Our coalition of mailing groups filed a reply brief on July 19th to the PRC’s brief, and the USPS filed one too. Major steps remaining include final briefs on July 26th, and oral arguments on September 13th. The appeals court decision will be sometime after that. ACMA’s co-litigant, the Alliance of Nonprofit Mailers detailed summary below:
- The Commission claims that modern rate regulation as set forth in the Postal Accountability & Enhancement Act (PAEA) of 2006 (heretofore referenced as 39 U.S.C. §3622(d)(3) ) “unambiguously” and “expressly” authorized it to replace the inflation-based price cap and other statutory requirements as part of its ten-year review. But it concedes that the provision does not “spell [this] out,” and it inserts missing words while ignoring existing ones to support its erroneous interpretation. The Court cannot “add words to the law to produce what is thought to be a desirable result. That is Congress’s province.”
- The Commission claims that its power to adopt an “alternative system” “necessarily” allows it to jettison statutory requirements because 39 U.S.C. §3622(d)(3) would otherwise be “superfluous.” Nothing in the statute supports that radical result and the statute leaves much for the Commission to do, both initially and upon its 10-year review, even with the statutory requirements intact.
- The Commission insists that 39 U.S.C. §3622(d)(3) refers to a statutory “system established by the entirety of 39 U.S.C. §3622(d)(3).” But there is no statutory system; the only “system” contemplated by the statute is the one created by regulation — and it is the regulatory system, not the statutory requirements, that the Commission has the power to alter or replace.
- Finally, the Commission does not seriously contend with the mailers’ argument that any delegation should be narrowly interpreted so as to avoid constitutional infirmities. Absent a price cap that coheres Congress’ policies, the Commission is left with statutory objectives that it concedes are in tension with one another, and thus cannot reasonably be said to provide clear policy and boundaries.
- The Commission’s density adjustment is arbitrary and capricious because the Commission failed to assess the adjustment’s effects on the very problem — volume decline — that the Commission was ostensibly solving, and it ignored record evidence showing that the adjustment would actually exacerbate the problem.
- The Commission also ignored revenues in the density-adjustment formula, which is irrational when the goal of the entire enterprise is to account for insufficient revenues to cover total costs. Providing rate authority regardless of whether USPS revenues are increasing severs the rational connection between the problem and the solution.
- In addition, the Commission’s rules are arbitrary and capricious because they do not reasonably account for, let alone balance, the statutory objectives of maximizing incentives to reduce costs and maintaining stable and predictable rates. Having prices rise by amounts that double and triple past increases, based on annual modifications that are unknown until the USPS files its calculations and the Commission approves them, and that go into effect mere months later, will leave the USPS with little incentive to cut costs and will render rates anything but predictable and stable. So, the Commission falls back on USPS’s “inherent incentive” “to exercise business judgment about what rates the market can bear.” But preventing USPS from pricing monopolistic products at what the market will bear is why Congress limited rates in the first place.