this Court’s prior decisions and has been

criticized by one Justice of this Court in Community Nutrition.

See fn 5, supra.

In sum, the D.C. Circuit’s decision below has

misinterpreted Clarke and is bound to cause further confusion

about the application of the zone of interest test of standing,

'© The D.C. Circuit’s premise that postal employees benefit from the PES

suffers from three erroneous assumptions: (1) that the PES requires maxi-

mization of revenues, (2) that maximizing revenues necessarily maximizes

employment opportunities; and (3) that, therefore, any competition with the

in the PES, the PRA, or their legislative histories requires the Postal Service

to maximize revenues. To the contrary, the PRA created the Postal Rate

Commission to help implement and regulate a cost-based rate structure. See

39 U.S.C. §§3601, 3621-3627 (1970). Maximizing revenues does not max-

imize employment. Indeed, the PRA requires the Postal Service to give

primary consideration to speed and efficiency in setting all postal policy. 39

U.S.C. §101(e). Thus, considerations other than employment levels have

priority over how revenues are allocated. Therefore, increased competition

from the remail industry, whatever its effe . on revenues, will have no

predictable effect on postal employment leveis. See United Transportation

Union v. Interstate Commerce Commission, 891 F.2d 908, 914 (D.C. Cir.

1989).

unless this Court clarifies the test and reverses the decision

below.!7

Ill.

INTERPRET THE 39 U.S.C. § 601

PUBLIC INTEREST STANDARD

The second issue presented, interpretation of the suspen-

sion provision, is equally important. As the court of appeals

noted, this case was the first occasion for an appellate court to

interpret §601(b) in this context. 891 F.2d at 312. The Postal

Service interpreted tle public interest standard to have been met

where it found the proposed remail rule to result in benefits to

the general public, competition, see Statement of Chairman

McKean at 6, supra., international competitiveness and remail

users. App. 23, 24a. Without specifically articulating its inter-

pretation of the public interest standard or any basis therefor in

the PES or its legislative history, the court of appeals found the

Postal Service’s and district court’s interpretation too “narrow.”

The court of appeals therefore erred in failing to give proper

deference to the Postal Service’s interpretation of the public

interest standard. Chevron USA, Inc. v. Natural Resources

Defense Council, 467 U.S. 837 (1984).

1” The standing issue in this case is related to an issue pending considera-

tion by the Supreme Court in Department of Treasury v. Federal Labor

Relations Authority, cert. granted, _ _ U.S.__, 110 S.Ct. 47, 107 L.Ed.2d

16 (October 2, 1989). The question presented in that case is whether an

agency’s contracting out determinations made pursuant to Office of Manage-

ment and Budget Circular No. A-27 are subject to grievance and arbitration

under Title VII of 1978 Civil Service Reform Act if incorporated into a

collective bargaining agreement. Thus, both cases deal with the deference

to be accorded agency employees to challenge agency decisions permitting

outsiders to perform tasks that the employees hope to preserve for themselves

to protect their employment opportunities.

Apart from failing to justify its alternative interpretation of

the public interest standard, the court of appeals’ prescription is

unsound and impractical, given the numerous types of service

the Postal Service offers and types of customers it has. The

court’s construction would make any future rulemaking to

suspend the PES into an unnecessarily drawn out, cumbersome

and expensive proceeding.

The court of appeals’ approach also violates the fundamen-

tal purpose of the PRA — operation of the Postal Service in more

business-like fashion — and is at odds with the rcalities of

institutional self-preservation. The Postal Service has every

incentive to maintain the postal monopoly. On the centennial

of the Sherman Acct it is hardly debatable that the economic

policy of this nation disfavors monopolies. When a monopolist

may by law narrow its own monopoly and does so, it should be

applauded instead of second-guessed. Rather than weighing

down the suspension provision with considerations of the effect

of a suspension on every conceivable special interest group of

postal employees and patrons, the Postal Service should be

presumed to be acting in the greater public interest when nar-

rowing the scope of its own monopoly.

The burden should be on the party challenging any suspen-

sion provision to show a specific detriment to the greater public

good. Such detriment should be one that is inconsistent with the

goals of national economic integration underlying the PES. The

Unions failed to offer any argument or factual support for any

inconsistency between the remail rule and the public interest.

Under these circumstances the Postal Service cannot be faulted

for its consideration of the record before it, rather than some

Platonic ideal of an administrative record it might have

developed. Interpretation by the Supreme Court of the §601

public interest standard is an important question of federal law

and administrative procedure.

CONCLUSION

For the reasons set forth above, this petition for a writ of

certiorari should be granted.

March 8, 1990

Respectfully submitted,

L. Peter Farkas

Lyon & Lyon

Suite 1150

1225 Eye Street, N. W.

Washington, D. C. 20005

(202) 842-8400

Attorneys for Petitioner

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 19, 1989 Decided December 8, 1989

No. 88-5436

AMERICAN POSTAL WORKERS UNION,

AFL-CIO, et al.,

Appellants

Vv.

UNITED STATES POSTAL SERVICE,

Appellee

Appeal from the United States District Court for the

District of Columbia

Keith E. Secular, with whom Anton G. Hajjar was on brief for

appellants.

Wilma A. Lewis, Assistant United States Attorney with whom

Jay B. Stephens, United States Attorney, John D. Bates, R. Craig

Lawrence, Assistant United States Attorneys and Charles D. Hawley,

Attorney, United States Postal Service were on brief for appellee.

Before: WALD, Chief Judge, and MIKVA and RUTH B.

GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge MIKVA.

Concurring opinion fiied by Circuit Judge RUTH B.

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. Ap-

pellants, 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 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”

We agree. The district court correctly concluded that the Unions

satisfy the requisites for article II] standing. We find, however, that

the district court erred in concluding that the Unions’ interest in

preserving employment opportunities bears no reasonable relation-

ship 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 con-

clude that the Unions are within the zone of interests of the PES. The

USPS’s suspension of the PES to allow unrestricted international

remailing by private entities constitutes arbitrary and capricious agen-

cy action because the USPS did not develop a record to project the

impact of the suspension on uniform postal rates and service. Conse-

quently, 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 post-

al routes. See 18 U.S.C. $§ 1693-1699, 1729 (1982); 39 U.S.C. §§

601-606 (1982). The USPS may “suspend [the Private Express restric-

tions] 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 leticrs 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 disap-

proval 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 the international remail services and preserve the benefits

of desirable competition between the Postal Service and private com-

panies.” The USPS withdrew its earlier proposal and began consider-

ing 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 informa-

tion.

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 remailing, the

comprehensive mapeneeroy we had hoped to receive

to supplement the essentially anecdotal information,

which snub Gaunhiedtenttnamenitndiee Nonethe-

less, 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 rulemaking 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

necd of U.S. businesses for private international remailing, 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 remail-

ing 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 case. -

Issuing a memorandum opinion, the district court granted the

Postal Service’s motion for summary judgment. Because the suspen-

sion threatened workers with the prospect of reduced employment

opportunities, the court found that the Unions met the constitutional

requirements for standing under Article III. The court concluded,

however, that the Unions were not within the zone of interests impli-

cated by the PES. Applying Clarke v. Securities Industry Association,

479 U.S. 388 (1987), the court reasoned that the Unions’ interests bore

no reasonable relationship to the purposes of the PES because those

Statutes were “designed to ensure only that the Service maintains

sufficient revenue to be able to provide efficient and effective mail

delivery services to all aspects of the market.” In addition, the court

asserted that, in certain circumstances, the interests of the Unions

might diverge from the purposes of the PES because Congress, in

enacting the “public interest” exception, recognized that there might

be situations in which the revenue objectives of the PES could be

achieved without the benefit of a monopoly. Finally, the court con-

cluded that a finding of standing in this case implicitly would afford

standing “to any agency employee whose job or employment oppor-

tunities were threatened as a result of an agency decision.”

On the issue of statutory authority, the court reasoned that the

“public interest requires” language of § 601(b) conferred broad dis-

cretion on the Postal Service “to define the public interest in a given

situation and to act accordingly.” The court concluded that the suspen-

sion decision was made on a reasoned basis, rejecting the charge that

relative dearth of empirical data” in the record, it relied upon court

precedents which upheld agency decisions lacking factually specific

support. See, e.g., FCC v. National Citizens Committee for Broadcast-

ing, 436 U.S. 775, 813-814 (1978) (factual specificity not always

required where “a forecast of the direction in which future public

interest lies necessarily involves deductions based upon the expert

knowledge of the agency”).

IL ANALYSIS

A. Standing

The law of standing is based on a set of constitutional and

prudential requirements. To establish standing undcr article III of the

Constitution a litigant must plead an injury in fact fairly traceabie to

the conduct complained of and likely to be redressed by the relief

requested. Allen v. Wright, 468 U.S. 737, 751 (1984). Prudential

standing requires that the “plaintiff's complaint fall within ’the zone

of interests to be protected or regulated by the statute or constitutional

guarantee in question.’ ” Valley Forge Christian College v. Americans

United for Separation of Church and State, Inc., 454 U.S. 464, 474-75

(1982) (quoting Association of Data Processing Serv. Orgs., Inc. v.

Camp, 397 U.S. 150,153 (1970)) (feotnote omitted). That the Unions

satisfy the constitutional requirements for standing is not in doubt.

Allowing private international remailers to compete directly with the

Postal Service threatens postal workers with the prospect of reduced

employment opportunities. See, e.g., American Postal Workers v.

React Postal Services, Inc., 771 F.2d 1375,1380 (lOth Cir. 1985)

(“[W]henever a private entity is allowed to perform the tasks of

collection, sortation, delivery, etc. in competition with the USPS, the

employment opportunities of the postal workers are inevitably

reduced.”). Such threatened injury is sufficient to satisfy the “injury

in fact” prong of the test for article III standing. See Valley Forge, 454

U.S. at 472.

At issue in this case is whether the Unions’ interest in retaining —

employment opportunities satisfies the “zone of interests” test as

iterated by the Supreme Court in Clarke v. Securities Industry Associa-

tion, 479 U.S. 388, 399-400 (1987). The Unions’ cause of action

derives from § 702 of the APA, which grants standing to a person

“aggrieved by agency action within the meaning of the relevant

statute.” 5 U.S.C. § 702 (1982). In Clarke, the most recent instruction

from the Supreme Court on the subject, the Court acknowledged that

the zone of interests test is a gloss on § 702 of the APA that provides

some limits on access to the courts. The Clarke Court, however, in

several places admonished this circuit and others in general for a

somewhat parsimonious approach to the law of prudential standing,

stating that “there need be no indication of a congressional purpose to

benefit the would-be plaintiff.” 479 U.S. at 399-400 & n.15. Again,

the Court asserted that the test “is not meant to be especially demand-

ing,” and that there need be only “a plausible relationship” between

the interests propounded by the plaintiff and the policies undergirding

the statutory framework. Pp. 396, 399, 403. Finally, the Court reaf-

firmed an established presumption in favor of judicial review. Would-

be plaintiffs should be allowed into courts unless they are “not

even ‘arguably within the zone of interests to be protected or regulated

by the statute.’” P. 397 (emphasis added, citation omitted). This

presumption would seem to operate with particular favor for those

plaintiffs that satisfy the constitutional requirements for standing.

As the Clarke Court explained, the zone of interests test serves

as our guide for deciding whether “in view of Congress’ evident intent

to make agency action presumptively reviewable, a particular plaintiff

should be heard to complain of a particular agency action.” P. 399. In

cases such as this, where the would-be plaintiff is not the subject of

the contested regulation, the test denies standing only if “the plaintiff's

interests are so marginally related to or inconsistent with the purposes

implicit in the statute that it cannot reasonably be assumed that

Congress intended to permit the suit.” P. 399. (emphasis added).

Turning to the circumstances of this case, we are easily con-

vinced that the Unions’ concerns have more than a “marginal”

relationship to the purposes implicit in the PES. The district court erred

in focusing too narrowly on the functions of the PES in isolation from

the entire Postal Reorganization Act of 1970 (“PRA”), of which the

PES are a part. When attempting to discern the scope of interests

embraced by a particular legislative provision, courts may look to the

purposes animating the entire statutory framework. See Clarke, 479

U.S. at 401 (“[W]e are not limited to considering the statute under

which respondents sued, but may consider any provision that helps us

to understand Congress’ overall purposes in the National Bank Act.”);

Association of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S.

150, 157 & n.2 (1970); see also National Coal Association v. Hodel,

825 F.2d 523, 529 (D.C. Cir. 1987) (looking beyond the Federal Land

Policy and Management Act of 1976 (FLPMA) to other legislation

aimed at the coal industry in order to “flesh out the meaning of the

term ‘public interest’ ” in the FLPMA); Wilderness Society v. Griles,

824 F.2d 4,18 n.ll (D.C. Cir. 1987) (“Thus, plaintiffs . .. appear to fall

within the zone of iuterests of the statutory scheme represented by

three complementary enactments.”).

This court’s approach in National Coal Association is instruc-

tive. In that case, § 206 of the FLPMA authorized the Secretary of the

Interior to dispose of public lands by exchange where “the public

interest” would be well served. In order to “flesh out” the meaning of

the term “public interest” for prudential standing purposes, the court

looked not only to the language and purposes of the FLPMA but also

to the concerns informing separate legislation having related objec-

tives. National Coal Ass’n, 825 F.2d at 529.

An examination of the function of the PES in advancing the goals

of the entire PRA demonstrates the relevance of the PRA to our zone

of interests inquiry. The PRA revamped the nation’s postal system,

rendering the Postal Service politically independent by endowing it

with financial and budgetary authority previously confided in Con-

gress. In enacting the PRA, Congress incorporated without substantive

modification private express provisions which originate from a statute

passed in 1792, when Congress first embraced the concept of a postal

monopoly. See Act of Feb. 20,1792, ch. 7, § 14,1 Stat. 236. In Section

7 of the PRA, Congress directed the new Postal Service to reevaluate

the PES and report on the continuing need for a posta! monopoly. In

1973, the Board of Governors submitted the requested report, con-

cluding that “the basic protections of the Private Express Statutes must

be retained if this country is to continue to have effective universal

mail service reaching into every community and serving all parts of

the nation.” Board of Governors, Statutes Restricting Private Car-

riage of Mail and Their Administration, Comm. Print No. 93-5, 93d

Cong., 1st Sess. 1 (June 29, 1973). Thus, the PES, which continue the

postal monopoly, play a pivotal role in achieving an important purpose

of the PRA: to “provide prompt, reliable, and efficient services to

patrons in all areas and ... render postal services to all communities.”

39 U.S.C. § 101.

A key impetus for the PRA appears to have been a nationwide

work stoppage by postal employees which occurred in March, 1970.

See H.R. Rep. No. 1104, 91st Cong., 2d Sess. 3 (1970). Therefore, a

principal purpose of the PRA was to implement various labor reforms

that would improve pay, working conditions and labor-management

relations for postal employees. See id. at 2-4, 13-14. The Postal Service

asserts that the other statutory provisions of the PRA should be looked

to only if they bear some relationship to the purposes of the PES. Yet,

to assess whether the Unions fall within the zone of interests of the

PES we need not create nice distinctions between the PES and the

PRA where Congress itself did not. As the Clarke Court made clear,

the presumption in favor of judicial review is overcome only when

“congressional intent to preclude judicial review is "fairly discernible

in the statutory scheme.’” 479 U.S. at 399 (quoting Data Processing,

397 U.S. at 157). The legislative history of the PRA leads inexorably

to the opposite conclusion. The Unions’ asserted interest is embraced

directly by the labor reform provisions of the PRA. The PES constitute

the linchpin in a statutory scheme concerned with maintaining an

effective, financially viable Postal Service. The interplay between the

PES and the entire PRA persuades us that there is an "arguable” or

“plausible” relationship between the purposes of the PES and the

interests of the Union.

We are equa!ly convinced that the revenue protective purposes

of the PES, standing alone, plausibly relate to the Unions’ interest in

preventing the reduction of employment opportunities. The PES were

designed specifically to prevent private mail services from “cream-

skimming” the most profitable mail services by undercutting the

Postal Service on low cost, high-profit routes, thereby leaving the

Service with less revenue to fulfill the requirement of providing

service throughout the nation at uniform rates. Doc. No. 1, 28th

Congress, 1st Sess. 596 et seq. (December 2, 1843), quoted in J. Haldi,

Postal Monopoly: An Assessment of the Private Express Statutes 9

(1974); 39 U.S.C. § 101, § 3623(d); see also Regents of the Univ. of

California v. Public Employment Bd., 108 S.Ct. 1404, 1408 (1988)

(“Because Congress desires ’prompt, reliable, and efficient services

to [postal] patrons in all areas,’ it has enacted the Private Express

Statutes and has provided for nationwide delivery of mail at uniform

rates.”) (citations omitted). As stated above, congressional intent to

benefit the Unions is not required. That postal workers benefit from

the PES’s function in ensuring a sufficient revenue base, however, is

scarcely deniable. Thus the Unions’ interests arguably are within the

zone of interests contemplated by the PES even when considered in

isolation. The district court’s reasoning that there may Se circumstan-

ces in which the interests of the Unions will diverge from the purposes

of the PES, exacts too demanding a standard for meeting the zone of

interests test. The relationship of the plaintiff to the statute need only

be arguable, not wholly coincident. Instead of requiring an a priori

showing that no conflicts could possibly ensue from a grant of stand-

ing, the zone of interests inquiry only “seeks to exclude those plaintiffs

whose suits are more likely to frustrate than to further statutory

objectives.” Clarke, 479 U.S. at 397 n. 12.

The PES reflect a congressional presumption that a postal

monopoly will be maintained to the extent necessary to ensure univer-

sal service at uniform postal rates. Hence the Unions would seem to

be appropriate plaintiffs to vindicate Congress’ intent that the USPS

reduce the scope of this monopoly only when clearly required by the

public interest. This reasoning accords with an earlier decision of this

circuit which found a union to be an appropriate challenger of agency

10a

action involving a statutory guarantee of a domestic monopoly. See

Autolog Corporation v. Regan, 731 F.2d 25, 30 (D.C. Cir. 1984)

(union representing American seamen was within the zone of interests

of the coastwise laws which create a monopoly for domestic shippers,

because such laws protect the livelihood of union members). Similar-

ly, an association representing the interests of business owners

licensed to operate in a particular industry is within the zone of

interests of a law that restricts entry of would-be competitors into that

industry. See Panhandle Producers and Royalty Owners Association

v. Economic Regulatory Administration, 822 F.2d 1105, 1109 (D.C.

Cir. 1987) (“[One need not be a cynic to understand competitors’

success in seeking to enforce licensing barriers: their interests are

generally congsuent with a statutory purpose to restrict entry.”).

We emphasize that this case is in a different genre from National

Federation of Federal Employees v. Cheney, No 88-5271, slip op.

(D.C. Cir. August 25,1989). In that case a union contested a United

States Army decision to “contract out” to private contractors the

services previously provided by federal employees at the Directorate

of Logistics in Fort Sill, Oklahoma. The majority found that the union

did not fall within the zone of interests of any of the three statutory

schemes at issue, either because the legislative history of the statute

did not indicate “that Congress contemplated in-house federal

employees or federal employee labor unions” as a particular class of

plaintiffs to be relied upon to challenge agency disregard of the law,

id. at 11, or because the interest asserted by the union was antithetical

to the pro-competitive objectives of the statute. Jd. at 22, 25. In

contrast, the legislative history of the PRA reveals a clearly expressed

concern for the welfare and employment conditions of postal workers.

More importantly, the PRA codified a postal monopoly dating back

to the late eighteenth century. Unlike the contracting-out provisions

at issue in NFFE v. Cheney, the presumption established by the PES

is against allowing private competition. For this reason the Unions’

interests are largely congruent with the purposes of the PES.

In light of the special emphasis which the PRA places on the

welfare of postal employees and the unique role of the PES in

maintaining the financial viability of the Postal Service, we must reject

the district court’s conclusion that affording standing in this case

implicitly would grant standing under § 702 to any agency employee

lla

whose employment opportunities were threatened as a result of an

agency decision. We recognize that agencies frequently face decisions

which could result in reduced employment opportunities for their

employees. The Postal Service, however, is charged with the respon-

sibility of preventing unwarranted dissipation of an historic postal

monopoly. Congress has imposed an obligation, largely congruent

with the interests of postal employees, that is much stronger than those

embodied in most statutory schemes under which disgruntled agency

employees might sue. Contrary to the district court’s implication,

“standing is not to be denied simply because many people suffer the

same injury.” United States v. Students Challenging Regulatory

Agency Procedures (SCRAP), 412 U.S. 669, 687 (1973).

The Unions alternatively claim standing as users of the mails.

Because we find that their interest in retaining employment oppor-

tunities falls within the zone of interests of the PES, we need not

resolve this claim.

B. The Merits

The USPS’s decision to suspend completely the PES with

respect to internationa! remailing rests chiefly on its finding that this

would benefit American businesses by providing them with faster,

cheaper service — thereby enhancing their ability to compete in inter-

national markets. In its notice of final rulemaking, the USPS conceded

that much of the evidence in support of these benefits was testimonial

in nature, but the Service was persuaded by the virtual unanimity of

the comments offered by businesses using the services of private

remailers. See 51 Fed. Reg. at 29,637 (Aug. 20,1986). Although the

USPS did not discuss revenue impact in its final notice, it did conclude

in an earlier notice of the proposed suspension that the total potential

loss of revenues — $882 million, representing all revenues from inter-

national mail in 1985 — would not be “so adverse to the Postal Service

as to outweigh allowing remailing to continue by virtue of the

[proposed] suspension.” 51 Fed. Reg. at 21,931 (June 17, 1986).

The Unions offer three core arguments to challenge this rulemak-

ing as arbitrary and capricious. First, they contend that none of the

factors relied upon by the Postal Service represents a legitimate

rationale for suspending the PES. Second, they aver that the alleged

benefits are not supported by concrete evidence in the record. Third,

12a

they argue that the Postal Service rejected without explanation more

“tightly drawn and narrowly restricted” alternatives in favor of the

broadest possible suspension, permitting all forms of international

remailing.

The scope of judicial review of agency action for arbitrariness

and caprice is narrow. A reviewing court cannot substitute its judg-

ment for that of the agency. Motor Vehicle Mfrs. Ass’n v. State Farm

Mutual Ins. Co., 463 U.S. 29, 43 (1983). In order to guard against

agency inferences that are “arbitrary,” however, the court must engage

in a “thorough, probing, in-depth review” of the agency’s asserted

basis for decision, ensuring that “the agency ... [has] examine[d] the

relevant data and [has] articulate[d] a satisfactory explanation for its

action including a rational connection between the facts found and

the choices made.’ ” Jd. (quoting Burlington Truck Lines v. United

States, 371 U.S. 156, 168 (1962)).

Our task is rendered more difficult in this case by the sweeping

nature of the “public interest requires” standard for justifying suspen-

sions. The district court reasoned, and the Postal Service echoes, that

by using this language in § 601(b), Congress vested the Service with

the discretion to “define the public interest in a given situation and to

act accordingly.” While this appears to be the first occasion in which

an appellate court has interpreted § 601(b) in this context, we are not

without the guidance of numerous court opinions interpreting similar

“public interest” language often used by Congress in giving regulatory

agencies their marching orders. See, e.g, Central Southern Motor

Freight TariffAss’n v. United States, 757 F.2d 301, 314-15 (D.C. Cir.),

cert. denied, 474 U.S. 1019 (1985) (describing the Interstate Com-

merce Commission’s broad authority to allow certain exemptions

when in the “public interest” as “a congressional charge to ‘go forth

and do good’””). The district court relied on a single Supreme Court

case, FCC v. WNCN Listeners Guild, which held that the “public

interest, convenience, and necessity” standard governing the FCC’s

licensing authority conferred broad discretion on that agency to imple-

ment its view of the public interest standard “‘so long as that view is

based on consideration of permissible factors and is otherwise

reasonable.’” 450 U.S. 582, 593-94 (1981) (quoting FCC v. National

Citizens Committee for Broadcasting, 436 U.S. 775 (1978)). Yet, as

13a

the preceding passage shows, a “public interest” standard does not

confer unfettered discretion on the agency administering it.

As in WNCN Listeners Guild, the term “public interest” is not

defined in the Private Express Statutes. We have no doubt that Con-

gress intended to confer a subsiantial degree of discretion on the USPS.

The scope of that discretion is a matter of statutory interpretation. In

the “pre-Chevron” era the Supreme Court stated that “the use of the

words ‘public interest’ in a regulatory statute is not a broad license to

promote the general public welfare. Rather, the words take meaning

from the purpose of the regulatory legislation.” NAACP v. FPC, 425

U.S. 662, 669 (1976). In Chevron USA, Inc. v. Natural Resources

Defense Council, 467 U.S. 837 (1984), the Supreme Court clarified

the standard of review applicable to an agency’s interpretation of the

statutes it administers. This court has aptly summarized the Chevron

analytical framework:

We first examine the text of the implicated statute and,

where appropriate, its legislative history; using tradi-

tional tools of statutory construction, we seek to deter-

mine whether and how Congress resolved specific

issues of law raised in the proceeding under review,

and confine the agency to consistency with Congress’

intent. If we find that Congress did not clearly resolve

those issues, however, we must accept the agency’s

interpretation so long as it is reasonable — i.e., “ration-

al and consistent with the statute.”

Midtec Paper Corporation v. United States, 857 F.2d 1487, 1496-97

(D.C. Cir. 1988) (citing NLRB v. United Food & Commercial Workers

Union, Local 23, 108 S. Ct. 413, 421 (1987); Chevron, 467 U.S. at

842-45) (emphasis added). In cases such as this, where Congress has

assigned broad authority to an agency — specifying only that a non-

defined “public interest” requires agency action — this court has ap-

plied the second prong of the Chevron analysis, upholding agency

interpretations where reasonable. In our view, Chevron reasonable-

ness review of an agency’s interpretation of a “public interest” stand-

ard is not empty rhetoric; it is intended to have a limiting effect on the

range of agency discretion. See, e.g, Midtec Paper, 857 F.2d at 1500

(“In order to support its exercise of discretion, the agency must provide

l4a

a reasoned analysis that is not manifestly contrary to the purposes of

the legislation it administers.”); Central & Southern Motor Freight,

757 F.2d at 321 (“[E}xceptions to a statute are not to be construed in

such a manner that they ‘defeat rather than further the purpose of

Congress.’””).

Although we recognize the broad discretion conferred upon the

agency, we believe that its apparently narrow interpretation of the

“public interest” in this case frustrates the core purpose of the PES.

The Postal Service considered only the benefits which apparently

would redound to a single segment of the Service’s consuming public:

businesses engaged in commerce overseas. In the context of the

purposes of the PES, the USPS also should have considered the impact

of the proposed suspension on those consumers who would continue

to use the Postal Service, both from a price and service perspective.

Indeed, as stated above, the fundamental purpose of the PES is to

prevent private competitors from “cream-skimming” profitable

routes, thereby providing the Postal Service with sufficient revenue to

fulfill its mandate of providing service throughout the nation and at

uniform rates. The USPS’s interpretation of the “public interest” is not

reasonable because it did not give sufficient attention to how revenue

losses might affect cost and service of other postal patrons.

The USPS’s own analysis in accepting the urgent letter suspen-

sion supports our reasoning. The Service limited that suspension to

mails meeting prescribed “loss of value” or “cost” conditions because

[t]his [measure] is designed to protect the postal sys-

tem against the inroads or “cream-skimming” by pri-

vate couriers solely on the basis of their ability to

undercut postal rates selectively. It is intended to test

whether the shipper looks to a private carrier because

he genuinely attaches an importance to prompt deliv-

ery, or simply because he desires to reduce shipping

costs selectively. If selective cost savings were suffi-

cient grounds to use a private courier to carry letters,

the Private Express Statutes would be effectively nulli-

fied.

44 Fed. Reg. 40,076 (July 9, 1979) (emphasis added). Despite the

soundness of this reasoning, the USPS proceeded in this case to ignore

15a

it, indeed to contravene it directly, by justifying an unqualified suspen-

sion solely on the selective cost and service benefits to businesses

engaged in international commerce. This approach is unreasonable,

arbitrary and capricious. Cf. Clark-Cowlitz Joint Operating Agency v.

FERC, 826 F.2d 1074, 1091-92 (D.C. Cir.), cert. denied, 108 S. Ct.

1088 (1988) (holding that agency administering a “public interest”

standard did not engage in reasoned decisionmaking when it focused

only on the economic impacts accruing to one segment of the power

consuming public).

The Postal Service replies that it did consider revenue impact by

factoring into its analysis (although not in its final rulemaking) an

estimate of the total potential loss of revenue from an unrestricted

which the Service assessed was the selective cost savings and service

benefits to the business sector. Given that such selective evidence is

not, without more, a sufficient justification for a suspension, a cursory,

lump-sum analysis of the potentia] revenue loss hardly amounts to a

reasoned assessment of the impact on uniform postal rates and service.

Such tepid reasoning makes it impossible for this court to discern

whether the suspension is indeed reasonable or consistent with the

purposes of the PES. The Unions argue, for example that international

mail rates have increased substantially as a result of the “skimming”

of volume of international remailers pursuant to the urgent letter

suspension). Yet no analysis even approaching such specificity was

undertaken by the Postal Service in its rulemaking below.

Contrary to the urging of the Unions, however, this court may

not impose its own rigid interpretation of the “public interest.” We are

unwilling to say that the USPS may not consider the benefits of a

proposed suspension to businesses engaged in commerce abroad,

including their enhanced competitiveness in the international arena.

Neither are we willing to say that there are no circumstances in which

the Service could justify a suspension to allow unrestricted interna-

tional remailing. The Unions are correct in asserting, however, that

where several more narrowly defined suspension alternatives were

under consideration, the USPS acted arbitrarily and capriciously in not

explaining its reasons for rejecting these alternatives. See Internation-

al Ladies’ Garment Union v. Donovan, 722 F.2d 795, 815-18 (D.C.

Cir.), cert. denied, 469 U.S. 820 (1984). The Postal Service submitted

16a

to the district court a declaration of Charles D. Hawley, its Assistant

General Counsel, which provides reasons as to why the alternatives

were rejected. Even if these reasons are accurate, this court “may not

accept [agency] counsel’s post hoc rationalizations for agency ac-

tion.... [A}]n agency’s action must be upheld ... on the basis articulated

by the agency itself.” Motor Vehicle Mfrs., 463 U.S. at 50.

Finally, because we find that the USPS did not engage in

reasoned decisionmaking due to its insufficient attention to the impact

__ of the suspension on all postal patrons, we need not reach the question

of whether the evidence of the selective benefits to the business

community was sufficient. We note merely that agencies are entitled

to engage in predictive judgments of the future public interest and that

a “complete factual support” is not required where such predictions

“necessarily involve[] deductions based on the expert knowledge of

the agency.” FCC v. National Citizens Comm. for Broadcasting, 436

U.S. 775, 814 (1978). Yet, agencies are not free to engage in unrea-

soned decisionmaking. Specifically, agencies cannot “ignore impor-

tant factors in making predictions, or ... reach judgments that are

irrational given the relevant evidence in the record.” /nternational

Ladies Garment Union, 722 F.2d at 821 n.56.

Ill. CONCLUSION

We find that a faithful application of the recent teachings of the

Supreme Court on prudential standing esiablishes that the Unions

clearly fall within the “zone of interests” of the Private Express

Statutes. Although the Postal Service may be able to justify a

wholesale suspension of the PES with respect to international remail-

ing, we conclude that the record before us does not reflect sufficient

consideration of the core purposes of the Statutes. Because the impact

of the proposed suspension on all of the Postal Service’s patrons was

never seriously considered and because the USPS failed to explain

why narrower alternatives were rejected, the rulemaking was arbitrary

and capricious in violation of the APA. 5 U.S.C. § 706(2)(A). We

therefore remand to the district court to vacate the grant of summary

judgment and to allow the agency an opportunity to reopen its proceed-

ings or take any other action consistent with this ruling.

It is so ordered.

17a

GINSBURG, RUTH B., concurring: While 1 concur in the

court’s opinion, I write separately to highlight a disturbing facet of this

case. The Postal Service, as the historical record confirms, initially

sought to maintain tight restraints on international remailing by private

carriers. See 50 Fed. Reg. 41, 462 (Oct. 10, 1985). Its effort to confine

the practice encountered the concerted opposition of the business

community and the Department of Justice. In a volte-face, the Service

then devised a rule broadly permitting international remailing. I agree

with my colleagues that the Service did not draw from the rulemaking

record reasons adequate to justify its action. | emphasize, however,

that the Service, in accounting for its action, did not home in on

comments in the record emphasizing that international remailing is

different from domestic mail service, and suggesting that private

competition in the international remailing market can be cordoned off

safely without opening the way for seriatim inroads on the Postal

Service monopoly.” On remand, the Service could focus its sights

_ precisely on the international/domestic mail delivery differen-

In finding that the public interest requirement was met in this

case, the Service rested on “almost universally consistent ... observa-

tions” that remailing was faster and cost less than U.S. airmail. 51 Fed.

Reg. 29,636, 29,637 (Aug. 20, 1986). These savings in time and cost,

the Service found, “enhanc[ed] the ability of American firms to

compete abroad.” Jd. In conclusion, the Service acknowledged com-

ments favorin:, allowance of international remailing operations made

by the Departrnent of Commerce, the Department of Justice, and the

Office of Management and Budget. /d. The Postal Service monopoly

would quickly crumble, however, if the public interest required

suspension of the Private Express Statutes whenever a private carrier

could serve U.S. businesses faster and at a lower price. Commenters

accordingly featured something more. Because international mail is

distinct and separable from stateside postal operations, they reasoned,

the international remailing permission at issue would leave intact the

solid core of the monopoly decreed by Congress.

' The remailing service at issue raises no question under international mail

reciprocity agreements, as counsel for appellants conceded at argument. But see Reply

Brief of Plaintiffs-Appellants at 9. Foreign governments would not have the problem

of dealing with multiple originating mail suppliers, for the remailers simply deposit

the letters they carry in the mails of foreign postal administrations.

18a

Commenters stressed this key point: the domestic monopoly

leaves all mailers in the same boat, but extending that monopoly to the

international arena put U.S. businesses at a marked disadvantage

relative to their foreign competitors. See Joint Appendix (J.A.) at 124,

137, 138, 164. Commenters further observed that outgoing interna-

tional mail imposes on the Postal Service far fewer capital and

operational costs than does domestic mail. The Postal Service simply

packages overseas missives and puts them on a ship or plane; a foreign

postal service does the delivery work. There are no “small towns” to

be served by the Postal Service at great cost. See J.A. at 143, 306, 373.

The cost-of-service differential suggests that, in comparison to the

domestic arena, a monopoly in the international domain is less vital

to the Private Express Statutes’ goal of assuring universal, affordable

service.

Similarly, and of special relevance to the union’s concerns,

commenters noted that the Postal Service freight forwarding operation

for international mail is not labor intensive; therefore, these com-

menters said, international remailers posed no large threat to postal

jobs. J.A. at 149. Furthermore, comments emphasized the limited

character of the service at stake: international remailers deal with bulk

mailings for large business mailers. J.A. at 210.

In sum, the comments invited close attention to the question

whether international mail should be distinguished from domestic

mail in implementing legislation, the Private Express Statutes,

designed to “bind the Nation together” through universal service at a

uniform price. See J.A. 305. That question could be pivotal in the

further examination this court has ordered.

2 Some commenters, most notably the Department of Justice, questioned whether

Congress intended to grant the Postal Service a monopoly over international mail as

well as domestic mail. See J.A. at 196-202; see also id. at 261, 395, 473, 516, 640. In

view of the firm position of the Postal Service that the Private Express Statutes apply

to international shipments of letters, see 51 Fed. Reg. 21,929, 21,930 (June 17, 1986),

lower courts properly reserve this question for legislative clarification. See Chevron

U.SA. Inc. v. NRDC, 467 U.S. 837, 843 (1984).

19a

Postal Service

39 CFR Part 320

Restrictions on Private Carriage of Letters; Suspension of the

Private Express Statutes; International Remailing

AGENCY: Postal Service.

ACTION: Final Rule.

SUMMARY: This final rule suspends the operation of the Private

Express Statutes, 18 U.S.C. 1693-1699, 39 U.S.C. 601-606, with

respect to international remailing so as to permit the private, uninter-

rupted carriage of letters from the United States to a foreign country

for ultimate delivery outside of the United States.

EFFECTIVE DATE: September 19, 1986.

FOR FURTHER INFORMATION CONTACT: Charles D.

Hawley (202) 268-2971.

SUPPLEMENTARY INFORMATION: On June 17, 1986, the

Postal Service proposed to suspend the Private Express Statutes to

permit “international remailing.” The adoption of this rule completes

a public rulemaking process that began with the publication of a Notice

of Proposed Rulemaking in October 1985.

“International remailing” consists of the carriage by private

firms of shipments of letters, addressed to persons outside the United

States, entirely outside of the United States Mails to foreign countries

where the letters are deposited into the mails of foreign postal ad-

ministrations.

The proposal published in the Federal Register of October 10,

1985, 50 FR 41462, would have amended the regulation establishing

the administrative suspension of the Statutes for extremely urgent

letters, 39 CFR 320.6, so as to make clear that this suspension, which

had not been intended to authorize remailing, did not in fact do so.

Most of the comments submitted in response to the notice opposed the

proposal, and instead supported the practice of remailing. Sub-

sequently, on March 4, 1986, the Chairman of the Board of Governors

of the Postal Service announced that the Postal Service would com-

mence a new rulemaking proceeding to establish the lawfulness of

remailing.

20a

On March 21, 1986, the Postal Service published a Federal

and solicited information on the nature and extent of remailing and on

the benefits derived by the public from this practice. 51 FR 9852. In

addition, the Postal Service, following the close of the period estab-

lished for response to the March 21 solicitation, held a public meeting

on May 22, 1986.

(Notice of this meeting was published on May 12, 1986, 51 FR 17366).

The information garnered in the successive steps described above

forms the factual record upon which the Postal Service based the

proposal, in the Federal Register on June 17, 1986, to permit remailing.

Nine additional comments were submitted in response to the

June 17 notice. Eight of the comments expressed support for the

proposal. Five expressed general support for the suspension and did

not suggest any specific changes; three suggested that the suspension

be modified in various ways. After careful consideration of all the

comments, including those submitted in previous, related proceed-

ings, the Postal Service, also bringing to the process its knowledge of

and experience with the international mails, has concluded that the

proposed suspension should be adopted without substantial modifica-

tion. The statement of the purpose of this rule and the basis for it,

which was published in the June 17 notice, and also the March 21

notice, are incorporated herein and form integral parts of this notice.

Applicability of Private Express Statutes to International

Remailing

Two of the comments submitted in response to the June 17

notice, although generally supporting the proposal, raised the

threshold questions of whether the Private Express statutes have any

applicability to the international carriage of letters and whether the

Postal Service has the authority to adopt a suspension to regulate the

international private carriage of letters. These questions had been

raised in the earlier comments and were carefully considered at that

time. The Postal Service reiterates its statement on these questions

which was published in the June 17 notice.

On the matter of the authority to regulate international remailing,

one comment contended that this power should be vested in the

21a

Executive Branch, in particular the Department of Justice, and not the

Postal Service. The comment also suggests that rather than adopting

a regulation, the proposed suspension should be recast as a statement

of general policy. In adopting the suspension, however, the Postal

Service is acting pursuant to authority specifically and exclusively

delegated to it by Congress in the Private Express Statutes themselves,

39 U.S.C. 601(b). The Postal Service is also empowered under 39

U.S.C. 401(2) to adopt, amend, and repeal regulations in order to

further the objectives of title 39. Associated Third Class Mail Users

v. United States Postal Service, 600 F.2d 824, 826 n.5 (D.C. Cir. 1979).

This title, of course, includes the statute noted above which authorizes

the suspensions. Finally, the Postal Service is itself an independent

establishment in the Executive Branch, 39 U.S.C. 201, and as such it

is generally not responsible to other Executive Branch agencies in

promulgating postal regulations. Nonetheless, the Postal Service has

solicited the views of various agencies and has received and con-

sidered comments on these proposals from several agencies.

Nonapplicability of Suspension for Extremely Urgent Letters to

Remailing

Several comments noted that in adopting a new suspension for

remailing the Postal Service is implicitly concluding that the suspen-

sion for extremely urgent letters, 39 CFR 320.6, ought not be inter-

preted as itself permitting remailing. While two comments agreed

with this rationale, a third requested that this interpretation be express-

ly repudiated. The Postal Service, by adopting this suspension for

international remailing, has expressly and forthrightly determined that

the practice will be permitted, and has stated the conditions under

which it will be permitted. The Postal Service has also concluded that

remailing need not be sanctioned under the color of a suspension

which was intended for another purpose.

Prohibition on Ultimate Delivery Within the United States

One comment objected to the provision which requires that

letters carried pursuant . the suspension not be ultimately delivered

within the United States. The comment contends that this provision

should not be adopted because remailing back into the United States

22a

is negligible, and because this limitation is said to prevent Americans

from availing themselves of lower postage rates that are offered to

non-Americans. These objections are not persuasive, as explained in

the June 17 notice.

The new suspension is not intended to allow the practice of

mailing, in a foreign country, matter which is subsequently shipped

by the postal administration of that country through the United States

as open or closed transit mail, under circumstances which cause the

United States to incur expenses for which it is not reimbursed. This

caveat does not prohibit the private carriage of letters for remailing if

that carriage is within the terms of the new suspension, but neither

does the suspension limit the remedies available to the Postal Service

with respect to transit mail.

Inspections and Audits

With regard to subsection (c) of the suspension, one comment

suggested that this provision should be modified to include inspection

and audit guidelines, and also to include a requirement that the Postal

Inspection Service provide the shipper with advance notice of an

inspection or audit, absent reasonable cause to suspect activity not in

conformity with the regulation. Another comment advanced the view

that subsection (c) should not be adopted because it exceeds the

authority of the Postal Service. The Postal Service has concluded that

the suggested inclusion of special inspection and audit guidelines in

this regulation is unnecessary because these are well established

functions of the Inspection Service. The authority of the Postal

Service to investigate postal offenses and civil matters relating to the

Postal Service is specifically provided by statute, 39 U.S.C. 404(a)(7).

We note, moreover, that a similar provision has been included pre-

viously in a suspension of the Statutes. See 39 CFR 320.6(e), and

compare 39 CFR 320.3(d). The Postal Service has, however, deter-

mined that wording in subsection (c) should be modified to read:

The failure of a shipper or carrier to cooperate with an inspection

or audit authorized and conducted by the Postal Inspection Service...

This minor modification makes it clear that it is the Postal Inspection

Service which authorizes and conducts the inspections and audits.

23a

The Factual Record as Supporting the Suspension

The comment opposed to adoption of the suspension asserted

that the record is inadequate to support the adoption of the regulation,

and that it is not manifest from the record that the public interest

requires the establishment of the suspension. The Postal Service had

sought, in its notice of March 21, 1986, and subsequently, to obtain

precise and detailed information regarding the level of services

provided by remailers, and the benefits which the customers of the

latter derive. It may well be, however, that, because of the diverse

character of the remail industry and the relatively recent development

of remailing, the comprehensive information we had hoped to receive

to supplement the essentially anecdotal information, which was fur-

nished 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.

The factual record includes the comments received in response

to the October 10 and June 17 notices. Information was also obtained

in response to the Federal Register notice of March 21, which reprinted

and addressed generally a letter, dated March 14, 1986, sent to

commenters who responded to the October 10 notice, soliciting further

information for the record. The transcript of the public meeting held

May 22, 1986 is also part of the record.

The comments came primarily from American commercial

enterprises, including financial institutions and publishers, that use the

services of international remailers in conducting their business abroad.

The comments were almost universally consistent in their observa-

tions regarding the level of service provided by remailers. Specifical-

ly, the comments asserted that remailing was faster than U.S. airmail

and that this time savings is often critical to the ability of American

businesses to compete in foreign markets. Moreover, the comments

asserted that remailing services were provided for a lesser cost than

U.S. airmail, thereby also enhancing the ability of American firms to

compete abroad. Although the Postal Service did not receive across-

the-board @ata on the level of service provided by remailers, many

commenters did provide information, testimonial in nature, indicating

that their use of remail services has resulted in time and cost savings.

Numerous commenters noted that this time and cost differential was

24a

critical in order for letter matter being sent abroad to retain its

commercial value. Several commenters also stated that, without faster

and cheaper services provided by remailers, it would not be feasible

for their businesses to compete in the international markets. The

Postal Service found it significant that the comments received in

response to the October 10 notice, which proposed language to make

clear that remailing is nct authorized under the suspension for ex-

tremely urgent letters, were overwhelming in their support of remail-

ing. The Department of Commerce informed us that international

remailing is of benefit to American businesses in foreign markets, a

position also reflected in comments from the Department of Justice

and the Office of Management and Budget.

Content of the Suspension

The new suspension, which is codified as § 320.8 of title 39,

Code of Federal Regulations, suspends, in § 320.8 operation of the

Statutes:

to permit the uninterrupted carriage of letters from a point within the

United States to a foreign country for deposit in its domestic or

international mails for delivery to an ultimate destination outside of

the United States.

The proposal also makes explicit in proposed § 320.8(b) that the

suspension does not authorize the remailing of letters for delivery

within the United States:

This suspension shall not permit the shipment or carriage of a

letter or letters out of the mails to any foreign country for subsequent

delivery to an address within the United States.

A third provision, in § 320.8(c), generally authorizes the Postal

Service, after notice and hearing, to revoke the suspension for a period

of one year, as to a particular shipper or carrier operating in violation

of the suspension. This provision also provides that a shipper or

carrier’s failure to cooperate with an inspection or audit authorized

and conducted by the Postal Inspection Service would, for the purpose

of proceedings under this subsection, create a presumption of a viola-

tion. This has the effect of shifting the burden of demonstrating

compliance to the shipper or carrier, who would have access to

25a

relevant information which its failure to cooperate has denied to the

Postal Service.

In view of the considerations discussed above, 39 CFR Part 320

is amended as follows:

(List of Subjects in 39 CFR Part 320)

Postal Service, Computer technology, Advertising.

PART 320—SUSPENSION OF THE PRIVATE EXPRESS

STATUTES

1. The authority citation for Part 320 is revised to read as set

forth below, and the authority citations following all the sections in

Part 320 are removed.

Authority: 39 U.S.C. 401, 404, 601-606; 18 U.S.C. 1693-1699.

2. A new § 320.8 is adced to read as follows:

§ 320.8 Suspension for international remailing.

(a) The operation of 39 U.S.C. 601(a)(1) through (6) and §

310.2(6)(1) through (6) of this chaptcr is suspended on all post routes

to permit the uninterrupted carriage of letters from a point within the

United States to a foreign country for deposit in its domestic or

international mails for delivery to an ultimate destination outside the

United States.

Example (1) The letters to overseas customers of commercial

firm A in Chicago are carried by Carrier B to New York where they

are delivered to Carrier C for carriage to Europe. Carrier C holds the

letters in its distribution center overnight, then sorts them by country

of destination and merges them with letters of other firms to those

countries before starting the carriage to Europe in the morning. The

carriage of firm A’s letters is not interrupted. The suspension for

international remailing applies to the carriage by Carrier B and by

Carrier C.

Example (2) The bills addressed to foreign customers of the

Chicago branch office of commercial firm D are carried by Carrier E

to New York where they are delivered to the accounting department

of firm D’s home office. The accounting department uses the infor-

mation in the bills to prepare its reports of accounts receivable. The

bills are then returned to Carrier E which carries them directly to

26a

Europe where they are entered into the mails of a foreign country. The

carriage of the bills from Chicago to Europe is interrupted in New

York by the delivery to firm D’s home office. The suspension for

international remailing does not apply to the carriage from Chicago to

New York. It does apply to the subsequent carriage from New York

to Europe.

(b) This suspension shall not permit the shipment or carriage of

a letter or letters out of the mails to any foreign country for subsequent

delivery to an address within the United States.

Example (1) A number of promotional letters originated by firm

F in ee Carrier G to Europe for deposit in the

mails of a foreign country. Some of the letters are addressed to persons

in Europe, some to persons in the United States. The suspension for

international remailing does not apply to the letters addressed to

persons in the United States.

sion is grounds for administrative revocation of the suspension as to

such shipper or carrier for a period of one year in a proceeding

instituted by the General Counsel in accordance with Part 959 of this

chapter. The failure of a shipper or carrier to cooperate with an

inspection or audit authorized and conducted by the Postal Inspection

Service for the purpose of determining compliance with the terms of

this suspension shall be deemed to create a presumption of a violation

for-the-purpose of this paragraph (c) and shall shift to the shipper or

carrier the burden of establishing the fact of compliance. Revocation

of this suspension as to a shipper or carrier shall in no way limit other

actions as to such shipper or carrier to enforce the Private Express

Statutes by administrative proceedings for collection of postage (see

§ 310.5) or by civil or criminal proceedings.

Fred Eggleston,

Assistant General Counsel, Legislative Division.

(FR Doc. 86-18752 Filed 8-19-86; 8:45 am)

BILLING CODE 7710-12-M

27a

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

AMERICAN POSTAL WORKERS UNION, AFL-CIO

1300 L Street, N.W.

Washington, D.C. 20005

and

NATIONAL ASSOCIATION OF LETTER CARRIERS, AFL-CIO

100 Indiana Avenue, N.W.

Washington, D.C. 20001,

Plaintiffs,

Vv.

UNITED STATES POSTAL SERVICE

475 L’Enfant Plaza

Washington, D.C. 20260,

Defendant,

and

AIR COURIER CONFERENCE OF AMERICA

2011 Eye Street, N.W.

Washington, D.C 20006,

Intervenor.

Civil Action No. 87-3199

Judge Charles R. Richey

ORDER

HAVING CONSIDERED the Air Courier Conference of

America’s (ACCA) motion to intervene, memorandum of points and

authorities in support thereof, the responses of plaintiff and defendant

thereto, and the entire record herein and it appearing to the Court that

the motion should be granted, it is this 26 day of February, 1988;

ORDERED that ACCA’s motion to intervene be and is hereby

granted pursuant to Rule 24(b).

United States District Judge

28a

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF COLUMBIA

AMERICAN POSTAL WORKERS UNION, AFL-CIO,

and NATIONAL ASSOCIATION OF LETTER

CARRIERS, AFL-CIO,

Plaintiffs,

UNITED STATES POSTAL SERVICE,

Defendant.

Civil Action No. 87-3199

APPEARANCES

Plaintiffs: For the American Postal Workers Union, AFL-CIO, Anton

G. Hajjar, O’Donnell, Schwartz & Anderson, Washington, D.C. For

the National Association of Letter Carriers, AFL-CIO, Richard N.

Gilberg, Sophia E. Davis, Cohen, Weiss and Simon, New York, New

York.

Defendant. Jay B. Stephens, United States Attorney, John D. Bates

and Wilma A. Lewis, Assistant United States Attorneys; of counsel,

Charles D. Hawley, Catherine V. Pagano, Law Department, United

States Postal Service.

OPINION OF CHARLES R. RICHEY

UNITED STATES DISTRICT JUDGE

INTRODUCTION

The United States Postal Service (the “Service”) enjoys a

Statutory monopoly over the delivery of mail in and from the United

States. This monopoly, as the Supreme Court recently noted, “has

prevailed in this country since the Articles of Confederation,” and is

intended to ensure “prompt, reliable, and efficient services to [postal]

patrons in all areas.” Univ. of California v. Public Employment Rela-

29a

tions Bd., 108 S. Ct. 1404, 1408 (1988)(quoting 39 U.S.C. § 10i(a)).

The monopoly is embodied in the Private Express Statutes (the

“PES”). 18 U.S.C. §§ 1693-1699; 39 U.S.C. §§ 601-606. The

monopoly serves its purpose by ensuring that the revenues available

to the Service are not endangered by private competition in less costly,

and thus more profitable, segments of the mail delivery market.

Although Congress has granted the Service a complete monopo-

ly in the PES, Congress has also granted the Service the power to

suspend that monopoly in certain situations. Under 39 U.S.C. § 601(b),

the Service “may suspend the operation of any part of [the PES] upon

any mail route where the public interest requires the suspension.” This

lawsuit concerns the Service’s decision to voluntarily suspend its

monopoly under the PES with respect to that part of the mail-delivery

market known as “international remailing.” The regulation which

suspended the Service’s monopoly effectively defines “international

remailing” by its description of what is permitted: the regulation

“permits the uninterrupted carriage [by private entities] of letters from

a point within the United States to a foreign country for deposit in its

domestic or international mails for delivery to an ultimate destination

outside of the United States.” 39 C.F.R. § 320.8. The Service issued

the regulation on August 20, 1986.

The plaintiffs, the American Postal Workers Union and the

National Association of Letter Carriers (hereinafter the “Unions”),

filed this suit on November 25, 1987. They allege that the Service’s

decision to permit private international remailing violated the APA in

two respects. First, they claim that the decision was arbitrary, capri-

cious and an abuse of discretion in violation of 5 U.S.C. § 706(2)(A).

Second (and not so differently) they claim that the decision was in

excess of the statutory authority granted the Service under 39 U.S.C.

§ 601(b), and therefore in violation of 5 U.S.C. § 706(2)(B). In a

nutshell, the Unions contend that the Service applied the wrong legal

standard in deciding to suspend international remailing monopoly.

' According to the Unions’ complaint, the American Postal Workers Union

represents approximately 250,000 Service employees “in the clerk, maintenance,

special delivery messenger, and motor vehicle service crafts nationwide.” Comp. at

4 4. The National Association of Letter Carriers represents approximately 220,000

Service employees “in the city letter carrier craft nationwide.” Comp. at 4 5.

30a

They further contend that the Service failed to develop an adequate

record upon which to base its decision, and that it drew incorrect

inferences from the record that did exist. The Service has met the

Unions’ contentions on the merits, and has argued in addition that the

Unions lack standing to challenge its decision.

The matter came before the Court on the parties’ cross-motions

for summary judgment. On October 17, 1988, the Court granted

judgment in favor of the Service. As further explained herein, the

Court concluded that the Unions do not enjoy standing to challenge

the Service’s decision in this matter, and further, that the Service’s

decision did not violate the APA.

DISCUSSION

1. Standing

The Service contends that the Unions lack standing because they

have not been able to show an actual or threatened injury to their

membership, and because they are not within the “zone of interests”

that the PES are designed to protect. This Court disagrees that the

Unions have not shown a sufficient actual or threatened injury, but

agrees with the Service that the Unions are not within the “zone of

interest” that the PES are designed to protect.

An essential element of standing in an Article III court, whether

suit has been brought to review agency action or otherwise, is that the

plaintiff must be capable of showing actual or threatened injury. Warth

v. Seldin, 422 U.S. 490, 498 (1975). The Service contends that the

Unions have made no such showing here, in that they have offered no

proof that their respective memberships have lost jobs or been express-

ly threatened with the loss of jobs.

The Service is correct; the Unions have made no such showing.

However, the Unions have not attempted to make such a showing.

Instead, the Unions allege that the decision to permit private interna-

tional remailing, with its attendant loss of revenue to the Service,

inflicts harm upon its membership through the loss of “employment

opportunities.” Compl. at 1 16. The Unions reason that, even if no jobs

~ are directly lost, the relinquishment of international remailing to the

3la

private sector reduces the current membership’s opportunity to engage

in international remailing, and thereby reduces the membership’s

opportunity to obtain “work time, overtime, employment oppor-

tunities, future benefits and . . . morale.” Pl. Mem. at 8 (quoting

National Association of Letter Carriers, AFL-CIO v. Independent

Postal System of America, 470 F.2d 265, 270 (10th Cir. 1972)).

The Court agrees with the Unions that the reasonable prospect

of reduced employment opportunities, even if no specific loss current-

ly can be shown, satisfies the “threatened injury” requirement of

standing. There is authority from the Tenth Circuit for this finding in

a context virtually identical to that presented here. See American

Postal Workers Union, AFL-CIO v. React Postal Services, 771 F.2d

1375, 1380 (10th Cir. 1985)(whenever private entity permitted to

perform postal functions contrary to the PES, the “employment op-

portunities of the postal workers are inevitably reduced”); National

Association of Letter Carriers, AFL-CIO, supra, 470 F.2d at 270

(injury in fact due to “significant” loss of employment opportunity

where PES not complied with). This conclusion is further consistent

with authority in this Circuit arising in slightly different contexts. See,

e.g., Intern’| Union of Bricklayers v. Meese, 761 F.2d 798, 802 (D.C.

Cir. 1985)(union had standing because guidelines a!lowing aliens to

enter workforce would interfere with jobs which “would otherwise

likely go to union members”); Autolog Corp. v. Regan, 731 F.2d 25,

31 (D.C. Cir. 1984)(alleged loss of “employment opportunity,” though

no loss of present jobs shown, sufficient to confer standing); National

Treasury Employees Union v. Horner, 659 F. Supp. 8, 12 (D.D.C.

1986)(union had standing where agency action would permit outside

competition with membership).

However, the Court disagrees with the Union on the question of

whether the interests asserted here fail within the “zone of interest”

implicated by the PES. In Clarke v. Securities Indus. Ass’n, US._,

107 S.Ct. 750 (1987), the Supreme Court expanded upon its prior

holdings that, in addition to the constitutional requirement of injury in

fact, a plaintiff seeking review of agency action under 5 U.S.C. § 702

must show that he or she falls within the “zone of interests” protected

by the statute at issue. This additional requirement, termed a “gloss on

the meaning of § 702,” 107 S.Ct. at 758 n.16, serves as “a guide for

deciding whether, in view of Congress’ evident intent to make agency

32a

action reviewable, a particular plaintiff should be heard to complain

of a particular agency decision.” 107 S.Ct. at 757. In situations such

as this, where the plaintiff is not the object of the agency action, but

instead complains of the indirect consequences of that action, the test

“denies a right of review if the plaintiff’s interests are so marginally

related to or inconsistent with the purposes implicit in the statute that

it cannot reasonably be assumed that Congress intended to permit the

suit.” Id.

Here, the avowed interests of the Unions’ respective member-

ships — the retention of employment opportunities — simply bear no

reasonable relationship to the purposes of the PES. The PES monopoly

was designed to ensure only that the Service maintains sufficient

revenue to be able to provide efficient and effective mail delivery

services to all aspects of the market. The Service retains the express

authority to suspend that monopoly when the public interest requires

such a suspension. There is simply no evidence that the PES was

intended to provide, even indirectly, job security for Service

employees, or that job security for Service employees furthers in any

way the purposes of the PES. The interests asserted by the Unions

simply bear no relation to the purposes and policies implicit in the PES

— indeed, they might well diverge in certain situations* —and it is

therefore reasonable to assume that Congress did not intend for

Service employees to enjoy the right to review the Service’s decisions

with respect to the PES.

The Unions’ position, in essence, fails to distinguish between the

harm required to establish injury — essentially quantitative deter-

? The “interest” created by the PES is in maintaining sufficient revenue, by means

of a monopoly, to permit the Service to serve the totality of the mail-delivery market

in the United States. As Congress expressly recognized in 39 U.S.C. § 601(b), there

may be situations in which the “interest” of the PES may be achieved without benefit

of the monopoly. Yet, anytime private entities engage in mail delivery of virtually

any type, the employment opportunities of Service employees will arguably be

endangered. As a result, Service employees and their Unions will always have an

incentive to challenge a suspension of the PES, without regard to the relationship

between the suspension and the “public interest” as contemplated by § 601(b). Thus,

even when the “interest” protected by the PES clearly and unequivocally favors a

suspension, the Unions will nevertheless have an interest in challenging the suspen-

sion. In this respect, the “interests” of the Union and the “interest” created by the PES

not only do not converge, but in certain circumstances clearly diverge.

33a

mination — and the harm required to bring a plaintiff within the “zone

of interest” test — essentially a qualitative determination. Alternative-

ly, the distinction can be seen as one between a “zone of interest” and

a “zone of consequence.” Judge Wilkey’s opinion in Tax Analysts &

Advocates v. Blumenthal, 566 F.2d 130, 144-45 (D.C. Cir. 1977), is

helpful in this regard. There, Judge Wilkey excluded from the “zone

of interest” of a provision of the Internal Revenue Code a person

whose competitive position had been injured by the IRS’s interpreta-

tion of the statute.> Judge Wilkey wrote, in an analysis that is quite

apposite here:

Every decision by a government agency generates

consequences and various forms of impact on a wide

range of valid interests held by a diverse range of

parties. There is no doubt that the decisions embodied

in the challenged revenue rulings have had an impact

on [appellant]. But the concepts of consequence and

impact are not the proper guideposts to define the

relevant zone of interests; reference to these concepts

does not aid greatly in determining whether a protected

interest exists, but rather serve as part of the vocabulary

in defining the relationship between an alleged injury

and an asserted interest.

Thus, consequences and forms of impact do play an

important role in the law of standing; these concepts

are relevant in determining whether there has been

injury in fact. ... We cannot define the zone of interests

as being the equivalent in every case of the “zone of

impact” or the “zone of consequences.” To do so would

establish a standing doctrine based solely on the exist-

ence of harm to a party.

(emphasis in original). See also Leaf Tobacco Exporters Ass'n. Inc. v.

Block, 749 F.2d 1106, 1116 (4th Cir. 1984)(“[E]very executive action

3 Although the Tax Analysts decision did not involve review of an agency decision,

as did Clarke, it applied the “zone of interest” test first developed in Association of

Data Processing Service Organization v. Camp, 397 U.S. 150 (1970). In Clarke,

however, the Supreme Court expressly reiterated and reaffirmed the strength of the

test as first announced in Data Processing.

34a

portends endless adverse impacts and infinite adverse ramifications.

We decline to convert the zone of interests test to one that calibrates

zones of impact or zones of consequence.”). Here, as in the above-

cited decisions, while the Service’s decision may have an impact upon

the employment opportunities of the Unions’ members, that impact is

simply not of a type that falls within the zone of interests implicated

by the PES, even taking into consideration the liberal teachings of

Clarke.* The Union’s members therefore do not have standing under

5 U.S.C. § 702 to challenge the Service’s decision to suspend the

Service’s monopoly over private remailing.

2. Violations of the Administrative Procedures Act

Even if the Unions had standing to challenge the Service’s

decision, however, it is apparent from the record that their challenge

would fail under the APA.

The Unions’ first contention, that the Service exceeded its

statutory authority in suspending the monopoly, rests upon the claim

that the language of 39 U.S.C. § 601(b) requires that the Service find

something close to a compelling public need before it may suspend

the monopoly in any segment of the mail delivery market. The Unions

assert that the Service’s decision therefore violated 5 U.S.C. § 706

(2)(B), because the record upon which the Service based its decision

did not reflect such a compelling public need.

Although it appears that no court has interpreted § 601(b) in this

context, the Court is comfortable that the Service bears no such

heightened burden in justifying its actions. The “public interest . . .

* Although the specifics of this situation clearly support the conclusion reached,

the logic of the result is strengthened when one considers that a contrary holding

would implicitly grant standing under § 702 to any agency employee whose job or

employment opportunities were threatened as a result of an agency decision. At

bottom, the Unions here seek standing because the Service’s decision will likely result

in reduced revenue for the service, and, as a result, reduced employment opportunities

for Service employees. Yet, agencies make decisions every day that affect the

allocation of resources within and among agencies, and thus affect the job prospects

of agency employees. It is unreasonable, at least in the consideration of this court, to

acsume that Congress intended to make § 702 available to any disgruntled agency

employee.

35a

requires” language that is at issue here also authorizes myriad forms

of agency action throughout the United States Code. Yet, to this

Court’s knowledge, it has never been construed to impose upon an

agency the heightened standard that the Unions request here. Indeed,

the opposite would appear to be true; the “public interest . . . requires”

language appears to suggest substantial discretion in an agency to

define the public interest in a given situation and to act accordingly.

Rather than indicating Congress’ desire to cabin the Service’s discre-

tion, the language of § 601(b) implies to this Court, based upon the

operation of similar language elsewhere, a desire to vest the Service

with substantial discretion. See, e.g., F.C.C. v. WNCN Listeners Guild,

450 U.S. 582, 593-94 (1981)(“public interest” language deemed to

grant agency broad discretion).

Here, the Service made an express finding that the public inter-

est, as expressed in the responses to its notice of proposed rulemaking,

favored the entry of private firms into the international remailing

market. Although the Unions are entitled to quarrel, and do quarrel,

with the Service’s conclusion that the record supports its decision, it

appears that the Service applied the proper standard here, and therefore

did not act in excess of its statutory authority under § 601(b).

The Unions’ second contention under the APA is that the

Service’s decision was “arbitrary, capricious and an abuse of discre-

tion,” and therefore in violation of 5 U.S.C. § 706(2)(A). The Unions

contend, in essence, that the Service’s decision was not based upon

adequate evidence that the public interest supports private internation-

al remail, and that the Service did not consider the proper factors

regarding the revenue effects of its decision.

This Court disagrees. Under the Supreme Court’s articulation of

the arbitrary and capricious analysis in Motor Vehicle Mfrs. Ass'n v.

State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983), an agency

need only “articulate a satisfactory explanation for its action including

a ’rational connection between the facts found and the choice made.”’

Here, the administrative record indicates that the Service initially

promulgated a rule designed to perpetuate the Service’s monopoly

over international remailing. This initial position met with strong,

nearly unanimous public opposition to a continuation of the monopoly

over this segment of the market, including opposition from various

36a

government officials. In response to this strenuous opposition, the

Service sought the public’s reaction to a suspension of the monopoly

and a transfer of international remailing to the private sector. The

public reaction the second time around was somewhat limited; only

twenty-five responses were received, but again, nearly all favored

private international remailing. Based upon these responses, and

conceding that the public input lacked to some extent the factual

specificity the Service had hoped for,® the Service’s issuing release

stated as follows:

The comments were almost universally consistent in

their observations regarding the level of service

provided by [private] remailers. Specifically, the com-

ments asserted that remailing was faster than U.S.

* The Service’s proposal to retain the monopoly over international remailing, firs:

published October 10, 1985, was opposed by, among others, James Miller, Director —

of the Office of Management and Budget, Bery! Sprinkel, Chairman of the Counse!

of Economic Advisors, Malcolm Baldridge, Secretary of Commerce, Congressmen

Mickey Leiand, Frank Horton and Robert Garcia, members of the Subcommittee on

° In its issuing release, the Service specifically noted the objection that the Unions

had raised at the notice and comment stage, and that they reiterate here — that the

record lacks sufficient empirical data to justify the Service’s conclusion that the public

interest supports a suspension. In the release, however, the Service responded that

“[i)t may well be . . . that, because of the diverse character of the remail industry and

the relatively recent development of remailing, the comprehensive information we

had hoped to receive to supplement the essential!y 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. at 29637. The Court regards the Service's response as

adequate under the circumstances, and does not view the relative dearth of empirical

data as undermining the Service's evaluation of the “public interest.” See, e.g., F.C.C.

v. Nat'l Citizens Comm. for Broadcasting, 436 U.S. 775, 813-14 (1978)(factual

specificity not always required where “a forecast of the direction in which future

public interest lies necessarily involves deductions based on the expert knowledge of

the agency”\(quoting FPC v. Transcontinental Gas Pipe Line Corp., 365 U.S. 1, 29

(1961); Nat’l Ass'n of Regulatory Utility Commissioners v. F .C.C., 737 F.2d 1095,

1140-41 (D.C. Cir. 1984)absence of complete factual support not fatal to agency

decision under arbitrary and capricious review; even though “an agency's decision is

a difficult one, or that the decision rests on a set of evidentiary facts less desirable or

complete than one which would exist in some regulatory utopia does not alter our

role”).

37a

airmail and ‘that this time savings is often critical to the

ability of American businesses to compete in foreign

markets. Moreover, the comments asserted that

remailing services were provided for a lesser cost than

U.S. airmail, thereby also enhancing the ability of

American firms to compete abroad. Although the Post-

al Service did not receive across-the-board data on the

level of service provided by remailers many com-

menters did provide information, testimonial in nature;

indicating that their use of remail services has resulted

in time and cost savings. Numerous commenters noted

that this time and cost differential was critical in order

for letter matter being sent abroad to retain its commer-

cial value. Several commenters also stated that without

faster and cheaper services provided by remailers, it

would not be feasible for their business to compete in

the international markets. The Postal Service found it

significant that the comments received in response to

the October 10 notice, which proposed language to

make clear that [the monopoly applies to international

remailing], were overwhelming in their support of

remailing. The Department of Commerce informed us

that international remailing is of benefit to American

businesses in foreign markets, a position also reflected

in comments from the Department of Justice and the

Office of Management and Budget.

51 Fed. Reg. at 29637. The Service’s explanation of its decision and

the bases therefore, while perhaps lacking the factual specificity tha:

might exist in a “regulatory utopia,” can hardly be regarded as ai-

bitrary, capricious and an abuse of discretion. Section 601(b) express-

ly entrusted the Service with the task of deciding whether the public

interest supports a continued monopoly over international remailing,

and this Court simply cannot conclude, on the record before it, that the

Service carried out its task in a manner that would justify judicial

intervention. The Service has identified the factors supporting its

decision, drawn rational inferences where detailed facts did not exist,

and drawn a rational connection between the facts found and the

decision made. The APA requires no more.

38a

Because the Service’s decision was not in excess of statutory

authority, and was not arbitrary, capricious and an abuse of discretion,

the Service would be entitled to judgment as a matter of law even if

the Unions had standing to bring this action.

Date: December 20, 1988

Charles R. Richey

United States District Judge

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.