Opinion ID: 407579
Heading Depth: 2
Heading Rank: 2

Heading: third class bulk rates

Text: 29 In its Modification Decision, the Board provided for permanent third class bulk mail rates. Several third class mailers now charge that the Board lacked power to modify rates for that subclass. 6 We agree but find that the rates as modified may be retained by the Board as temporary rates under section 3641. 7 30 An understanding of this controversy must begin with the PRC's First Recommended Decision. As we described in Newsweek, that decision included third class bulk rates which were, legally and practically speaking, impossible to implement because they failed to conform to the existing classification schedule. 663 F.2d at 1206-07. In effect, the PRC's rates were contingent upon a change in classification which had neither been discussed nor proposed in any record proceeding. Id. at 1206. Accordingly, we held that the Board was entitled to disregard the recommended third class bulk rates, and implement temporary rates pursuant to its powers under 39 U.S.C. § 3641(a), which provides: 31 In any case in which the Postal Rate Commission fails to transmit a recommended decision on a change in rates of postage or in fees for postal services to the (Board) in accordance with section 3624(c) of this title, the Postal Service may establish temporary changes in rates of postage and in fees for postal services in accordance with the proposed changes under consideration by the (PRC). Such temporary changes may take effect upon such date as the Postal Service may determine, except that such temporary changes may take effect only after 10 days' notice in the Federal Register. 32 We stressed in Newsweek that the PRC's failure to recommend third class bulk rates capable of being implemented produced the same net effect as a failure by the PRC to transmit a recommended decision within the meaning of section 3641, id. at 1207 n.16. 33 Despite the Board's declaration that the recommended third class bulk mail rates were impossible to implement, the PRC's Second Recommended Decision proposed identical rates. 8 The PRC stated simply: Upon reconsideration we are constrained to reaffirm our recommended rate structure .... Second Recommended Decision at 156, J.App., Vol. 7 at 156. The Board purportedly rejected those rates along with the PRC's other proposals in its June 29, 1981 decision. 9 Decision of the Governors of the United States Postal Service on the Postal Rate Commission's June 4, 1981 Recommended Decision Upon Reconsideration 13-15, J.App., Vol. 1 at 336-38. The PRC's Third Recommended Decision reaffirmed those rates once again. Third Recommended Decision at 60, J.App., Vol. 8 at 60. Subsequently, in its Modification Decision, the Board implemented revised permanent third class bulk rates. Modification Decision at 19-20, J.App., Vol. 1 at 358-59. 34 The third class mailers argue that the Board lacked authority to establish permanent third class bulk mail rates under section 3625(d) because the PRC had never recommended rates capable of being rejected or modified. The Postal Service responds that while the PRC's recommended third class bulk rates were incapable of implementation, they were capable of being rejected and were definitely rejected. Brief for Respondent United States Postal Service at 25. We hold that the PRC's failure to transmit a proper recommended third class bulk rate precluded the Board from exercising its modification option as to that rate. 35 At the outset, we reiterate the reason that the PRC's initial recommended third class bulk mail rates were held to be legally defective in Newsweek -the recommended rates failed to conform to the existing classification schedule. Thus, for the same reason that the recommended rates could not be implemented under the existing classification schedule, they could not be modified to comport with that schedule. 10 Moreover, we construe sections 3625 and 3641 to be mutually exclusive-only one can apply to a recommended rate. Where the PRC recommends a proper rate under the Act, 11 the Board's options are set forth in section 3625. In the absence of a proper recommended rate, however, the Board is empowered to act only on a temporary basis as set forth in section 3641. For the reasons set forth in Newsweek, 663 F.2d at 1206-07, the third class bulk rates proposed in each of the PRC's recommended decisions fell within the latter category. Accordingly, the Board simply lacked the authority to exercise its options under section 3625 with respect to these rates. 36 Although the Board lacked authority to modify the PRC's recommended third class bulk rates and to establish permanent rates for that class, the Board was clearly empowered to implement temporary rates pursuant to section 3641. Newsweek, 663 F.2d at 1206-07. Indeed, the authority to establish temporary rates may be exercised whenever the PRC fails to transmit a recommended decision. Thus, the Board is free to establish or adjust temporary rates where appropriate after each recommended decision within the same rate-making proceeding. The limitations on temporary rates are set forth in section 3641(b)-(d): 37 (b) Any temporary rate or fee established by the Postal Service under subsection (a) of this section shall be in accordance with the policies of this title and shall not exceed such amount as may be necessary for sufficient revenues to assure that the total estimated income, including appropriations, of the Postal Service shall, to the extent practicable, be equal to the total estimated costs of the Postal Service. 38 (c) Notwithstanding the provisions of subsection (b) of this section, the Postal Service may not establish any temporary rate for a class of mail or any temporary fee for a postal service which is more than the permanent rate or fee requested for such class or postal service by the Postal Service under section 3622 of this title. 39 (d) Any temporary change in rates of postage or in fees for postal services made by the Postal Service under this section shall remain in effect no longer than 150 days after the date on which the (PRC) transmits its recommended decision to the (Board) under section 3624(d) of this title, unless such temporary change is terminated by the (Board) before the expiration of such period. 40 Under these guidelines, the third class bulk mail rates adopted by the Board in its Modification Decision would clearly be permissible as temporary rates. Accordingly, the Board may retain these rates should it wish as temporary rates under section 3641. Should the Board fail to implement such rates on a temporary basis before the mandate in this proceeding issues, the third class bulk rates will revert to those temporary rates extant prior to November 1, 1981. 41 Our disposition of this issue on the merits renders moot the appeal of Direct Mail/Marketing Association concerning the jurisdiction of the district court to enjoin the third class bulk rates. Accordingly, that appeal is dismissed.