Back in January 2019, the Postal Service raised the price of a First Class stamp from 50 to 55 cents. Postal watchdog Douglas Carlson filed a petition with the U.S. Court of Appeals for the District of Columbia Circuit (aka the DC Circuit) challenging the Postal Regulatory Commission’s decision to approve this rate hike.
Carlson argued that in approving the rate hike on Forever stamps the Commission had failed to consider the statutory pricing factors and objectives in the Postal Accountability and Enhancement Act (PAEA) and the public comments questioning this increase. He also argued that the Commission did not reasonably explain its decision. Therefore, he claimed, the Commission’s decision was arbitrary and capricious.
Today the court issued a ruling granting Carlson’s petition and vacating the PRC’s approval of the rate increase on First Class postage. (The court’s opinion is here; the order vacating the PRC ruling is here.)
It’s not clear what will happen next. The PRC could file a petition for a hearing en banc, meaning that it will ask the entire DC Circuit to review the case, as opposed to the three-judge panel that issued today’s ruling. Apparently anticipating such a possibility, the DC Circuit today also issued an order “that the Clerk withhold issuance of the mandate herein until seven days after disposition of any timely petition for rehearing or petition for rehearing en banc.”
If such a petition is not granted, the PRC could even appeal to the Supreme Court. (After the DC Circuit ruled against UPS on an unrelated case involving postal rates, UPS took both of those steps, to no avail.)
In the meantime, we don’t know what impacts today’s ruling will have on the rate hike, which has been in effect since January.
Under the PAEA, the Postal Service has the right to request its next inflation-based rate increase this fall, with an effective date in January 2020. How the next increase will interact with today’s court decision is also unclear.
Here’s the section of today’s order that reviews the main issues in the case:
The court goes on to note that the stamp price hike is intertwined with the rate adjustments on other types of First Class mail (like bulk FC), such that “The ten percent increase in the first-class letter stamp limited the Commission’s ability to raise rates for other first-class mail products.” In other words, under the rate cap system of PAEA, if the Postal Service had raised rates less than 5 cents on single piece stamps, it could have raised rates on other types of FC mail more than it did. In any case, because the various types of First Class are intertwined as far as the rate increase is concerned, the court determined that it needed to vacate the PRC’s order concerning this category entirely. The rate increases on other types of mail (like standard mail) are not affected by the court’s order.
The court’s opinion concludes as follows: