United States Court of Appeals, District of Columbia Circuit
January 5, 2018
Petition for Review of Orders of the Postal Regulatory
C. Belt, Attorney, U.S. Postal Service, argued the cause and
filed the briefs for petitioner. Stephan J. Boardman, Chief
Counsel, U.S. Postal Service, entered an appearance.
Kaersvang, Attorney, U.S. Department of Justice, argued the
cause for respondent. With her on the brief were Michael S.
Raab, Attorney, David A. Trissell, General Counsel, Postal
Regulatory Commission, Christopher J. Laver, and Erica A.
Before: Pillard, Circuit Judge, and Edwards and Williams,
Senior Circuit Judges.
Williams, Senior Circuit Judge.
the Postal Accountability and Enhancement Act, Pub. L. No.
109-435, 120 Stat. 3198 (2006), the Postal Regulatory
Commission is authorized to set rate caps for the
"market-dominant products" of the United States
Postal Service. (The act contrasts such products, consisting
most obviously of products where the Postal Service enjoys a
legal monopoly, such as first-class mail, with the Postal
Service's "competitive" products.) The
Commission is to set "an annual limitation on the
percentage changes in rates" equal to the rate of
inflation, 39 U.S.C. § 3622(d)(1)(A); the statute
defines "rates" as "fees for postal services,
" 39 U.S.C. § 102(7).
USPS v. Postal Regulatory Comm'n, 785 F.3d 740
(D.C. Cir. 2015) ("USPS I"), we wrestled
with the question of whether, and if so under what
circumstances, the Commission could treat Postal Service
changes in mail preparation requirements as "changes in
rates" subject to the cap.
rejected the Postal Service's theory that the statute
encompassed "only changes to the official posted prices
of each product, " id. at 751, saying that
"the Commission may have the authority under the price
cap statute and regulations to consider mail preparation
requirement changes of the kind at issue in this case as
changes in rates, " id. at 755. But, mystified
by the Commission's efforts to explain how it would
decide when a mailing requirement actually was a rate change,
we found its action arbitrary and capricious and remanded to
the Commission for it to "enunciate an intelligible
standard and then reconsider its decision in light of that
standard." Id. at 756.
course the Commission produced the order now before us, Order
No. 3047, Order Resolving Issues on Remand (Jan. 22,
2016). The order rules that a mail preparation change
constitutes a change in rates if it results "in the
deletion of a rate cell" or "in the
redefinition of a rate cell if the mail preparation change
causes a significant change to a basic characteristic of a
mailing." Id. at 15.
this standard, the Commission reaffirmed its earlier decision
that the proposed mail preparation change constituted a
change in rates. The Postal Service moved for
reconsideration, which the Commission denied. Order No. 3441,
Order Resolving Motion for Reconsideration of Commission
Order No. 3047 (July 7, 2016). The Postal Service again
petitions for review.
find that the Commission's new analysis adds no
discernible clarity to the reasoning it supplied on the last
round and that it rests on an unreasonable interpretation of
"changes in rates" that "goes beyond the
meaning that the statute can bear." MCI Telecomm.
Corp. v. AT&T Co., 512 U.S. 218, 229 (1994).
"[U]nder the familiar standard of Chevron, . .
. a 'reasonable agency interpretation
prevails'"; "[o]f course, 'if Congress has
directly spoken to an issue then any agency interpretation
contradicting what Congress has said would be
unreasonable.'" Loan Syndications & Trading
Ass'n v. SEC, 882 F.3d 220, 222 (D.C. Cir. 2018)
(quoting Entergy Corp. v. Riverkeeper, Inc., 556
U.S. 208, 218 n.4 (2009)). "Even under Chevron,
after all, agencies only 'possess whatever degree of
discretion [an] ambiguity allows.'" Id. at
224 (quoting City of Arlington v. FCC, 569 U.S. 290,
307 (2013)). We grant the petition and vacate the orders.
2015 decision recites the relevant background. See USPS
I, 785 F.3d at 744-50. We cover the same ground only as
Commission does not apply the rate cap by limiting the rate
for each product in isolation. Rather, it allows the Postal
Service to trade off above-inflation increases in the rate of
one product with below-inflation increases in the rate of
another product within the same class (or, of course,
constant-dollar decreases in rates). As a result, apart from
market-driven changes in volume, the Postal Service's