Opinion ID: 2669124
Heading Depth: 2
Heading Rank: 1

Heading: GameFly I’s Mandate

Text: USPS first contends the PRC’s remedy is inconsistent with our mandate in GameFly I. See City of Cleveland, Ohio 5 Intervenor GameFly also questions USPS’s standing but we find USPS adequately demonstrated it has been injured—as well as “adversely affected or aggrieved,” 39 U.S.C. § 3663—by the PRC’s challenged orders under which it receives less compensation for flat DVD mail than previously. 9 v. Fed. Power Comm’n, 561 F.2d 344, 346 (D.C. Cir. 1977) (“The decision of a federal appellate court establishes the law binding further action in the litigation by another body subject to its authority. The latter is without power to do anything which is contrary to either the letter or spirit of the mandate construed in the light of the opinion of (the) court deciding the case . . . .”) (quotation mark and footnote omitted). In its challenge, USPS attempts to limit the scope of our mandate to require that the Commission implement an operational remedy—i.e., one changing the way that mail is processed— rather than the rate-based remedy the PRC in fact adopted, equalizing the letter and flat rates. USPS argues that in Gamefly I, we faulted the PRC’s remedy because it “left in place ‘terms of service discrimination,’ i.e., ‘providing manual letter processing to Netflix but not GameFly,’ ” and that therefore “the price difference between letters and flats was irrelevant to the finding of discrimination, which concerned the discriminatory terms of service offered for DVDs sent as letters.” USPS Br. 37 (quoting GameFly I, 704 F.3d at 149) (emphases in original). USPS places too much emphasis on the isolated language it quotes. In GameFly I, we made clear the residual discrimination lay in both the services offered and the rates charged therefor. We expressly noted the PRC “found that the Postal Service had discriminated against GameFly in rates and terms of service” and instructed that where it “allows discrimination to exist in the postal rate structure, it must explain why that discrimination is due or reasonable under § 403(c).” 704 F.3d at 147-48 (emphases added). Moreover, our mandate was quite broad, directing the PRC on remand to “either remedy all discrimination or explain why any residual discrimination is due or reasonable under § 403.” Id. at 149 (emphasis added). In no wise did we foreclose adopting a rate-based remedy. To the contrary, we foresaw that on remand the 10 Commission would “surely consider” the remedies GameFly had already proposed (and the PRC rejected)—which were themselves rate-based remedies, see id. at 147—while noting “there may be a range of other possible remedies which would withstand appellate review.” 704 F.3d 149 (emphasis added). In the end, we rejected the Commission’s chosen remedy not because it was rate-based—although it was—but because the PRC had not adequately justified what it acknowledged was a “ ‘difference in the rates that will be paid by Netflix and GameFly under the remedy.’ ” Id. at 148 (quoting 2011 PRC Order at 115) (emphasis added). Contrary to USPS’s arguments, our decision in GameFly I (as well as GameFly’s complaint and the 2011 PRC Order) focused on rate discrimination and GameFly’s need to “resort to [expensive] workarounds to get its DVDs to its customers” and to spend “millions annually to avoid the Postal Service’s automated letter processing stream.” Id. at 147. The high costs of flat mailer services were part and parcel—the direct result—of the service discrimination the PRC and this court found. See id. at 149 (‘[T]he Commission’s findings establish that the Postal Service’s terms of service discrimination against GameFly . . . led to the companies’ use of different mailers.”); id. at 149 (“[T]he use of different mailers is itself the product of the service discrimination.”). Accordingly, we conclude that the Commission’s rate based remedy is fully consistent both with our decision in GameFly I and with the Commission’s remedial authority—and obligation—under PAEA to “take such action as . . . appropriate in order to achieve compliance with the applicable requirements and to remedy the effects of any noncompliance.” 39 U.S.C. § 3662(c) (emphasis added). 11