Appeals court rejects Postal Service’s secrecy regarding losses on inbound foreign mail

Washington Postal Scene by Bill McAllister

A federal appeals court has weighed into the murky question of international postal rates and handed a defeat to the United States Postal Service.

The unanimous June 30 ruling by a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit rejected a plea by postal lawyers to keep secret details of the agency’s acknowledged losses on inbound foreign mail.

The judges upheld a decision by the Postal Regulatory Commission that it needed specific data about that mail “to facilitate public participation in discussions of possible reforms and to help the public understand why inbound letter post was so unprofitable.”

At stake in the case are revenue, volume, cost and foreign contribution data for this segment of the mail.

The court said the public has a vital interest in those numbers because “If foreign mailers didn’t pay their fair share, the Postal Service would need to charge domestic mailers more or cannibalize profits from other ventures to make up the difference.”

Postal Service lawyers had argued before the commission that its competitors might be able to use the disclosed data to divert some of its business or get more favorable terms from the Postal Service.

The commission told the court that the USPS had failed to explain how that might happen.

The three judges agreed, holding that the PRC’s ruling was “reasonably ordered.”

Their ruling noted: “Because the UPU’s rates failed to compensate the Postal Service, the President had announced that the United States would withdraw from the UPU unless the UPU allowed it to set its own rates.” The UPU is the Universal Postal Union, the international body that had set rates for inbound mail.

Faced with a possible U.S. withdrawal, the UPU has allowed the United States to set rates for bulky letters and small parcels.

The USPS had called the Postal Regulatory Commission’s decision to disclose data about foreign mail “arbitrary and capricious.”

The appeals court rejected that reasoning.

“Surely, the public has an interest in understanding why a government establishment is hemorrhaging hundreds of millions of dollars per year,” the court said.

“After all, artificially low prices can distort domestic competition and result in Americans paying more than they should for other mail products,” it said.

The ruling called some of Postal Service’s objections to disclosing the data “feeble,” adding, “We see no reason to disagree with the [commission’s] conclusion that the Postal Service’s allegations [of potential harm] are ‘conclusory and unsupported.’ ”

A spokesman for the Postal Service said that the agency is reviewing the decision and has no comment at this time.

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