Opinion ID: 533817
Heading Depth: 1
Heading Rank: 4

Heading: review of domestic mail manual 425.226

Text: 39 Our standard of review depends upon how we perceive Domestic Mail Manual § 425.226 and how we classify it within a given dichotomy. The case law makes clear that a Postal Service regulation regarding the classification of mail must either be (1) a valid interpretation of a class of mail established by the Board of Governors; or (2) a new and invalid classification of mail created outside of the procedures provided by the Postal Reorganization Act. If a reviewing court determines that a Postal Service regulation is a valid exercise of interpretive discretion, then enforcement of the rule may not be denied on the ground that it is ultra vires. 2 If the court determines that the regulation constitutes a classification of mail, then the rule is ultra vires and the court may enjoin its implementation until such a time as [the Postal Service] has complied with the provisions of 39 U.S.C. §§ 3622-25. United Parcel Service, 604 F.2d at 1382. 40 Under the Postal Reorganization Act, the Board of Governors has the exclusive and nondelegable authority to establish 'classes of mail' and 'rates of postage', 39 U.S.C. §§ 402, 3621, but only after the Governors have received a recommended decision from the Postal Rate Commission. Id. at 1377. The Postal Service may not bring about a change in either rates or classifications of mail without first submitting the proposed change to the Commission who in turn must issue a recommended decision to the Board of Governors. United Parcel Service v. United States Postal Service, 615 F.2d 102, 107 (3d Cir.1980). While it is clear that the Postal Service cannot bypass the complex regulatory scheme of the Act, id., it is also true that the Service possesses a residuum of authority to interpret mail classifications in the process of implementing them, so long as that interpretation does not effect a substantive change in the types of mail or identity of mailers encompassed within the classification. National Retired Teachers Ass'n, 593 F.2d at 1363. This interpretive authority in part stems from the practical reality that a classification schedule can only define general outlines. Id. Consequently the Service must retain some flexibility and discretion to interpret the general provisions of the mail classification schedule in day-to-day implementation. Id. (footnote omitted). 41 A mail classification has been defined as a 'grouping' of mailing matter for the purposes of assigning it a specific rate or method of handling. Relevant factors include size, weight, content, ease of handling, and identity of both posting party and recipient. National Retired Teachers Ass'n, 430 F.Supp. at 146-47 (footnote omitted). The relevant inquiry, then, in evaluating an ultra vires challenge to a Postal Service regulation is determining whether the regulation in question does indeed work a change in the scope of a mail classification, National Retired Teachers Ass'n, 593 F.2d at 1363, through manipulation of one or any combination of these factors. 42 The Postal Service here urges us to find that Domestic Mail Manual § 425.226 is a valid interpretation of Domestic Mail Classification Schedule § 200.0123. This suggestion cannot be taken seriously. The district court correctly found it patently clear ... that both the interim and final versions of DMM § 425.226 were more than mere interpretations of DMM § 200.0123. 686 F.Supp. at 670. The Service would have us uphold its regulation if only for the reason that it is consistent with the purposes underlying Domestic Mail Classification Schedule § 200.0123, however, as the district court noted, 686 F.Supp. at 670 n. 11, this argument demonstrates a failure on the part of the Service to recognize the distinction between the policies underlying Domestic Mail Classification Schedule § 200.0123 from the actual expression of those policies. 43 Domestic Mail Classification Schedule § 200.0123 established two criteria for determining whether an 'issue' of a newspaper or other periodical would be deemed to be a separate publication. Issues which failed to satisfy these criteria would have to meet the qualifications of Domestic Mail Classification Schedule §§ 200.0101-200.0109 or Domestic Mail Classification Schedule § 200.0110, independently of the qualification of other issues of the publication, in order to be eligible for second-class rates. The Nashville Banner and The Tennessean rearranged the publication of their Plus issues so as to avoid the reach of Domestic Mail Classification Schedule § 200.0123. That is, their Plus issues were not published at a regular frequency on the same day as another regular issue of the same publication. Domestic Mail Classification Schedule § 200.0123(a). (emphasis added) 44 Interim Domestic Mail Manual § 425.226 failed to include the same day requirement of Domestic Mail Classification Schedule § 200.0123(a) or any reference to the day of publication. Final Domestic Mail Manual § 425.226 effectively overruled Domestic Mail Classification Schedule § 200.0123(a). For the same day criterion of Domestic Mail Classification Schedule § 200.0123(a), the Postal Service substituted the criterion that no issue be published at a regular frequency, such as once a week, but not on the same day as another regular 'issue' of the same publication. Domestic Mail Manual § 425.226(a). This is not a valid interpretation of Domestic Mail Classification Schedule § 200.0123. Instead it effectively works a change in the scope of a mail classification. National Retired Teachers Ass'n, 593 F.2d at 1363. This act was ultra vires because it exceeded the powers granted to the Postal Service under the Postal Reorganization Act. 45 This conclusion is consistent with the finding of the district court. However, the court also found that Domestic Mail Manual § 425.226 expanded the scope of Domestic Mail Classification Schedule § 200.0123 to include an additional class of mailers-publishers of nondaily newspapers. 686 F.Supp. at 670. (emphasis in original). In support of this position the court noted that the Postal Rate Commission expressly recognized that the applicability of DMCS 200.0123 was limited to daily newspapers in both the original and subsequent Advo litigation. Id. The Postal Service correctly argues, and we agree, that this issue is not properly before this Court nor was it properly before the court below. 3 46 The Postal Service suggests that the district court mistakenly took Domestic Mail Classification Schedule § 200.0123 as the basis upon which the Service sought to justify Domestic Mail Manual § 425.226. The Service argues that its regulation is justified by Domestic Mail Classification Schedule § 200.012 which excludes publications designed primarily for advertising purposes, free circulation, or circulation at nominal rates from second-class eligibility. The Service notes that it referred to Domestic Mail Classification Schedule § 200.012 when explaining the basis for interim Domestic Mail Manual § 425.226 in the Federal Register. See 51 Fed.Reg. 25,525 (July 15, 1986). The service did not, however, refer to Domestic Mail Classification Schedule § 200.012 in its explanation of final Domestic Mail Manual § 425.226, see 51 Fed.Reg. 33,608 (September 22, 1986). Indeed, here the Service tries to justify the final rule in terms of what it believes is the purpose and intent of Domestic Mail Classification Schedule § 200.0123. See Fed.Reg. at 33,609 (September 22, 1986). 47 The Service's assertion that Domestic Mail Manual § 425.226 is legitimate because it is a valid interpretation of Domestic Mail Classification Schedule § 200.012 is not credible. The Service focused its attention on Domestic Mail Classification Schedule § 200.0123 when drafting Domestic Mail Manual § 425.226. More importantly, the Service could not, as it suggests, deny second-class eligibility to The Tennessean's and The Nashville Banner's Plus issues because those issues independently fail to satisfy the other requirements for second-class eligibility including Domestic Mail Classification Schedule § 200.012. 4 This argument presumes that Plus issues had to qualify independently for second-class eligibility prior to Domestic Mail Manual § 425.226, when in fact, the opposite was true. Prior to the adoption of Domestic Mail Classification Schedule § 200.0123 and after its adoption, following the plaintiffs' change in publication schedule, Plus issues were not treated as independent publications, despite their advertisement dominated contents. Indeed, Domestic Mail Classification Schedule § 200.0123 was written with the presumption in mind that Plus issues were issues of the newspaper or periodical which published them, and as such entitled to second-class rates. 5 Consequently, regardless of which section of the Domestic Mail Classification Schedule the Postal Service relies upon to support its regulation, Domestic Mail Manual § 425.226 altered the eligibility criteria for second-class rates. The Postal Service lacked the statutory power to do this, and so Domestic Mail Manual § 425.226 is void.