[Federal Register Volume 76, Number 137 (Monday, July 18, 2011)]
[Notices]
[Pages 42140-42141]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-17924]
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POSTAL REGULATORY COMMISSION
[Docket No. R2010-4R; Order No. 757]
Rate Adjustment Remand
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: The Commission is noticing a proceeding to address the
causation standard in exigent rate adjustments. This notice provides
information on legal developments associated with this proceeding,
addresses preliminary procedural matters, and invites public comment.
DATES: Comments are due: July 25, 2011; reply comments are due: August
1, 2011.
ADDRESSES: Submit comments electronically by accessing the ``Filing
Online'' link in the banner at the top of the Commission's Web site
(http://www.prc.gov) or by directly accessing the Commission's Filing
Online system at https://www.prc.gov/prc-pages/filing-online/login.aspx. Commenters who cannot submit their views electronically
should contact the person identified in the FOR FURTHER INFORMATION
CONTACT section as the source for case-related information for advice
on alternatives to electronic filing.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
at 202-789-6820 (case-related information) or [email protected]
(electronic filing assistance).
SUPPLEMENTARY INFORMATION:
Regulatory History: 75 FR 40853 (July 14, 2010).
On May 24, 2011, the United States Court of Appeals for the
District of Columbia Circuit issued its opinion in United States Postal
Service v. Postal Regulatory Commission, 640 F.3d 1263 (D.C. Cir.
2011). The court denied in part and granted in part a Postal Service
petition for review of the Commission's September 30, 2010 order
denying a Postal Service request for an exigent rate adjustment under
39 U.S.C. 3622(d)(1)(E).\1\ 640 F.3d at 1268.
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\1\ Order Denying Request for Exigent Rate Adjustments,
September 30, 2010 (Order No. 547).
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On July 11, 2011, the court issued its mandate remanding the case
to the Commission. The Commission is issuing this order to promptly
establish procedures for receiving initial and reply comments that
address the causation standard applicable to exigent rate adjustment
requests submitted under 39 U.S.C. 3622(d)(1)(E).\2\
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\2\ Section 3622(d)(1)(E) provides in relevant part as follows:
``[R]ates may be adjusted on an expedited basis due to either
extraordinary or exceptional circumstances, provided that the
Commission determines * * * that such adjustment is reasonable and
equitable and necessary to enable the Postal Service, under best
practices of honest, efficient, and economical management, to
maintain and continue the development of postal services of the kind
and quality adapted to the needs of the United States.'' (emphasis
added).
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Background. On July 6, 2010, the Postal Service filed a request for
an exigent rate adjustment pursuant to 39 U.S.C. 3622(d)(1)(E).\3\ This
was the first such request filed by the Postal Service. The Exigent
Request alleged that ``extraordinary or exceptional circumstances'' had
occurred--namely, the recent recession and related declines in mail
volume--and that the Postal Service was entitled to an exigent rate
adjustment. Id. at 6.
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\3\ Exigent Request of the United States Postal Service, July 6,
2010 (Exigent Request).
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After holding public hearings and considering initial and reply
comments filed by the Postal Service and other interested persons, the
Commission issued Order No. 547 denying the Postal Service's Exigent
Request. The Commission analyzed the plain meaning of ``due to'' in
section 3622(d)(1)(E), interpreting the phrase as requiring that a
``proposed adjustment * * * be causally related to the alleged
extraordinary or exceptional circumstance.'' Order No. 547 at 54. The
Commission found that the recent recession and its impact on postal
[[Page 42141]]
volumes qualified as an ``extraordinary or exceptional'' circumstance.
Id. at 50. However, it ruled that the Postal Service had failed to
demonstrate that the proposed rate adjustments were ``due to'' the
``extraordinary or exceptional'' circumstance, as required by section
3622(d)(1)(E), because it did not show how the rate increases related
to exigent circumstances that purportedly gave rise to them. Id. at 53,
60. Accordingly, the Commission denied the requested exigent rate
adjustment. Id. at 87.
The court's opinion. On appeal, the court affirmed the Commission's
conclusion that the plain meaning of the words ``due to'' in section
3622(d)(1)(E) requires a causal relationship between the amount of the
requested adjustment and the impact of the extraordinary or exceptional
circumstances.\4\ The court confirmed that, ``under the plain meaning
of [section 3622(d)(1)(E)], a rate may be `adjusted on an expedited
basis' only because of `extraordinary or exceptional circumstances.' ''
Id. (emphasis in original).
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\4\ 640 F.3d at 1267 (``[W]e agree with the Commission that the
plain meaning of `due to' mandates a causal relationship between the
amount of a requested adjustment and the exigent circumstances'
impact on the Postal Service.'').
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The court nevertheless concluded that the plain meaning of the
``due to'' phrase does not adequately express how close the
relationship between the proposed adjustment and the exigent
circumstance must be.\5\ In the court's view, the ``due to'' phrase in
section 3622(d)(1)(E) is ambiguous because the phrase can mean ``due in
part to'' as well as ``due only to.'' Id. (emphasis in original).
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\5\ Id. at 1268 (``[A]lthough [`due to'] has a plain meaning
regarding causal connection vel non, * * * it has no similar plain
meaning regarding the closeness of the causal connection.'').
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Because the phrase ``due to'' is ambiguous as a standard of
causation, the court held that the Commission could not properly reject
the Exigent Request based on a plain meaning interpretation of the
phrase.\6\ Thus, it granted the Postal Service's petition in part and
remanded the case to the Commission to satisfy its obligation ``to fill
the statutory gap by determining how closely the amount of the
adjustments must match the amount of the revenue lost as a result of
the exigent circumstances.'' Id.
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\6\ Id. The court rejected the Commission's plain meaning
interpretation as ``requiring that the Postal Service match the
amount of the proposed adjustments precisely to the amount of
revenue lost as a result of the exigent circumstances.'' Id.
(emphasis in original).
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The Commission's response. As directed by the court, the Commission
will proceed to apply its expertise and interpret the phrase ``due to''
to determine how closely the amount of an exigent rate adjustment must
match the amount of revenue lost as a result of an exigent
circumstance. Id.; see Chevron, U.S.A., Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837, 842-43 (1984).
The Commission establishes Docket No. R2010-4R to consider issues
on remand. Docket Nos. R2010-4 and R2010-4R are part of the same
proceeding. The Commission shall consider all documents filed to date
in Docket No. R2010-4 as part of the record in Docket No. R2010-4R.
To ensure that the Postal Service and other interested persons have
an opportunity to make their views known regarding the proper
interpretation of ``due to'' as the standard of causation in 39 U.S.C.
3622(d)(1)(E), the Commission hereby provides for submission of initial
and reply comments on this topic. Initial comments are due no later
than July 25, 2011. Reply comments are due no later than August 1,
2011. All comments and other documents related to issues on remand must
be filed under Docket No. R2010-4R.
It is ordered:
1. The Commission establishes Docket No. R2010-4R to consider
issues on remand.
2. James Waclawski will continue to serve as officer of the
Commission (Public Representative) to represent the interests of the
general public in this proceeding.
3. Initial comments addressing the proper interpretation of ``due
to'' as a standard of causation in 39 U.S.C. 3622(d)(1)(E) are due no
later than July 25, 2011.
4. Reply comments addressing matters raised in initial comments are
due no later than August 1, 2011.
5. All comments and other documents related to issues on remand
must be filed under Docket No. R2010-4R.
6. The Secretary shall arrange for publication of this order in the
Federal Register.
By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2011-17924 Filed 7-15-11; 8:45 am]
BILLING CODE 7710-FW-P