American Postal Workers Union v. Postal Regulatory CommissionAmerican Postal Workers Union v. Postal Regulatory Commission
Jeffrey E. Sandberg, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Michael S. Raab, Attorney, David A. Trissell, General Counsel, Postal Regulatory Commission, and Christopher Laver, Deputy General Counsel.
Before: WILKINS, Circuit Judge, and EDWARDS and WILLIAMS, Senior Circuit Judges.
WILKINS, Circuit Judge:
The American Postal Workers Union (the “Union“) petitions this Court for review of the Postal Regulatory Commission‘s (“PRC“) denial of its December 13, 2013 amended complaint. In its amended complaint, the Union alleged that the United States Postal Service failed to comply with First-Class Mail service standards. See Am. Compl. ¶20. Upon review, the PRC dismissed the Union‘s amended complaint for three reasons. First, the PRC explained that the service standards set forth in
I.
In 2006, Congress enacted the Postal Accountability and Enhancement Act (“PAEA“) to reform postal operations and mitigate the U.S. Postal Service‘s financial difficulties. See
The PAEA required the Postal Service to establish a set of service standards for market-dominant products, including First-Class Mail.
As relevant to this case, the Postal Service issued a final rule on May 25, 2012, altering its existing service standards in
- Overnight Mail: An overnight service standard will be appliеd to intra-Sectional Center Facility (“SCF“) domestic Presort First Class Mail pieces properly accepted at the SCF before the day-zero Critical Entry Time (“CET“). 77 Fed. Reg. at 31,194. The overnight standard will no longer apply to mail sent by retail customers, regardless of location. Id.
- Two-Day Mail: A two-day service standard will be applied to all inter-SCF domestic First-Class Mail pieces that are properly accepted before the day-zero CET if the drive time between the origin Processing and Distribution Center or Facility and destination SCF is six hours or less. Id.
- Three-, Four-, and Five-Day Mail: The three-, four-, and five-day service standards remain unchanged. A three-day service standard will be aрplied to all domestic First-Class Mail pieces properly accepted before the day-zero CET if the overnight and two-day service standards do not apply and additional origin/destination criteria are satisfied. Id. at 31,194-95. A four-day service standard will apply to domestic First-Class Mail pieces properly accepted before the day-zero CET if the overnight, two-day, and three-day service standards do not apply and additional origin/destination criteria are satisfied.
39 C.F.R. § 121.1(d) (2014) . A five-day service standard will apply to “all remaining domestic First-Class Mail pieces properly accepted before the day-zero CET.”Id. § 121.1(e) .
These new service standards shifted a substantial portion of mail previously subject to the overnight standard to either the two-, three-, four-, or five-day service standards, and further transferred a large volume of the two-day mail to the three-, four-, and five-day service standards. PRC Order No. 2512, supra, at 18; MPNR Advisory Opinion, supra, at 7; U.S. Postal Regulatory Comm‘n, Annual Compliance Determination Report Fiscal Year 2013 105 (Mar. 27, 2014) [hereinafter ACD FY 2013].
The PAEA further directs the Postal Service to develop a “plan” for meeting its service standards, including the establishment of “performance goals” for mail delivery.
To evaluate the Postal Service‘s compliance with its service standards, the PRC must issue an Annual Compliance Determination (“ACD“) report for each fiscal year. See
The ACD results for fiscal year 2014 showed a continual decline in Postal Service performance. While First-Class Mail presorted letters and postcards subject to ovеrnight or two-day service standards continued to meet their applicable service goals, all remaining First-Class Mail products failed to satisfy their service requirements, including: (1) single-piece letters and postcards subject to overnight, two-day, and three- to five-day delivery; (2) pre-sorted letters and postcards subject to three- and five-day delivery; (3) flats; (4) parcels; (5) inbound letter post; and (6) outbound single-piece international letters. ACD FY 2014, supra, at 87-88 tbls. V-1, V-2. Although the decreased service performance occurred during Phase 2 of the MPNR initiative, the Postal Service linked its noncompliance to severe winter storms that plagued the first and second quarters of fiscal year 2014. Id. at 88. After reviewing the data, the PRC concluded that winter storms likely impacted service delivery times, but nonetheless cautioned that “weather cannot consistently be employed as a catchall excuse for failing to meet performance standards.” Id. at 104. The PRC further instructed that it “expects service performance to improve in FY 2015.” Id. Regarding First-Class Mail flats specifically, the PRC directed the Postal Service to “improve service for First-Class Mail Flats in FY 2015 or to provide an explanation in the FY 2015 [Annual Compliance Report] for why efforts to improve service performance results ... have been ineffective and detail what changes it plans to make to improve service performance.” Id.
Notwithstanding the PRC‘s responsibility to publish ACD reports, any interested person who believes the Postal Service is not operating in compliance with its regulatory or statutory requirements may file a complaint with the PRC.
Given the dual remedies available through the ACD and complaint process, the Newspaper Association of America expressed concern several years ago that a finding of compliance or noncompliance in an ACD could moot a pending complaint on the same issue. U.S. Postal Regulatory Comm‘n, Order No. 195, Order Establishing Rules for Complaints and Rate or Service Inquiries 21 (Mar. 24, 2009) [hereinafter Rules for Complaints]. The PRC responded by noting that Congress contemplated this exact issue and addressed it in the statute. Id. at 22. Specifically, section 3653(e) creates a rebuttable presumption of compliance by the Postal Service if the PRC issues a timely written determination of compliance in an ACD.
II.
On September 5, 2013, the Union submitted a complaint to the PRC alleging that the Postal Service violated the requirements of
Upon review, the PRC initially dismissed the Union‘s amended complaint for lack of standing on February 27, 2014. See U.S. Postal Regulatory Comm‘n, Order No. 2000, Order Dismissing Complaint (Feb. 27, 2014). Subsequently, on May 27, 2015, the PRC granted the Union‘s motion for reconsideration and vacated its earlier dismissal. See PRC Order No. 2512, supra,
Second, the PRC noted that the Union‘s complaint failed to raise new or material issues of fact or law. Id. at 13. While the Union performed a limited mailing test to support its allegations, its results did not add any new information that was not already publicly known or addressed by the PRC. Id. at 16-17. The PRC was aware of the Postal Service‘s noncompliance with service standards and should not be required to expend limited resources reestablishing a known fact. See id. at 17; see also id. at 19-20 (“[A]fter an issue has been considered under [either an ACD or a complaint], in most instances reconsidering the same issue using the alternative approach is not a necessary or efficient use of resources.“). Unlike the situation contemplated by Congress in which the PRC‘s finding of compliance serves only as a rebuttable presumption, the Union presented allegations entirely consistent with the PRC‘s findings. Id. at 20. Such consistency does not present a new issue of material fact.
Finally, the PRC noted that it already directed the Postal Service to take remedial action to ensure future compliance. Id. at 17. Given the unusual impact caused by winter storms, the PRC determined that the appropriate action was to “reiterate the Postal Service‘s responsibility to meet service performance goals.” Id. at 19. Because the PRC may direct the same remedies for a finding of noncompliance under either an ACD or a complaint, the PRC ruled it is unlikely to award further relief for this instance of noncompliance. See id. at 19-20. Thus, the PRC dismissed the Union‘s amended complaint.
Commissioner Goldway, however, dissented from the majority opinion and argued that the Union‘s amended complaint was prematurely dismissed. See U.S. Postal Regulatory Comm‘n, Order No. 2512, Dissenting Opinion of Commissioner Goldway 1-3 (May 27, 2015). The dissent argued that the PRC previously observed that full effect would not be given to thе statutory scheme if complaints could be rendered moot by issuance of an ACD report. Id. at 2. Accordingly, the Union should be afforded the opportunity to prove its case, and the majority‘s dismissal denies the Union a fair opportunity to engage in discovery and create a full record. Id. at 3. Because the PAEA “anticipate[d] a robust Complaint mechanism,” Commissioner Goldway argued, the PRC‘s remedial authority is much broader than the majority described. Id. The PAEA intended for the ACD and complaint processes to work in tandem, not in a manner that is mutually exclusive. Id. Thus, the mere fact that the PRC has previously recognized service quality рroblems in its ACD reports should not bar a legitimate complaint. Id. at 1. The Union timely filed a petition for review in this Court on May 29, 2015.
III.
This case presents two primary questions. First, did the PRC reasonably determine
A.
This Court has jurisdiction to review the PRC‘s dismissal of a complaint pursuаnt to
With regards to statutory interpretation, the Court follows the framework set forth in Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-44, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). See U.S. Postal Serv. v. Postal Regulatory Comm‘n, 640 F.3d 1263, 1266 (D.C. Cir. 2011) (noting that because Congress expressly delegated to the PRC responsibility to implement the PAEA, the PRC‘s interpretation is reviewable under Chevron). Chevron review involves a two-step analysis. First, if a statute is clear, the Court must give effect to Congress‘s unambiguous intent. Chevron, 467 U.S. at 842-43. Where ambiguity plagues a statute, the Court must turn to the second Chevron principle and give deference to the agency‘s reasonable interpretation of the statute. Id. at 843.
B.
The first issue we address is the PRC‘s interpretation of “service standards.” The Union argues that the PRC erroneously interprets service standards as aspirational goals that lack the force of law. See Pet‘r Br. 23-32. According to the Union, the PRC has conflated service standards with operational performance goals and implicitly authorized the Postal Service to underperform. See id. at 30-35. The Union, however, misconstrues the PRC‘s order. The PRC does not contend that service standards are legally unenforceable. Resp‘t Br. 33; see generally PRC Order No. 2512, supra, at 8-12 (highlighting that service standards are enforceable when assessed in conjunction with performance goals). Rather, the PRC maintains that whether the Postal Service has complied with its statutory requirements is evaluated by separately published service performance goals. Resp‘t Br. 33; see PRC
First, Congress has not directly addressed the issue of how Postal Service noncompliance should be calculated. Pursuant to the PAEA, the Postal Service must promulgate regulations that establish service standards for market-dominant products.
Second, we find the PRC‘s interpretation that “service standards” should be measured in conjunction with separately defined performance goals reasonable and entitled to deference. The PAEA requires the Postal Service to establish a set of service standards, not service guarantees. See
This interpretation is reasonable given that nothing in the PAEA suggests that the Postal Service violates the law every time a piece of mail arrives outside the applicable time window set forth in
Further, if service standards could be violated on an envelope-by-envelope basis, it would be a foregone conclusion in every ACD that the Postal Service is in noncompliance with the statute. This result would eliminate any meaningful distinction between compliance and noncompliance. Rather than being subject to remedial directives only in years of noncompliance,
Similarly, nothing in the PAEA requires the Postal Service to disclose information to the PRC regarding the delivery outcome of every single piece of mail. The PAEA only mandates that the Postal Service provide the PRC with a report analyzing the “quality of service” in enough detail “to demonstrate that all products during such year complied with all applicable requirements” in Title 39.
Finally, the legislative history bolsters the PRC‘s interpretation. In 2004, Congress considered a legislative proposal in which the language corresponding to section 3691(b)(1)(C) would have required service standards to “guarantee Postal Service customers delivery reliability, speed and frequency consistent with reasonable rates and best business practices.” S. 2468, 108th Cong. § 301 (2004) (emphasis added). A later version of the legislation, which was enacted, replaced the word “guarantee” with the phrase “reasonably assure,” S. 662, 109th Cong. § 301 (2005), thus clarifying that service standards do not create binding on-time delivery requirements for each piece of mail. See
C.
The second question we must answer is whether the PRC acted arbitrarily or capriciously by dismissing the Union‘s amended complaint. As a preliminary matter, we find that the PRC reasonably construed the Union‘s amended complaint as alleging that the Postal Service‘s aggregate rate of compliance fell below its established goals. See PRC Order No. 2512, supra, at 13. As previously discussed, a complaint alleging violations of service standards on an envelope-by-envelope basis does not state a cognizable claim. Rather, service standards may only be violated in the aggregate when measured against external performance goals. Thus, PRC‘s construction of the Union‘s amended complaint conforms with its interpretation of service standards discussed in Section III.B. For the reasons discussed below, we hold that the PRC‘s decision to dismiss the Union‘s amended complaint was not arbitrary or capricious.
The strongest support for upholding the PRC‘s dismissal is the fact that the PRC already recognized the Postal Service‘s
In essence, the Union‘s amended complaint requested that the PRC issue a different remedial order that required the Postal Service “to cease and desist from making changes in its mail processing network that will cause it to violate service standards.” Am. Compl. at 22. By articulating an alternative rationale for the Postal Service‘s noncompliance, the Union contends that the PRC‘s remedial order was ineffective to redress violations of service standаrds caused by post office closures. The Union, however, did not challenge the adequacy of the PRC‘s remedy before this Court and, accordingly, has forfeited this claim. See Nat‘l Oilseed Processors Ass‘n v. OSHA, 769 F.3d 1173, 1182 (D.C. Cir. 2014) (holding that petitioners forfeited a claim by mentioning it “only in a cursory manner“); Pet‘r Br. 45 (arguing that if the PRC‘s statements urging the Postal Service to improve “were enforceable through agency order and court injunction, they might satisfy the Commission‘s duty“).
Finally, the Union argues that the PRC cannot rely on its finding of noncompliance in the ACD to avoid processing a meritorious complaint on the same or similar issues. Pet‘r Br. 36, 41-42. The PRC addressed a comparable concern in its March 24, 2009 Order Establishing Rules for Complaints and Rate or Service Inquiries. Specifically, the PRC agreed that “it would not give full effect to the statutory scheme if complaints could be rendered moot by the issuance of an annual compliance determination.” Rules for Complaints, supra, at 22. The PRC does not take a contrary position in the present case. Nothing in the PRC‘s order states that an individual is estopped from contesting findings in the ACD report by objecting or filing a complaint. The right to object remains intact. As shown above, the PRC‘s denial of the Union‘s amended complaint in this case was based on the fact that the complaint failеd to raise a material issue of fact or law. Thus, the Union‘s argument on this ground is unpersuasive.
Accordingly, we hold that the PRC‘s dismissal of the Union‘s amended complaint was not arbitrary or capricious.
For the reasons discussed above, we deny the Union‘s petition. The PRC reasonably determined that whether service standards are violated must be evaluated in reference to external performance goals. Based on this interpretation, the PRC logically construed the Union‘s amended complaint as asserting a claim for violation of service standards in the aggregate, in accordance with the relevant perfоrmance goals. The PRC‘s subsequent dismissal of this amended complaint was not arbitrary or capricious because the amended complaint failed to allege new issues of material fact or law. Accordingly, the petition is denied.
So ordered.