June 15, 1979

79-43 MEMORANDUM OPINION FOR THE

ASSISTANT ATTORNEY GENERAL, CIVIL

DIVISION

Settlement of Litigation—Authority of the Postal

Service (39 U.S.C. §§ 409, 2008)—Authority of the

Attorney General (28 U.S.C. §§ 516, 519)

This responds to your memorandum of March 14, 1979, requesting 

our opinion concerning the settlement of litigation in which the U.S. 

Postal Service (Postal Service) is represented by the Department of Justice 

pursuant to 39 U.S.C. § 409(d).1 You ask in particular whether this Office 

still adheres to the position taken in its memorandum of February 13, 

1973. That memorandum concluded that although the matter was not free 

from doubt the better interpretation of the pertinent legislation is that the 

authority to settle is implicit in the power of the Attorney General to 

conduct litigation affecting the Postal Service; hence, that such litigation 

cannot be settled without the concurrence of the Attorney General.

For the reasons set forth below in detail, we are modifying the position taken in our earlier memorandum to the extent that where litigation 

involves a matter within the sole prerogative of the Postal Service, the Attorney General cannot settle the litigation over the objection of the Postal 

Service, nor can he block a settlement advocated by the Postal Service. 

Otherwise we adhere to our memorandum of February 13, 1973.

The issues underlying your inquiry and our 1973 memorandum are, 

first, whether 39 U.S.C. § 2008(c) gives the Postal Service final settlement

1 39 U.S.C. § 409(d) provides:

(d) The Department of Justice shall furnish, under section 411 o f this title, the Postal 

Service such legal representation as it may require, but with the prior consent o f the 

Attorney General the Postal Service may employ attorneys by contract or otherwise to 

conduct litigation brought by or against the Postal Service or its officers or employees 

in matters affecting the Postal Service.

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authority over its litigation,2 and, second, whether the independent status 

of the Postal Service under the Postal Reorganization Act limits the controls normally exercised by the Attorney General over agency litigation 

pursuant to 28 U.S.C. §§ 516, 519.3

Our subsequent memorandum to the Special Assistant to the Solicitor 

General, dated September 28, 1973, took a more cautious position than 

the earlier memorandum and concluded that “ given the language of 39 

U.S.C. § 2008(c), it is far from clear that this Department could successfully maintain that in no instance may the Postal Service settle a case 

without the concurrence of this Department.” The memorandum suggested that this problem might better be resolved on the basis of an agreement between the Department of Justice and the Postal Service.

Since then the Court of Appeals for the First Circuit handed down its 

decision in Leonard v. United States Postal Service, 489 F. (2d) 814 (1st 

Cir., 1974), holding that in the specific litigation before it the Postal Service had the authority to settle a law suit over the objection of the Department of Justice. The court stated that “ the legislative history [of 39 

U.S.C. § 2008(c)] pointed out to us does not indicate that the section was 

meant to have a reading not in accord with its literal language.” At 817. 

The court, however, did not deem it necessary to provide a definitive 

delineation of the respective litigating powers of the Postal Service and the 

Department of Justice. It felt it sufficient to rule that in the case at bar the 

Department of Justice could not block a settlement concluded by the 

Postal Service affecting matters which, under the Postal Reorganization 

Act, were committed to the control of the Postal Service. The opinion also 

suggested that while the authority of the Department of Justice over litigation might empower it to refuse to entertain and possibly to settle litigation 

even over the objection of the Postal Service, the Department lacked the 

authority to block a settlement to which it agreed. Fn. 7, p. 817.

Although we do not agree with all the reasoning of the Court of Appeals, it may have reached the correct result in the case before it, assuming 

that the subject matter of the litigation truly was peculiarly within the

1 39 U .S.C . § 2008(c) provides:

(c) Subject only to the provisions o f this chapter, the Postal Service is authorized to 

make such expenditures and to enter into such contracts, agreements, and arrangements, upon such terms and conditions and in such manner as it deems 

necessary, including the final settlement o f all claims and litigation by or against the 

Postal Service. [Emphasis added.]

1 28 U.S.C. §§ 516 and 519 provide:

Section 516. Conduct o f litigation reserved to Department o f Justice. Except as otherwise authorized by law, the conduct o f litigation in which the United States, an agency, 

or officer thereof is a party, or is interested, and securing evidence therefor, is reserved 

to officers o f the Department o f Justice, under the direction o f the Attorney General. 

Section 519. Supervision o f litigation. Except as otherwise authorized by law, the Attorney General shall supervise all litigation to which the United States, an agency, or 

officer thereof is a party, and shall direct all United States attorneys, assistant United 

States attorneys, and special attorneys appointed under section 543 of this title in the 

discharge o f their respective duties.

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autonomous sphere of the Postal Service.4 In connection with its interpretation of 39 U.S.C. § 2008(c), we believe that it would have been possible for the Department to make a stronger case based on the legislative 

history of the subsection by showing that it was intended to cover only the 

relationship between the Postal Service and the Comptroller General.5 

Nevertheless, we would recommend relitigation of. that issue if at all, only 

in an exceptionally strong case, for example, where the Postal Service 

position is clearly erroneous.

The second branch of the Court of Appeals opinion deals with the 

extent to which the control of the Attorney General over Government 

litigation conducted by the Department of Justice is modified by the 

“ somewhat uneasy and unresolved tension between the dependent and 

independent aspects of the new [Postal] Service.” 6 Leonard, at p. 815. 

While 39 U.S.C. § 201 establishes the Postal Service as an independent 

establishment in the “ executive branch,” § 202(a) provides for a bipartisan Board of Governors with fixed terms who can be removed by the 

President only for cause. In addition, the Postmaster General and the 

Deputy Postmaster General are appointed and removable not by the President but by the Board of Governors. § 202(c), (d).

An agency headed by a Board of Governors and by executive officers 

who are not freely removable by the President is not substantively within 

the executive branch of the Government as that term is commonly understood. Purely executive officers must be freely removable by the President, Myers v. United States, 272 U.S. 52 (1926), and their discretionary 

acts are subject to Presidential control. Marbury v. Madison, 5 U.S. (1 

Cranch) 137, 166 (1803); Congress Construction Co. v. United States, 161

4 See fn. 11, infra.

’ Section 2008(c) is located in a chapter entitled “ Finance.” Section 2008 itself is entitled 

“ Audit and expenditures” and deals exclusively with the relationship between the Com ptroller General and the Postal Service. The pertinent Committee report explains § 2008(c) as 

follows:

Subsection (c);—Authorizes the Postal Service to make all expenditures and enter into 

all contracts and agreements it deems necessary, including final settlement o f all claims 

against the Postal Service, expenditures cannot be disallowed by the Comptroller

General. [(Emphasis added.) H. Rept. 1104, 91st Cong., 2d sess. 40 (1970).]

Moreover, § 2008(c) is virtually identical with § 9(c) o f the Tennessee Valley A uthority Act, 

16 U.S.C. § 831h (b). H.R. 4, 91st Cong., 1st sess., a predecessor to the bill that ultimately 

became the Postal Reorganization Act, used the TVA as a model for the Postal Service. H. 

Rept. 988, 91st Cong., 2d sess. 19 (1970). The legislative history of a 1941 amendment to the 

TVA legislation from which the pertinent parts here of 16 U.S.C. § 83lh(b) are derived shows 

that they were inserted in the legislation in response to complaints by the TVA that interference by the Comptroller General had prevented the TVA from entering into compromises that could have avoided litigation and from settling law suits on favorable terms. 

See, Amending the Tennessee Valley Authority Act, Hearing before the Committee on 

Military Affairs, House o f Representatives, 77th Cong., 1st sess., on H.R. 4961, pp. 52-64, 

115-116, 121-122, 132, and 87 C o n g r e s s io n a l R e c o r d 6199 (1941) (Representative May).

‘ This uneasy and unresolved tension is illustrated by the difference o f approach taken by 

Leonard and Butz Engineering Corp. v. United States, 204 Ct. C l. 561 (1974). The former 

case stressed the independence o f the Postal Service, while the latter emphasized its 

dependence.

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Ct. Cl. 50, 55-56 (1963), cert, denied, 375 U.S. 817 (1963); 7 Op. A tt’y. 

Gen. 453, 469-470 (1855). Congress clearly did not intend Postal Service 

officials to have that status. The pertinent committee report (H. Rept. 

91-1104) states that the Postal Service was taken completely out of the 

President’s Cabinet and out of politics (at pp. 6, 12-13) and that the Board 

was to constitute a buffer between the management of the Postal Service 

and the possible influence of partisan politics. Ibid. In sum, the legislation 

was designed to remove “ the day-to-day management of the Postal Service from both Presidential and Congressional areas of concern while still 

leaving the Postal Service subject to [their] broad policy guidance.” At 

p. 13. Another important legislative consideration was the desire that the 

Postal Service function in a business-like manner, rather than as a government organization not subject in all respects to that standard. At 

pp. 11-12.

Section 410(a) of title 39 accordingly exempts the Postal Service from 

many of the laws dealing with Federal contracts, property, works, officers, employees, budgets, or funds, leaving, however, many important 

laws in those fields applicable to the Postal Service. 39 U.S.C. § 410(b).7

The peculiar status of the Postal Service exempting it to a large extent 

from Presidential control and from a substantial range of laws normally 

applicable to executive establishments necessarily has an impact on the 

control exercised by the Attorney General over postal litigation conducted 

by the Department of Justice. The Attorney General’s power to control 

litigation under 28 U.S.C. §§ 516, 519 flows from several sources. Some 

result from his status as an officer of the court. Hence, it is his responsibility not to litigate cases that would unnecessarily burden the Federal 

courts," and that responsibility applies to litigation by the Department 

conducted on behalf of independent regulatory agencies. See, Federal

Trade Commission v. Claire Furnace Co., 274 U.S. 160, 174 (1927); 

Federal Trade Commission v. Guignon, 390 F. (2d) 323, 330 (8th Cir. 

1968).9 It is also within his power to refuse to institute litigation and to terminate law suits, once he determines that to bring or to continue them 

would constitute unjust harassment against private parties. 2 Op. Atty. 

Gen. 482, 486 (1831). Finally, the Attorney General must be able to prevent action by an executive agency that would be illegal, such as a settlement prohibited by law. 22 Op. A tt’y. Gen. 491 (1899).

Another source of the Attorney General’s authority and responsibility 

to control litigation is a derivative of the President’s power to control the 

discretion of the agencies referred to above. That power is vested in the 

Attorney General as the President’s alter ego, so that uniform policies

’ For the laws o f a governmental nature applicable to the Postal Service, see, Butz

Engineering Corp. v. United States, 204 Ct. C l. 561, 573-574, supra.

' See, Leonard, fn. 7, p. 817.

’ In this context see, however, the amendment to § 16 of the Federal Trade Commission 

Act, 15 U.S.C. § 56, by § 204(a) of the Act of January 4, 1975, 88 Stat. 2199.

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in the execution of the laws and the conduct of litigation will prevail. This 

source of the Attorney General’s power is necessarily weakened with 

respect to an entity, such as the Postal Service.

In our view, the answer to the questions posed depends on the basis on 

which the Attorney General seeks to settle a case, and on the subject matter of the litigation. If the Attorney General acts in his capacity as an officer of the court, or for Government-wide policy reasons based on laws 

and regulations that cover the Postal Service, we do not believe that consent of the Postal Service is required. Moreover, since the power to dismiss 

includes the power to prescribe the terms on which the suit is to be dismissed, settlement negotiations are within his jurisdiction, 39 U.S.C. 

§ 2008(c) notwithstanding. See, Castell v. United States, 98 F. (2d) 88, 91 

(2d Cir., 1938), cert, denied, 305 U.S. 652 (1938); Leonard, supra, fn. 7, at 

817-818; 22 Op. Att’y. Gen. 491, 494 (1899).'°

On the other hand, where the subject matter of the litigation is of 

“ parochial” interest to the Postal Service and involves its day-to-day 

management (H. Rept. 91-1004, p. 13, supra) without any impact on the 

general Federal law, or “ policy decisions within the sole prerogative of the 

Postal Service” (.Leonard, at 817), the spirit and purpose of the Postal 

Reorganization Act of 1970 indicate that a decision to settle and the conduct of settlement negotiations are both within the jurisdiction of the 

Postal Service.

Conversely, we do not believe that Leonard stands for the proposition 

that the Attorney General can never block a settlement the Postal Service 

seeks to conclude. As indicated, above, if the settlement is illegal or if it 

would create a precedent adversely affecting the Federal establishment as a 

whole, the Attorney General must be able to prevent it. Leonard does not 

hold to the contrary. That case was based rightly or wrongly" on the 

premise that the litigation involved only matters that were of concern to 

the Postal Service, and the court deliberately refrained from passing on 

problems relating to settlements not within those narrow confines.

In our view, our analysis applies equally to the question you pose as to 

cases pending in the Court of Claims.

10 As we read Leonard, § 2008(c) supersedes the statutory settlement authority of the A ttorney General only in areas within the sole prerogative o f the Postal Service.

" The issue in Leonard was the policy of hiring employees with arrest records not leading 

to conviction unless the position was designated as sensitive or the charges were currently 

pending. A strong argument could be made that this issue was not o f a nature peculiar to the 

Postal Service but that it involved Government-wide employment policies closely related to 

provisions of title S, United States Code, which are applicable to the Postal Service pursuant 

to 39 U.S.C. § 410(b)(1).

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We realize that the practical application of our reasoning may be difficult. That, however, is the inescapable consequence of the hybrid status of 

the Postal Service under the Postal Reorganization Act, i.e., the “ uneasy 

and unresolved tensions between the dependent and independent aspects 

of the new [Postal) Service.” Leonard, at 815.

Le o n U lm an

Deputy Assistant Attorney General

Office o f Legal Counsel

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