Appeals court wary of upending Postal Service rate case

Washington Postal Scene by Bill McAllister

A three-judge appeals court appeared reluctant to upset the United States Postal Service’s recent postal rate increase during a Sept. 13 hearing.

“It’s very hard for me to see how we can second guess them,” said Judge David S. Tatel as he questioned the efforts of several large mailing groups to overturn the Aug. 29 rate increase.

Tatel’s skepticism focused on the Postal Regulatory Commission’s decision to throw out a price cap that for a decade had kept stamp rate increases at no more than the rate of inflation.

The 5.6 percent rate increase on Aug. 29 reflected what lawyers for the U.S. Postal Service and the Postal Regulatory Commission described as an innovative effort to replace an older rate setting regime that had failed to keep the USPS from falling $80 billion into debt.

The hearing at the U.S. Court of Appeals for the District of Columbia Circuit lasted 76 minutes.

It ended without the judges giving any indication when they might rule.

Mailers groups had previously urged the appeals court to block the rate increase, which boosted the price of a first-class stamp to 58¢ from 55¢. But the appeals court declined to intervene.

The appeals court hearing illustrated that the idea of blocking the increase was not popular among the three judges.

Ayesha Khan, who represented the mailers, argued that the PRC’s decision to scuttle the price cap “defies common sense” as well as the history of Congress keeping a tight hand over stamp prices.

Lawyers for the PRC and the Postal Service countered that Congress had given the regulatory agency powers to change its rate-making process if it found the old procedures had not worked.

Dana Kaervang, who represented the PRC, called the rate decision “a reasonable response.”

David Belt, who represented the USPS, said the agency must be able to cover all its costs, something it has not done for 14 years.

Judge Tatel said he found that the law under which the changes occurred “so clearly gives” the commission the power to change its process after 10 years under the old price cap.

Judge Judith W. Rogers said that she found that “nothing requires a price cap.”

The third member of the panel, Judge A. Raymond Randolph, did not indicate how he would rule.

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