A consolidated challenge to last January’s rate increase by the U.S. Postal Service was rejected late last week by a federal appeals court in Washington.
A three-judge panel of the U.S. Court of Appeals for the District of Columbia also refused to review the Jan. 10 rate increase that raised commercial rates by an average of 3 percent and nonprofit rates by just about 20 percent.
The increase was challenged by the Alliance of Nonprofit Mailers, United Parcel Service and Niagara Telephone Co.
“Obviously we’re disappointed with the decision,” said Neal Denton, Alliance executive director. The Alliance, he explained, hoped that the lawsuit would strengthen and increase the Postal Rate Commission’s authority in reviewing USPS revenue needs.
Indicating that an appeal to the U.S. Supreme Court was “being considered but unlikely,” Denton added that his group and others plan to “turn to Capitol Hill and hope that with all the different legislative initiatives there, we will find some relief granting the PRC more authority postal rate setting.”
Currently there are two bills pending in Congress to overhaul the USPS.
There was no immediate comment on the court’s decision by either Atlanta-based UPS or upstate New York-based Niagara Telephone.
The tribunal’s 20-page decision dealt largely with the Alliance’s challenge to the rate increase. It said disallowing last January’s rate increase would seriously interfere with the determination of the postal service’s Board of Governors “that additional funds were needed to improve service.”
Responding to the Alliance’s allegation that the USPS essentially was swimming in money because of three successive $1 billion-plus surpluses, the court rejected the notion saying that the USPS, on recommendation of the PRC, “could implement [higher] rates only once its profits were exhausted.”
Relying on the PRC’s expertise, the court rejected United Parcel’s challenge to USPS Parcel Post and Priority Mail rates. The court also upheld the PRC’s refusal to recommend the USPS offer a separate postage rate for “local” mail deposited at individual post offices, as suggested by Niagara Telephone, saying the record for such a service is remains to be developed on its merits and impact on USPS finances.
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