Calling the Postal Regulatory Commission’s actions “irrational”, the US Postal Service yesterday filed its brief with the DC Appeals Court contesting the PRC’s decision holding that the USPS Full-Service’ Intelligent Mail barcode requirement was an improper rate increase. From the brief:
The Commission’s conception of the price cap bears no resemblance to the statutory language. The cap that Congress imposed is strict but is limited in scope.
It places a cap on changes in “rates,” not on costs incurred by mailers or on mail classification changes that the Postal Service proposes. The PRC’s assumption that the term “changes in rates” is broad enough to encompass “changes in classifications” ignores the statute’s plain language – and particularly the fact that Congress uses the terms “rates” and “classifications” to mean different things – as well as the PRC’s own regulations, which also treat “rates” and “classifications” separately.
Further, even if “changes in rates” could somehow be construed to mean “changes in classifications,” the mail-preparation requirement at issue here is not a “change in classification.” Under both the statute and the PRC’s regulations, “classification” changes subject to PRC oversight mean and have always meant changes to the Mail Classification Schedule, a product list that describes and assigns rates to the Postal Service’s products. The change at issue here did not alter or amend the Mail Classification Schedule, but rather was merely a change to the Postal Service’s Domestic Mail Manual, a regulation of the Postal Service issued under its own regulatory authority that sets forth the Postal Service’s mailing standards and operational requirements. Accordingly, even if a “classification change” can somehow run afoul of the price cap’s restrictions on rate adjustments, the requirement here is not a classification change.
Finally, even if the PRC can now define changes to mail-preparation requirements as classification changes, and even if classification changes can be viewed as “rate” changes under the price cap, the PRC’s order is nevertheless arbitrary and capricious. First, the order provides no basis for ascertaining why some mail-preparation requirements are “rate” increases subject to the cap while others are not. Second, the PRC’s order is wholly irrational in assessing the extent of the “rate” change here.