National Association of Greeting Card Publishers v. United States Postal Service

PETITIONER: National Association of Greeting Card Publishers
RESPONDENT: United States Postal Service
LOCATION: Mobile, Alabama

DOCKET NO.: 81-1304
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 462 US 810 (1983)
ARGUED: Dec 01, 1982
DECIDED: Jun 22, 1983

ADVOCATES:
Bernard G. Segal - on behalf of the Petitioner in No. 81-1381
John H. Garvey - on behalf of Respondents in both cases
Matthew S. Perlman - on behalf of the Petitioner in No. 81-1304

Facts of the case

Question

Media for National Association of Greeting Card Publishers v. United States Postal Service

Audio Transcription for Oral Argument - December 01, 1982 in National Association of Greeting Card Publishers v. United States Postal Service

Warren E. Burger:

We will hear arguments first this morning in 81-1304, on the consolidated case, National Association of Greeting Card Publishers against the United States Postal Service.

Mr. Segal, you may proceed whenever you are ready.

Bernard G. Segal:

Mr. Chief Justice, and may it please the Court, this case involves the rate-making provisions of the Postal Reorganization Act of 1970, which eliminated the Post Office Department and transferred its functions to the United States Postal Service.

Since the new agency was to operate the first class letter monopoly as well as provide classes of mail competitive with enterprises in the private sector, Congress enacted unique rate-making provisions designed to prevent the Postal Service from utilizing the monopoly power, by overcharging first class mail users, and subsidizing other classes of mail.

I shall discuss the statutory language which seeks to effectuate this Congressional purpose by requiring that the rates for each class of mail recover the costs caused by the class.

Mr. Perlman, counsel for the other Petitioner, will demonstrate that the legislative history confirms the plain meaning of the statute.

Initially, I note a very substantial concession made by the Postal Service in this Court.

The Postal Service had participated in persuading the Second Circuit to rule that the Act does not require long-term, but calls only for short-term costing, variable costing.

By virtue of this holding, the $3 billion of cost which formerly had been attributed to various classes of mail can now be shifted to the first class mail monopoly, this by virtue of the decision.

Now, the Postal Service, in the Solicitor General's brief in this Court, concedes that costs vary with volume in the long run, and must be attributed that way.

Although four Respondents still adhere to the view, nevertheless, the language of the statute clearly compels the concession, and calls for reversal of the Second Circuit decision.

Despite the concession, the Postal Service still improperly limits attributable costs.

The Postal Service says that attributable costs are only those costs that can be proven by statistics to vary with changes in volume, but the language of the Act contains no such limitation.

Section 3622(b)(3), and I read the requisite provision, that

"each class of mail or type of mail service bear the direct and indirect postal costs attributable to that class or type. "

and that is all it says.

Congress did not use technical language.

It employed as the key word "attributable", which the dictionary says is caused or brought about by, and it couldn't have used the more all-inclusive word, I submit.

As the District of Columbia Circuit stated so well, the Commission cannot stop with statistical variability in looking for causal connections between costs and classes of mail.

It must go on, as does all business, to other inferences of causation, deductive analysis, logic, common sense.

Section 3622(b)(3), the costing section, also couples the attributable cost requirement with a requirement that each class of mail must also bear that portion, and I am quoting,

"of all other costs reasonably assignable to such class. "

The fact that the reasonably assignable section is in the costing subsection makes it clear that some unattributed costs must be reasonably assigned on specific cost of service principles.

Warren E. Burger:

What would be an example, Mr. Segal, of one in that category?

Bernard G. Segal:

Well, for example, they have a contingency grant, one which provides for contingencies that might arise in the coming year.

That one ought to be reasonably assigned based on the classes which cause the costs that lead to the concern of the contingency.

Sandra Day O'Connor:

Mr. Segal, are there other causal costs that don't vary either directly or indirectly with the amount or weight or volume of the mail?

Bernard G. Segal:

Yes, there are, and in our judgment, for example, they will amount to about $6 billion, or 25 percent of all costs which will be apportionable to the other eight factors in 3622.

Sandra Day O'Connor:

Well, generally speaking, what do those consist of, the causal costs that don't vary?

Bernard G. Segal:

The causal costs that don't--