United States Postal Service v. Flamingo Industries (USA), Limited - Oral Argument - December 01, 2003

United States Postal Service v. Flamingo Industries (USA), Limited

Media for United States Postal Service v. Flamingo Industries (USA), Limited

Audio Transcription for Opinion Announcement - February 25, 2004 in United States Postal Service v. Flamingo Industries (USA), Limited

Audio Transcription for Oral Argument - December 01, 2003 in United States Postal Service v. Flamingo Industries (USA), Limited

William H. Rehnquist:

We'll hear argument now in No. 02-1290, the United States Postal Service v. Flamingo Industries.

Mr. Kneedler.

Edwin S. Kneedler:

Thank you, Mr. Chief Justice, and may it please the Court:

The Ninth Circuit held in this case that the United States Postal Service may be sued for treble damages under the Federal antitrust laws.

The court of appeals fundamentally erred in this holding.

Throughout the nation's history, postal operations have been carried out by the United States Government itself, pursuant to the express authorization in article I of the Constitution, for Congress to establish post offices and post roads.

As this Court explained in the Council of Greenburgh case about 20 years ago, the furnishing of postal services has historically been regarded as a sovereign function, indeed a sovereign necessity, to promote intercourse among the states and bind the nation together.

Such functions of the United States Government are not regulated by the antitrust laws.

Indeed, more than 60 years ago, in the Cooper Corporation case, this Court held that the United States is not a person for purposes of the antitrust laws.

Although the precise question before the Court in that case was whether the United States could sue as a plaintiff under section 7 of the Sherman Act, the Court noted that the same word, person, is used to describe who may be held liable as a defendant, either in a civil action or in a criminal prosecution.

Sandra Day O'Connor:

Mr. Kneedler, in your view, are there any instrumentalities of the United States that you think could be considered a person under the Sherman Act?

Edwin S. Kneedler:

Well, I... I think that there are no instrumentalities that are constituent parts of the United States Government itself that could... that could be held liable.

The word instrumentality is used in a... in a somewhat vague sense, elastic sense, and I think it would be necessary to look at the particular statute to see how much of a governmental character a particular entity has.

Sandra Day O'Connor:

Of course, I guess the court whose judgment we're reviewing thought that the change in the structure of the Postal Service affected the nature of that instrumentality.

Edwin S. Kneedler:

It... it... it did, but the... the court of appeals was wrong on that.

First of all, after the... the court of... after the... this Court's Cooper decision, a number of lower court decisions have held, beginning with the D.C. Circuit's decision in the Sea-Land case involving the Alaska Railroad, that agencies of the United States or instrumentalities just like the United States itself is not a person subject to the antitrust laws.

The Ninth Circuit didn't...

Ruth Bader Ginsburg:

Mr. Kneedler... Mr. Kneedler, but I don't think in that case there was... the question was raised whether the Alaska Railroad was an agent of the United States that would... would carry the immunity of the United States.

Edwin S. Kneedler:

Well, the... the... it was... the Court regarded it as an... as an instrumentality, and in fact the... the Court there recognized that the railroad and the officials of the Government responsible for supervising the railroad could be sued under the APA, and that, therefore, there had been a waiver of sovereign immunity to that extent, and to the extent of allowing injunctive relief.

So the... the Court certainly focused on the question that the Alaska Railroad and those responsible for managing it were part of the United States Government.

Ruth Bader Ginsburg:

I didn't think it was a contested issue in... in that case.

Edwin S. Kneedler:

It may not have been contested, but it... but it... the Court certainly addressed that question and then went on to hold that as an instrumentality of the United States, the... the railroad was not subject to suit under the antitrust law.

Antonin Scalia:

Is the Postal Service subject to the Administrative Procedure Act?

Edwin S. Kneedler:

It is not.

It... it... Congress specifically accepted it that there's... in section 410 of the act, there's a very detailed enumeration of the provisions that Congress did want and did not want to be... the Postal Service to be subject to.

But the... the important point for present purposes is that in 1970, when Congress enacted the Postal Reorganization Act, it carried forward the essential governmental character of the Postal Service, just as it had been up until that point.

In fact, section 101(a) of the act says that the United States... and I quote... the United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States.

And then it says, the Postal Service shall have as its basic function the obligation to provide postal services to bind the nation together.

Antonin Scalia:

So you say it carried forward the... the essential governmental character.

What... what does that consist of?