Postal Gadfly Sues USPS over Stamp Price Increase

Excerpted from the February 4, 2019 edition of Mailers Hub News 

The price of a stamp went from $0.50 to $0.55 last month but a challenge to that increase continues.

With little apparent publicity in the postal media at the time, Douglas Carlson filed a petition last December 11, asking the US Court of Appeals for the DC Circuit “for review of the portion of Postal Regulatory Commission (PRC) Order No. 4875 that relates to an increase in the price for single-piece, oneounce, stamped, First-Class letters from 50 cents to 55 cents.”

As later described by Save the Post Office when it reported on the suit in a January 27 article, Carlson

“… is a self-professed postal ‘watchdog’ who has filed numerous comments and formal complaints with the PRC, advocating in the interest of the general public for better postal rates and services. He also has faced off with the Postal Service in federal court numerous times in Freedom of Information Act cases. He holds a law degree from the University of California, Berkeley, and lives in San Francisco.”

The issues

In his petition, Carlson stated, in part:

“A five-cent increase in the price of a Forever stamp will be the largest increase in history for the one postage price that most Americans pay. As a percentage, the 10-percent increase is the largest since 1991, and it is about four times the average increase since 2006. … So why is the Postal Service increasing the Forever stamp price by five cents? And how can the Postal Service increase so dramatically the price that the general public and small businesses pay while increasing prices for large mailers by less than inflation?

“In its Notice of Market-Dominant Price Adjustment, the Postal Service told the Postal Regulatory Commission (PRC) that a five-cent increment ‘should facilitate convenience for retail customers, for whom a straightforward, understandable pricing structure is more important than it is for commercial customers, who do not rely on stamps.’

The Postal Service’s assertions defy logic and common sense and insult the intelligence of the American public. The Consumer Price Index rose 2.4 percent. Rounding up, a two-cent rate hike might have been in order. However, apparently a two-cent increase would have been too complex for average customers to understand. Not only will customers more easily grasp the concept of a five-cent increase, so the argument goes, but they also supposedly will prefer to pay 55 cents instead of 52 cents.

“The Postal Service asserts that the five-cent increment will contribute to ‘simplicity of structure’ of the price system, a statutory consideration for setting postage prices. Under the Postal Service’s novel interpretation, the Postal Service says that it intends to maintain five-cent increments in the future.

“Last October, I filed comments with the PRC opposing this increase. I noted that the public had never had any difficulty understanding postage prices that were not divisible by five. Also, most customers buy stamps in quantities of 20 or 100 and pay by debit or credit card, so any notion that prices that are divisible by five are more straightforward or understandable is nonsense. Finally, mail that pays the additional-ounce price comprises only 3.3 percent of total volume, so the decrease in this price will not mitigate the effect of the price increase.

“In response to this major price increase, the PRC’s Order on Price Adjustments offered just three sentences: ‘Several commenters take issue with the Postal Service’s proposed pricing adjustments for First-Class Mail products – specifically Stamped Letters prices and the increased price differential between Stamped Letters and Metered Letters. However, subject to certain limitations, most prominently the price cap, the PAEA gives the Postal Service pricing flexibility within First-Class Mail. The Postal Service has complied with the applicable statutory and regulatory requirements.’ … ”

Concurrently, Carlson asked the court for expedited consideration of his petition.

He later added a statement of the issues he intended to raise before the court. Those included, basically, whether the USPS adequately justified its proposal to increase the price of a stamp to 55 cents, whether the PRC adequately considered several statutory standards when reviewing the Postal Service’s request, and whether the commission’s approval of the increase was “plainly erroneous, inconsistent with the regulation, arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

Answers

The Department of Justice responded on behalf of the PRC to the request for expedited consideration, stating that

• The court “grants expedited consideration very rarely,” that “a party seeking expedition ‘must demonstrate that the delay will cause irreparable injury and that the decision under review is subject to substantial challenge,’ and that the reasons supporting expedition “must be ‘strongly compelling.’”
• The petitioner notes that … “once that change takes effect, no mailer who pays the higher rate will be able to obtain reimbursement, even if the rate increase is ultimately set aside.”
• “Petitioner makes no effort to quantify the extent to which he personally will be injured by the rate increase, relying instead on the impact of the rate increase on the general public. ... There is thus no reason to believe that the impact on petitioner himself of having this case briefed and argued in the regular course will be anything more than de minimis. …”
• “Petitioner argues at length that his challenge is substantial [but] we note now that we do not agree that petitioner has any probability of succeeding on the merits of his claim. …”

Because of the government shutdown, DoJ attorneys were unable to work on the case, so they asked that the calendar be adjusted if the motion to expedite is granted.

An observation

As a practical matter, it’s questionable whether the average citizen that Carlson purports to defend would really suffer “irreparable injury.” For example, for someone who sends a lot of retail rate First-Class Mail (in this era of email), perhaps fifteen items per week, the five-cent increase would translate into an additional $39 per year in postage costs.

To the small community of postal observers, Carlson is a known figure who seems to enjoy playing David to the USPS Goliath, using his legal training to challenge it over pet complaints having little relevance beyond his own interests.

Just the same, the resources of the USPS, PRC, DoJ, and the court of appeals will be consumed arguing with Carlson over whether that aspect of the price change impacting stamp prices was properly conducted. In the end, even if the court were to order the Postal Service and the commission to redo their work to satisfy Carlson’s critique, it’s doubtful that the price of a stamp wouldn’t remain at $0.55.


Excerpted from the February 4, 2019 edition of the Mailers Hub NewsFor the full issue and others, please visit the Mailers Hub News archives. 

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