Opinion ID: 533817
Heading Depth: 1
Heading Rank: 5

Heading: refund

Text: 48 The district court found that despite the fact that Domestic Mail Manual § 425.226 was improper, under 39 U.S.C. § 3681 Combined Communications and Nashville Banner Publishing were not entitled to a refund for the excess postage they paid during the time that Domestic Mail Manual § 425.226 was in effect. Section 3681 of Title 39 provides: 49 No mailer may be reimbursed for any amount paid under any rate or fee which, after such payment, is determined to have been unlawful after proceedings in accordance with the provisions of section 3628 of this title, or is superseded by a lower rate or fee established under subchapter II of this chapter. 50 Combined Communications and Nashville Banner Publishing here argue that because section 3628 does not apply to this case neither does section 3681. Furthermore, they argue that the policies underlying section 3681 are inapplicable to this case. They assert that Congress chose to make presumptively valid those rates and classifications issued in compliance with the procedures of the Postal Reorganization Act. In other words, they assert that a Board decision made in response to a Commission recommendation and pursuant to 39 U.S.C. §§ 3622-3625 is presumptively valid. A change in mail classification which complies with these procedures ensures that interested parties enjoy the protection Congress intended, including the opportunity for notice and comment. A change in classification that does not follow these procedures is not entitled to the same presumption of validity. 6 51 This argument makes little sense on its own terms. A classification may be entitled to presumptive validity if it is adopted pursuant to the procedures in the Act. If a classification is found to be unlawful under section 3681, however, those procedural protections were ineffective. Nonetheless, section 3681 prohibits reimbursement in such a situation. There is no basis in the Act or its statutory history for finding a desire on the part of Congress to allow reimbursement where a classification was unlawful but procedurally correct, and not to allow a reimbursement where a classification was both unlawful and procedurally deficient. 52 The district court similarly found that 39 U.S.C. § 3681 and the policy underlying it required that the Service's decision not to award a refund be upheld. Section 3681 provides that [n]o mailer may be reimbursed for any amount paid under any rate or fee which, after such payment, is determined to have been unlawful after proceedings in accordance with the provisions of section 3628.... Although Combined Communications and Nashville Banner Publishing conceded that their ultra vires challenge to Domestic Mail Manual § 425.226 was not about the legality of a classification recommended by the Commission and approved by the Board of Governors, the court found nothing in the general scheme or legislative history of the Act 'to indicate that Congress did intend this limitation to apply when agency action is challenged as ultra vires rather than substantively unsound or procedurally irregular.'  686 F.Supp. at 670 (quoting United Parcel Service v. United States Postal Service, 524 F.Supp. 1235, 1246 (D.Del.1981)). Moreover, the district court found that the policy underlying section 3681, a desire on the part of Congress to avoid controversy that could seriously disrupt the provision of postal services, id., would be best served by applying section 3681 to ultra vires acts by the Postal Service. 53 We agree with this conclusion and find additional support for it in the structure of the Act. We have reviewed this case under the general grant of jurisdiction which Congress gave to federal courts under 28 U.S.C. § 1339 and 39 U.S.C. § 409(a). We have not reviewed this case under the grant of appellate review provided in 39 U.S.C. § 3628. Section 3681 provides that no mailer shall be reimbursed for payment of a rate or fee determined to have been unlawful after proceedings in accordance with the provisions of section 3628.... (emphasis added). It appears that the unlawfulness of a payment must be gleaned by the court of appeals in its review under section 3628. Section 3628 provides that this court shall review the decision [of the Board of Governors upon the recommended decision of the Postal Rate Commission] in accordance with section 706 of title 5, chapter 158 and section 2112 of title 28.... Under 5 U.S.C. § 706, a court which is reviewing agency action may 54 (2) hold unlawful and set aside agency action findings, and conclusions found to be ... 55 (C) in excess of statutory jurisdiction, authority or limitations, or short of statutory right; 56 (D) without observance of procedure required by law.... 57 We have held that what the Postal Service did was in excess of statutory ... authority and without observance of procedure required by law. The promulgation and enforcement of Domestic Mail Manual § 425.226 was ultra vires. Had we, however, been reviewing a decision by the Board of Governors under 39 U.S.C. § 3628 and consequently under 5 U.S.C. § 706, and had we found the Board's actions to be in excess of statutory ... authority or without observance of procedure required by law.... we would have been precluded from ordering a reimbursement under 39 U.S.C. § 3681. Congress did not intend a refund where the Postal Service's ultra vires acts bring financial detriment to some private party. 58 The judgment of the district court is affirmed. 59