Opinion ID: 600710
Heading Depth: 2
Heading Rank: 2

Heading: The Postal Service's Right to Initiate Review

Text: 62 Of course, congressional intent to allow the Postal Service to appear on its own terms in actions challenging its orders is not the same as an intent to permit the agency to initiate a review proceeding in the absence of the Attorney General's consent. We find such an intent, however, in the specific language of §§ 3625(c) and 3628, in the structure of the congressionally-crafted ratemaking provisions, and in the legislative history of the PRA, which together reveal an unmistakable congressional design to accord the Postal Service the autonomous right to initiate judicial review of the PRC recommendations that it allows under protest. 63 We start with the language of the statute. First, § 3625(a) of the PRA provides that, [u]pon receiving a recommended decision, from the Postal Rate Commission, the Governors may ... allow under protest ... that decision in accordance with the provisions of this section. The relevant provisions of that section are found in § 3625(c), which provides that, when the Governors allow a recommended decision to take effect under protest, they may seek judicial review thereof under section 3628 of this title.... Language and logic indicate that judicial review thereof is review of the PRC's recommended decision. Thus, in this limited circumstance, Congress intended that the PRC's recommended decision, which has taken effect, be a reviewable order. Section 3628, in turn, provides for judicial review of decisions by an aggrieved party who appeared in the proceedings under section 3624(a) of this title. Section 3624(a) provides that the Rate Commission's proceedings should accord an opportunity for a hearing to, among others, the Postal Service. 64 We read these provisions together to provide that, when the Governors seek judicial review of a PRC recommendation, they do so as an aggrieved party under § 3628 of the PRA, and consequently, under § 2348 of the Hobbs Act. Stated another way, when the Governors seek judicial review under § 3625(c) of a PRC recommendation, they are effectively claiming that they are aggrieved by that decision. 65 We next inquire what rights the Hobbs Act affords such an aggrieved party. Under § 2344 of that Act, any party aggrieved by an order reviewable under the Act may petition for its review in a court of appeals. Under § 2348, any party in interest in the proceeding before the agency whose interests will be affected if an order of the agency is or is not enjoined, set aside, or suspended, may appear as parties thereto, of their own motion and as of right, and be represented by counsel in any proceeding to review the order. The Postal Service is, therefore, entitled to appear as a party and be represented by counsel in any judicial review proceeding. 66 Of course, in the typical Hobbs Act litigation, the party aggrieved is a private party contesting an agency action. In that situation, the aggrieved party's right to appear is unaffected by the Attorney General's litigating authority. In this peculiar situation, however, in which a federal agency is an aggrieved party, we must inquire whether its right to appear and be represented by counsel is subject to the Attorney General's control--and therefore, veto. Review of the legislative history of the Postal Reorganization Act leads us to conclude that it is not. Instead, it is clear that Congress considered meaningful judicial review of PRC/Postal Service disputes to be [300 U.S.App.D.C. 56] an integral part of a carefully crafted ratemaking structure, and that we should therefore construe the statute to preserve this option. 67 The Postal Reorganization Act grew out of congressional frustration with postal inefficiency. Both houses emphasized that the key to ending this inefficiency was to give the nation's postal service more independence--independence from political pressures and independence to manage its operations in a professional, businesslike manner. See H. REP. NO. 1104, 91st Cong., 2d Sess. 6 (1970), reprinted in 1970 U.S.C.C.A.N. 3649, 3654 (House Report) ([T]he Post Office must be taken out of politics and politics out of the Post Office.); id. at 3661 (citing wide agreement that one of the cardinal needs of postal reform is to seal off the Postal Service from partisan political influence); S. REP. NO. 912, 91st Cong., 2d Sess. 8 (1970) (Senate Report) (The elimination of politics in the selection of ... officers or employees of the postal service is, in the last analysis, the moral and ethical responsibility of the President and the Board of Governors.). 68 The structure established by Congress--two independent agencies, with a Board of Governors at the head of the Postal Service--was deliberately chosen to promote this desired independence. The first step toward that end was removing the Post Office from the President's cabinet. 4 As a second step, the Board of Governors was to provide an invaluable buffer between the management of the Postal Service and the possible influence of partisan politics. House Report at 12, 1970 U.S.C.C.A.N. at 3660. The Senate similarly perceived the Board of Governors as independent of ordinary legislative and executive supervision and control. Senate Report at 4. The Chair of the Senate Committee on the Post Office and Civil Service, which drafted the Senate bill, echoed that the legislation isolat[ed] the postal service from Presidential or congressional control over its program activities, and ... protect[ed] the Chief Executive officials from political influence through the Board of Governors. 116 CONG. REC. at 21712 (statement of Sen. McGee). 69 The purpose of this political independence was managerial independence. The Postal Service was to have unfettered authority and freedom ... to maintain and operate an efficient service. Senate Report at 2; id. at 2, 3 (concerned that the Postmaster General was blocked or undercut at every turn, the Committee sought to provide more control over costs and revenues and greater continuity of top management). The day-to-day management of the Postal Service was to be removed from both presidential and congressional areas of concern. House Report at 13, 1970 U.S.C.C.A.N. at 3661. The Board of Governors was to have policy control with functions similar to a board of directors, while the Postmaster General was to be the operating head of the Postal Service. 116 CONG. REC. at 19845 (statement of Rep. Dulski). The independence of the Postal Service was so great that one representative feared that the Postmaster General would become the absolute czar of the Postal Service, ... completely and effectively remove[d] ... from any possible control by the people or the people's elected representatives. 116 CONG. REC. at 19848[300 U.S.App.D.C. 57] (statement of Rep. Gross). To ensure this operational freedom, Congress established a scheme in which: 70 The Board of Governors shall have broad authority and shall not, except as specified, be subject to Federal laws dealing with contracts, property, the civil service system, the Budget and Accounting Act of 1921, and other laws which in most instances apply to Government agencies and functions. 71 Senate Report at 5; 39 U.S.C. § 410. 72 Although the two houses agreed on the need for political and operational independence, they differed initially on the specific structure and allocation of ratemaking authority between the Postal Service and the Postal Rate Commission. 5 The original House bill created the Postal Rate Commission (which it referred to as a Rate Board) as a completely independent agency, while the Senate established it within the Postal Service. The House, but not the Senate, provided for a one-house congressional veto of rates adopted by the Board, while the Senate, but not the House, included the allowance under protest option. The Conference Committee adopted elements of each bill. It made the PRC an independent agency, eliminated the congressional veto, and incorporated the Senate's allowance under protest option and its more limited Postal Board modification provision. H. REP. NO. 1363, 91st Cong., 2d Sess. 6 (1970), reprinted in 1970 U.S.C.C.A.N. 3712, 3717 (Conference Report). 73 This legislative history demonstrates that Congress carefully crafted a unique ratemaking structure that created a deliberate tension between the Postal Service and the Rate Commission. Neither entity alone could effect rate changes. The Board of Governors' broad ratemaking authority was checked by its need for a PRC recommendation, but the PRC was by no means given an absolute veto over the Governors' actions. The Governors' power to modify a PRC recommendation, for example, was designed as a means--other than judicial review--by which the Governors could prevent the PRC from getting a complete strangle hold over any and all service changes which the Postal Service would like to make. 116 CONG. REC. 22053 (statement of Sen. Fannin). At the same time, this power to modify was sharply circumscribed: it became effective only after the Commission had reconsidered its recommendation and only with the written approval of each of the Governors. Id. § 3625(c) & (d). See also Senate Report at 13 (The limited circumstances under which a recommended rate decision made by the Commission may be modified by the Governors are spelled out in the language of the bill.); Association of American Publishers, Inc. v. Governors of USPS, 485 F.2d 768, 777 n. 4 (D.C.Cir.1973) (Bazelon, J., concurring) (Although the PRC technically ... merely renders a 'recommended decision,' [300 U.S.App.D.C. 58] ... the power of the Board of Governors to revise that opinion is extremely narrow.). In short, this was not a piecemeal or haphazard effort, but an attempt to create a comprehensive procedure for rate setting and service changes. House Report at 11, 1970 U.S.C.C.A.N. at 3659. 74 The allowance under protest option must be seen as an integral component of this complex and delicate structure negotiated in Congress. See Senate Report at 17 (The Governors have other possible courses of action open to them on receipt of a recommended decision from the Rate Commission. They may, in the exercise of their discretion, implement a recommended decision of the Rate Commission under protest.). Its importance is underscored by the congressional focus on timeliness in the rate-making process, which Congress deemed imperative. House Report at 19, 1970 U.S.C.C.A.N. at 3667. The statute specifically provides that the Rate Commission shall promptly consider a request from the Board of Governors, 39 U.S.C. § 3624(a), and that it is to conduct its proceedings with the utmost expedition consistent with procedural fairness. Id. § 3624(b). The Commission generally must respond to a Board request on rates within ten months. Id. § 3624(c)(1). 75 The allowance under protest is one of two provisions specifically intended to ensure that delays or impasse in the ratemaking process not stem the flow of necessary revenues to the Postal Service. The other provision is § 3641, which provides for temporary rate increases in three cases of delay. 6 Timely rate increases were essential to Congress' design to make the Postal Service largely, if not entirely, self-sufficient; after a transition period, there would be no or virtually no federal subsidies to make up for revenue shortfalls or delays. See House Report at 17, 1970 U.S.C.C.A.N. at 3665; Conference Report at 7, 1970 U.S.C.C.A.N. at 3719. Financial self-sufficiency was a consistent guiding principle, both in the earlier reorganization proposals, which contemplated a government-owned postal corporation, and in the later proposals, which called for independent executive agencies. Then-Postmaster General Winton Blount testified at the Senate hearings on an earlier version of postal reform bill: 76 Mr. Chairman, the Kappel Commission [President's Commission on Postal Organization] expressed profound concern with the problem of regulatory delay. We share this concern. Accordingly, the bill provides a full range of procedures which the rate commissioners may adopt to expedite proceedings while, at the same time, insuring a full and fair hearing for all. If the rate commissioners are unable to complete their proceedings within [the statutory period], or if judicial proceedings are instituted to set aside a final decision of the Postal Service with respect to rates, a proposed change may be put into effect temporarily after [the required] notice. These temporary rate provisions are analogous to the suspension provisions contained in the statutes governing the major Federal regulatory agencies. Under such statutes, the effective date of a proposed rate filed by a regulatory company with the regulatory agency may be suspended for a relatively brief period. If the agency has not completed its investigation of the rate within the stipulated time, the regulated company may put the proposed rate into effect pending subsequent approval [300 U.S.App.D.C. 59] or disapproval by the regulatory agency. 77 1 Postal Modernization: Hearings Before the Senate Comm. on Post Office and Civil Service, 91st Cong., 1st Sess. 507 (1969). 78 While Postmaster General Blount spoke specifically of the interim rate provisions, the allowance under protest option performs similar functions and provides similar guarantees of ongoing revenues. When the Postal Service exercises its statutory authority to seek judicial review of a Postal Rate Commission recommendation, it avoids crippling delays by permitting that recommended decision to take effect in the interim. Absent such an option, the Postal Service would face the Hobson's choice of capitulating to the PRC recommendation, and thereby abdicating its statutory authority to set rates, or resubmitting its request for possibly endless rounds of reconsideration by the PRC, and thereby delaying the flow of needed revenues to the Postal Service. The revenue implications are obvious in the case before us, as the Board of Governors estimates that its decision to allow the recommended decision under protest provides the Postal Service an additional $20 million a day in revenues. Motion of United States Postal Service for Leave to Appear as a Party on Its Own Behalf, at 6 n. 4. 79 Although the allowance under protest option applies as well to decisions resubmitted to the PRC for reconsideration, it loses much of its utility if it does not also include meaningful judicial review. In any event, it was the clear judgment of Congress to allow this option in both circumstances. The DOJ, however, asserts the right unilaterally to determine when--if ever--this option could be exercised. This reading of the statute would effectively permit the Department to veto judicial review of PRC/Postal Service disputes, a result wholly at odds with clearly expressed congressional intent. Further, in light of the Department's suggestion that judicial review at the Postal Board's instigation may never be appropriate, Letter from Stuart M. Gerson, Assistant Attorney General, to Mary S. Elcano, General Counsel of the Postal Service (October 27, 1992), the Department could completely and single-handedly obliterate this congressionally-authorized--and congressionally-intended--review proceeding. 80 The DOJ's reliance on §§ 516 and 519, which were not persuasive as a matter of statutory construction, are even less convincing when considered in light of Congress' unequivocal intent gleaned from the legislative history to free the Postal Service both from political control and from the operation of laws which in most instances apply to Government agencies and functions. Respect for the language of the Postal Reorganization Act and its underlying purposes simply will not permit the conclusion that Congress intended simultaneously to give the Postal Service such broad and unfettered discretion and to condition its judicial review options on the Department of Justice's--or even the President's--approval. 81 Although we conclude that § 409(d) cannot be read to frustrate Congress' clear intent to give the Postal Service a meaningful option to allow under protest and seek judicial review, we do not conclude that this feature of the ratemaking scheme can be read to deprive § 409(d) of all content. Instead, there is a way to reconcile these two provisions. As a preliminary matter, § 409(d) still requires that the Postal Service first seek legal representation or consent to self-representation from the DOJ. But when this representation or consent is declined, the Postal Service is not barred from pursuing this statutorily authorized option on its own. We stress, however, that this does not make the request to the DOJ for representation or consent meaningless or merely pro forma. There is no indication that Congress intended to give the Department no role in this form of judicial review, only that it did not intend to make the allowance under protest option subject to the Department's effective revocation. The express requirements of § 409(d), along with respect for the Attorney General's responsibility for centralized litigation, still require that the Postal Service first attempt to work out a representation [300 U.S.App.D.C. 60] agreement with the Attorney General. Given the general success that the Postal Service and the DOJ have had in coordinating Postal Service litigation, we expect that disagreements such as the one before us today will continue to be the exception.