Respondents Brief — Air Courier Conference of America v. American Postal Workers Union

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AdOD JIGVIKAY 1S39

QUESTIONS PRESENTED

1. Whether the respondent unions had standing to

bring a civil action seeking judicial review of the final

rule promulgated by the United States Postal Service

suspending the Private Express Statutes so as to permit

the practice of international remailing.

2. Whether the court of appeals correctly held that

the Postal Service’s final rule suspending the Private Ex-

press Statutes for international remailing pursuant to 39

U.S.C. 601(b) was arbitrary and capricious because

the Postal Service failed to consider the impact of the

Suspension on all postal patrons and failed to explain its

reasons for rejecting several more narrowly defined sus-

pension alternatives.

(i)

TABLE OF CONTENTS

II.

ITT.

THE INTERNATIONAL REMAILING SUS-

PENSION IS SUBJECT TO JUDICIAL RE-

ati ass ercesitseeneeecce- 1...

A. The “Strong a In Favor Of

a a

D. The Government Has Waived The Defense

That The APA Is Inapplicable...

THE UNIONS HAVE STANDING __ es

A. Postal Employees Are Within The Zone Of

Interests Of The PRA... sis

2. The 1970 legislative consideration of the

PRA and its special solicitude for postal em-

ployees and their unions... s—S

B. Postal Employees Have Standing Under

| ee

THE COURT OF APPEALS CORRECTLY

OVERTURNED THE INTERNATIONAL RE-

MAIL SUSPENSION 00000

A. The Suspension Was Inconsistent With The

Public Interest Standard Provided By Sec-

Eee

B. The Postal Service Failed To Consider The

Impact Of Revenue Loss Caused bad The

CONCLUSION... ieiditbdbsabsiachceetcntcnibcmasassdbbeséconce

TABLE OF AUTHORITIES

CASES Page

Abbott Laboratoriés v. Gardner, 387 U.S. 186

SINE ciniertebbiciiedddcnierd in ticisgakotstatae st Rtas ae et 22, 24

Adickes v. S. H. Kress & Co., 398 U.S. 144

MRE SII Anca SSN Aeon ce area 25

Allen v. Wright, 468 U.S. 787 (1984)... 41

Alyeska Pipeline Service Co. v. Wilderness Soci-

ety, 421 U.S. 240 (1976) «............................ 16

American Postal Workers Union, Detroit Local v.

Independent Postal Systems of America, Inc.,

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

Gap ee ee a a 25

American Postal Workers Union v. React Postal

Services, Inc., 771 F.2d 1375 (10th Cir. 1985)... 24

Associated Third Class Mail Users v. USPS, 440

F. Supp. 1211 (D.D.C. 1977), aff'd, 600 F.2d

824 (D.C. Cir.), cert. denied, 444 U.S. 887

TE eae < OC RON, ee ae 19, 20

Associated Third Class Mail Users v. USPS, 600

F.2d 824 (D.C. Cir.), cert. denied, 444 U.S. 837

tinitnmiaee ee 14

Association of Data Processing Service Organiza-

tions, Inc. v. Camp, 397 U.S. 150 (1970)... 27, 41

Bell v. Hood, 327 U.S. 678 (1946) 26

Bigelow v. Forrest, 76 U.S. (9 Wall.) 339 (1870)... 14

Block v. Community Nutrition Institute, 467 U.S.

a a 11, 24, 26

Boston Stock Exchange v. State Tax Commission,

429 U.S. 318 (1977) .......................... SCE ES ae 41

Bowen Vv. Michigan Academy of Family Physi-

cians, 476 U.S. 667 (1986)... 11, 23

Burks v. Lasker, 441 U.S. 471 (1979)... 26

Burns v. USPS, 380 F. Supp. 628 (S.D.N.Y.

EE ADEE een ae he Ty 20

Califano v. Sanders, 430 U.S. 99 (1977)... 26

City of Milwaukee v. Block, 823 F.2d 1158 (7th

_. ¢_ OeeanORR ih Sess Ck a dtsin el 28

Clarke v. Securities Industry Association, 479 U.S.

ENT IE Sis SRT Re passim

TABLE OF AUTHORITIES—Continued

Page

Combined Communications v. USPS, 891 F.2d

a 19

Continental Management, Inc. v. United States,

627 F.2d 618 (Ct. Cl. 1975) ........................... 21, 22

Cort v. Ash, 422 U.S. 66 (1975)... 7, 24, 25, 41

Cousins v. Secretary of DOT, 880 F.2d 603 (1st

Or 21, 24

Davis Vv. Passman, 442 U.S. 228 aaa 26

Dole v. United Steelworkers of America, 110 S. Ct.

Oe 13

Duignan v. United States, 274 U.S. 195 (1927)... 25

Duke Power Co. v. Carolina Environmental Study

Group, 438 U.S. 59 (1978) 26

F’. W. Fitch Co. v. United States, 323 U.S. 582

Nt aR paras Ser oh a 14

Fort Stewart Schools vy. Federal Labor Relations

Authority, 58 U.S.L.W. 4624 (U.S. May 29,

a AE oe a a A Se 12

General Investment Co. v. New York Central R.

se fg + Fie aaa 26

Gladstone, Realtors v. Village of Bellwood, 441

| eS iat ides ca el 41

Harmon Vv. Brucker, 355 U.S. 579 atta 23

Harrison v. PPG Industries, Inc., 446 U.S. 578

Ae LIRR Se ah EA De Sa 13, 14

International Union, UAW vy. Brock, 477 U.S. 274

BA Ey ne ve nea 22, 23

Jackson Vv. Seaboard Coast Line R. Co., 678 F.2d

Se I 26

Johnson V. Robison, 415 U.S. 361 aia, 11

Jordan V. Bolger, 522 F. Supp. 1197 (N.D. Miss.

1981), aff'd, 685 F.2d 1384 (5th Cir. 1982),

cert. denied, 459 U.S. 1147 (1988)... 20

Leedom Vv. Kyne, 358 U.S. 184 SCENE 23

Lindahl v. Office of Personnel Management, 470

is 11

Local 542, International Union of Operating Engi-

neers V. NLRB, 328 F.2d 850 (3d Cir.), cert.

denied, 379 U.S. 626 (1964)... 26

TABLE OF AUTHORITIES—Continued

Page

Lujan v. National Wildlife Federation, 110 S. Ct.

4 REESE tees iret Ry oN ee 29, 30

SRR a el ene EN Nolin SR ose A 23

Midlantic National Bank v. New Jersey Depart-

ment of Environmental Protection, 474 U.S. 494

TRS ASOT Me SOIL TES Beret 21

Motor Vehicle Manufacturers Association v. State

Farm Mutual Automobile Insurance Co., 463

tiie a 42, 46

Mt. Healthy City School District Board of Educa-

tion V. Doyle, 429 U.S. 274 (1977)... 26

Mullins Coal Co. v. Director, OWCP, 484 U.S. 135

eal AE Nee Set R Ae ole enka ine estore Na 19

NAACP vy. Federal Power Commission, 425 U.S.

I Gt a es Pal Rae Sr ee 43

NAACP Vv. Secretary of HUD, 817 F.2d 149 (1st

RRR SEER cowl oT eet en Ei 21, 24

National Association of Greeting Card Publishers

v. USPS, 462 U.S. 810 (1988) .......................... 8, 38

National Association of Letter Carriers v. Inde-

pendent Postal Systems of America, Inc., 470

co 4 f. |. 5 . (piesa 25

National Association of Postal Supervisors Vv.

USPS, 602 F.2d 420 (D.C. Cir. 1979)... 20

National Easter Seal Society v. USPS, 656 F.2d

£ Ree 13, 16

National Federation of Federal Employees Vv.

Cheney, 883 F.2d 1038 (D.C. Cir. 1989), cert.

denied, 110 S. Ct. 8214 (1990)... 40

National Retired Teachers Association Vv. USPS,

430 F. Supp. 141 (D.D.C. 1977), aff’d on other

grounds, 593 F.2d 1360 (D.C. Cir. 1979)... 13

Norfolk Redevelopment and Housing Authority v.

Chesapeake & Potomac Telephone Co., 464 U.S.

eee 21

Owen V. Mulligan, 640 F.2d 1130 (9th Cir. 1981). 20

Peoples Gas, Light and Coke Co. v. USPS, 658

F.26 1168 (7th Cir. 1961) ........................... 19, 28

vii

TABLE OF AUTHORITIES—Continued

Page

Powers v. Alabama Department of Education, 854

F.2d 1285 (11th Cir. 1988), cert. denied, 109

fF “ Seo ee Se eee 26

Regents of the University of California v. Public

Employment Relations Board, 485 U.S. 589

SE EE a eS ee ee 2, 3, 38

Reilly v. Pinkus, 388 U.S. 269 (1949)... 23

Rusk v. Cort, 369 U.S. 367 (1962)... 18

San Juan Legal Service, Inc. v. Legal Service

Corp., 655 F.2d 434 (1st Cir. 1981) 23

School of Magnetic Healing v. McAnnulty, 187

a 20

Shaughnessy v. Pedreiro, 319 U.S. 48 (1955)... 18

Simon Vv. Eastern Kentucky Welfare Rights Or-

ganization, 426 U.S. 26 (1976) ...0 41

Smith v. Davis, 323 U.S. 111 (1944) 200 14

Spokane County Legal Service v. Legal Service

Corp., 614 F.2d 662 (9th Cir. 1980) 24

Stark v. Wickard, 321 U.S. 288 (1944) 20

Szostak v. Railroad Retirement Board, 370 F.2d

NE ee Oe ae 24

Tennessee Electric Power Co. v. Tennessee Valley

Authority, 306 U.S. 118 (1989) 27, 41

Traynor V. Turnage, 108 S. Ct. 1872 (1988)... 6, 10,

11, 12

United States ex rel. Milwaukee Social Democratic

Public Co. v. Burleson, 255 U.S. 407 (1921)........ 20

United States v. Salen, 235 U.S. 237 (1914)... 14

United States v. Stever, 222 U.S. 167 (1911)... 14

Valley Forge Christian College v. Americans

United For Separation of Church and State,

Ine., 464 U.S. 464 (1962) ................................ oe 41

Withers v. USPS, 417 F. Supp. 1 (W.D. Mo.

a 20

STATUTES AND REGULATIONS

Act of March 25, 1864, ch. 40, § 7, 18 Stat. 37........ 3

Act of August 31, 1852, ch. 113, 10 Stat. 141... 3

Postal Reorganization Act, Pub. L. No. 91-375,

§§ 7-10, 18, 84 Stat. 788-786 .....................--0..200<.... 4,17

viii

TABLE OF AUTHORITIES—Continued

Page

ay oli coiicctissvicentonins odsdhcnnddncslinshaldlbansnmainasontoe 17

I. i aesadiinilltaedietbesasnaaiiaennitiatlaivete 18

Oe... scnscisasinbsindinistibnaneetine—obemuminteiibcsedsines 17

i cncvncnsecinsedmunseniomatonsnsenisnanseaeiibe 6, 19

IID ocnccscccccscnssnsiniersatevesnscnensvasenivorvertes 18

I oo... ssnceecscnassecnsteniwesssciosetbimenesonniatie 1

§ {>i 1

in os - ncncncscndectiiienlnnsiionesiceavenpersebeaiaes 7

I cccnecccnssnsccsnsnnreseevissnenentinsssiinvesnsesecctoonse 11

39 U.S.C. 101 SEE RASS ER SOs Lae er aac 10

I os cicvnicnecscsntsnsthincentesenitecnmnininenammncntogeete 36

I I vnceececctscceecevesxsocnssinecsenevenssosccssnccosnseecees 36

i slicelinncaboninnitinnerannindansoen 36

ITD ovvnccvecccscecvctesersensecsescocesnccsstoncosediipanstene 43

in ov ccsancocscoccctrensetidenceestinadicestonigesntetettn 7

| Ee passim

89 U.S.C. 601(b) -..... Le i cacuiialins <adilsnsainleibapngeesibeceranlaal passim

ED .o sassse-conutenidesansibiemntiotionstone 1

39 U.S.C. 1005 (f) -......... takai esi tinatetedeanitadintintaaaldiich 36

eo cacaicer canecnnniocanesenisaneaienneteta 3, 46

a. as incsinidusipsbene-ciubiabincchnetmnsaintanbessinist 43

a a cinen ceeriuenidntnbedbnhiciationmeinn 12

I iiss cccnsiccnsevescksoncbiie -cinitishineetiliikiassiatasel 2, 18, 25

i a saaliiseeh enailtniinnesemnanesett 4

TLE SSA TEASE ORO 5, 44

iiss ecabenenionatbrenentenbasinnnion 2

MISCELLANEOUS

Albert, Standing to Challenge Administrative Ac-

tion, 88 Yale L.J. 425 (1974) .........--.---.------------+---- 22

Byse & Fiocca, Section 1361 of the Mandamus and

Venue Act of 1962 and “Nonstatutory” Judicial

Review of Federal Administrative Action, 81

eh Hi Ba I Gr ctttitetincrtintnsstticncerminerinces 22

K. Davis, Administrative Law Treatise (2d ed.

Eo 22

Cong. Globe, 38th Cong., Ist Sess. 1243 (1864) ..... 3

116 Cong. Rec. 9,516-517 (1970) ........-...------------0+--00-+- 4

116 Cong. Rec. 12,208 (1970) ..........------.e------eeeeeeeeee es 17

TABLE OF AUTHORITIES—Continued

Page

116 Cong. Rec. 19,837-839 (1970) ..............------------- 36

116 Cong. Rec. 20,200-241 (1970) .............-..---------- 36

116 Cong. Rec. 20,328-331 (1970) .............-..------------ 36

116 Cong. Rec. 20,432-501 (1970) ..............---------------- 36

116 Cong. Rec. 20,479 (1970) ...........----------2---------e 4

116 Cong. Rec. 21,709 (1970) -........--.--------------------000 15

116 Cong. Rec. 22,279-346 (1970) ...............------------ 36

116 Cong. Rec. 23,525-528 (1970) ..................------------ 36

116 Cong. Rec. 26,953-959 (1979) ..............-...--------- 36

116 Cong. Rec. 26,962-966 (1970) ................. 36

116 Cong. Rec. 27,596 (1970) ............--.--------------- 38

116 Cong. Rec. 27,599 (1970) ......... .-------.-- eee 17

116 Cong. Rec. 27,604 (1970) -..............--------------. eats 35, 36

89 Fed. Reg. 33,211 (1974) ..................... 5 aitianiieagiel 47

44 Fed. Reg. 40,076 (1979) .........-------------------------eneeees 44

44 Fed. Reg. 61,181 (1979) ...........-----------------ee-eeee 4

50 Fed. Reg. 41,462-464 (1985) .................---.------------ 5

51 Fed. Reg. 9,853 (1986) ...............--------------0--:--e0-ee-+ 5

51 Fed. Reg. 21,931 (1986) -......................... pe 6

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

Hearings Before the House Committee on Post

Office and Civil Service, House of Representa-

tives, 91st Cong, 2d Sess. (1970) ..............--.------. 87

H.R. Rep. No. 1104, 91st Cong., 2d Sess. (1970) . passim

H.R. Rep. No. 1363, 91st Cong., 2d Sess. (1970) .. 15

Postal Labor Relations and Employee Morale:

Hearings Before the Subcommittee on Postal

Operations and Civil Service, House of Repre-

sentatives, 91st Cong., Ist Sess. (1969) —........... 32

Postal Modernization: Hearings Before the Sen-

ate Committee on Post Office and Civil Service,

91st Cong., 1st Sess. (1969) ..................------- 32

Priest, The History of the Postal Monopoly, in

the United States, 18 J. of Law & Econ. 33

CIID ccercscncsncnettetccmresnccnsisistnesemmenmnmnananees te 3

Scalia, Sovereign Immunity and Nonstatutory Re-

view of Federal Administrative Action; Some

Conclusions from the Public Lands Cases, 68

Mich. L. Rev. 867, 870, 913-14 (1970) .................

TABLE OF AUTHORITIES—Continued

. Page

S. Rep. No. 912, 91st Cong., 2nd Sess. (1970) ...15, 17, 31

Statement of General Policy Determining Lack of

Jurisdiction and Order Terminating Proceed-

ings, Regulations Implementing The Private Ex-

press Statutes, Docket No. RM76-4, Order No.

SE CI sieticcincnsittcsete tended Mamsdiabaniedeootid. dele 18, 19, 38

8, | a ere? Ln ee 25

The Report of the President’s Commission on

Postal Organization, Towards Postal Excellence

ae Se aN, ays 16, 31, 38

United States Postal Service Board of Governors,

Statutes Restricting Private Carriage of Mail

and Their Administration, Com. Print No. 93-5,

93d Cong., Ist Sess. (1978) ................................... passim

Webster’s Third International Dictionary of the

English Language (Unabridged) (1986)... 13

IN THE

Supreme Court of the United States

OCTOBER TERM, 1990

No. 89-1416

AIR COURIER CONFERENCE OF AMERICA,

. Petitioner,

AMERICAN POSTAL WORKERS UNION, AFL-CIO,

NATIONAL ASSOCIATION OF LETTER CARRIERS, AFL-CIO,

and UNITED STATES POSTAL SERVICE,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

JOINT BRIEF FOR RESPONDENTS

AMERICAN POSTAL WORKERS UNION, AFL-CIO, AND

NATIONAL ASSOCIATION OF LETTER CARRIERS,

AFL-CIO

STATEMENT '

1. On August 20, 1986, respondent United States

Postal Service (‘Postal Service” or “USPS”) published a

final regulation suspending in part the Private Express

Statutes, 18 U.S.C. 1693-1699, 1729; 39 U.S.C. 601-

606 (“PES”). The PES establish the postal monopoly.

The partial suspension in question is for the purpose of

permitting a practice known as international remailing.

1 Respondents accept the specification of the opinions below, juris-

diction, and statutory and regulatory provisions involved, as set

forth in the brief submitted on behalf of respondent Postal Service

(“USPS Br.”).

39 C.F.R. 320.8 (1986), Pet. App. 19a-26a, 51 Fed.

Reg. 29,636 (1986). The new international remail regu-

lation permits private carriers to deliver mail originating

in the United States directly to foreign postal systems,

bypassing the Postal Service.

On November 25, 1987, the respondents, American

Postal Workers Union, AFL-CIO (“APWU”) and Na-

tional Association of Letter Carriers, AFL-CIO

(‘“NALC”) (hereafter “the Unions”) brought this action

for declaratory and injunctive relief challenging the reg-

ulation. APWU and NALC are national labor organiza-

tions representing more than 600,000 Postal Service em-

ployees whose employment opportunities would be ad-

versely affected by the diversion of mail and revenue to

private couriers permitted by the regulation. The crux

of the Union’s claim is that the suspension is contrary to

the mandate of 39 U.S.C. 601(b) in that the administra-

tive record failed to establish that “the public interest

requires” a suspension of the PES for international

remail.

The district court granted summary judgment for

the Postal Service, holding that the Unions lack standing

to bring the action and, further, that the Postal Service

had not acted arbitrarily and capriciously or beyond

statutory authority. The court of appeals reversed the

district court on both issues and remanded the case to

the Postal Service for further development of the admin-

istrative record.

2. The PES, reserving to the Postal Service a monop-

oly over the carriage of letters, date back at least to the

Continental Congress. The statutes were enacted to en-

sure that the Post Office would have sufficient revenues

to maintain universal service at uniform rates. Regents

of the University of California v. Public Employment

Relations Board, 485 U.S. 589, 593 (1988) (“Re-

gents”); United States Postal Service Board of Gov-

ernors, Statutes Restricting Private Carriage of Mail

and Their Administration, Com. on Post Office and Civil

Service Print No. 5, 93d Cong., 1st Sess. 5-7 (June

29, 1973) (“Governors’ Report”). “[{SJince colonial

times, the postal monopoly . . . has been regarded as the

foundation of the country’s postal system. Priest, The

History of the Postal Monopoly in the United States, 18

J. of Law & Econ. 33 (1975) (“Hist.”) ; see Governors’

Report at 5-56. Private expresses were viewed by Con-

gress in the nineteenth century as “selfish” and “preda-

tory.” Hist. at 65-66.’

3. The Postal Reorganization Act of 1970 (“PRA”),

abolished the former cabinet-level Post Office Department

and created the present Postal Service. The Postal Serv-

ice, heretofore heavily subsidized, was required to be self-

supporting, 39 U.S.C. 3621. See National Ass’n of Greet-

ing Card Publishers v. USPS, 462 U.S. 819, 813 (1983) ;

Regents, 485 U.S. at 594. Congress considered and re-

jected an amendment during the floor debate on the PRA

2 It is important to note that at no point prior to the 1970 postal

reorganization did Congress intentionally authorize the Post Office

to suspend the monopoly. The suspension authority now codified at

39 U.S.C. 601(b) was originally enacted in 1984, Act of March

25, 1864, ch. 40 Section 7, 13 Stat. 37, twelve years after enact-

ment of the predecessor statute to the present 39 U.S.C. 601(a)

which allowed private carriage of mail on which postage has been

paid. Act of August 31, 1852, ch. 113 Section 8, 10 Stat. 141.

The legislative history of the 1864 statute indicates that its purpose

was to allow the Postmaster General to halt abuses of the stamped

letters exception by suspending the exception, not the postal monop-

oply. See Cong. Globe, 38th Cong., Ist Sess. 1243 (1864) (statement

of Rep. Alley). Prof. Priest summarizes the legislative history of

the predecessor statutes to 39 U.S.C. 601(b) as follows:

Congress intended to establish an exception to the monopoly

for the convenience of certain mailers, but only under condi-

tions such that the revenue of the Post Office would not be

harmed. ... The Postmaster General’s suspension power was

the power to refuse this convenience—to prohibit private

carriage under these conditions. . . . [Hist. at 79 n.228.]

ACCA’s International Remail Committee agreed with this conclu-

sion in the administrative proceedings below. See Court of Appeals

Appendix at 312-317.

that would have eliminated the Private Express Stat-

utes and allowed competition with the Postal Service. See

116 Cong. Rec. 9516-9517 (1970) ( statement of Rep.

Crane) ; id. at 20479 (1970) (statement of Rep. Udall)

(noting that “high-volume, low-cost mail, would be peeled

off by the private carriers and the Government would be

left with the unprofitable business.”) Congress, accord-

ingly, reenacted the PES as part of the PRA.

In addition, the PRA required the Board of Governors

to report and make recommendations to the President

and Congress within two years on the “modernization”

of the PES, based on a congressional finding that “a

complete study and thorough reevaluation” of the PES

was required. Pub. L. 91-375, section 7, 84 Stat. 783.

The Governors’ Report issued in 1973 concluded that the

PES should be continued but not expanded, and that they

should be administered in a systematic way through a

rule-making process. Governors’ Report at 9-14. The

Governors found that the monopoly was essential to

achieve the statutory policy of self-sufficiency. Id. at 6-7.

The Report also suggested that the Postal Service could

invoke authority under 39 U.S.C. 601(b) to implement

narrowly drawn suspensions of the monopoly, but only

“where there is a definite public need for delivery service

that is substantially faster than any generally available

service which the Postal Service now provides.” Jd. at

11.

4. Following the issuance of the Governors’ Report,

the Postal Service promulgated regulations, inter alia,

adopting “the rule-making provisions of the Administra-

tive Procedure Act,” 39 C.F.R. 310.7, and creating certain

narrow suspension of the postal monopoly. See 39

C.F.R. 320. In October 1979, the Postal Service adopted

a regulation pursuant to its authority under 39 U.S.C.

601(b) suspending the operation of the Private Express

Statutes for extremely urgent letters. 44 Fed. Reg.

61,181 (1979). The suspension was narrowly drawn and

established two tests to determine whether a letter is

extremely urgent—a “loss of value” test and a “cost”

test.°

On the promulgation of the urgent letter suspension,

private mail services began relying on the suspension to

justify the practice of international remailing in which

private firms carry letters addressed to destinations out-

side the United States and deposit those letters in the

mail stream of foreign postal administrations. Believing

that the practice represented “a misuse of the urgent

letter suspension” (see USPS Br. at 3), the Postal Serv-

ice asked the Department of Justice to enjoin the prac-

tice. When the Department refused, the Postal Service

initiated a rule-making proceeding in October 1985 to

modify the urgent letter suspension to confirm that the

Suspension did not cover the practice of international

remailing. 50 Fed. Reg. 41,462-64 (1985).

In March 1986, after receiving comments primarily

from remailers and other members of the business com-

munity opposing the proposed rule-making, the Postal

Service abruptly changed its position on international

remailing. The Chairman of the Postal Service’s Board

of Governors, John R. McKean, announced the initiation

of a new rule-making proceeding to consider whether the

public interest required the suspension of the Private

Express Statutes to allow international remailing. Mc-

Kean’s announcement was part of a notice published on

March 21, 1986 in the Federal Register withdrawing the

October, 1985 proposed rule and announcing that a new

rule-making proceeding would be initiated “as soon as

a factual record is fully developed.” 51 Fed. Reg. 9853

(1986).

* Under the loss of value test, the letter must be delivered within

a short, specified period of time after dispatch and the value of use-

fulness of the letter must be greatly diminished if not delivered

within that period. The cost test is satisfied if the amount paid for

private carriage is at least $3.00 or twice the applicable U.S. postage

for First-Class mail, whichever is the greater. 39 C.F.R. 320.6.

The Postal Service never developed such a factual rec-

ord. In particular, the Service failed to analyze the effect

of the loss of revenue resulting from the suspension on

all other users of the mails. In both the June 17, 1986

notice of proposed rule-making and the notice published

on August 20, 1986, announcing the final rule, the Postal

Service acknowledged the lack of factual information in

the record.‘

The Service nonetheless concluded that the record “ap-

pears to demonstrate the existence of a public benefit to

support the suspension” and, accordingly, published its

final rule. 51 Fed. Reg. 29,636 (1986). This lawsuit

followed.

SUMMARY OF ARGUMENT

1. The international remailing suspension is subject to

judicial review under the Administrative Procedure Act,

5 U.S.C. 701-706 (“APA”). The Court has “repeatedly

acknowledged ‘the strong presumption that Congress in-

tends judicial review of agency action.’” Traynor v.

Turnage, 108 S.Ct. 1372, 1878 (1988). This presumption

may be overcome “only upon a showing of ‘clear and con-

vincing evidence’ of a contrary legislative intent.” /d.

In this instance, the government bases its contention

that Congress intended to preclude review on section 410

(a) of the PRA. Section 410(a) provides, in pertinent

part, that “no Federal law dealing with public or Federal

contracts, property, works, officers, employees, budgets,

or funds, including the provisions of chapters 5 and 7

of title 5 [the APA], shall apply to the exercise of the

powers of the Postal Service.” The fairest reading of

* See e.g., 51 Fed. Reg. 21,931 (1986) where the Service acknow]l-

edged the “anecdotal character” of tables charting relative delivery

times, the “imprecision of the data” on the need for private inter-

national remail, and the fact that there was “little or no reliable

information as to the amount of revenues diverted to date by the

activities of remailers”; id. at 29,636 (referring to failure “to ob-

tain precise and detailed information’”’).

these words is that the Postal Service is absolved from

the APA only where the Service takes action which, but

for the provisions of section 410(a), would have been

covered by a law “dealing with” one of the enumerated

subject matters: “contracts, property, works, officers,

employees, budgets or funds.” Postal Service actions

under the Private Express Statutes are well outside the

scope of the enumerated items of section 410.

The narrow reading of the APA exception that we

suggest is supported by the specific legislative history of

section 410(a) and reflects the basic themes of the legis-

lative history of the PRA as a whole. Accordingly, it

cannot be said that there is “clear and convincing evi-

dence” of a congressional intent to preclude all judicial

review under the APA.

Even if section 410 of the PRA renders the APA

inapplicable, the Postal Service actions suspending the

Private Express Statutes are subject to traditional “com-

mon law” or “non-statutory” review. The postal jurisdic-

tional statutes, 39 U.S.C. 409 and 28 U.S.C. 1339, vest

the federal courts with subject matter jurisdiction to

entertain claims that the Service has violated the sub-

stantive provisions of the PRA or its own regulations, or

that postal regulations are ultra vires. Case law demon-

strates that the APA has not “supplanted” the common

law, so that a holding that there is no APA review here

does not mean that the Postal Service’s action is totally

unreviewable, as the government contends. Similarly, the

cases provide no support for the government’s contention

that judicial review is available only upon a demonstra-

tion of the four factors in Cort v. Ash, 422 U.S. 66

(1975).

In any event, insofar as the Postal Service never

argued in the lower courts that its purported exemption

from the APA under section 410(a) precluded judicial

review, and this question was not presented in ACCA’s

petition for writ of certiorari, the government is pre-

cluded from raising this issue for the first time in this

Court. Since the APA is not jurisdictional, a defense

based on exemption from the APA can be waived by the

Postal Service. The Court should conduct its review of

the questions presented in the certiorari petition—appli-

cation of the zone of interests test and the merits—based

on the assumption that the APA is applicable.

2. In Clarke v. Securities Industry Association, 479

U.S. 388, 395 (1982), the Court reaffirmed a test of

standing which requires that “the interest sought to be

protected by the complainant [be] arguably within the

zone of interests to be protected or regulated by the stat-

ute or constitutional guarantee in question.” That test is

statute-specific, and “all indicators helpful in discerning

[congressional] intent must be weighed.” Jd. at 400.

The test denies standing only where a plaintiff’s inter-

ests are “so marginally related to or inconsistent with

the purposes implicit in the statute that it cannot rea-

sonably be assumed that Congress intended to permit the

suit.” Jd. at 399. In assessing the Union’s standing to

bring this action under section 601(b). of the PRA, the

Court is “not limited to considering the statute under

which [the Unions] sued, but may consider any pro-

visions which help [the Court] understand Congress’

overall purposes in the [PRA].” /d. at 400. Here, there

is no question that postal employees were among the

specific beneficiaries of the PRA. That statute, which

was “jointly developed, through the collective bargaining

process”, H.R. Rep. No. 1104, 91st Cong., 2d Sess. 57

(1970) (“H. Rep.”), completely reformed all aspects of

postal organization, including employee and labor rela-

tions. The PRA was enacted as a complete statutory

scheme, the parts of which cannot be viewed in isolation.

A critical component of this legislative reform—indeed,

the very foundation of the postal establishment—was the

reenactment of the PES. The interests of the Unions in

protecting the employment opportunities of their mem-

bers which would be endangered by unauthorized dissipa-

tion of the monopoly promotes, rather than frustrates,

statutory policies in the overall statute, clearly indicating

that Congress did not intend to preclude suits of this

sort. Clarke, 479 U.S. at 398-399.

The foregoing also demonstrates that, even if this

action is not viewed as one arising under the Adminis-

trative Procedure Act, the Unions meet the prudential

rule of standing suggested in Clarke, which would grant

standing to those “for whose especial benefit the statute

was enacted.” Jd. at 400 n.16.

3. The court of appeals correctly overturned the inter-

national remail suspension. 39 U.S.C. 601/(b) permits

the Service to suspend its monopoly if—but only if—‘“the

public interest requires such suspension.” (emphasis

added). The international remail suspension did not

comply with this standard because, as the court of ap-

peals found, a) the suspension was intended solely to

benefit a single segment of the Service’s consuming pub-

lic, i.e. businesses engaged in commerce overseas, and

b) the Service failed to consider the impact of the sus-

pension on postal rates and service to those mailers who

would continue to use the Postal Service.

ARGUMENT

I. THE INTERNATIONAL REMAILING SUSPEN-

SION IS SUBJECT TO JUDICIAL REVIEW

The government, but not petitioner ACCA, advances

the extreme contention that all postal regulations are

entirely unreviewable.* According to the government, the

Administrative Procedure Act (“APA”) is inapplicable,

and no other right of action is express or can be implied

in the Postal Reorganization Act (“PRA”). USPS Br. at

9-12, 21-30. As discussed below (see pp. 25-27), the gov-

ernment’s defense of non-reviewability is not properly

before the Court because that defense was not advanced

in the proceedings below and was not presented in the

certiorari petition. We begin, however, by showing that

the government’s argument is without merit in any event.

A. The “Strong Presumption” In Favor Of Judicial

Review

The Court has “repeatedly acknowledged ‘the strong

presumption that Congress intends ‘udicial review of

agency action.’”’ Traynor v. Turnage, 108 S.Ct. 1372,

1378 (1988) (citation omitted). Traynor—the most re-

cent of this Court’s cases explaining the nature of the

presumption—involved the question whether the refusal

of the Veterans’ Administration to allow two recovered

alcoholics extensions of time in which to use their vet-

erans’ educational benefits was subject to judicial review

under the Rehabilitation Act of 1973, 29 U.S.C. 794.

5 ACCA obviously has a strong interest in preserving the right

to challenge postal regulations affecting its members. Indeed, ACCA

is the lead party in a case currently pending in the District of Dela-

ware seeking to overturn an international mail rate. Air Courier

Conference of America/International Committee Paragraph 1 of

the complaint states :

This action arises under the Postal Reorganization Act of

1970, 84 Stat. 719, 39 U.S.C. §101 et seq. (the “Act’’), as

amended. Jurisdiction is based on § 409(a), as well as on 28

U.S.C. § 1339 (Postal Matters).

Precisely as here, the government argued that review

was precluded, citing 38 U.S.C. 211(a) which explicitly

bars judicial review of “the decisions of the Adminis-

trator on any question of law or fact under any law

administered by the Veterans Administration providing

benefits for veterans.” Id. at 1377.

The Traynor Court began its analysis by stressing that

“clear and convincing evidence” of congressional intent

is necessary to overcome the presumption in favor of

judicial review:

The presumption in favor of judicial review may be

overcome “only upon a showing of ‘clear and con-

vineing evidence’ of a contrary legislative intent... .

We look to such evidence as “ ‘specific language or

specific legislative history that is a reliable indicator

of congressional intent,’ or a specific congressional in-

tent to preclude judicial review that is ‘fairly dis-

cernible in the detail of the legislative scheme.’ ”

[108 S. Ct. at 1378 (citations omitted) }.

The Court then concluded that the prohibitions of section

211 are “aimed at review only of those decisions of law

or fact that arise in the administration by the Veterans’

Administration of a statute providing benefits for vet-

erans. Id. at i379 (emphasis in original, citing Johnson

v. Robison, 415 U.S. 361 (1974) ).

Accordingly, the Court held that “|[t)he text and legis-

lative history of § 211(a) ... provide no clear and con-

vincing evidence of any congressional intent to preclude

a suit” under the Rehabilitation Act. Jd. See also Bowen

v. Michigan Academy of Family Physicians, 476 U.S.

667, 674 (1986) (“The right to review is too important

to be excluded on such slender and indeterminate evi-

dence of legislative intent”); Lindahl v. Office of Per-

sonnel Management, 470 U.S. 768, 778-780 (1985) ; Block

v. Community Nutrition Institute, 467 U.S. 340, 351

(1984).

In this instance, the government bases its contention

that Congress intended to preclude review on section 410

(a) of the PRA. As we now show, here, as in Traynor,

neither the literal statutory language nor its legislative

history, provide the requisite clear and convincing evi-

dence of a congressional intent to bar judicial review of

the Postal Service’s administration of the Private Ex-

press Statutes.

B. APA Review

The starting point is, of course, the language of the

statute. Fort Stewart Schools v. Federal Labor Rela-

tions Authority, 58 U.S.L.W. 4624, 4625 (U.S. May 29,

1990). Section 410(a) reads:

Except as provided by subsection (b) of this sec-

tion, and except as otherwise provided in this title or

insofar as such laws remain in force as rules or

regulations of the Postal Service, no Federal law

dealing with public or Federal contracts, property,

works, officers, employees, budgets, or funds, includ-

ing the provisions of chapter 5 and 7 of title 5, shall

apply to the exercise of the powers of the Postal!

Service.

One fair reading of these words—and we submit the

fairest reading—is that Congress intended to absolve the

Postal Service from the APA only where the Service

takes action which, but for the provisions of section 410

(a), would have been covered by a law “dealing with”

one of the enumerated subject matters: “contracts, prop-

erty, works, officers, employees, budgets or funds.” * See

* For example, the Postal Service publishes, and regularly amends,

regulations contained in a wide variety of manuals covering every

phase of postal operations (e.g., the Postal Operations Manual, Ad-

ministrative Support Manual, Employee and Labor Relations Man-

ual, and Financial Management Manual). See 39 C.F.R. 211.2

(defining the regulations of the Postal Service and listing manuals).

The exemption set forth in section 410(a) means that the Postal

Service, in implementing these regulations, need not comply with

federal laws including the rule-making and judicial review pro-

visions of the APA.

National Retired Teachers Ass’n v. USPS, 430 F. Supp.

141, 147 (D.D.C. 1977), aff'd on other grounds, 593 F.2d

1360 (D.C. Cir. 1979). But see, e.g., National Easter

Seal Society v. USPS, 656 F.2d 754, 766 (D.C. Cir.

1981).

Had Congress intended to exempt the Postal Service

from the APA altogether—and not only to exempt the

Service from the APA as to contract and related mat-

ters—the natural locution would have been the use of a

conjunction such as “and none of” before the phrase “the

provisions of chapters 5 and 7 of title 5,” not the connec-

tive “including.” For the latter denotes that what fol-

lows is “a discrete or subordinate part or item of a larger

aggregate [or] group”. Webster’s Third International

Dictionary of the English Language (Unabridged)

(1986) at 1143. This construction of the statutory words

is supported by cases applying the principles of noscitur

a soctis and ejusdem generis to analogous statutes.’

7 See, e.g., Dole v. United Steelworkers of America, 110 S.Ct.

929, 935 (1990) (“words grouped in a list should be given related

meaning”, citing cases); Harrison v. PPG Industries, Inc., 446

U.S. 578, 588 (1980). In Harrison the Court was asked to apply

the rule of ejusdem generis to a provision of the Clean Air Act

granting the federal courts of appeals, instead of the district courts,

exclusive jurisdiction to review certain expressly specified actions

of the Administrator of the Environmenial Protection Agency “or

any other final action of the: Administrator under this Act .. .

which is locally or regionally applicable... .” The respondents in

Harrison—resisting the assertion of jurisdiction in the court of

appeals—argued that the phrase “any other final action” should

be limited to those final actions which are similar to the enumerated

actions of the administrator previously specified in the statute.

The majority rejected this construction on the ground that the rule

of ejusdem generis applies only where there is uncertainty as to

the meaning of the statutory language, and there was no uncer-

tainty in the meaning of the relevant phrase. Harrison, 446 U.S.

at 588.

Here, uncertainty as to the meaning of section 410(a) neces-

sarily arises from the presumption of reviewability insofar as the

construction proffered by the government would preclude judicial

Postal Service actions under the Private Express Stat-

utes are, moreover, well outside the scope of the enumer-

ated items of section 410. The enumerated items focus

exclusively on the Postal Service’s internal operations, i.e.

on activities which are most like those of a private busi-

ness, where efficiency and flexibility are of particular

concern. By contrast, when the Service promulgates reg-

ulations implementing or suspending the Private Express

Statutes, the Service is acting as a regulatory agency

administering a public law by defining the rights and

privileges of citizens and firms acting on their own and

subject to both criminal and civil penalties; i.e. the Serv-

ice is acting in an area in which the due process of law

is a particular concern. See Associated Third Class Mail

Users v. USPS, 600 F.2d 824, 826 n.5 (D.C. Cir.), cert.

dented, 444 U.S. 837 (1979).

It is also very much to the point that the PRA’s legis-

lative history contains no indication that Congress con-

templated that section 410 would generally exempt all

Postal Service actions—including those outside the scope

of the enumerated items—from judicial review under the

APA. To the contrary, the APA is not even mentioned

in the committee reports explaining the statutory lan-

guage. Thus, the House Post Office and Civil Service

Committee Report’s section-by-section analysis of H.R.

17070 explains:

review altogether (rather than simply determine the proper forum

as in Harrison). Cf. id. at 595-601 (Rehnquist, J., dissenting).

Moreover, the use of the disjunctive article “or” in the Clean Air

Act language construed in Harrison (“or any other final action’’)

necessarily cuts against a linkage of the words at the end of the

clause with the enumerated items which precede it. Here, the use

of the word “including” in PRA Section 410(a) compels such link-

age. See F. W. Fitch Co. v. United States, 323 U.S. 582, 585-6

(1945) ; see also Smith v. Davis, 323 U.S. 111, 116-7 (1944); United

States v. Salen, 235 U.S. 237, 249 (1914); United States v. Stever,

222 U.S. 167, 174-5 (1911); Bigelow v, Forrest, 76 U.S. (9 Wall.)

339, 348-9 (1870).

Section 114 '*\—Application of Other Laws.—This

section excludes the operation of Federal laws deal-

ing with Federal contracts, property, works, officers,

employees or funds, except as provided in the title or

in the bylaws of the Postal Service.

H.R. Rep. No. 1104; 91st Cong., 2d Sess. (“H. Rep.’’) at

26 (1970). Similarly, the Senate Post Office and Civil

Service Committee Report on S. 3842° explains Section

410 as follows:

The Board of Governors shall have broad authority

and shall not, except as specified, be subject to Fed-

eral laws dealing with contracts, property, and civil

service system, the Budget and Accounting Act of

1921, apportionment of funds, and other laws which

in most instances apply to Government agencies and

functions.

S. Rep. No. 912, 91st Cong., 2d Sess. 5 (1970) (‘“S.

Rep.”).

Nor did any committee or member of Congress so

muck as suggest that section 410 constituted a blanket

waiver of the APA. To the contrary, on the floor of the

Senate, Senator McGee—the chairman of the Post Office

and Civil Service Committee that reported the bill—

characterized the laws which the bill made inapplicable

to the Postal Service as those “relating to public works,

contracts, employment, appropriations, budgeting, and

any other laws governing agency operations”. 116 Cong.

Rec. 21,709 (1970). This statement directly supports the

8 The provision which is now Section 410 appeared in H.R. 17070

as Section 114.

®S. 3842 amended H.R. 17070 by striking it in its entirety and

substituting the Senate version. The Conference Committee ac-

cepted this, with amendments. H.R. Rep. No. 1363, 91st Cong.,

2d Sess. 1, 79 (1970). The Conference Committee adopted the

Senate version of the PRA. The comments of the managers on the

part of the House included in the conference Report do not list

the two formulations among those which are substantively dif-

ferent. Jd. at 79,

proposition that PRA section 410(a) deals only with

laws governing internal agency operations—i.e. the

enumerated subjects—and the APA is inapplicable only

with respect to administrative actions on those subjects.’

Beyond the specific references to section 410, the nar-

rower reading of the APA exception that we suggest re-

flects the basic themes of the legislative history. As dis-

cussed more fully below (see pp. 30-39), a basic objective

of postal reorganization was to “[e]liminate serious han-

dicaps that are now imposed on the postal service by cer-

tain legislative, budgetary, financial, and personnel poli-

cies that are . . . inconsistent with modern management

and business practices”. H. Rep. at 2. This objective is

obviously furthered by allowing the Postal Service fiex-

ibility in administering its contracts, property, workers,

officers, employees, budgets, and funds. As we noted

above, that is precisely what section 410 fairly read ac-

‘” The origins of the PRA also support our suggested interpre-

tation. As discussed below, the proposals that eventually resulted

in the reorganizaton of the Post Office originated in the 1968 Re-

port of the President’s Commission on Postal Organization, entitled

Towards Postal Excellence (1968) (“Kappel Report”). The report,

while recommending exemption of the Postal Service from certain

federal laws like personnel statutes, recognized the need to subject

the Service to others, such as equal employment and conflict of in-

terest laws, and the Hatch Act. Kappel Report, at 80-81. No men-

tion is made of a blanket exception from the APA. In addition, the

Commission’s compilation of laws affecting postal operation char-

acterized Title 5 as “generally cover[ing] employment.” Jd. Annex

vol. IV, at 7.73. The APA is not mentioned in the study.

We recognize that our analysis of the text and legislative history

of PRA section 410 was rejected by the D.C. Circuit in National

Easter Seal Society v. USPS, 656 F.2d at 766-8, and that other

-lower courts have held that section 410 exempts the Postal Service

from the APA (although those courts have also recognized the

availability of non-APA review under the postal jurisdictional

statutes; see p. 19, n.13 infra). For the reasons stated above we

submit that this conclusion is erroneous and should be rejected by

the Court. Cf. Alyeska Pipeline Serv, Co. v. Wilderness Soc’y., 421

U.S. 240 (1975).

complishes. This rationale, however, does not justify an

APA exemption for the Postal Service’s actions having

the force and effect of positive law under the Private

Express Statutes.

Indeed, the government’s claim that section 410 “is a

clear signal of Congress’ belief that an alleged violation

of federal law should be enforced through the political

process, and not through the courts at the behest of pri-

vate parties,” (USPS Br. at 23), is directly contrary to

express congressional intent. One of the primary pur-

poses of the PRA was to free the Postal Service from

“partisan political pressure” by insulating the Postal

Service “from direct control by the President, the Bureau

of the Budget and the Congress.” See Message from the

President of the United States, 116 Cong. Rec. 12,203

(1970); see also S. Rep. at 8 (“The Committee simply,

and hopefully, recommends that politics in the Post Office

be abolished and authorizes the postal service to insure

the fulfillment of that policy.”); 116 Cong. Rec. 27,599

(1970) (remarks of Rep. Ford).

In sum, the weight of the evidence strongly indicates

that Congress had a limited purpose in enacting section

410(a). Plainly—in light of the statutory text and the

foregoing—it cannot be said that there is “clear and con-

vineing evidence” of a congressional intent to preclude

all judicial review under the APA. This conclusion is

further buttressed by established rules of construction

governing APA coverage. Section 559 of the APA pro-

vides that “[{s]ubsequent statutes may not be held to

supersede or modify this chapter [i.e. chapter 5] |[or]

chapter 7... except to the extent that it does so ex-

pressly.” 5 U.S.C. 559 (emphasis added).'' Consistent

11 In this connection, it is noteworthy that section 6 of the PRA

amends various federal statutes, including provisions of Title 5

of the United States Code. The amendments excluded the new

Postal Service from the list of “Executive departments” provided

by 5 U.S.C. 101 and the definition of executive branch “independ-

with the presumption of review, the Court has held that

section 559 makes APA Chapter 7 applicable in any case

where there is doubt or ambiguity about the issue. See

Shaughnessy v. Pedreiro, 349 U.S. 48, 51 (1955) (am-

biguity in the word “final” in the 1952 Immigration

and Nationality Act subjects deportation orders to the

APA); see also Rusk v. Cort, 369 U.S. 367, 379-380

(1962). Section 410 of the PRA does not clearly and

unambiguously exempt from the APA Postal Service ac-

tivities outside the enumerated items. Aecordingly, Sec-

tion 559 of the APA makes chapter 7 applicable here.”

ent establishments” provided by 5 U.S.C. 104. See Pub. L. 91-375,

Sec. 6(c). However, the technical amendments did not amend 5

U.S.C. 701(b) (1), listing those government entities that are sub-

ject to judicial review under the APA. This is another indication

that what Congress intended in enacting section 410(a) was a

partial exemption of the Postal Service from the APA, confined to

the enumerated items, rather than a blanket prohibition of judicial

review.

' As the court of appeals below observed, the Postal Service’s

regulations make the APA applicable to the Service’s administra-

tion of the Private Express statutes so that “the APA provides the

appropriate standards for evaluating the procedural and substan-

tive issues in this case.” 891 F.2d at 307. 39 C.F.R. 310.7 provides

that:

Amendments of the regulations in this part and in part 320

[governing suspensions] may be made only in accordance with

the rulemaking provisions of the Administrative Procedure

Act.

PRA section 410(a) expressly permits the Postal Service to con-

tinue in force laws that would otherwise be inapplicable “as rules

or regulations of the Postal Service”. Congress thus granted

the Postal Service the right to promulgate rules with the force of

law imposing statutory requirements on itself.

The government would blunt the force of 39 C.F.R. 310.7 by the

“interpretation” that the section encompasses only the notice and

comment provisions of APA chapter 5 and not the judicial review

provisions of chapter 7. But the language of the regulation is not

limited to chapter 5. In fact, the regulation has been interpreted

by the Postal Rate Commission as giving rise to judicial review

under the APA. See Statement of General Policy Determining

C. Non-APA Review

Even if section 410 of the PRA renders the APA in-

applicable, the Postal Service actions suspending the Pri-

vate Express Statutes are subject to traditional ‘com-

mon law” or “non-statutory” review. The postal juris-

dictional statutes, 39 U.S.C. 409 and 28 U.S.C. 1339,

vest the federal courts with subject-matter jurisdiction,

respectively, “over all actions brought by or against the

Postal Service” and over “any civil action arising under

any Act of Congress relating to the Postal Service.”

Lower courts—including those who have ruled that

APA review is unavailable by reason of section 410

of the PRA—have relied on these jurisdictional statutes

to entertain claims that the Service has violated the sub-

stantive provisions of the PRA or its own regulations, or

that postal regulations are ultra vires."

Lack of Jurisdiction and Order Terminating Proceedings, Regula-

tions Implementing the Private Express Statutes, Docket No. RM76-

4, Order No. 133 (1976) at 24 (amendments to the private express

regulations are “subject to judicial review under 5 U.S.C. §§ 701-

706”, citing 39 C.F.R. 310.7).

Indeed, the Postal Service has never previously argued that APA

review of its actions under the PES is precluded. See Associated

Third Class Mail Users v. USPS, 440 F. Supp. 1211, 1213 (D.D.C.

1977), aff'd, 600 F.2d 824 (D.C. Cir.), cert. denied, 444 U.S. 837

(1979), and discussion below at n.13. Accordingly, while we need

not press the point, we would suggest that this is one instance

where an agency's proffered interpretation of its own regulation

is wrong. Cf. Mullins Coal Co. v. Director, OwcP, 484 U.S. 135,

159 (1987) (stressing consistency of administrative interpretation ).

13 See Combined Communications v. USPS, 891 F.2d 1221, 1227-

28 (6th Cir. 1989) (“a federal district court has jurisdiction under

28 U.S.C. § 1339, 39 U.S.C. §409(a) and the ‘well-established,

common-law presumption favoring judicial review of administra-

tive action’. . . to entertain the question of whether a final Postal

Service regulation is ultra vires”) ; Peoples Gas, Light and Coke Co.

v. USPS, 658 F.2d 1182, 1191 (7th Cir. 1981) (the Postal Service’s

“exemption from the provisions of the Administrative Procedure

Act does not negate the applicability of common law review prin-

ciples .... We conclude that the exemptions found in section 410

of the Postal Reorganization Act do not manifest a congressional

These decisions, endorsing the availability of non-APA

or common law review in suits brought under the postal

jurisdictional statutes, are firmly rooted in this Court’s

precedents. Before the APA was enacted in 1946, the

Court allowed suits to be brought at common law chal-

lenging actions taken by the Postmaster General in the

absence of any statutory provision expressly providing

for such review. See School of Magnetic Healing v. Mc-

Annulty, 187 U.S. 94, 108 (1902); United States ex rel.

Milwaukee Social Democratic Pub. Co. v. Burleson, 255

U.S. 407, 412-13 (1921). See also Stark v. Wickard, 321

U.S. 288, 310 (1944) (“The responsibility of determin-

ing the limits of statutory grants of authority in such

instances is a judicial function entrusted to the courts

by Congress by the statutes establishing courts and

marking their jurisdiction.” ).

intent to foreclose all judicial review of alleged violations [of] the

Postal Service’s . . . regulations.”) ; National Ass’n of Postal Super-

visors v. USPS, 602 F.2d 420, 429 (D.C. Cir. 1979) (postal juris-

dictional statute “triggers the well-established presumption favor-

ing judicial oversight of administrative activities” ).

See also Jordan v. Bolger, 522 F.Supp. 1197, 1201-02 (N.D. Miss.

1981) (“Despite the inapplicability of the APA, most federal courts

have held that postal service employees are nonetheless entitled to

nonstatutory judicial review of agency determinations.”), aff’d, 685

F.2d 1384 (5th Cir. 1982), cert. denied, 459 U.S. 1147 (1983); Burns

v. USPS, 380 F. Supp. 623, 626 (S.D.N.Y. 1974) (“The fact that

the APA is not applicable . . . does not indicate a congressional

desire to foreclose judicial review”); Withers v. USPS, 417 F.Supp.

1, 3 (W.D. Mo. 1976).

In a number of cases the Postal Service did not even challenge the

reviewability of its actions. For example, in Associated Third Class

Mail Users, the plaintiff mailers brought suit under sections 409

and 1339 claiming that the Postal Service private express regula-

tions improperly expanded the scope of the postal monopoly through

its definition of the term “letter.” 440 F. Supp. at 1213. The

Postal Service never claimed that the regulation was not subject to

judicial review; it simply defended the regulation on the merits.

See also Owen v. Mulligan, 640 F.2d 1130, 1134 n. 10 (9th Cir.

1981) (“At oral argument [Postal Service] counsel conceded that if

the suit is characterized as one requiring the Postal Service to fol-

low its own regulations, there is jurisdiction.” )

The government claims that the APA has “supplanted”’

the common law and that a holding that there is no APA

review here must mean that the action is totally unre-

viewable. (USPS Br. at 22-23). As we understand it,

the argument is that the doctrine of common law or non-

statutory review is dead, and has been since 1946." The

authorities, however, show that the doctrine is very much

alive.

As the Court held in Norfolk Redevelopment and Hous-

ing Authority v. Chesapeake & Potomac Telephone Co.,

464 U.S. 30, 35-6 (1983):

It is a well-established principle of statutory con-

struction that “{t]he common law . . . ought not to

be deemed to be repealed, unless the language of a

statute be clear and explicit for this purpose.”

See also Midlantic Nat'l Bank v. New Jersey Dep't

of Envtl. Protection, 474 U.S. 494, 501 (1986) (“The

normal rule of statutory construction is that if Congress

intends for legislation to change the interpretation of a

judicially created concept, it makes that intent specific’’) ;

Continental Management, Inc. v. United States, 527 F.2d

613, 620 (Ct. Cl. 1975) (“common law rights and reme-

144The government relies solely on two lower court decisions,

Cousins v. Secretary of DOT, 880 F.2d 603, 606 (1st Cir. 1989),

and NAACP v. Secretary of HUD, 817 F.2d 149, 152-53 (1st Cir.

1987), and legislative history of the APA establishing tha‘ the

APA was designed to provide “a uniform method and scope of ju-

dicial review” and to “cover a broad spectrum of administrative

actions” to support its argument that the APA “exhausts the field.”

USPS Br. at 22-23. However, the cases and legislative history cited

merely establish that if the APA applies, Congress intended that

the statute govern. For example, the court in Cousins found that

“the APA not only should, but does, offer Cousins the type of re-

view he seeks” and that it was “preferable” to call the lawsuit “a

request for APA review, and not an exercise of an implied private

right of action.” 880 F.2d at 605. Likewise in NAACP, the court

applied the provisions of the APA and rejected an attempt to

invoke the private right of action doctrine. NAACP, 817 F.2d

at 153.

dies survive, unless Congress intended the legislative pro-

vision to be “exclusive.’’).

The Court in Abbott Laboratories v. Gardner, 387

U.S. 136, 140 (1967), after reviewing the legislative his-

tory of the APA, found that the Act served to “rein-

force” pre-existing common law review:

Early cases in which this type of judicial review was

entertained .. . have been reinforced by the enact-

ment of the Administrative Procedure Act, which

embodies the basic presumption of judicial review to

one “suffering legal wrong because of agency action,

or adversely affected or aggrieved by agency action

within the meaning of a relevant statute,” 5 U.S.C.

§ 702, so long as no statute precludes such relief or

the action is not one committed by law to agency

discretion, 5 U.S.C. § 701(a). (Emphasis added).

Not surprisingly, then, the generai understanding is

that “common law” or “nonstatutory” review continues

to be available. See Albert, Standing to Challenge Ad-

ministrative Action, 83 Yale L.J. 425, 456-64 (1974),

Scalia, Sovereign Immunity and Nonstatutory Review of

Federal Administrative Action; Some Conclusions from

the Public Lands Cases, 68 Mich. L. Rev. 867, 870 nn.

12-13, 913-14 (1970). :

For example, in International Union, UAW v. Brock,

477 U.S. 274 (1986), the Court allowed a direct challenge

by a union, with no mention of the APA, of the Secre-

tary of Labor’s interpretation of the Trade Act since

“there is no indication that Congress intended [the stat-

ute] to deprive federal district courts of subject-matter

15 See also Byse & Fiocca, Section 1361 of the Mandamus and

Venue Act of 1962 and “Nonstatutory” Judicial Review of Federal

Administration Action, 81 Harv. L. Rev. 308 (1967). Professor

Davis states without equivocation: “the law of reviewability is in

all major respects the same as it would be without the APA.” 7 K.

Davis, Administrative Law Treatise § 28:1 at 256 (2d ed. 1984)

(emphasis omitted).

jurisdiction” and “claims that a program is being op-

erated in contravention of federal statute .. . can

be brought in federal court.” Jd. at 285. Likewise in

Leedom v. Kyne, 358 U.S. 184 (1958), the Court allowed

a lawsuit brought by a union challenging the NLRB’s

decision to include professional employees in a unit with

non-professional employees without their consent. This

suit was brought not under the APA but directly under

section 9(b) (1) of the NLRA “which commands that the

Board ‘shall not’ do so.” Jd. at 186. The Court found

that a cause of action shall be inferred from the “clear

and mandatory” “shall” language of section 9(b) (1) in

order to prevent

“a sacrifice or obliteration of a right which Con-

gress” has given.... This Court cannot lightly infer

that Congress does not intend judicial protection of

rights it confers against agency action taken in ex-

cess of delegated powers. [J/d. at 190.]

See also Bowen v. Michigan Academy of Family Phy-

sicians, 476 U.S. at 673 (referring to “review under the

grant of general federal-question jurisdiction found in

28 U.S.C. § 1331,” not the APA); Harmon v. Brucker

355 U.S. 579, 581-82, 585 n.5 (1958) (relying on pre.

APA cases for the proposition that “[g]enerally, judicial

relief is available to one who has been injured by an

act of a government official which is in excess of his

express or implied powers,” even where underlying stat-

ute expressly provides that “[a]ll functions performed

under this title . . . shall be excluded from the operation

. the ae Procedure Act”); Manual Enters.,

ne. v. Day, 370 U.S. 478 (1962); Reilly v. Pi

U.S. 269 (1949). Sagi ies

**In addition to the postal cases cited in note 13, su

courts have also held that an exemption from the Ppa

bar common law review in cases arising under statutes other than

the PRA. See San Juan Legal Serv., Inc. v. Legal Serv. Corp., 655

F.2d 434, 438 (1st Cir. 1981) (finding judicial review where statute

silent as to review and APA not applicable since silence “does not

indicate a legislative intent to preclude judicial review” and pre-

Significantly, no case has held that non-APA judicial

review is available only upon a demonstration of the

four factors in Cort v. Ash, 422 U.S. 66 (1975), as the

government now argues. USPS Br. at 21. This argu-

ment basically confuses a private cause of action with

the right of judicial review.’ The former permits a pri-

vate party directly to enforce statutory provisions; the

latter simply submits to the courts the contention that

the agency entrusted with enforcing a given statute has

misinterpreted it. Understandably the law makes the

burden of demonstrating a private cause of action a

much more demanding one than that governing review-

ability, which is presumed to be available. Private causes

of action are disfavored, not presumed to exist, because

the duty of enforcing public law belongs primarily to the

government. By contrast, the right of review is implicit

in every statute unless a congressional intent to deny it

is shown by “clear and convincing evidence.” Community

Nutrition, 467 U.S. at 350, quoting Abbott Laboratories

v. Gardner, 387 U.S. at 141."*

clusion of judicial review “is not lightly to be inferred”) ; Spokane

County Legal Serv. v. Legal Serv. Corp., 614 F.2d 662, 669 & n.11

(9th Cir. 1980) (since APA not applicable, court applied rule

“which the Supreme Court fashioned for judicial review of ad-

ministrative decisions before the advent of the APA” which has

“no discernible difference [from] the ‘arbitrary and capricious’

standard”) ; Szostak v. Railroad Retirement Bd., 370 F.2d 253, 255

(2d Cir. 1966) (exclusion from the APA “would not preclude re-

view for abuse of discretion” ).

17 Again, while the government relies on Cousins v. Secretary

of DOT, the Cousins court noted that “[t]he concept of an implied

private right of action serves a useful legal purpose elsewhere in

the law, when a plaintiff seeks to enforce a federal statue against a

non-federal person.” 880 F.2d at 606 (emphasis added). Accord

NAACP v. Secretary of HUD, 817 F.2d at 152.

18 If there were a private cause of action available, the defendants

would be private parties like ACCA or its members, whom the

Unions would sue directly under the PES to enjoin their operations.

See American Postal Workers Union v. React Postal Serv., Inc.,

771 F.2d 1375 (10th Cir. 1985) (finding a private cause of action

~ ee ate eh a

“25

In sum, this action can clearly be brought using com-

mon law review principles as they have developed up

until the present, even if the APA is found to be in-

applicable.

D. The Government Has Waived The Defense That The

APA Is Inapplicable

As noted above, the Postal Service never argued in the

lower courts that its purported exemption from the APA

under section 410(a) precluded judicial review.’® Simi-

larly, this question was not presented in ACCA’s petition

for writ of certiorari. Accordingly, the government is

precluded from raising this issue for the first time in this

Court. See Cort v. Ash, 422 U.S. 66, 72 n.6 (1975);

Adickes v. S. H. Kress & Co., 398 U.S. 144, 147 n.2

(1970); Duignan v. United States, 274 U.S. 195, 200

(1927); and Supreme Court Rule 14.1 (barring con-

under the PES). Accord National Ass’n of Letter Carriers v.

Independnet Postal Systems of America, Inc., 470 F.2d 265 (10th

Cir. 1972); contra American Postal Workers Union, Detroit Local

v. Independent Postal Systems of America, Inc., 481 F.2d 90 (6th

Cir. 1973), cert. dismissed, 415 U.S. 901 (1974).

19 The government asserts that the unions’ complaint “did not in

fact dely upon the APA as a basis for their claim.” (USPS Br. at

10). This simply is not true. Paragraph 19 of the complaint specifi-

cally alleged, as one of the Unions’ “claims for relief”, that “[t]he

defendants actions, as described above, were: a) arbitrary, capri-

cious, an abuse of discretion and otherwise not in accordance with

law; in excess of statutory jurisdiction, authority or limitations;

and unwarranted by the facts within the meaning of 5 U.S.C.

§ 706”. J.A. 110 (emphasis added). The complaint also alleged:

“[W hile the USPS is generally exempt from the provisions of the

[APA] . .. it voluntarily follows APA procedures.” J.A. 109.

From our point of view—one in which the court of appeals con-

curred—it did not matter whether the APA supplied the applicable

legal standard directly or through 39 C.F.R. 310.7 (adopting APA

procedures); under either theory, the Postal Service failed to

comply with the applicable APA standard. In any event, the ade-

quacy of the complaint is not at issue. The government acknowl-

edges that all parties “assumed that the APA applied to this case”

(USPS Br. at 9 n.4) so that this case was litigated and decided as

an APA case.

sideration of issues not presented, or fairly included, in

the certiorari petition ).

The government seeks to justify raising section 410

for the first time before this Court on the ground that its

claim involves “congressional preclusion of judicial re-

view” which is asserted to be “in effect jurisdictional.”

(USPS Br. at 9 n.4, citing Block v. Community Nutri-

tion Institute, 467 U.S. at 353 n.4). This assertion is

erroneous.

Section 410, at most, exempts the Postal Service from

the APA. The judicial review provisions of the APA are

not jurisdictional. Califano v. Sanders, 430 U.S. 99, 107

(1977); Local 542, Int’l Union of Operating Eng’rs v.

NLRB, 328 F.2d 850, 854 (3d Cir. 1964), cert. denied,

379 U.S. 626 (1964); see also Davis v. Passman, 442

U.S. 228, 239 n.18 (1979) ; General Inv. Co. v. New York

Central R. Co., 271 U.S. 228, 230 (1926); Bell v. Hood,

327 U.S. 678, 682 (1946).

Since the APA is not jurisdictional, a defense based on

exemption from the APA can be waived by the Postal

Service. Jackson v. Seaboard Coast Line R. Co., 678 F.2d

992, 1013 (11th Cir. 1982); Powers v. Alabama Dep’t of

Educ., 854 F.2d 1285, 1296-97 (11th Cir. 1988), cert.

denied, 109 S. Ct. 3158 (1989). See also Burks v. Lasker,

441 U.S. 471, 476 n.5 (1979) (“[t]he question whether

a cause of action exists is not a question of jurisdiction,

and therefore may be assumed without being decided.’’) ;

Mt. Healthy City School Dist. Bd. of Educ. v. Doyle, 429

U.S. 274, 279, 281 (1977) (The defendant below had

“failed to preserve the issue whether [the] complaint

stated a claim upon which relief could be granted,” and

the Court was not required to resolve the issue because it

was “not of the jurisdictional sort.”) ; Duke Power Co. v.

Carolina Envtl. Study Group, 438 U.S. 59, 71 (1978).

Thus, since the APA exemption question is not juris-

dictional, and because the Postal Service failed to pre-

serve the issue below, the Court should conduct its review

of the questions presented in the certiorari petition—

application of the zone of interest test and the merits—

based on the assumption that the APA is applicable.

II. THE UNIONS HAVE STANDING

A. Postal Employees Are Within The Zone Of Inter-

ests Of The PRA

1. The test as explicated in Clarke

The court of appeals concluded (891 F.2d at 308)—

and neither the government nor ACCA contests the con-

clusion—that the Unions meet the injury in fact require-

ment of Article III. The only standing issue in this case

is whether the Unions’ interest in protecting the employ-

ment opportunities of their members meets the “zone of

interest” test. That test, as stated in this Court’s most

recent opinion focusing on this standing question, is

whether “the interest sought to be protected by the com-

plainant [is] arguably within the zone of interests to be

protected or regulated by the statute or constitutional

guarantee in question.” Clarke v. Securities Industry

Ass’n, 479 U.S. 388, 395 (1982), quoting Association of

Data Processing Service Org., Inc. v. Camp, 397 US.

150, 153 (1970).

2° The zone of interest test was first articulated in Data Process-

ing. It was, however, implicit in earlier cases, such as Tennessee

Electric Power Co. v. Tennessee Valley Authority, 306 U.S. 118

(1939), with which the test is compared, and which is said to have

been based on the necessity of a litigant to demonstrate a “legal

interest” in the statute. See Clarke, 479 U.S. at 394. Tennessee

Electric was a suit by competitors of the TVA to enjoin its opera-

tions as unconstitutional under the Fifth, Ninth, and Tenth Amend-

ments. Because the company was alleging an unconstitutional dep-

rivation of property under the Fifth Amendment, the Court re-

quired it to prove the existence of a property right to be free from

competition, which, of course, it could not. 306 U.S. at 138. For

example, the Court rejected the proposition that “the franchise

to be a public utility corporation and to function as such, with

incidental powers, is a species of property which is directly taken

or injured by the Authority’s competition.” Jd. at 138. As to the

It bears special emphasis that the answer to this ques-

tion is statute-specific: “at bottom, the reviewability

question turns on congressional intent, and all indicators

helpful in discerning that intent must be weighed.”

Clarke, 479 U.S. at 400. .To be sure, in canvassing the

statutory materials, the starting point is that Congress

“inten[ds] to make agency action presumptively review-

able.” Jd. at 399. That being so, “[t]he test is not

meant to be especially demanding; in particular, there

need be no indication of congressional purpose to benefit

the would be plaintiff.” Jd. at 399-400.”

Given the arguments made by ACCA and the govern-

ment here, it is also critical to note that the inquiry con-

cerns the entire statute, not just the particular section

alleged to have been violated. As the Court stressed in

Clarke, “we are not limited to considering the statute

which respondents sued, but may consider any provision

which helps us understand Congress’ overall purposes in

the National Bank Act.” Jd. at 401. The critical point

here, as the Clark Court put it is this:

In cases where the plaintiff is not itself the subject

of the contested regulatory action, the test denies a

Ninth and Tenth Amendment claims, the Court held that only the

states themselves could assert these rights. Jd. at 144. This is

but another way of saying that state-chartered public utilities were

not within the zone of interests protected by the Ninth and Tenth —

Amendments. Thus, it is evident that the Data Processing Court

was referring to the Fifth Amendment claim made in Tennessee

Electric when it said that “[t]he ‘legal interest’ test goes to the

merits.” 397 U.S. at 153. This is because the legal interest test

required the utilities to prove that they possessed a property right

which was violated by the TVA even to raise the question whether

they were deprived of their property without the due process of law.

21 Earlier, we noted that Peoples Gas, 658 F.2d at 1191, held

that Postal Service regulations were reviewable. We note, however,

that the Court of Appeals for the Seventh Circuit disapproved ec

standing aspects of Peoples Gas as too “restrictive” in ligh. of

Clarke. City of Milwaukee v. Block, 823 F.2d 1158, 1165 (7th Cir.

1987).

—————————

right of review if the plaintiff's interests are so

marginally related to or inconsistent with the pur-

poses implicit in the statute that it cannot reason-

ably be assumed that Congress intended to permit the

suit. [Jd. at 399.]

We recognize that on this critical point both the gov-

ernment and ACCA invoke Lujan v. National Wildlife

Federation, 110 S. Ct. 3177 (1990). Lujan is cited in

support of their argument that, to demonstrate their

standing, the Unions have the burden of showing that

they are within the zone of interests protected by section

601 of the PRA—the section the Postal Service is alleged

to have violated—and not within the PRA’s overall zone

of interests. USPS Br. at !8, ACCA Br. at 17. That

argument is doubly flawed Zujaw turned on the entirely

separate issue not even contested here of whether the

appellees were injured by the Secretary’s failure to com-

ply with certain environmental statutes, not whether

their interests were comprehended within the zone of in-

terests protected by those statutes generally.

Nonetheless in their zone of interests argument, the

government and ACCA cite the emphasized part of the

following passage from Lujan:

We have long since rejected that interpretation .. .

which would have made the judicial review provision

of the APA no more than a restatement of pre-

existing law. Rather, we have said that to be “ad-

versely affected or aggrieved . . . within the mean-

ing” of a statute, the plaintiff must establish that

the injury he complains of (his aggrievement, or

the adverse effect upon him) falis within the zone of

interests” sought to be protected by the statutory

provision whose violation forms the legal basis for

his complaint. See Clarke v. Securities Industry

Assn., 479 U.S. 388, 396-397 (1987). [110 S.Ct. at

3186 (concluding emphasis added). |

As we have already noted, the Clarke Court said plainly

that, in the zone of interests analysis, the Court was “not

limited to the statute under which respondents sued, but

may consider any provision that helps us to understand

Congress’ overall purposes in the National Bank Act” at

issue there. 479 U.S. at 401. And the foregoing quota-

tion from Lujan makes it plain that the Court merely

intended to give a shorthand description of the Clarke

holding and did not overturn any aspect of Clarke. Given

that point, the government’s and ACCA’s “argument

focuses too narrowly on [PRA section 601], and does not

adequately place [§ 601] in the overall context of the

[PRA].” Clarke, 419 U.S. at 401.”

With these principles in mind, we turn to an analysis

of the PRA and its legislative history.

2. The 1970 legislative consideration of the PRA

and its special solicitude for postal employees

and their unions

The government’s argument against Union standing

rests on isolating the revenue-protective purposes of the

PES from the overall Postal Reorganization Act, of which

Section 601 is a part. USPS Br. 14-16. “But this argu-

ment is not faithful to the actual history.” Clarke, 479

U.S. at 416 (Stevens, J., concurring). As the court of

appeals below observed:

{T]o 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...

22 The USPS’s and ACCA’s comparison of the postal unions’

interest in protecting the revenue of the Postal Service with the

interest of the court reporter in having “on the record hearings”

in the example cited by the Court in Lujan, 110 S. Ct. at 3186, is

without merit. USPS Br. at 19-20, ACCA Br. at 19. While we

have no reason to dispute the proposition Congress would most

likely not consider the benefit to court reporters when enacting

statutory provisions granting hearing rights and would certainly

not rely on court reporters to enforce such hearing rights, in the

next section we demonstrate clearly that Congress did consider the

benefits of its actions to postal employees when enacting the PRA.

Unions asserted interest is embraced directly by the

labor reform provisions of the PRA. The PES con-

stitute 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 “argu-

able” or “plausible” relationship between the pur-

poses of the PES and the interests of the Union.

[891 F.2d at 310.]

The PRA embodies congressional consideration of every

aspect of postal organization and functioning. By the

1960’s, the Post Office had deteriorated to a disastrous

extent. See H. Rep. at 4-5; S. Rep. at 3. On April 8,

1967, the President created a Commission on_Postal Or-

ganization, which came to be known as the Kappel Com-

mission. In July 1968, the Commission submitted a re-

port entitled “Toward Postal Excellence”. The report

found that “[t]he United States Post Office faces a

crisis.” Id. at 1. The report highlighted several catego-

ries of severe problems including “the circumstances of

postal employment, ” id. at 14-16, and criticized “unpro-

ductive labor-management relations” between postal unions

and supervisors. Jd. at 18-22. The Commission recom-

mended establishment of a government-owned corpora-

tion. The aim of such a corporation would be “the in-

troduction of modern management practices” which

would result in “not only greatly improved mail service,

but the early elimination of the postal deficit, and... .

better career opportunities, and working conditions for

the individual postal employee.” Jd. at iii.

The critical event leading to enactment to the PRA

was the nationwide work stoppage by postal employees

in March 1970.%* See H. Rep. at 3. Congress recognized

*8 Prior to the strike, the need for reform in the Post Office was

recognized by Congress to be a matter of great urgency. Hearings

on postal reorganization were held in both houses throughout 1969.

Members and witnesses warned of growing frustration among postal

workers over pay and working conditions which could result in an

that this strike was the result of “legitimate grievances

that had contributed to the cumulative frustration among

postal employees .... Although it is one of the Nation’s

largest employers, the Post Office has an unsatisfactory

record of labor-management relations. Career prospects

are bleak, working conditions are frequently primitive,

and morale is unacceptably low.” H. Rep. at 3-4.

Although several bills to reform the Post Office had

been introduced, the work stoppage “had the effect of

crystallizing heretofore opposing and conflicting confer-

ences in support of a new compromise postal reform pro-

posal.” H. Rep. at 3. Indeed, that compromise proposal,

which became the PRA, was itself a product of negotia-

tions between postal unions and the Nixon Administra-

tion. The Message from the President, dated April 16,

1970, explains that the Administration’s bill** was

“jointly sponsor[ed]” by the Post Office Department and

the postal unions, pursuant to the strike settlement

agreement. H.R. Doc. No. 313, 91st Cong., 2nd Sess. 1,

reprinted in H. Rep. at 51. The memorandum of agree-

ment between the Post Office Department and the postal

unions expressly stated that “the parties have jointly

developed, through the collective bargaining process, pro-

posed legislation which provides for a major reorganiza-

tion of the Post Office Department.” H. Rep. at 57

(emphasis added) .*°

illegal strike. See Postal Labor Relations and Employee Morale:

Hearings Before the Subcomm. on Postal Operations and Civil

Service, House of Representatives, 91st Cong., 1st Sess. 1, 65, 75,

98 (1969); Postal Modernization: Hearings Before the Senate

Comm. on Post Office and Civil Service, 91st Cong., lst Sess. 782-83

(1969).

24 The Administration’s bill became S. 3842 and H.R. 17070. Al-

though amended in committee, the reported bills embodied “a sub-

stantial number of the Administration’s recommendations.” S. Rep.

at 1. See H. Rep. at 1-2 (purpose of H.R. 17070 was to carry out

the President’s Message of April 16, 1970).

25 The agreement also promised amnesty for all strikers. Jd. at

58.

President Nixon’s message stated:

In the agreement, the Post Office Department and

the postal employee organizations affiliated with the

AFL-CIO undertook to negotiate and jointly sponsor

a postal reorganization and pay bill to be recom-

mended to the Congress as a measure that could ulti-

mately lead to a cure of the problems that have been

festering for years in the postal system.

The negotiations . . . have now culminated in

agreement on a legislative proposal that would:

—Convert the Post Office Department into an inde-

pendent establishment in the Executive Branch of the

Government freed from direct political pressures and

endowed with the means of building a truly superior

mail service.

—Provide a framework within which postal em-

ployees in all parts of the country can bargain col-

lectively with postal management over pay and work-

ing conditions.

—Increase the pay of postal employees by 8 percent,

over and above the Government-wide increase of 6

percent, and shorten the time required to reach the

top pay step for most postal jobs. [Jd. at 51.]

The proposed law was specifically intended “to allow

postal workers to share the benefits of the increases in

efficiency and productivity that should be attainable

under a properly reorganized postal system.” Jd. at 54.

The President recognized the obvious fact that attain-

ment of the service objectives of the postal laws was in-

separable from consideration of the welfare of postal

employees. He said:

The Congress is now presented with an oppor-

tunity to pass legislation that will bring a new meas-

ure of fairness to postal employees, a new efficiency

to the system itself, and long overdue equity to the

taxpayer.

Neither better pay nor better organization will, in

and of itself, guarantee better mail service.

Laws do not move the mail, nor do dollars. What

moves the mail is people—people who have the will

to excel, the will to do their work to the very best of

their ability.

Enactment of the legislation that I now propose

would give our postal employees the means to attain

a goal they have never before had the means of

attaining—the goal of building, in America, the best

postal system in the world.

That is a goal worth striving for. With this postal

reform legislation, it is a goal that can be achieved.

I hope that Congress will lose no time in enacting the

laws that are needed to let our postal people get on

with the job. [Jd. at 56.]

An enormous amount of preliminary work and debate

had already been done by Congress before these bills

were introduced. “The provisions of S. 3842 result from

one of the longest and most intensive studies in the com-

mittee’s history.” S. Rep. at 1. The House Report stated:

“Rarely has any subject received as much careful and

intensive consideration by a committee of the Congress

as this committee has given to the very complex and

important subject of postal reform... .” H. Rep. at 2-3.

The House Report summarized the statutory goals:

When enacted, H.R. 17070 will totally reform the

Nation’s postal system so as to—

Enable the postal service to continue to provide

—and extend and improve upon—the present

quality and scope of postal service in the face of

the tremendous increases of mail volume that

are expected in the future;

Eliminate serious handicaps that are now im-

posed on the postal service by certain legisla-

tive, budgetary, financial, and personnel policies

that are outmoded, unnecessary, and inconsistent

a re ee A ee ee Rn es hee

Ne ne

with the modern management and business prac-

tices that must be available if the American

public is to enjoy efficient and economical postal

service;

Modernize limitations on the authority of the

postal service to procure transportation for mail

so as to permit the most expeditious and eco-

nomic movement of the mails, and thus facilitate

more rapid and less expensive delivery, enable

more economic utilization of the Nation’s trans-

portation resources, and encourage more respon-

sive and imaginative development of new trans-

portation facilities;

Create a lasting foundation for a modern, dy-

namic, and viable postal institution that is both

equipped and empowered at all times to satisfy

the postal requirements of the future techno-

logical, economic, cultural, and social growth of

the Nation;

Provide postal employees with decent and mod-

ern working environments and with the facilities

and modern equipment that they need in order

to realize their full productive potential;

Improve postal employee-management relations,

to recognize by law—that postal employees have

the right freely to select collective bargaining

representatives of their own choosing, and to

give postal employees a voice in determining

their conditions of employment and a real stake

in the quality of the postal service that they pro-

vide to the public; and

Adjust the salaries of postal employees so as to

compensate for the limited opportunities of ca-

reer advancement that most postal workers have

traditionally faced and to allow postal workers

to share benefits of the improved efficiency and

productivity that should be attainable under a

properly organized postal system. [/d. at 2.]

The Senate Committee called the Act a “complete break

with the past.” S. Rep. at 2. See also 116 Cong. Rec.

27,604 (1970) (statement of Rep. Udall) (“[Wle are

truly making a historic charge here today. A funda-

mental structure of American Government is abolished

and a new Postal Service will take its place.”).

Congress’ recognition of the interests of postal em-

ployees is found throughout the PRA. The labor reforms

of the PRA were among the essential means of achieving

an efficient postal service. The Act specifically states as

a postal policy that employees must be paid wages com-

parable to those in the private sector, and in particular

mandates that the Service “place particular emphasis

upon opportunities for career advancement of all officers

and employees and the achievement of worthwhile and

satisfying careers in the service of the United States.”

39 U.S.C. 101(c). Postal facilities were to be designed

“to create desirable working conditions for its officers

and employees.” 39 U.S.C. 101(g). Representatives of

employees, nominated by their unions, were given four

(of 11) seats on the Postal Advisory Council, which the

Service was required to consult with and receive advice

from on “all aspects of postal operations.” 39 U.S.C.

206. Chapter 10 established comprehensive, progressive

employment policies, including maintenance of existing

minimum standards. 39 U.S.C. 1005(f). Chapter 12 en-

acted a regime of collective bargaining based on the pri-

vate sector model. Section 8 of the uncodified act pre-

served jobs of postal workers by transferring them to the

Postal Service; section 9 legislated an 8% pay raise for

all employees; section 10 required the negotiation of

collective bargaining agreements meeting minimum

standards; and section 13 directed immediate implemen-

tation of a merit system. PRA §§ 8-10, 13, 84 Stat.

783-786.”

26 Indeed, employment issues dominated the debates over the bills

which culminated in the PRA. See, e.g., 116 Cong. Rec. 19,837-839;

20,200-241; 20,328-331; 20,432-501; 22,279-346; 23,525-528; 26,953-

959 and 26,962-966 (1970).

ee ee ee ee

But beyond those provisions dealing directly with labor

issues, it was understood during the legislative process

leading to enactment of the PRA that postal employees’

interests—and thus the interests of the postal unions—

were implicated in every aspect of the legislation. The

agreement between the postal unions and the Nixon Ad-

ministration “called for the parties to agree upon and

jointly sponsor legislation designed to restructure the

existing Post Office Department so that it might operate

on a self-contained basis.” H. Rep. at 3. Then-Postmaster

General Winton M. Blount gave the following response

to a question raised as to why postal unions had an inter-

est in all aspects of the bill including the transportation

provisions:

Mr. Corbett: Mr. Chairman, in that connection I

am wondering why the postal unions or associations

care about this particular section of the bill. Is

there any reason for them to have concern about how

you handle your transportation?

Mr. Blount: Mr. Corbett, both the postal unions and

the Department have made it very clear that what

they were doing was recommending to the Congress

a complete postal reorganization measure. This rec-

ommendation involved the entire bill. We did dis-

cuss and talk about all the legislation. And certainly

the employees of the Department are extremely in-

terested in the manner in which we are able to handle

our business, because they want to provide the best

service to the American public that they can.

So our negotiations were in the matter of a recom-

mendation to the Congress, and that recommendation

included an entire legislative package.

Hearings Before the Committee on Post Office and Civil

Service, House of Representatives, 91st Cong., 2d Sess.

35 (1970).

For precisely these reasons, the PES cannot be viewed

as somehow distinct from the “entire legislative pack-

age.” The fact that the PES were reenacted as part

of the PRA without substantial modification (see USPS

Br. at 19) does not mean that the PES were not integral

parts of the overall legislative enactment. The PES were

reenacted only after Congress had given specific consider-

ation to the need to maintain the Postal Service as a

monopoly under the reorganization.** The PES were crit-

ical to the monopoly structure of the Postal Service,

which was the “lasting foundation” upon which the reor-

ganization was built. H. Rep. at 2; see Governors’ Re-

port at 6, 98. Indeed, because the PRA required the

Postal Service, which had been heavily subsidized, to be-

come financially self-sufficient, 39 U.S.C. 3621, see Greet-

ing Card Publishers, 462 U.S. 813; Regents, 485 U.S. at

594, the PES became even more important to the finan-

27 The Kappel Commission recommended retention of the PES,

“although not necessarily in its present form” where they “do not

seem to be adapted to the reality of modern communications.”

Towards Postal Excellence at 129. See id. Annex, vol. II, p. 6-5.

Along with the rest of the PRA, “Congress concerned itself in

detail with the Postal monopoly.” PRC Order No. 133, at 17. See

116 Cong. Rec. 27596 (1970) (statement of Rep. Dulski). Before

including language of the old PES in the PRA during the 1970

floor debate, Congress considered and rejected an amendment offered

by Representative Crane during the 1970 floor debate that would

have eliminated the PES. See id. at 9,516-517 (1976) (statement

of Rep. Crane). Representative Udall spoke in opposition to the

amendment, specifically noting the problem of cream-skimming. 116

Cong. Rec. 20479 (1970). See also id. at 26,954 (1970) (statement

of Sen. McGee) id. at 26,954 (1970) (statement of Sen. Fong).

In section 7 of the PRA, Congress ordered the Board of Governors

to study whether to continue the PES in their current form and to

report its findings within two years. Pub. L. 91-375, § 7, 84 Stat.

783. The Governors’ Report concluded that the PES should be con-

tinued but not expanded, and that they should be administered in

a systematic way through a rulemaking process. Governors’ Report

at 9-14. The Board of Governors also claimed the right under

section 601 to suspend the PES when the public interest required

it. Jd. at 11. After the report issued, Congress held hearings on

it. No statutory modifications resulted, and the monopoly stood as

reenacted in the PRA.

ee er ee |

ee ee se

cial viability of the new system. Governors’ Report at

6-7. Obviously, then, failure properly to enforce the PES

could, as a practical matter, deprive the postal unions of

the essence of their legislative bargain.”

Thus, unlike the banking laws considered in Clarke,

the PRA is a single, unified statute which was enacted

in its entirety at a single time. The PES were an inte-

gral part of that legislative package. And the Congress

that enacted the PRA recognized that the postal unions’

interests were bound up with every aspect of the PRA.

In these circumstances, the court of appeals’ finding of

union standing is completely faithful to the overall “leg-

islative spirit” of the PRA. Clarke, 479 U.S. at 414

(Stevens, J., concurring).

Far from being inconsistent with the objectives of the

PRA (USPS Br. at 17), recognition of union standing

here would simply permit a party, whose interests Con-

gress recognized, to sue to vindicate norms established in

the statute.** And those norms reflect interests that the

PRA was designed to advance: the interests of preserva-

tion of the financial base of the Postal Service and pro-

tection of the employment opportunities of postal em-

ployees. The postal unions in this case are at the core of

28 The memorandum of agreement specifically provided for the

Postal Service “to generally be self-supporting by January 1, 1978.”

H. Rep. at 58.

2° The government argues that the Unions’ interest are incom-

patible with those of the PES because they always have an interest

in challenging suspensions of the PES, even where the public inter-

est requires it. USPS Br. at 17. However, nothing in Clarke sug-

gests that an incentive to sue is a reason to deny standing. The

Unions’ incentive to sue is no different from bank competitors’

incentive to sue whenever the Comptroller of the Currency permits

national banks to expand their business in ways that threaten their

profits through increased competition. In any event, the historical

truth is that the Unions have not challenged other suspensions.

the “zone of interests” sought to be protected by the

PRA.”

B. Postal Employees Have Standing Under Non-APA

Standards

We have shown, supra at 19, that if the agency action

here were not reviewable under the APA, it would be

39 The Postal Service is wide of the mark in suggesting that

according the unions standing in this case would somehow lead to

suits by employees against agencies whenever employees believe

that “daily . . . decisions” threaten their employment opportunities.

USPS Br. at 20. This case, of course, does not involve such daily

personnel actions; this case deals with judicial review of an agency’s

final rule. From all that has been shown in the foregoing text—

viz., “the special emphasis which the PRA placed on the welfare

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

the financial viability of the Postal Service,” 891 F.2d at 311—the

Unions’ interests clearly are not “so marginally related to or incon-

sistent with the purposes implicit in the statute that it cannot

reasonably be assumed that Congress intended to permit the suit.”

Clarke, 479 U.S. at 399.

And the court of appeals directly addressed the government’s

worry about opening a floodgate of litigation :

The Postal Service . . . is charged with the responsibility of

preventing unwarranted dissipation of an historic postal mo-

nopoly. Congress has imposed an obligation, largely congrudent

with the interests of postal employees, that is much stronger

than those embodied in most statutory schemes under which

disgruntled agency employees might sue. [Jd.]

In this regard, the court of appeals was careful to distinguish the

kind of case as to which the Postal Service brief expresses concern:

National Federation of Federal Employees v. Cheney, 883 F.2d 1038,

reh. denied, 892 F.2d 98 (D.C. Cir. 1989), cert. denied, 110 S.Ct.

3214 (1990), which denied standing to a federal employee union

which challenged a decision to contract out work to private firms.

The Cheney court held that the statutes there at issue did not pro-

vide staiiding to the union. Those statutes were intended to foster

the contracting out of government work to private firms. Jd. at

1050. This contrasts with the PES, which legislate against com-

petition, and with the PRA, which recognizes the interests of postal

employees—interests which are congruent with the PES’s purposes.

891 F.2d at 311.

reviewable under common law principles. As we now

show, the postal unions would have standing in the event

that such non-APA review were found to govern this

case.

In Clarke the Court withheld judgment on the question

whether “the standing inquiry under whatever constitu-

tional or statutory provision a plaintiff asserts is the

same as it would be if the ‘generous review provisions’ of

the APA apply.” 479 U.S. at 400 n.16." The Court com-

pared the zone test with the standards governing im-

plied causes of action, which established a “threshold bur-

den” on a plaintiff of showing that the plaintiff is “one of

the class for whose especial benefit the statute was en-

acted.” Jd., quoting Cort v. Ash, 422 U.S. 66, 78 (1975)

(emphasis in original). Whatever test might apply in

the range from “zone of interests” to “especial benefit,”’

the Unions here would have standing.

We have already shown at length that the Unions here

meet the “zone of interests” test. See supra at 27-40.

That same showing would also meet the requirements of

the “especial benefit” standard. As the President of the

United States stated, the Unions here negotiated and “‘co-

sponsored” the PRA as part of the resolution of a nation-

wide labor dispute. See supra at 31-34. The agreement

provided for “restructur[ing]” that would allow the Postal

Service to “operate on a self-contained basis.”’ Congress

%1 The zone test has been cited in both APA and non-APA cases.

Data Processing, for example, expressly stated that the test applied

to “constitutional guarantees.” 397 U.S. at 153. See Boston Stock

Exchange v. State Tax Comm’n, 429 U.S. 318, 320-321, n.3 (1977)

(applying the test to the Commerce Clause); Tennessee Electric,

306 U.S. at 144 (implicitly holding that utilities were not within

the zone of interests of the Ninth and Tenth Amendments) ; see also

Valley Christian College v. Americans United For Separation of

Church and State, Inc., 454 U.S. 464, 475 (1982); Allen v. Wright,

468 U.S. 737, 751 (1984); Gladstone Realtors v. Village of Bellwood,

441 U.S. 91, 109 n.6 (1978); Simon v. Eastern Kentucky Welfare

Rights Org., 426 U.S. 26, 39 n.19 (1976), where the test was

mentioned.

was expressly informed by the Postmaster General that

the postal unions had an interest in every part of the

legislative package that constituted the PRA. And the

PES were an integral part of that package. Due recog-

nition of the process that produced the PRA requires that

the Unions be recognized as “one of the class for whose

especial benefit the statute was enacted.”

Ill. THE COURT OF APPEALS CORRECTLY OVER-

TURNED THE INTERNATIONAL REMAIL SUS-

PENSION

PRA section 601(b) permits the Postal Service to sus-

pend its monopoly if—but on/y if—“the public interest

requires” such suspension (emphasis added). The court of

appeals found that the suspension of the PES for inter-

national remailing was inconsistent with this public in-

terest standard because the suspension was intended

solely to benefit “a single segment of the Service’s con-

suming public: businesses engaged in commerce over-

seas.” 891 F.2d at 313. That court also concluded that

the Postal Service had acted unreasonably in that the

Service failed to consider “the impact of the proposed

suspension on those customers who would continue to use

the Postal Service, both from a price and service per-

spective.” Jd. Both these conclusions are correct and

should now be affirmed.

A. The Suspension Was Inconsistent With the Public

Intent Standard Provided by Section 601(b)

The public interest standard set forth in section 601(b)

is not an open-ended grant of discretion.” “|{T]he use

%2 In addition, the court’s conclusion that the USPS acted arbi-

trarily and capriciously by failing to explain its reasons for reject-

ing “more narrowly, defined suspension alternatives,” 891 F.2d at

314, citing Motor Vehicle Manufacturers Ass'n v. State Farm

Mutual Auto. Ins. Co., 463 U.S. 29, 50 (1983), should also be

affirmed.

33 The government argues that section 601(b) does not define

the term ‘public interest’, and it entrusts the public interest deter-

De a ne se

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 purposes of

the regulatory legislation.” NAACP v. Federal Power

Comm’n, 425 U.S. 662, 669 (1976).

The most authoritative statement of the purposes of

the PES, in the context of the PRA, is the 1973 Gover-

nors’ Report. The Report stressed that the postal monop-

oly is necessary to meet the PRA’s goal of making the

Postal Service “self-sufficient . . . in the face of cream-

skimming competition against its major product” and

therefore, strongly recommended that the monopoly be

retained and that any exceptions to the monopoly be nar-

rowly drawn. Governors’ Report at 6. The Report

further emphasized that suspension of the monopoly to

aid “some members of the business community” would

ultimately have a negative impact on the “larger business

and general public community”:

Relaxation could well serve some members of the

business community whose primary financial interests

are tied to letter mail. It would ill serve members

of a larger business and general public community

mination to the judgment of the Postal Service. (USPS Br. at 28).

However, this attempt to characterize section 601(b) as a broad

grant of discretion ignores the fact that where Congress did choose

to confer regulatory discretion on the Postal Service it used dis-

tinctly different statutory language. Section 401 of the PRA pro-

vides the USPS with the necessary powers to effectuate the pur-

poses of the PRA, among them the power “to adopt, amend, and

repeal such rules and regulations as it deems necessary to accomp-

lish the objectives of this title.” 39 U.S.C. 401(2) (emphasis added).

No comparable language exists in section 601. The Postal Service’s

claim of broad discretion to suspend the PES would in effect substi-

tute the rule-making language of section 401(2) for the signifi-

cantly more narrow language used in section 601(b), and, thus, read

the latter provision out of the Act. See also 39 U.S.C. 5001 (pro-

viding for temporary transportation arrangements “when, as deter-

mined by the Postal Service, an emergency arises”) (emphasis

added ).

who depend on the Postal Service to serve al! their

mail needs.

Relaxation would also impose genuine hardships upon

those people who live in thinly populated or low in-

come areas, areas which private carriers might not

serve and in which Postal Service capabilities would

inevitably decline. [Jd. at 9.]

When the Postal Service promulgated the urgent letter

suspension, 39 C.F.R. 320.6, the Postal Service itself

recognized that selective cost savings for individual mail-

ers do not represent a legitimate justification for a sus-

pension of the Private Express Statutes. The Postal

Service’s rational for including a requirement that the

cost of private carriers be higher than that of the Postal

Service to qualify fcr the urgent letter suspension was to

protect against having low cost cream-skimming com-

petitors undermine the postal system and “effectively

nullif{y]” the Private Express Statutes. As the Service

stated in its Federal Register notice of proposed rule-

making:

The test we have suggested is greater of three dol-

lars or twice the applicable U.S. postage for first-

class mail. This is designed to protect the postal sys-

tem against the inroads of “cream-skimming” by

private 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 delivery, or simply because he desires to re-

duce shipping costs selectively. If selective cost sav-

ings were sufficient grounds to use a private courier

to carry letters, the Private Express Statutes would

be effectively nullified.

44 Fed. Reg. 40,076 (1979) (emphasis added).

The Postal Service simply ignored the foregoing rea-

soning during the rule-making proceedings below, and

instead relied on comments that international remailers

could provide lower cost service. See comments cited in

USPS Br. at 32, n.14. However, the lower costs sup-

posedly offered by the international remailers do not rep-

resent a benefit to the overall mailing public. Rather,

the public ultimately must absorb, through higher postal

rates, the net revenue loss to the Postal Service because

of a suspension designed to benefit only a relatively small

number of firms who mail to international destinations.”

The argument offered in response to the foregoing by

the government and ACCA is that the private couriers

offer international mailers service that is faster, more

flexible and more reliable, thus enhancing American com-

petitiveness overseas. The fatal flaw in this argument—

even assuming, arguendo, that private couriers are fas-

ter, more flexible, and more reliable than the Postal

Service—is that prior to the international remail suspen-

sion, international mailers already had access to private

couriers through the urgent letter exemption. The only

real consequence of the remailing suspension was to re-

lease international remailers from the time and cost

requirements of the urgent letter rule which remain ap-

plicable to all other mailers who wish to utilize private

couriers. The record is devoid of any facts that justify

according international remailers such favored treat-

ment.

In sum, the international remail suspension cannot be

characterized as satisfying the public interest standard

of section 601(b).

%4 As was demonstrated by the declaration of economist Dr. Jack

Rutner that was submitted below, J.A. 140-141, the Postal Service’s

own data show that the Service has suffered a net loss of revenue

due to skimming of mail volume by international remailers.

B. The Postal Service Failed to Consider the Impact

of Revenue Loss Caused By the Suspension

In Motor Vehicle Manufacturers Association v. State

Farm Mutual Automobile Insurance Co., 463 U.S. at 43,

the Court. observed that a regulation promulgated by an

administrative agency will be overturned as arbitrary

and capricious, inter alia, “if the agency has relied on

factors which Congress has not intended it to consider

[or] entirely failed to consider an important aspect of

the problem’. Here, the Postal Service not only relied

on an inappropriate factor (selective cost savings to

businesses who mail abroad) but failed to consider a

crucial aspect of any private express issue—the impact

of the loss of revenue necessarily resulting from a sus-

pension of the monopoly.

It is undisputed that the Postal Service was never

able to forecast the revenue that would be lost due to the

international remail suspension. Instead, the Service

simply asserted that even if the amount would be di-

verted was equal to the total amount of revenue from

international mail—$882.3 million or 3.2% of total postal

revenue—such loss would not outweigh the perceived

benefits to the public interest. USPS Br. at 35. But, as

the court of appeals correctly concluded, the Postal Serv-

ice never attempted to assess the impact on postal rates

and services that would result from an $882.3 million loss

of revenue. Since the Postal Service is required by stat-

ute to be economically self-sufficient, 39 U.S.C. 3621,

these losses will ultimately have to be charged back to the

overall mailing public in the form of higher postal rates,

or, conceivably, reduced service. Having failed to give

any consideration of these questions, the Postal Service

cannot be said to have reasonably evaluated “the public

interest” as required by section 601(b).*

%5 The Postal Service has not always been so cavalier about the

loss of revenue caused by suspensions of the Private Express Stat-

CONCLUSION

The judgment of the court of appeals should be af-

firmed.

Respectfully submitted,

KEITH E. SECULAR ANTON G. HAJJAR

Counsel of Record Counsel of Record

Sopuia E. Davis KAREN J. WARD

COHEN, WEISS & SIMON Of Counsel

300 West 42nd Street O’DONNELL, SCHWARTZ &

New York, NY 10036 ANDERSON

(212) 563-4100 Suite 200

Attorneys for Respondent 1300 L Street, N.W.

pee pp rege of Washington, D.C. 20005

Letter Carriers, AFL-CIO (202) 898-1707

Attorneys for Respondent

Of Counsel: American Postal Workers

LAURENCE GOLD Union, AFL-CIO

815 16th Street, N.W.

Washington, D.C. 20006

(202) 637-5383

September, 1990

utes. In a rule-making proceeding in 1973-74 which resulted in a

revision of its private express regulations, the Postal Service con-

sidered a suspension for intra-company materials. It ultimately

abandoned this proposal in part because:

[Financial conditions in the Postal Service today require that

the most careful consideration be given to any proposal that

might curtail postal revenues, particularly if the curtailment

could be large and its control difficult. For these principal rea-

sons, we have concluded that the Postal Service should not exer-

cise its discretion to suspend the Private Express Statutes as

to intra-company letters. -

39 Fed. Reg. 33,211 (1974).

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.