Mailers defend the PRC’s public inquiry into Delivering for America

Steve HutkinsBlog, Featured

On April 20, the Postal Regulatory Commission opened a Public Inquiry docket to examine the Postal Service’s Delivering for America plan, particularly the initiative to relocate carriers from post offices to large Sorting & Delivery Centers. On May 5, the Postal Service filed a motion arguing that the PRC should reconsider its order creating the docket because the regulator lacks the authority to create such a “far-flung inquiry.”

Yesterday, two groups of mailers filed comments opposing the Postal Service’s motion. The mailers argue that the Commission was operating well within its authority to open the inquiry, and it needs to go forward.

One of the comments was submitted by the Association for Postal Commerce (PostCom) and the Alliance of Nonprofit Mailers (ANM). The other was filed by the National Postal Policy Council, the Major Mailers Association, and the News/Media Alliance.

The mailers’ arguments

In their comments, PostCom and the ANM note that during the inquiry the Postal Service would be able to file objections to specific information requests, but the Postal Service objects “to providing the Commission and the public with any information regarding the implementation of the Delivering for America plan.” The Postal Service “objects to even engaging with its regulator.”

PostCom/ANM proceed to refute the Postal Service’s argument that the Commission did not cite any statute that would provide a legal basis for the inquiry. The mailers state that “39 U.S.C. § 503 provides the Commission broad authority to gather information in support of its role as the Postal Service’s regulator.” If it’s important that the Commission cite such statutes, PostCom says, it can correct this omission by issuing another order with the citation.

In its motion, the Postal Service cited numerous precedents involving regulators exceeding their authority. PostCom/ANM say these cases are irrelevant because the Commission hasn’t issued any rule changes or taken any other action, aside from opening a docket to make inquiries.

A large section of the PostCom/ANM comments focuses on the history of the Commission itself and how Congress envisioned the scope of its authority. While the earlier Rate Commission was limited in its authority, Congress expanded this authority when it created the Regulatory Commission with PAEA in 2006.

Finally, PostCom/ANM contest the Postal Service’s claim of a “deliberative process privilege” — a reference to the USPS argument that “premature review has the potential to interfere with the deliberative process of the Postal Service and intrude upon the prerogatives of the Postal Service, and our Governors.”

According to PostCom/ANM, the DFA plan is no longer “predecisional,” and the S&DC initiative is not simply a “plan.” It’s being implemented already, with the opening of the first S&DC in Athens, Georgia, in November 2022 and several others in February 2023, with another phase of conversions scheduled for June 2023 and September. As the commenters observe, “These conversions effect changes encompassing 15 S&DCs and about 65 post offices and 600 routes.”

The comments from National Postal Policy Council, the Major Mailers Association, and the News/Media Alliance also argue that “opening a public inquiry to educate itself regarding what appears to be a major restructuring of postal processing and delivery facilities is a reasonable and prudential action well within the regulator’s discretion.” The contention that the Commission lacks statutory authority even to initiate this proceeding, say NPPC et al, “is meritless.”

Like PostCom, NPPC argues that “It is difficult to take seriously the notion that S&DCs are in the ‘early stages’ of ‘strategic and operational planning.’” As the mailers point out, those plans were “sufficiently decisional” to enable the Postal Service to commit nearly $7.6 billion to proceed with the creation of the new processing and delivery network.

The NPPC comments conclude by observing that “the vesting of operational authority in postal management and the Governors is not an excuse for evading the oversight necessary to permit the regulator to fulfill its responsibility to serve as a check to ensure that the Service acts in compliance with the law and does not abuse its legal monopoly over the essential mail side of its business. It is difficult to understand how the Commission can fulfill its responsibilities based on the little information that the Postal Service has deigned to share to date about network changes.”

What happens next?

Now that the Commission can consider both sides of the matter, it will soon issue an order responding to the Postal Service’s motion to close down the public inquiry. My guess is that the Commission will deny the motion and remind the Postal Service that it can object to any particular information request posed by participants in the docket. The Commission may also modify its order creating the public inquiry by identifying parameters that limit what kinds of information requests will be considered.

If the inquiry goes forward, the information requests will probably come at a fast pace — PostCom submitted its first request within days after the inquiry began — and they will cover a wide range of topics that the Postal Service doesn’t want to discuss. These include details about the new costs incurred by the plan — for new facilities, repurposing processing centers, additional carrier routes, etc. — and the projected cost savings the plan will achieve — which will involve eliminating thousands of clerk positions, downgrading postmasters, reducing retail window hours, and closing post offices.

Revealing details about such topics will make it difficult for the Postal Service to control the narrative about the Delivering for America plan. So rather than fighting over each information request, one by one, the Postal Service may prefer to appeal the Commission’s order to the D.C. Circuit court.

It’s not clear what would happen then. Would the Commission put the public inquiry on hold while the appeal is being heard — which could take a year before a ruling is issued — or would it proceed to issue information requests in the meantime? And if it does issue those requests, will the Postal Service agree to respond or will it say it’s not participating in the inquiry while the appeal is pending? If the Postal Service doesn’t provide adequate responses, would the Commission issue subpoenas, as it has the authority to do?

That may seem like an unlikely scenario, but in its motion for reconsideration the Postal Service issued this warning: “An attempt to use the Commission’s subpoena power as a legal basis to initiate Docket No. PI2023-4 would be mistaken.”  In other words, subpoenas will be challenged in court.

The Chevron twist

Another interesting aspect of this controversy involves the eventual decision of the Supreme Court on a current case involving the Chevron doctrine. This refers to the 1984 case Chevron v. Natural Resources Defense Council, in which the Court said a government agency’s interpretation of a statute should be given deference if Congress has not spoken directly on the issue and the agency interpretation is reasonable.

Over the coming months, it’s possible, perhaps likely, that the Supreme Court will overturn Chevron, which will significantly reduce the power of government agencies to interpret and implement laws passed by Congress — a goal of anti-regulatory conservatives since the New Deal expanded the authority of government nine decades ago.

In the past, both the Postal Service and the PRC have had occasion to invoke Chevron to help make their case. For example, in a 2016 Public Inquiry into the interpretation of terms involving post office closings, the Postal Service argued that it, not the Commission, was entitled to deference. In 2020, when mailers challenged the authority of the Commission to change the rate system, the Commission argued that it was entitled to deference on the question.

If the DFA public inquiry goes to court, it’s possible that the Postal Service and the Commission will both argue that they’re entitled to Chevron deference. It’s not certain who would win that argument. On the other hand, if Chevron has been overturned, the D.C. Circuit would need to offer its own interpretation of what the scope of the Commission’s authority actually is.

This week the House Subcommittee on Government Operations will hold a hearing to “bring transparency to the progress and impacts of the Postmaster General’s transformative 10-year plan.” Perhaps the Postmaster General will be asked why he’s trying to shut down the PRC’s own effort to provide transparency on the DFA plan.

— Steve Hutkins

To learn more about the transformation of the processing and delivery networks, check out our S&DC dashboard.

Previous posts on the Public Inquiry docket: