[Federal Register Volume 79, Number 111 (Tuesday, June 10, 2014)]
[Rules and Regulations]
[Pages 33389-33413]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12430]



[[Page 33389]]

Vol. 79

Tuesday,

No. 111

June 10, 2014

Part III





 Postal Regulatory Commission





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39 CFR Part 3001





 Revisions to Procedural Rules; Final Rule

Federal Register / Vol. 79 , No. 111 / Tuesday, June 10, 2014 / Rules 
and Regulations

[[Page 33390]]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3001

[Docket No. RM2012-4; Order No. 2080]


Revisions to Procedural Rules

AGENCY: Postal Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Commission is issuing a set of final rules concerning the 
procedures related to Postal Service requests for an advisory opinion 
from the Commission on a change in the nature of service. Adoption of 
the rules follows a review of comments on proposed rules. After 
consideration of comments received, some proposed rules were modified, 
clarified, or corrected. Adoption of these rules will expedite the 
issuance of advisory opinions.

DATES: Effective July 10, 2014.

FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 
202-789-6820.

SUPPLEMENTARY INFORMATION: Regulatory History:

77 FR 23176 (April 18, 2012)
78 FR 35812 (June 14, 2013)

Table of Contents

I. Introduction
II. Comments
III. Changes to Proposed Rules
IV. Discussion
    A. Background
    B. Legal Basis for Changes
    C. The 90-Day Schedule/Pro Forma Scheduling Order
    D. Limited Scope of Proceeding
    E. Pre-Filing Conference/Revised Filing Requirements
    F. Mandatory Technical Conference
    G. Shortened Procedural Deadlines/Procedures Generally
    H. Discovery
    I. Testimony
    J. Hearings
    K. Briefs
V. Section-by-Section Analysis of the Rules
VI. Effective Date
VII. Ordering Paragraphs

I. Introduction

    In this Order, the Commission adopts new procedures for nature of 
service proceedings (N-cases). These new procedures replace the rules 
set forth in 39 CFR part 3001, subpart D, and are intended to address 
the need for more timely completion of N-cases. Under the new 
procedures, the Commission would provide an advisory opinion within 90 
days of the date on which the Postal Service files its request under 39 
U.S.C. 3661.
    The Commission first solicited comments on this issue in an advance 
notice of proposed rulemaking.\1\ Eight parties filed comments on 
matters such as whether changes to existing rules and procedures were 
warranted and if so, what the changes should be.\2\
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    \1\ Advance Notice of Proposed Rulemaking on Modern Rules of 
Procedure for Nature of Service Cases Under 39 U.S.C. 3661, April 
10, 2012 (Order No. 1309).
    \2\ The Appendix to Order No. 1738 identifies initial and reply 
comments to Order No. 1309.
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    In response to those comments, the Commission issued a notice of 
proposed rulemaking setting forth proposed regulations for modifying 
the N-case procedures.\3\ Order No. 1738 solicited comments on the 
proposed rules. After careful consideration of the comments submitted, 
the Commission is adopting the proposed rules with several minor 
modifications, clarifications, and corrections.
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    \3\ Notice of Proposed Rulemaking Regarding Modern Rules of 
Procedure for Nature of Service Cases Under 39 U.S.C. 3661, May 31, 
2013 (Order No. 1738).
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II. Comments

    In response to Order No. 1738, the following parties submitted 
comments: David B. Popkin (Popkin),\4\ the Greeting Card Association 
(GCA),\5\ the National Newspaper Association, Inc. (NNA),\6\ the Public 
Representative,\7\ Valpak Direct Marketing Systems, Inc. and Valpak 
Dealers' Association, Inc. (collectively, Valpak),\8\ and the Postal 
Service.\9\
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    \4\ Comments of David B. Popkin, July 29, 2013 (Popkin 
Comments).
    \5\ Initial Comments of the Greeting Card Association, July 29, 
2013 (GCA Comments).
    \6\ Comments of National Newspaper Association, July 29, 2013 
(NNA Comments).
    \7\ Public Representative's Comments, July 29, 2013 (PR 
Comments).
    \8\ Valpak Direct Marketing Systems, Inc. and Valpak Dealers' 
Association, Inc. Initial Comments on Notice of Proposed Rulemaking, 
July 29, 2013 (Valpak Comments).
    \9\ United States Postal Service Initial Comments, July 29, 2013 
(Postal Service Comments).
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    Reply comments were submitted by GCA,\10\ Valpak,\11\ the Public 
Representative,\12\ and the Postal Service.\13\
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    \10\ Reply Comments of the Greeting Card Association, August 28, 
2013 (GCA Reply Comments).
    \11\ Valpak Direct Marketing Systems, Inc. and Valpak Dealers' 
Association, Inc. Reply Comments on Notice of Proposed Rulemaking, 
August 28, 2013 (Valpak Reply Comments).
    \12\ Public Representative's Reply Comments, August 28, 2013 (PR 
Reply Comments).
    \13\ United States Postal Service Reply Comments, August 28, 
2013 (Postal Service Reply Comments).
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III. Changes to Proposed Rules

    The following proposed regulations have been modified from Order 
No. 1738:

 39 CFR 3001.20--Formal intervention
 39 CFR 3001.81--Pre-filing requirements
 39 CFR 3001.83--Contents of formal requests
 39 CFR 3001.87--Interrogatories
 39 CFR 3001.88--Production of documents or things
 39 CFR 3001.89--Admissions
 39 CFR 3001.92--Hearings
 39 CFR 3001.93--Initial and reply briefs.

    The following proposed regulations are being enacted with the 
language proposed in Order No. 1738, except, in some instances, for 
minor editorial changes not intended to change the content of the rule:

 39 CFR 3001.71--Applicability
 39 CFR 3001.72--Advisory opinion and special studies
 39 CFR 3001.73--Computation of time
 39 CFR 3001.74--Service by the Postal Service
 39 CFR 3001.75--Motions
 39 CFR 3001.80--Procedural schedule
 39 CFR 3001.82--Filing of formal requests
 39 CFR 3001.84--Filing of prepared direct evidence
 39 CFR 3001.85--Mandatory technical conference
 39 CFR 3001.86--Discovery--in general
 39 CFR 3001.90--Rebuttal testimony
 39 CFR 3001.91--Surrebuttal testimony.

IV. Discussion

A. Background

    The statutory basis for N-cases was enacted as part of the Postal 
Reorganization Act of 1970, Public Law 91-375, 84 Stat. 719, 39 U.S.C. 
101 et seq. (PRA) and is codified at 39 U.S.C. 3661. Section 3661 
requires the Postal Service to seek an advisory opinion from the 
Commission whenever it determines that there should be a change in the 
nature of postal services which will generally affect service on a 
nationwide basis. The Commission cannot issue an opinion on any 
proposal until it first provides the Postal Service, users of the mail, 
and the Commission's Public Representative an opportunity for hearing 
on the record under sections 556 and 557 of the Administrative 
Procedure Act (APA).
    Procedural rules governing N-cases are contained in 39 CFR part 
3001, subpart D. N-cases are also subject to procedural rules of 
general applicability set forth in 39 CFR part 3001, subpart A. 39 CFR 
3001.71. Under these rules, the Commission has historically conducted 
N-case hearings as formal, trial-type proceedings.

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    Since the enactment of the Postal Accountability and Enhancement 
Act (PAEA) in 2006, the frequency of Postal Service requests for 
advisory opinions under section 3661 has increased significantly. Order 
No. 1738 at 2. Between 1970 and 2006, the Postal Service initiated five 
N-cases. Id. at 1-2. In the last seven years, the Postal Service has 
filed six additional N-cases.\14\ As the frequency of N-cases has 
increased, so has their complexity and duration. Of the last six N-
cases, three have required eight months or more to complete.\15\ The 
longest of those cases (Docket No. N2010-1) took almost a full year to 
complete. Id.
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    \14\ In addition to the five N-cases identified on page 2 of 
Order No. 1738, one additional N-case has been filed and concluded. 
See Docket No. N2014-1, Advisory Opinion on Service Changes 
Associated with Standard Mail Load Leveling, March 26, 2014.
    \15\ See ``Survey of N-cases'' attached to APWU Reply Comments 
to Advance Notice of Proposed Rulemaking on Modern Rules of 
Procedure for Nature of Service Cases Under 39 U.S.C. 3661, July 17, 
2012.
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    As its financial situation has worsened, the Postal Service has 
called for more expeditious resolution of its N-case proposals. 
Congress has taken notice of the Postal Service's calls for expedition 
and is considering the imposition of a 90-day deadline for the issuance 
of all N-case advisory opinions.\16\ Mailers and others oppose a fixed 
deadline for the completion of N-cases. See, e.g., Valpak Comments at 
3. They base their opposition on existing legal requirements and on 
practical considerations, such as the need to conduct discovery of 
Postal Service information which, they assert, is needed to analyze and 
evaluate N-case proposals. Id. at 9-11.
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    \16\ Postal Reform Act of 2014, S. 1486, 113th Cong., 2d. Sess. 
section 206 (as reported by S. Comm. on Homeland Security and 
Governmental Affairs on February 6, 2014) (S. 1486).
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    The Commission has attempted to respond to Postal Service calls for 
expedition and N-case participant demands for an opportunity to explore 
and contest Postal Service proposals by balancing the interests of both 
in the procedural schedules it adopts in individual N-cases. While it 
understands the Postal Service's desire for more prompt issuance of 
advisory opinions, the Commission has not always been able to 
accommodate Postal Service requests for expedition. The tension between 
the rights of participants and the rights of the Postal Service in N-
cases was discussed in a 2012 Commission order denying a Postal Service 
request for reconsideration of a procedural schedule:

    Before the Commission is permitted to issue an advisory opinion, 
it is required to provide an opportunity for hearing on the record. 
. . . Participants [in the proceeding have] justified requests for 
hearings on the record. The Commission has procedures in place, both 
by precedent and rule, to implement these [statutory] requirements, 
which provide due process to all participants. The procedures are 
flexible enough to accommodate various complexities of cases, and 
levels of controversy, but also include procedural steps that once 
triggered require somewhat rigid increments of time. . . . A 
reasonable amount of time, consistent with the complexity of the 
case, must be provided for each step to ensure due process.\17\
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    \17\ Docket No. N2012-1, Order Denying Motion for 
Reconsideration of Ruling Establishing Procedural Schedule, January 
31, 2012, at 2-3 (Order No. 1183).

    Given the increasing frequency and the varied complexity of N-cases 
and the Postal Service's continuing expressions of the need for 
expediting these cases, among other reasons, on April 10, 2012, the 
Commission issued an advance notice of proposed rulemaking in which it 
solicited comments on: (1) Whether changes to the current N-case 
procedures and regulations are warranted; (2) if so, what those changes 
would be; and (3) such other relevant subjects commenters might wish to 
address.\18\ Comments were filed by the Postal Service and seven other 
persons.\19\
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    \18\ See Order No. 1309.
    \19\ Order No. 1738, Appendix.
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    After reviewing these comments, on May 31, 2013, the Commission 
issued Order No. 1738 in this docket, in which it presented a 
comprehensive proposal for restructuring and streamlining N-case 
procedures. The objective of the Commission's proposal was to establish 
a procedural framework in which advisory opinions could be issued 
within 90 days of the filing of a Postal Service request.
    The issuance of an advisory opinion within 90 days requires a 
number of inter-related changes to the Commission's existing N-case 
procedures. The principal changes include:
     The establishment of a pre-filing phase intended to inform 
interested persons of the Postal Service's proposal and to provide the 
Postal Service with feedback useful in preparing a final proposal less 
likely to require substantial revisions after commencement of formal 
Commission proceedings;
     The adoption of a pro forma procedural schedule that 
provides for issuance of an advisory opinion within 90 days;
     A limitation on the scope of the proceeding to the Postal 
Service's proposal with an opportunity for participants to explore 
related subjects by means of special Commission studies or public 
inquiry proceedings;
     The adoption of expedited deadlines for filing and 
responding to motions;
     The adoption of new discovery procedures that provide for 
a mandatory technical conference and a limitation on the number of 
written interrogatories;
     Expedited filing of rebuttal and surrebuttal testimony, if 
any;
     Revised hearing procedures that provide for back-to-back 
hearings on the Postal Service's direct case; rebuttal testimony, if 
any; and surrebuttal testimony, if any;
     An expedited briefing schedule and limitations on the 
length of initial and reply briefs; and
     Adoption of a policy of issuing advisory opinions targeted 
to the Postal Service's proposal and, when appropriate, the institution 
of special studies or a public inquiry proceeding to explore related 
subjects.

Order No. 1738 at 9-10.

    No single procedural change, by itself, is capable of significantly 
reducing the duration of N-cases. It is only in combination that these 
changes have the potential for achieving the objective of issuing an 
advisory opinion within 90 days of the date of the Postal Service's 
filing.

B. Legal Basis for Changes

    39 U.S.C. 3661(c) sets forth the Commission's legal authority to 
issue advisory opinions. Subsection 3661(c) requires the Commission to 
provide the Postal Service, users of the mail, and the Commission's 
Public Representative an opportunity for a hearing on the record.
    The Commission has historically interpreted section 3661's 
prohibition on the issuance of an advisory opinion ``until an 
opportunity for hearing on the record under sections 556 and 557 of 
title 5 has been accorded'' to require formal, trial-type proceedings. 
See Order No. 1183. Notwithstanding this interpretation, section 3661 
does not prohibit the Postal Service from implementing proposed changes 
in postal services prior to the conclusion of Commission proceedings. 
Nor does section 3661 prohibit the Postal Service from implementing 
proposed changes in postal services found by the Commission in its 
advisory opinion to be inappropriate or unwise. In other words, 
advisory opinions issued under section 3661 are advisory in nature.
    Additionally, the Commission's evaluation of N-cases is conducted

[[Page 33392]]

according to procedures set forth in 39 CFR part 3001, subpart D. 
Procedural rules of general applicability in 39 CFR part 3001, subpart 
A also apply.

C. The 90-Day Schedule/Pro Forma Scheduling Order

    In Order No. 1738, the Commission proposed a ``deadline for 
issuance of an advisory opinion, which is 90 days from the date of 
filing [of the Postal Service's request].'' Order No. 1738 at 13. See 
also id. at 29 (proposed Sec.  3001.72(a)); id. at 33 (proposed Sec.  
3001.80 (a)(12)). The 90-day deadline was part of a pro forma N-case 
procedural schedule that the Commission proposed to add to its part 
3001, subpart D procedural regulations in CFR title 39. Id. at 50. That 
pro forma procedural schedule was based upon, and incorporated, the 
other changes in N-case procedures proposed by the Commission to 
expedite the issuance of advisory opinions. See id. at 13. The pro 
forma procedural schedule was, in turn, to provide the basis for 
scheduling orders in individual N-cases. See id. at 13-14. Accompanying 
the 90-day deadline was a provision that permitted changes in the 
procedural schedule for ``good cause.'' Id. at 33 (proposed Sec.  
3001.80(b)).
    Responses to the 90-day deadline range from apparent acquiescence 
by GCA to clear opposition by Valpak.\20\ Comments by NNA, the Postal 
Service, and the Public Representative either accept or support the 
proposed 90-day deadline, subject to potential exceptions or 
clarifications that could impact whether the deadline is extended.\21\
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    \20\ See GCA Comments at 6-8; Valpak Comments at 2; Valpak Reply 
Comments at 6-9.
    \21\ NNA Comments at 5; Postal Service Comments at 2-4; Postal 
Service Reply Comments at 1-2; PR Comments at 13-14.
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    In its comments, GCA states that it ``does not disagree with the 
general thrust of the proposed rules,'' although it believes that the 
completion of complex or highly controversial cases in 90 days ``will 
be a challenging task.'' GCA Comments at 9.
    Although NNA does not express per se opposition to the 90-day 
deadline, it does express concern over ``the effect a shortened review 
period would have upon the time available for field hearings.'' NNA 
Comments at 1. It therefore proposes that the N-case procedural 
schedule ``adopt a 120- to 180-day expectation'' if ``participants 
persuasively argue or the Commission's own analysis determines that 
citizens across the country should have the opportunity to be heard at 
[field] hearings. . . .'' Id. at 5. The issue of field hearings was 
raised by various participants and will be discussed in more detail in 
section IV.J., infra. Until a decision is made to hold field hearings, 
there is no way to estimate what impact such hearings would have on the 
deadline for issuing an advisory opinion. Accordingly, it would, at 
best, be premature for the Commission to adopt NNA's proposal.
    Valpak challenges the 90-day deadline as an ``effort to cut short 
intervenor participation.'' Valpak Comments at 2. It also asserts that 
``[a] fixed, 90-day timeline for Advisory Opinions is unreasonable (and 
thus unlawful). . . .'' Valpak Reply Comments at 7. The Commission 
disagrees with both propositions.
    The Commission's objective is not to ``cut short'' participation by 
interested parties. Rather, its objective is to focus intervenor 
participation on the Postal Service's proposal, as opposed to potential 
alternatives, and thereby accelerate the issuance of the requested 
advisory opinion.
    The history of N-cases demonstrates that participants frequently 
seek to challenge the Postal Service's case by establishing the 
feasibility of one or more alternatives that they argue would be 
preferable.\22\ In furtherance of such efforts, participants have 
engaged in discovery in an effort to establish a factual basis to 
support their alternative(s). The exploration of alternatives can add 
significantly to the time required to issue an advisory opinion.
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    \22\ See, e.g., Docket No. N2006-1, Advisory Opinion Concerning 
a Proposed Change in the Nature of Postal Services, December 19, 
2006, at 84-85 (Evolutionary Network Development Proposal).
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    In some cases, the Commission has found the alternatives, or 
aspects of the alternatives, proposed by participants to be preferable 
to the Postal Service's proposals.\23\ In other cases, the 
presentations by participants appear to have caused the Postal Service 
to have modified its proposal during the course of the N-case. See, 
e.g., Evolutionary Network Development Proposal at 88, ] 7019. Given 
the potential value of participant-identified alternatives, the 
Commission does not intend to preclude participants from endorsing such 
alternatives. Rather, the Commission seeks to redirect such efforts 
into either the pre-filing conferences that will be required under the 
new regulations or into special studies or public inquiry proceedings.
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    \23\ Docket No. N2011-1, Advisory Opinion on Retail Access 
Optimization Initiative, December 23, 2011, at 64-81.
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    In adopting this approach, the Commission emphasizes that 
participants may identify or advocate alternatives to the Postal 
Service's proposal during the course of an N-case. However, the manner 
and the degree to which an alternative can be pursued in the N-case 
proper will be restricted. This issue is discussed further in later 
sections of this Order.
    The Commission also disagrees with Valpak's assertion that the 90-
day deadline is unlawful. Notwithstanding the Commission's use of the 
term ``deadline,'' the 90-day period is not immutable as Valpak seems 
to suggest. Valpak Comments at 3. The Commission has expressly reserved 
the right in Sec. Sec.  3001.71 and 3001.80(b) to extend the deadline 
for ``good cause.'' Indeed, the Postal Service has cited the 
possibility of a ``good cause'' extension as the basis for concern that 
the 90-day deadline may prove to be merely aspirational. Postal Service 
Comments at 25-27. The ``good cause'' basis for an extension of the 90-
day deadline is discussed below.
    In its comments, the Postal Service presents an affirmative case 
for the 90-day deadline. For the reasons that follow, the Commission 
does not rely upon the reasons offered by the Postal Service in support 
of a 90-day deadline. The Commission does, however, conclude that a 90-
day deadline is appropriate as part of the comprehensive package of 
procedural changes adopted by this Order. The reasons for that 
conclusion are also set forth below.
    The Postal Service argues that the Commission already operates 
under a 90-day deadline in both the Annual Compliance Determination 
(ACD) proceedings conducted under 39 U.S.C. 3653(b) and exigent rate 
cases conducted under 39 U.S.C. 3622(d)(1)(E). In both types of 
proceedings, the result is a binding Commission directive or order. By 
contrast, N-cases result in the issuance of a non-binding advisory 
opinion. Id. at 4.
    While the Postal Service is correct in distinguishing between the 
legal effect of these types of proceedings, what the Postal Service 
fails to note is that statutorily required procedures for ACD 
proceedings and exigent rate cases are less demanding than the 
statutorily required procedures for N-cases. Thus, 39 U.S.C. 3653(a) 
requires only that the Commission ``provide an opportunity for 
comment'' on the Postal Service's Annual Compliance Report that will be 
the subject of the Commission's ACD. The opportunity that the 
Commission provides for filing written comments satisfies this 
requirement.
    Similarly, the provisions of 39 U.S.C. 3622(d)(1)(E) governing 
exigent rate cases require only that the Commission

[[Page 33393]]

provide an ``opportunity for a public hearing and comment. . . .'' The 
Commission satisfies this requirement by affording participants the 
opportunity to file written comments and to propose questions that 
Commissioners can consider posing to Postal Service witnesses at public 
hearings. By contrast, the provisions of 39 U.S.C. 3661 governing N-
cases prohibit the Commission from issuing its advisory opinion ``until 
an opportunity for hearing on the record under sections 556 and 557 of 
title 5 [i.e., the APA]. . . .'' The requirement to provide an 
opportunity for a ``hearing on the record'' obligates the Commission to 
afford interested persons procedural rights that go beyond those 
afforded in ACD proceedings and exigent rate cases. This obligation to 
provide an opportunity for a ``hearing on the record'' places practical 
limitations on the Commission's ability to expedite N-case proceedings. 
The objective of this rulemaking proceeding is to minimize unnecessary 
delays that can flow from practical limitations produced by the 
existing legal standards the Commission must observe.
    Second, the Postal Service cites the abbreviated 20- to 90-day 
timeframes observed by other federal agencies in issuing binding 
advisory opinions to suggest that Commission N-case proceedings that 
produce non-binding advisory opinions are ``unnecessarily drawn out.'' 
\24\ However, none of the six agencies identified by the Postal Service 
is required to provide an ``opportunity for hearing on the record under 
sections 556 and 557 [of the APA]'' as is the Commission. Indeed, it 
appears from the regulations cited by the Postal Service that five of 
the six agencies are authorized to issue advisory opinions on an ex 
parte basis without any input whatsoever from third parties.\25\ The 
remaining agency limits interested persons to the submission of written 
comments only.\26\ The Commission is not authorized to issue ex parte 
advisory opinions, nor is it categorically authorized to limit 
participation by interested persons to the submission of written 
comments. The Commission concludes that the comparisons offered by the 
Postal Service are misplaced.
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    \24\ Postal Service Comments at 4, n.6 (citing United States 
Postal Service Comments, June 18, 2012, at 7, n.13 in response to 
Order No. 1309 (Postal Service Response to Order No. 1309)).
    \25\ See Postal Service Response to Order No. 1309 at 7, n.13 
(regulations of the Federal Reserve Board of Governors; Department 
of Commerce, Bureau of Industry and Security; Office of the Special 
Master for TARP Executive Compensation; Centers for Medicare and 
Medicaid Services; and Office of the Inspector General for Health 
and Human Services).
    \26\ Id. (regulations of the Federal Election Commission).
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    Third, the Postal Service cites Senate passage of S. 1486 and 
comments filed in response to Order No. 1309 by Senator Carper for the 
proposition that ``the Commission's advisory opinion process can and 
should be subject to a 90-day time limit.'' Postal Service Comments at 
4. While it appreciates the sentiments cited by the Postal Service, the 
Commission must conduct N-cases under section 3661 as it exists. The 
provisions of S. 1486 cited by the Postal Service omit any requirement 
for a ``hearing on the record'' and limits participants to the filing 
of written comments.\27\ Pending enactment of provisions like those 
contained in S. 1486, the Commission's attempts to expedite N-cases 
must satisfy the existing legal requirements of section 3661.
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    \27\ See S. 1486, section 206(b)(2)(A) (``Advisory Opinion.--
Upon receipt of a proposal [to make a change in the nature of postal 
services], the Postal Regulatory Commission shall . . . provide 
notice and an opportunity for public comment. . . .'').
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    The Commission nevertheless concludes that it is appropriate to 
prescribe a 90-day deadline for N-cases. It bases that conclusion on 
the consideration of several factors, including: (1) The increased 
importance of issuing advisory opinions more promptly given the Postal 
Service's financial difficulties; (2) the incentive that a 90-day 
deadline will provide to expedite N-case proceedings; (3) the potential 
that other structural and procedural changes adopted by this Order have 
for enabling the Commission to meet the 90-day deadline; and (4) the 
right retained by the Commission to extend the 90-day deadline if 
necessary and appropriate.
    The Postal Service's precarious financial situation is widely known 
and has in recent years led to an increase in the frequency of N-case 
proposals. The Postal Service states that its ``unsustainable financial 
position has even impelled it to initiate service changes about which 
it has sought the Commission's advice before the conclusion of the [N-
case] review process that will generate that advice.'' Postal Service 
Comments at 3. It states further that ``timelier proceedings can offer 
greater relevance for the Postal Service's ultimate decisions.'' Id. 
The Commission agrees that the situation confronting the Postal Service 
militates in favor of expediting N-cases under existing statutory 
authority.
    The Postal Service also supports the Commission's proposal to 
complete N-cases within 90 days of the submission of an advisory 
opinion request. Id. at 2. The Commission agrees with the Postal 
Service's assertion that ``[a] commitment to a 90-day process will make 
N-case procedures more effective. . . .'' Id. at 2-3.
    In two of the most recent N-cases, the Commission has issued 
advisory opinions within 90 days of the filing of the Postal Service's 
request.\28\ Opponents of a 90-day deadline argue that such cases were 
atypical and cannot be considered representative of all N-cases, many 
of which are far more complex. Valpak Comments at 2. The Commission 
recognizes the potential for differences in N-case complexity and does 
not mean to suggest that all N-cases will present the same (or even 
nearly the same) level of complexity. In these more recent instances, 
the Postal Service's pre-filing outreach to affected stakeholders gave 
it an early understanding of the proposals and facilitated issuance of 
the advisory opinion within 90 days.\29\ This experience demonstrates 
that a 90-day deadline can be an attainable goal, particularly when 
stakeholders cooperate in the formulation and presentation of a 
proposal, as anticipated by the pre-filing requirements adopted herein. 
To be sure, while the circumstances surrounding each request for 
advisory opinion may vary, the safeguards incorporated into the 
procedures are designed to accommodate those variations.
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    \28\ Docket No. N2012-2, Advisory Opinion on Post Office 
Structure Plan, August 23, 2012 (POStPlan Opinion); and Docket No. 
N2014-1, Advisory Opinion on Service Changes Associated with 
Standard Mail Load Leveling, March 26, 2014 (Standard Mail Load 
Leveling Opinion).
    \29\ See POStPlan Opinion at 5 (``The POStPlan represents a more 
fully realized Postal Service effort to optimize its retail network 
. . . The POStPlan incorporates many of the recommendations the 
Commission made in its RAOI Advisory Opinion.'').
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    The Commission also believes that the adoption of a 90-day deadline 
will provide an appropriate incentive for timely issuance of advisory 
opinions. The Postal Service, interested participants, and the 
Commission will each have responsibilities for meeting the 90-day 
deadline. For example, at the pre-filing stage discussed in section 
IV.E., infra, it will be necessary for the Postal Service to engage 
interested persons in a discussion of its proposal. Participants must, 
among other things, meet expedited procedural deadlines in pursuing 
discovery, submitting testimony, and making other filings. The 
Commission will be required to issue prompt rulings, to place 
appropriate limitations on the scope of the proceedings, and otherwise 
to facilitate

[[Page 33394]]

the timely completion of the proceeding.
    Adoption of a 90-day deadline is also facilitated by the 
restructuring of N-case proceedings and by the procedural changes being 
adopted by this Order. These changes, each of which is discussed below, 
include limitation of the scope of a proceeding; adoption of a pre-
filing conference requirement; revisions to filing requirements; 
adoption of a mandatory technical conference requirement; shortened 
procedural deadlines; revised discovery procedures; revised procedures 
for the filing of testimony; revised hearing procedures; revised 
briefing requirements; and the adoption of procedures for conducting 
special studies of issues beyond the scope of the Postal Service's 
specific N-case proposal.
    Finally, the Commission concludes that the adoption of a 90-day 
deadline must include provisions for an extension of that deadline in 
appropriate cases. In adopting the new N-case rules, the Commission 
seeks to balance the interest of the Postal Service in obtaining more 
timely advisory opinions and the interest of all participants in being 
accorded due process. This balance must be achieved under the statute 
as it exists. Although the exercise is challenging, the Commission is 
committed to providing both more timely opinions and due process. 
Nevertheless, cases may be presented in which it is not possible to 
issue an opinion within 90 days. For that reason, a safety valve must 
be available to permit extension of the deadline. That being said, 
however, the Commission does not intend to invoke its right to extend a 
90-day deadline without good cause first being established.
    The Postal Service and the Public Representative both request the 
Commission to clarify what situations or circumstances might constitute 
``good cause'' under proposed Sec.  3001.80(b) for extending the 90-day 
deadline. Postal Service Comments at 25-27; PR Comments at 14. In a 
related request, Valpak asks the Commission to amend proposed Sec.  
3001.80(c) to provide for the automatic reset of the 90-day clock to 
zero in any cases in which the Postal Service changes its proposal as 
the case progresses. Valpak Comments at 5.
    The Commission does not believe that it is either necessary or 
advisable at this stage to specify what situations or circumstances 
would justify a ``good cause'' extension. That standard is intended to 
be flexible and dependent upon specific factual circumstances. It is 
for the proponent of an extension to articulate a ``good cause'' basis 
for an extension.

D. Limited Scope of Proceeding

    Section 3001.72, as proposed, would require the Commission to issue 
an advisory opinion no later than 90 days following the filing of the 
Postal Service's request for an advisory opinion, absent a 
determination of good cause for extension. Proposed Sec.  3001.72(a). 
It would also be limited in scope to the specific changes proposed by 
the Postal Service in its request. Proposed Sec.  3001.72(b). Any 
alternatives or issues tangentially related to the proposed changes may 
be evaluated by the Commission in a separate special study or public 
inquiry proceeding within the discretion of the Commission. Order No. 
1738 at 23.
    GCA opines that the limitation of scope may be the most significant 
change to the N-case proceedings. GCA Comments at 6. It observes that 
``since the Postal Service must have the same procedural rights and 
opportunities as other parties, the presentation of alternatives could 
extend the case well past the Commission's 90-day limit.'' Id. However, 
it contends proposed Sec.  3001.72 does not exploit the possibilities 
of a special study or public inquiry as fully as it should. Because 
briefs, hearings, rebuttal, and surrebuttal cases are limited to the 
Postal Service's proposal by Sec. Sec.  3001.93(b)(3), 92(e)(1) and 
(f)(3), and 90(a) and (b) respectively, it states that it is unclear 
how the discussion of alternatives could arise in N-cases. Id. at 6-7. 
It proposes the Commission reinforce its regulations by providing for a 
special procedure whereby a participant could petition for institution 
of a special study public inquiry. Id. at 7.
    The Public Representative supports the proposed rule, so long as 
participants may request exploration of alternatives in special studies 
or public inquiry proceedings. PR Comments at 31.
    The Postal Service agrees with the principle that participants be 
allowed to file a petition for public inquiry for alternative 
proposals. Postal Service Reply Comments at 4. However, it states that 
specific language creating procedures for them to do so is unnecessary, 
as any participant may request the Commission open a public inquiry at 
any time, even without an explicit provision in the Commission's rules. 
Id.
    Valpak opposes the limitation of scope and maintains that the 
consideration of alternatives is integral to the development of a 
quality and informed advisory opinion. Valpak Comments at 10. It 
contends that any after-the-fact studies of alternative proposals after 
an advisory opinion has been issued would be ``well nigh impossible.'' 
Valpak Reply Comments at 3.
    The Commission does not believe that its proposed restructuring of 
N-cases will preclude the issuance of informed advisory opinions or the 
careful review of worthy alternatives. Rather, it believes that its 
approach preserves a balance between the efficacy and meaningfulness of 
a 90-day review of a specific Postal Service proposal and the 
Commission's ability to give thorough consideration to the range and 
complexity of alternatives proposed by participants. The Commission 
notes that participants may, if they wish, raise alternative proposals 
in their briefs and even list reasons why those alternatives would be 
superior to the Postal Service's proposal. The Commission would view 
such discussion as critique of the Postal Service's current proposal. 
It would not, however, evaluate or opine on the merits of the 
alternative proposal in the advisory opinion.
    The Postal Service correctly notes that any party may petition the 
Commission to open a rulemaking or public inquiry at any time. As such, 
modification of the proposed rule to create a special procedure for 
such requests is unnecessary. The Commission will not set forth 
specific requirements in this section for such requests. It does so 
with the intent of giving participants who wish to file alternative 
proposals the ability to do so in the form that they deem most 
appropriate.

E. Pre-Filing Conference/Revised Filing Requirements

    Pre-filing conference. As a condition for issuance of an advisory 
opinion within 90 days of filing, proposed Sec.  3001.81 would require 
the Postal Service to conduct a pre-filing conference with interested 
persons prior to filing a request for an advisory opinion. It sets 
forth certain parameters regarding the purpose of the pre-filing 
conference, the notice to be given for the benefit of interested 
parties, and specifies the informal and off the record nature of pre-
filing conferences. See proposed Sec.  3001. 81. The Commission 
believes that a formal pre-filing process will both aid the Postal 
Service in developing its proposal before formally requesting an 
advisory opinion and expedite the Commission's review of the proposal 
once it is filed. Order No. 1738 at 12.
    Certain commenters question the value of a pre-filing phase. Popkin 
expresses concern that an intelligent

[[Page 33395]]

discussion may not be possible when participants have not seen or fully 
evaluated the pending proposal. Popkin Comments at 2. Valpak doubts 
that the pre-filing phase will do anything to shorten the time required 
to issue an advisory opinion. Valpak Comments at 7. It states that some 
Postal Service filings are based on incomplete and developing 
information and the Postal Service often takes the position that 
nothing is final until approved by the Governors. As such, it asserts 
``there is little reason to believe that the Postal Service will be in 
a position to disclose material information about the nature of a 
proposal before it is finalized and filed.'' Id.
    Many commenters suggest refinements and improvements to the pre-
filing phase. NNA recommends the Commission require the Postal Service 
to make a policy or ``road-map'' witness available in the pre-filing 
conference. NNA Comments at 7. The Public Representative proposes that 
the Commission modify the notice requirements to require the Postal 
Service to notify all participants in the past five N-cases and all 
participants in a certain number of rate and complaint cases in order 
to ensure that all potentially affected persons may be reached. PR 
Comments at 8. She also opines that it would be useful for the rules to 
state explicitly that the prohibition on ex parte communications in 
Sec.  3001.735-501 in the Commission's Standard of Conduct for 
employees also applies in the pre-filing stage. Id. at 8-9. Finally, 
she proposes to re-cast the filing phase as a ``conditional 
acceptance'' phase to allow for active Commission involvement during 
this stage of the proceedings. Id. at 10.
    The Postal Service does not oppose creating a formal pre-filing 
process so long as it ``is not significantly more burdensome than the 
pre-filing activities that the Postal Service undertakes under current 
practice.'' Postal Service Comments at 7. It suggests that in order to 
ensure participants do not use the pre-filing phase to delay N-case 
proceedings, the Commission should indicate that alleged nonconformity 
with pre-filing rules does not provide a basis for extending the 90-day 
procedural schedule. Id.
    The Commission emphasizes that the pre-filing stage is not intended 
to be overly burdensome to either the parties or the Postal Service. 
However, it does envision the pre-filing conference as a step above and 
beyond the current discussions conducted by the Postal Service with key 
customer segments before it files a request for an advisory opinion. In 
the most recent advisory opinion, the Commission recommended that the 
Postal Service conduct more meaningful customer outreach prior to 
submitting an N-case proposal to the Commission.\30\ The Commission 
views the formal pre-filing conference as one of several potential 
means to ameliorate the current gaps in customer outreach prior to 
implementation of a service change. To that end, the Commission is 
adopting several changes suggested by commenters as clarification in 
its final rule.
---------------------------------------------------------------------------

    \30\ Docket No. N2014-1, Advisory Opinion on Service Changes 
Associated with Standard Mail Load Leveling, March 26, 2014, at 50-
52.
---------------------------------------------------------------------------

    As NNA suggests, the final rules include a requirement that the 
Postal Service make a representative available at the pre-filing 
conference who can explain the policy rationale behind the proposal to 
participants in the pre-filing conference.
    The language in the final rule has also been modified to make clear 
that the Commission may, in its discretion, consider an extension to 
the procedural schedule if the Postal Service's failure to satisfy the 
requirements of the pre-filing conference is established by any 
participant. The intent of this modification is not to be punitive, but 
rather to provide an incentive for the Postal Service to be prepared to 
engage in productive and meaningful dialogue with its customers during 
the pre-filing conference. The Commission will allow the Postal Service 
ample discretion to conduct the pre-filing conference in the manner it 
deems most appropriate. The Commission views the formal pre-filing 
process as a prerequisite for adoption of an expedited procedural 
schedule. It is intended to aid the Postal Service in developing its 
proposal and to afford interested stakeholders an opportunity to learn 
about and possibly shape the Postal Service's plans prior to the Postal 
Service filing a request for an advisory opinion.
    Revised filing requirements. Section 3001.83 sets forth the 
information that must be included in the Postal Service's request for 
an advisory opinion. Order No. 1738 at 13.
    The Public Representative expresses concern that the requirement 
for the Postal Service to provide a summary of pre-filing discussions 
in its request for an advisory opinion will have a chilling effect on 
these discussions. PR Comments at 12-13. She suggests elimination of 
this requirement as well as the requirement that the Postal Service 
explain how it made a good faith effort to address criticisms and 
suggestions made by interested persons. She asserts that both of these 
requirements defeat the purpose of ``off the record'' discussions--
namely, that the matters discussed will not be disclosed in a manner 
that affects participants. She also maintains that the likelihood of 
the pre-filing phase becoming a case unto itself would increase if a 
summary and certification were required. Id.
    The Commission seeks to foster an open and productive exchange of 
information at the pre-filing conference. It is persuaded by the Public 
Representative's assertion that such an exchange may be chilled if the 
Postal Service is required to provide the Commission with a summary of 
the conference. However, it does not believe that the certification of 
good faith by the Postal Service will create a similarly chilling 
effect on pre-filing discussions. The final rule will eliminate the 
requirement for the Postal Service to provide a summary of the pre-
filing conference but maintain and clarify the Postal Service's 
obligation to certify that it made a good faith effort to address 
critiques of the proposal by participants to the pre-filing conference.

F. Mandatory Technical Conference

    Section 3001.85 requires the Postal Service to make witnesses 
available for a mandatory technical conference with Commission staff 
and interested participants. The purpose of the conference is to 
clarify various technical aspects of the Postal Service's proposal and 
to allow attendees to identify and request relevant information. The 
technical conference will be conducted off the record, but information 
obtained from the conference may be used to seek additional information 
through formal discovery procedures. Order No. 1738 at 18.
    NNA, the Public Representative, and the Postal Service all support 
inclusion of a mandatory technical conference in the final rules. NNA 
Comments at 7; PR Comments at 18; Postal Service Comments at 6-7. 
Valpak opposes the technical conference because it doubts the utility 
to participants. Valpak Comments at 8.
    Despite its support for the concept of a mandatory technical 
conference, the Postal Service maintains that the requirement 
obligating all witnesses who submit direct testimony to attend is 
unnecessarily burdensome and does not advance the objective of open 
information exchange. Postal Service Comments at 28. It proposes 
several alternatives to the proposed rule. The first alternative would 
require only witnesses whose testimony contains technical information 
to attend the

[[Page 33396]]

technical conference. The second alternative would allow the Public 
Representative to determine which, if any, witnesses' testimony 
contains technical information. Only those witnesses would be required 
to attend. Id. at 28-29.
    GCA contends that neither of these alternatives improves the 
proposed rule. It states that not all participants will agree with 
either the Postal Service or the Public Representative's definition of 
what constitutes technical information. Lack of an objective definition 
may lead to more motions practice as participants request the Postal 
Service provide witnesses not initially determined to be technical 
witnesses. It proposes the proposed rule remain unchanged or that the 
Commission allow the Postal Service to move that certain witnesses be 
excused from attendance upon a demonstration that the witnesses' 
testimony neither presents nor uses technical information. GCA Reply 
Comments at 10-11.
    The Commission regards the technical conference as an important 
procedural safeguard to ensure that participants and Commission staff 
are able to obtain necessary information about the Postal Service's 
proposal. Although the Commission's intent is not to create an undue 
burden on the Postal Service, GCA underscores the difficulty with 
achieving a consensus definition on technical or technically-based 
testimony. The Commission notes that this conference is the first 
opportunity within the formal procedural schedule for participants or 
Commission staff to clarify important and potentially complex aspects 
of the Postal Service's proposal. The utility of a mandatory technical 
conference may be significantly impaired if all necessary witnesses 
were not present. To that end, the Commission has determined to 
maintain the language of the proposed rules as-is, keeping in mind that 
the conference is an opportunity to ask witnesses questions of a 
technical nature. If the Postal Service seeks for one of its witnesses 
to be excused from the conference, it may file a motion with its 
proposal along with supporting justification for why the witness is not 
testifying or relying on any technical information.

G. Shortened Procedural Deadlines/Procedures Generally

    In order to issue an advisory opinion by the 90-day target deadline 
and meet the intermediate procedural deadlines of the pro forma 
schedule, the Commission shortened the procedural deadlines for: 
Oppositions to notices of intervention (proposed Sec.  3001.20(d)); the 
Commission's motions practice (proposed Sec.  3001.75); discovery 
procedures (e.g., proposed Sec. Sec.  3001.87, 3001.88, and 3001.89); 
and procedures for designating evidence from other Commission dockets 
(proposed Sec. Sec.  3001.31(e) and 3001.31(k)(4)). The Commission 
included Saturdays, Sundays, and holidays in calculating deadlines 
(proposed Sec. Sec.  3001.73 and 3001.15). Finally, the Commission 
proposed elimination of the ``limited participator'' status in N-cases 
(see proposed Sec.  3001.20a).
    Commenters express a number of concerns regarding these changes. 
Mr. Popkin and NNA expressed general concern that smaller participants 
may be disadvantaged because of a lack of internet access and because 
of an undue burden that smaller participants will experience in 
attempting to comply with shorter deadlines. Popkin Comments at 2-3; 
NNA Comments at 6. Mr. Popkin also objects to the possibility that 
proposed Sec.  3001.73 will make filings due before 4:30 p.m. on days 
when the Commission is only open for part of the day. Popkin Comments 
at 3. NNA argues that 2-day deadlines (e.g., proposed Sec.  3001.75's 
deadline for answers to motions) could toll over a long weekend. NNA 
Comments at 6.
    The Commission acknowledges that shortened procedural deadlines may 
require more intensive participation by participants in N-cases. 
However, small participants will not be the only ones who confront 
challenges under the new procedures. Everyone involved in the process, 
including the Commission, which will be responsible for issuing prompt 
rulings on motions and other filings made during the course of the 
proceeding and for issuing an advisory opinion within 90 days, will be 
required to increase their efforts to meet the expedited procedural 
deadlines. While different participants may encounter various 
challenges, all participants and the Commission will have increased 
responsibilities. Nor is the Commission convinced that a lack of access 
to the internet is so pervasive that it will adversely impact a 
significant number of potential smaller participants. Problems that may 
arise because of a lack of internet access will be dealt with in 
specific cases.
    Nor do the alleged problems identified by Mr. Popkin and NNA with 
respect to specific regulations preclude the establishment of shortened 
deadlines. Mr. Popkin objects to the possibility that proposed Sec.  
3001.73 could make filings due before 4:30 p.m. on days, such as snow 
days, when the Commission closes early. Popkin Comments at 3. However, 
this possibility already exists under the Commission's current 
regulations. See 39 CFR 3001.15. NNA's concern that a 2-day deadline 
could toll over a weekend is obviated by the fact that the Commission 
does not propose changing the second sentence in the current version of 
Sec.  3001.15 which extends the deadline to the next business day. See 
proposed change in Sec.  3001.15 (replacing the third sentence and 
leaving the first two sentences unchanged).
    In addition to assertions that the shortened deadlines will be more 
burdensome, both the Postal Service and the Public Representative argue 
that compliance with these deadlines will not be feasible and that 
motions for extensions of time will become routine. Postal Service 
Comments at 48-49; PR Comments at 17-18; Postal Service Reply Comments 
at 2-3; PR Reply Comments at 9. The Postal Service asserts that the 
preferable alternative is to abandon ``Participant Discovery'' and 
adopt ``Commission-Led Discovery.'' Postal Service Comments at 8-12.
    The single biggest challenge to the expedition of N-cases is the 
discovery of information needed to provide ``an opportunity for hearing 
on the record'' as required by section 3661(c). While the Postal 
Service prefers the adoption of Commission-Led Discovery to the 
continuation of Participant Discovery, the Commission concludes that, 
under the existing statutory scheme and in light of its experience in 
conducting N-cases, Participant Discovery should be retained. See 
section IV.H.1.a., infra. To meet the challenge presented by discovery 
in N-cases, the Commission has proposed an array of changes. It has 
restructured the N-case process by, for example, creating a pre-filing 
conference process, narrowing the scope of the proceeding to the Postal 
Service's proposal, and deferring consideration of alternatives to 
public inquiry proceedings or special Commission studies. Within the 
framework thus created, a number of non-structural procedural changes 
are essential if the Commission is to issue advisory opinions within 90 
days. The adoption of shortened procedural deadlines is such an 
essential procedural change.
    The Commission appreciates that practice under the shortened 
procedural deadlines it has proposed will require an adjustment on the 
part of participants. It remains to be seen whether the Postal Service 
and the Public Representative are correct in suggesting that the 
shortened procedural deadlines proposed by the Commission will be 
beyond the ability of participants to comply. In the meantime, the 
Commission believes that

[[Page 33397]]

the approach it is adopting is needed, and can be managed successfully.
    Finally, the Commission concludes that the status of ``limited 
participator'' should no longer be available to participants in N-
cases. A number of participants agree with that conclusion. NNA 
Comments at 6; Valpak Comments at 7. The Public Representative urges 
the Commission to defer decision on the continued availability of the 
limited participator status in N-cases. PR Comments at 16-17. Aside 
from the Public Representative's assertions that the continued 
availability of the limited participator status is unlikely to have an 
adverse impact on N-cases, the Commission sees no affirmative value in, 
or need for, that special status in N-cases. Accordingly, the 
Commission is adopting the proposed changes in its regulations that 
will eliminate the limited participator status in N-cases.

H. Discovery

    Historically, a significant portion of N-cases has been devoted to 
discovery. In the discovery rules adopted by this Order, the Commission 
seeks to reduce the time and effort that will be spent on formal 
discovery by the Postal Service, other N-case participants, and by the 
Commission. The objective is to facilitate the more timely issuance of 
advisory opinions while, at the same time, providing for the 
development of an adequate record for decision.
    By instituting a pre-filing conference procedure, the Commission 
seeks to encourage the voluntary exchange of information that would be 
directly related to the proposal filed by the Postal Service. By 
requiring a mandatory technical conference, the Commission seeks to 
afford participants an opportunity to inform themselves further 
regarding information relevant to the proposal after its filing. By 
requiring the Postal Service to make policy and institutional 
information available at the pre-filing and technical conference and to 
provide testimony, the Commission seeks to reduce the need for formal 
discovery to elicit such information. By limiting the scope of N-cases 
to a review of the Postal Service's proposal, the Commission seeks to 
eliminate the need for discovery by participants of information for use 
in supporting alternatives to the Postal Service's proposal, as well as 
the need for discovery by the Postal Service and participants of 
information regarding alternatives proposed by others. By eliminating 
the need to litigate the feasibility and appropriateness of 
alternatives in the N-case itself,\31\ the Commission seeks to 
eliminate or to reduce the possible need for Postal Service discovery 
of other participants.
---------------------------------------------------------------------------

    \31\ As discussed elsewhere in this Order, alternatives worthy 
of consideration could be evaluated in public inquiry proceedings or 
in special Commission studies.
---------------------------------------------------------------------------

    Supplementing its attempt to reduce the need for formal discovery, 
the Commission is placing limits on the number of interrogatories that 
can be served on the Postal Service without express authorization. 
Participants will continue to be able to request the production of 
documents and to request the admission by the Postal Service of 
relevant facts.
    The Commission also seeks to expedite formal discovery by adopting 
stricter discovery deadlines, such as deadlines for serving and 
answering discovery requests.
    Finally, the Commission is establishing a new procedure by which 
the Postal Service can seek to avoid answering particular discovery 
requests through the filing of a motion to be excused from answering. 
This procedure replaces the filing of discovery objections followed by 
motions to compel and answers to motions to compel.
1. Discovery-Generally
a. ``Participant Discovery'' vs. ``Commission-Led Discovery''
    Under the Commission's existing N-case rules, parties seek 
discovery of relevant facts from each other without prior Commission 
authorization by means of interrogatories, requests for production of 
documents or things, and requests for admission. See 39 CFR 3001.26, 
3001.27, and 3001.28. The Commission's role in discovery is to resolve 
discovery disputes presented to it by the parties. This discovery 
method has been referred to by commenters in this proceeding as 
``Participant Discovery'' to distinguish it from an alternate method 
referred to as ``Commission-Led Discovery.'' This latter method is 
employed by the Commission in other regulatory contexts, such as ACD 
proceedings and rate cases, including, most notably, exigent rate 
cases.
    Participant Discovery is not available to participants in these 
types of proceedings. Instead, by motion, participants request the 
Commission to issue specific information requests (interrogatories). 
After review, the Commission or presiding officer will issue an 
information request containing participants' questions found to be 
appropriate. The Commission is neither obligated to present a proposed 
discovery request to another participant, nor is it required to present 
a request as formulated by the proponent of the request.
    The Postal Service urges the Commission to adopt Commission-Led 
Discovery in lieu of Participant Discovery. Postal Service Comments at 
8-18.\32\ The Public Representative suggests that Commission-Led 
Discovery can be consistent with the public interest, provided 
participants have a realistic opportunity to pursue legitimate avenues 
of inquiry. PR Reply Comments at 8. GCA and Valpak both oppose the 
Postal Service's proposal. GCA Reply Comments at 1-9; Valpak Reply 
Comments at 10-11.
---------------------------------------------------------------------------

    \32\ Attached to the Postal Service's comments is an appendix 
that contains a copy of the Commission's pro forma procedural 
schedule revised to reflect the effect of Commission-Led Discovery.
---------------------------------------------------------------------------

    In support of its proposal, the Postal Service argues that the 
Commission's practice in ACD proceedings, exigent rate cases, and other 
rate proceedings demonstrates that Commission-Led Discovery is the most 
efficient form of fact-finding. Postal Service Comments at 12-14. In a 
related argument, it asserts that sections 556 and 557 of the APA, 
although applicable to N-cases by virtue of section 3661, do not give 
participants discovery rights. Id. at 14.
    Valpak responds by arguing that N-cases are more complex than ACD 
proceedings, which involve after-the-fact review and are more suitable 
for Commission-Led Discovery. Valpak Reply Comments at 7-8. GCA adds 
that Commission-Led Discovery would not further the goal of expediting 
N-cases because it transfers the burden of performing discovery to the 
Commission. GCA Reply Comments at 2-5. Both GCA and Valpak argue that 
the adoption of Commission-Led Discovery would, in effect, unlawfully 
deprive participants of the opportunity for a hearing on the record as 
provided in section 3661(c). They base their argument on the fact that 
responses to interrogatories are used as written cross-examination in 
N-Case hearings and that a denial of Participant Discovery would 
effectively deny them the right ``to conduct such cross-examination as 
may be required for a full and true disclosure of the facts'' as 
guaranteed by APA section 556(d). GCA Reply Comments at 5-9; Valpak 
Reply Comments at 10-11. The Commission concludes that the successful 
use of Commission-Led Discovery in other proceedings, such as ACD 
proceedings and exigent rate cases, does not justify its use in N-
cases. As discussed previously in this Order, the

[[Page 33398]]

statutory authorization in section 3661 is significantly different from 
the statutory authorizations for these other types of proceedings. The 
opportunity for hearing accorded in N-cases is an opportunity for 
hearing ``on the record'' as that term has been used in the APA.
    Although courts have recognized, as the Postal Service correctly 
points out, that APA hearings on the record do not grant an express 
right of discovery, they have acknowledged that, in some cases, 
discovery may be necessary to afford participants a meaningful 
opportunity for hearing. Citizens Awareness, 391 F.3d 338, 350 (1st 
Cir. 2004), citing U.S. Lines, Inc. v. Fed. Maritime Comm'n, 584 F.2d 
519, 540 (D.C. Cir. 1978) (``. . . the requirement of a hearing to 
determine the public interest means, at a very minimum, that an 
opportunity must be afforded for meaningful public participation.'').
    Based upon its N-case experiences, the Commission finds that 
discovery in N-cases is necessary to permit meaningful public 
participation. Despite what the Commission assumes are the Postal 
Service's best good faith efforts, proposals sometimes come before the 
Commission without enough information to assess the merits of the 
proposal. Valpak Comments at 7 (noting ``some Postal Service filings 
have been made based on incomplete and developing information. . . 
.''); Docket No. N2012-1, Advisory Opinion on Mail Processing Network 
Rationalization Service Changes, September 28, 2012, at 13 (``When the 
Postal Service provided its proposal to the Commission, it had not 
fully completed its analysis of the plan.''). In such cases, discovery 
has been necessary for participants to assess and comment on the Postal 
Service's proposal. Discovery by participants has also been an 
important aid to the Commission in developing an adequate record for 
decision.
    Moreover, as GCA and Valpak have argued, discovery responses are 
used as written cross-examination in N-case hearings. Written cross-
examination has proved to be a relatively efficient means whereby 
participants develop evidence to support their positions. The use of 
discovery responses as written cross-examination also aids in the 
``full and true disclosure of the facts'' consistent with the 
requirements of APA section 556.
    Nor is the Commission persuaded by the Postal Service's arguments 
that Commission-Led Discovery would be more efficient and would more 
effectively expedite the issuance of advisory opinions than would 
Participant Discovery.
    The Postal Service begins by questioning the Commission's proposals 
to shorten discovery and other procedural deadlines: ``The mere 
establishment of tighter response deadlines, without substantial 
reduction in the scope of discovery, simply means that deadlines will 
be harder to meet and that more deadlines will be missed.'' Postal 
Service Comments at 8-9 (footnote omitted).
    What the Postal Service overlooks is that other elements of the 
Commission's proposed rules do, indeed, seek to achieve a ``substantial 
reduction in the scope of discovery'':

    The pre-filing conference seeks to engage the Postal Service in 
a constructive dialogue which, among other things, will improve 
understanding of its proposal, identify areas of agreement and 
disagreement, and narrow the need for discovery by enabling the 
Postal Service to file a well-supported proposal that reduces the 
scope of needed discovery.
    The Commission is limiting the scope of the N-case to a 
consideration of the Postal Service's proposal and by referring 
potentially viable alternatives to public inquiry proceedings or by 
conducting special studies of such proposals. This limitation is 
also intended to contribute to a ``substantial reduction in the 
scope of discovery.''
    The Commission is limiting the number of interrogatories that 
participants may serve on the Postal Service and, elsewhere in this 
Order, is taking steps to eliminate opportunities to circumvent the 
limitation on interrogatories. See sections IV.H.2.a. and 
IV.H.2.b.(1)(c), infra.

    Although the Commission declines to place limits on requests for 
production and requests for admission, it is providing the Postal 
Service with a streamlined procedural mechanism (the motion to be 
excused from answering) that will allow it to oppose requests that are 
not well-grounded. See section IV.H.1.d., infra.
    For these reasons, the Commission believes that its proposals have 
the potential for producing the ``substantial reduction in discovery'' 
that the Postal Service asserts is a necessary condition for expediting 
discovery and the issuance of advisory opinions.
    The Postal Service's suggestion that Commission-Led Discovery would 
be a preferable alternative to the revised Participant Discovery 
adopted by this Order is not persuasive. First, as GCA points out, 
Commission-Led Discovery will not reduce the number of discovery 
requests made by participants. It will only transfer responsibility for 
the initial review of those requests from the Postal Service to the 
Commission. GCA Reply Comments at 2-5.
    Second, between the Commission and the Postal Service, it is the 
Postal Service that is in the best position initially to assess the 
nature of the request, the likelihood that the requested information 
exists, the potential relevance or irrelevance of the requested 
information to the Postal Service's proposal, and the potential of the 
request for being unduly burdensome.
    Third, the Postal Service does not appear to relinquish the right 
to oppose a proposed discovery request submitted to the Commission by a 
participant for adoption as a Commission information request. See 
Postal Service Comments at 13, n.16. An objection by the Postal Service 
would, of course, require an opportunity to respond be given to the 
proponent of the request, as well as an opportunity for the Commission 
to decide whether to issue an information request.\33\ The failure of 
the Postal Service to account for these additional steps results in a 
significant understatement of the potential amount of time needed to 
obtain information by means of Commission-Led Discovery.\34\
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    \33\ In addition to possible objections to the issuance of 
Commission information requests, the Postal Service raises the 
further possibility that the failure to make such an objection 
``should not waive or otherwise prejudice any rights that a 
responding party has with respect to how it answers (or declines to 
answer) any resulting Commission information request.'' Id.
    \34\ Under the Postal Service's proposal, one round of 
Commission-Led Discovery would require 10 days to complete. See 
Postal Service Comments, Appendix I at 23 (Pro-Forma N-Case 
Procedural Schedule). Deadlines for applications for issuance of 
Commission Information Requests would be due by Day 14; information 
requests would be issued by Day 17; and responses to information 
requests would be due by Day 24. If a motion for leave to object 
were filed within a day of the application for issuance of an 
information request (as would be permitted under the Postal 
Service's proposal), followed by an answer to the motion within 5 
days (proposed Sec.  3001.75(a)(2)), an additional 6 days or more 
would be added to the 10 days required for a single round of 
Commission-Led Discovery. Moreover, additional time would be needed 
to complete the process if the respondent did not answer fully or 
unambiguously, as the Postal Service suggests might occur. See note 
33, supra. By contrast, a single round of Commission-proposed 
Participant Discovery would take 11 days, including resolution of a 
respondent's motion to be excused from answering, assuming the 
Commission were to act on the motion within 3 days of receipt of the 
answer to the motion. See proposed Sec.  3001.75.
---------------------------------------------------------------------------

    For these reasons, the Commission is not adopting the Postal 
Service's proposal to substitute Commission-Led Discovery for 
Participant Discovery.
b. Discovery by the Postal Service
    The pro forma procedural schedule proposed in Order No. 1738 omits 
dates for discovery by the Postal Service or any supporters of 
participant rebuttal cases. See Order No. 1738 at 50 (Proposed Appendix 
A to Part 3001, subpart D, Pro Forma N-case Procedural Schedule). In 
its comments, the Postal

[[Page 33399]]

Service states that it or other participants ``may have need to 
propound discovery upon a party offering the rebuttal testimony.'' 
Postal Service Comments at 35-36. It therefore requests the Commission 
to revise the proposed discovery regulations to make those rules 
``party neutral'' and to revise the proposed pro forma schedule to 
include dates for discovery on rebuttal cases. Id. at 18-22; 35-37. The 
Public Representative supports giving the Postal Service the right to 
conduct discovery. PR Comments at 24.
    The Commission does not intend categorically to deny the Postal 
Service or other participants the opportunity to conduct discovery of 
participant rebuttal cases. However, it is not persuaded that such 
discovery will necessarily be required in N-cases as restructured. 
Under the new N-case procedures, the scope of the proceeding is being 
limited to the Postal Service's proposal. Participants will no longer 
be permitted to present and attempt to support alternatives. Moreover, 
with the increased opportunity for dialogue between the Postal Service 
and interested persons, beginning with the pre-filing consultations 
required under the revised procedures, the Postal Service should be 
better able to anticipate and address possible objections to its 
proposal when it files its direct case. These changes reduce the 
likelihood of the need for discovery of rebuttal cases by the Postal 
Service and others.
    Should the need for such discovery nevertheless arise, the Postal 
Service and others may request an opportunity to propound discovery. 
Appropriate requests will be granted. Accordingly, although the 
Commission is not revising the pro forma schedule, it is revising the 
text of its proposed N-case discovery rules to make those rules ``party 
neutral'' for use in the event discovery by the Postal Service or 
others becomes necessary.
c. Stricter Discovery Deadlines
    Stricter discovery deadlines include shortened deadlines for 
conducting discovery, expedited deadlines for contesting and resolving 
discovery disputes, and stricter deadlines for providing responses to 
discovery requests. The stricter deadlines applicable to discovery are 
consistent with the shortening of all deadlines in N-cases in order to 
facilitate the issuance of an advisory opinion within 90 days of 
filing. As noted in section IV.G., supra, shortened procedural 
deadlines within the new N-case framework are essential if the 
Commission is to meet the 90-day target for advisory opinions. Stricter 
discovery deadlines are no exception.
d. New Procedures for Contesting Discovery Requests
    In Order No. 1738, the Commission proposed to replace the method 
traditionally used by recipients of discovery requests to contest 
specific requests. That method typically involved four steps: (1) 
Service of an objection on the proponent of the request by the 
recipient of the request; (2) filing and service of a motion to compel 
by the proponent of the request; (3) filing and service of an answer by 
the recipient of the request; and (4) issuance by the Commission or a 
presiding officer of an order granting or denying (in whole or in part) 
the motion to compel.
    Under the new procedure, set forth in proposed Sec.  3001.75, the 
process would be reduced to three steps: (1) Filing by the recipient of 
a discovery request of a motion to be excused from answering; (2) 
filing by the proponent of the request of an answer in support of its 
request; and (3) issuance by the Commission or a presiding officer of 
an order granting or denying (in whole or in part) the motion to be 
excused from answering. See proposed Sec.  3001.75(b). In addition to 
eliminating objections to discovery requests as an antecedent condition 
to the filing of a motion, the new section would set a short deadline 
for the filing of the motion to be excused from answering (i.e., within 
3 days of the filing of the discovery request. Id. at 3001.75(b)(1). 
Answers to the motion would be due within 2 days. Id. at 3001.75(b)(2). 
Answers to the discovery request would be due within 3 days of the 
denial of a motion to be excused from answering. Id. at 3001.75(b)(3).
    The Postal Service opposes these changes on essentially two 
grounds. Postal Service Comments at 29-31. First, it restates its 
preference for Commission-Led Discovery. Id. at 31. Second, the Postal 
Service argues that the new process ``could paradoxically increase the 
burden on party and Commission resources and the time spent in 
discovery.'' Id. at 29 (emphasis in the original).
    The Commission is not persuaded by either of the grounds offered 
for rejecting the new procedure. For the reasons previously given, the 
Commission is not adopting the Postal Service's proposal for 
Commission-Led Discovery. See section IV.H.1.a., supra. Nor does the 
Commission accept the Postal Service's assertion that the new procedure 
can be expected to increase the burdens of, or time required for, 
discovery.
    The Postal Service predicates the alleged increased discovery 
burdens and time requirements on the assumption that ``the Commission 
proposes to do away with the role of party discretion and to subject 
every objectionable discovery request--even those that a proponent 
would not otherwise have contested--to an adversarial dispute 
resolution process as a matter of course.'' Id. at 30. That is not the 
case. Although the Postal Service is correct that under the current 
procedural rules discovery disputes can be resolved informally and 
summarily when a proponent of a request acquiesces in an objection, the 
Postal Service errs in assuming that such an informal and summary 
resolution would not be possible under the new procedure. Thus, for 
example, upon receipt of a discovery request to which it objects, the 
recipient of the request can informally contest the request and seek to 
have it withdrawn before it files a motion to be excused from 
answering. The participant proposing the discovery request can agree to 
withdraw the request as it can currently do in response to a formal 
objection. Alternatively, if a motion to be excused from answering has 
already been filed, the proponent of the request can acquiesce in the 
motion formally by answer or informally by not answering. In either 
event, the most that would be required of the Commission or presiding 
officer would be a one-page order granting the motion to be excused.
2. Discovery-Interrogatories
    All six commenters address the Commission's proposed N-case 
interrogatory rule contained in Sec.  3001.87. The centerpiece of that 
rule is a limit on the number of interrogatories that a participant may 
serve on the Postal Service. Commenters raise essentially three 
questions:
    (1) Should there be a limit on the number of interrogatories that a 
participant may serve?
    (2) If limited, is the proposed 25-interrogatory limit appropriate?
    (3) Can the limit on interrogatories be expected to be effective in 
expediting the proceeding and permit the development of an adequate 
record for decision?

Each of these questions, and the issues they raise, is discussed below.
a. Should there be a limit on the number of interrogatories?
    Barring the adoption of its Commission-Led Discovery proposal, the 
Postal Service supports the imposition of a limit on the number of 
interrogatories that participants may

[[Page 33400]]

serve. Postal Service Comments at 32-35, 39-40. The Public 
Representative also acknowledges the need for numerical limits on 
interrogatories. PR Comments at 19 (``[i]f expedition of N-cases is to 
be achieved, it seems that numerical limits on interrogatories directed 
to the Postal Service are inevitable, notwithstanding legitimate 
concerns about the difficulty of capturing the qualitative aspects of a 
case in such a finite fashion.''). Other participants acquiesce in the 
Commission's proposed limit on the number of interrogatories, subject 
to certain additions and modifications to the proposed interrogatory 
rule. GCA Comments at 1; NNA Comments at 6.
    The only commenter that expressly opposes limits on the number of 
interrogatories is Valpak. Valpak Comments at 5-9. Valpak takes the 
position that unless limits are placed on the scope of any one N-case 
and the length of the Postal Service's filing, there ``should be no 
limitation on the number of written interrogatories. . . .'' Id. at 8. 
Valpak bases its position on its right to ``a hearing on the record 
under sections 556 and 557'' of title 5 of the United States Code and 
upon general claims of its right to due process. See id. at 5-6. Valpak 
challenges as ``utopian'' any expectation that the Postal Service will 
be forthcoming about its proposal during a pre-filing period and a pre-
filing technical conference. Id. at 8. Valpak therefore dismisses such 
expectation as a rationale for limiting discovery. Id.
    Unlike Valpak, most participants recognize that some numerical 
limits must be imposed as part of an attempt to issue advisory opinions 
more promptly. Neither the statutory requirements of a ``hearing on the 
record'' under sections 556 and 557, nor constitutional requirements of 
due process preclude the imposition of such limits. Indeed, the 
imposition of such limits is commonplace, as evidenced by the numerical 
limits imposed by the Federal Rules of Civil Procedure (FRCP) on 
interrogatories in civil actions. See Fed. R. Civ. P. 33. Like the 
limits imposed by FRCP Rule 33, the limits proposed by the Commission 
in Sec.  3001.87 can, upon an adequate showing, be increased. See id.
    The proposed numerical limit on interrogatories, like the 90-day 
limit on the duration of N-cases, is predicated, in part, upon good 
faith efforts by the Postal Service to make relevant information 
available to participants outside the context of formal discovery. The 
expectation of good faith voluntary production of information is not, 
as Valpak suggests, ``utopian,'' since it is in the Postal Service's 
self-interest to produce relevant information voluntarily in order to 
obtain an advisory opinion by the 90-day target deadline. Furthermore, 
as discussed below, formal interrogatories will not be the only means 
whereby participants can obtain relevant information for use in an N-
case.
    The alternative suggested by Valpak that a limitation on the number 
of interrogatories should require ``a corresponding limit on the scope 
of any one N-docket and the length of the filing of the Postal 
Service'' is not explained. It remains unclear exactly what 
``corresponding limit'' Valpak has in mind.
    Valpak's skepticism regarding the efficacy of pre-filing 
disclosures does not persuade the Commission that it should refrain 
from imposing a limit on the number of interrogatories that 
participants may serve on the Postal Service. The Commission concludes 
that a limit on interrogatories subject to an opportunity to seek 
Commission permission to serve additional interrogatories is the 
preferable procedure.
b. If limited, is the proposed 25-interrogatory limit an appropriate 
limit?
    In Order No. 1738, the Commission proposed to limit each N-case 
participant to the service of 25 interrogatories on the Postal Service. 
Proposed Sec.  3001.87(a). Included within that limit would be the 
combined total of each participant's initial and follow-up 
interrogatories for all witnesses, as well as institutional 
interrogatories directed to the Postal Service. Although the Commission 
did not state the basis for its selection of 25 as the appropriate 
limit, several commenters correctly infer that the Commission used as 
the model for its proposal the limit in FRCP Rule 33 that applies to 
federal courts in civil litigation. See Postal Service Comments at 32; 
PR Comments at 19.
    GCA and NNA either implicitly accept the Commission's proposed 
limit or conditionally accept that limit, subject to additions or 
modifications to the interrogatory rule.\35\ Valpak agrees with GCA's 
and NNA's assertions regarding alleged problems with a limit of 25 on 
the number of interrogatories that each participant could serve on the 
Postal Service. Valpak Reply Comments at 1-4. It does not, however, 
agree with their proposed solutions. Id. Mr. Popkin suggests that by 
limiting the number of interrogatories to 25, the Commission will 
precipitate an increase in the number of discovery motions. Popkin 
Comments at 3. The Public Representative notes the commenters' concerns 
and urges the Commission ``to revisit its proposed across-the-board 
numerical limit on interrogatories, especially as this limit affects 
followup interrogatories and applies case wide, rather than by 
witness.'' PR Reply Comments at 9.
---------------------------------------------------------------------------

    \35\ GCA does not expressly challenge the limit of 25 
interrogatories, but questions whether that number of 
interrogatories will be adequate in suggesting that, upon motion, 
participants be given an opportunity to serve follow-up 
interrogatories for supplementation or clarification. GCA Comments 
at 2. NNA takes a similar position by accepting a limit of 25 on 
initial interrogatories, but urging the Commission to authorize ``at 
least one set of follow up interrogatories without limitation by a 
discovery cap.'' NNA Comments at 6. These comments are addressed in 
section IV.H.2.b.(1)(a), infra.
---------------------------------------------------------------------------

    The Postal Service takes the position that 25 interrogatories per 
participant is far too large. See Postal Service Comments at 10-11 
(discussing hypothetical discovery scenario in which five participants 
serve a total of 1,250 interrogatory questions (including subparts), 
150 requests for production, and 250 requests for admission, thereby 
placing an ``insurmountable strain'' on Postal Service resources).
    Several factors influence the selection of an appropriate limit on 
the number of interrogatories. These include: (1) The availability to 
participants of relevant information through means other than the 
service of formal interrogatories; (2) the narrowed scope of the 
proceeding; (3) the manner in which the limit is to be applied; and (4) 
the availability of opportunities to exceed the limit.
    The availability of relevant information by means other than 
interrogatories. Participants will have access to relevant information 
by means other than formal interrogatories, including: information 
submitted by the Postal Service in other proceedings or in reports 
filed with the Commission; information made available in pre-filing 
conferences; information contained in the Postal Service's request for 
an advisory opinion; policy and institutional information provided by 
Postal Service representatives at pre- and post-filing conferences; 
information contained in documents produced under Sec.  3001.88; and 
responses to requests for admission made under Sec.  3001.89. The 
availability of relevant information from these other sources should 
reduce the relative need for discovery by interrogatories.
    These same alternative sources should reduce the potential 
discovery burdens hypothesized by the Postal Service. See Postal 
Service Comments at 10-11. If the Postal Service provides relevant 
information voluntarily during the various stages of an N-case 
(including

[[Page 33401]]

the pre-filing stage) the need for formal discovery requests should be 
reduced.
    The narrowed scope of the proceeding. An equally important factor 
bearing upon the appropriate limit on the number of interrogatories is 
the narrowed scope of the N-case proceeding. To date, N-case 
proceedings have encompassed consideration of both the Postal Service's 
proposal and participant alternatives. To develop and support their 
alternatives, participants have asserted a need to engage in sometimes 
extensive discovery of the Postal Service. This participant discovery 
adds to the length of the N-case proceeding.
    As discussed earlier, the Commission has decided to restructure N-
cases by narrowing their scope to consideration of the Postal Service's 
proposal and by deferring consideration of potential alternatives to 
other contexts, such as special Commission studies or public inquiry 
proceedings. This reduction in the scope of N-case proceedings should 
reduce the need for discovery generally and for interrogatories, in 
particular. This limitation on the scope of the N-case will not only 
limit participants' needs for discovery, including discovery by means 
of interrogatories, it will also limit the potential discovery burdens 
on the Postal Service.
    (1) The manner in which the 25-interrogatory limit will operate. 
Commenters address several issues regarding the scope and application 
of the 25-interrogatory limit. Those issues concern: (1) The intended 
scope of the limit; (2) the criteria for determining whether subparts 
of interrogatories are to be counted toward the limit; (3) potential 
circumvention of the limit; and (4) the effect of the limit on the 
opportunity to serve institutional interrogatories on the Postal 
Service.
    (a) Scope of the limit. Both GCA and NNA suggest that the 25-
interrogatory limit should be applied only to initial interrogatories. 
GCA Comments at 2; NNA Comments at 6. GCA would make all follow-up 
interrogatories subject to presiding officer approval upon motion by 
the participant establishing that the answers to the initial 
interrogatory were incomplete, non-responsive, or ambiguous and that 
the follow-up interrogatories did not exceed the scope of the initial 
interrogatories. GCA Comments at 2. NNA would permit ``one set'' of 
follow-up interrogatories without any numerical limit. NNA Comments at 
6. These proposed changes are allegedly needed to ensure that 
participants get responsive answers to the 25 interrogatories they 
would be entitled to serve on the Postal Service. See GCA Comments at 
2; NNA Comments at 6. In its reply comments, Valpak agrees with GCA's 
and NNA's assertions that Postal Service responses to interrogatories 
are not always complete or responsive. Valpak Reply Comments at 2. 
Valpak also warns that the proposed 25-interrogatory limit could create 
an incentive for the Postal Service ``to divide presentation of its 
case among more witnesses'' thereby limiting the number of 
interrogatories that could be directed to each witness. Id.\36\
---------------------------------------------------------------------------

    \36\ In the example presented by Valpak, the 25-interrogatory 
limit could restrict a participant to one initial and one follow-up 
interrogatory per witness in N-cases like the Docket No. N2010-1 and 
Docket No. N2012-1 proceedings in which the Postal Service presented 
11 and 13 witnesses, respectively. Although the Commission will not 
assume fragmentation by the Postal Service of witnesses' testimony, 
it will entertain requests to exceed the 25-interrogatory limit, if, 
for any reason, the large number of witnesses unfairly hampers the 
ability of participants to obtain discovery by means of 
interrogatories.
---------------------------------------------------------------------------

    In its reply comments, the Postal Service warns that the proposals 
by both GCA and NNA would seriously undermine the potential 
effectiveness of the 25-interrogatory limit and ``move N-cases even 
farther from the goal of a predictable 90-day framework.'' Postal 
Service Reply Comments at 10-11. The Postal Service finds NNA's 
suggestion least acceptable because it would permit an unlimited number 
of follow-up interrogatories without any need for justification or 
Commission approval. Id. at 11, n.10. The Postal Service objects to 
GCA's proposal because the proposed process for approval of additional 
interrogatories would consume additional time in an already tight 
procedural schedule and thereby enhance the risk that the 90-day target 
deadline could not be met. Id. at 11-12.
    As proposed, the 25-interrogatory limit would apply to both initial 
and follow-up interrogatories. The participant would decide how many of 
its 25 interrogatories should be served as initial interrogatories, 
with the remainder available to be served as follow-up interrogatories. 
If the participant felt additional interrogatories were necessary, it 
would be required to obtain Commission approval for such 
interrogatories before serving them on the Postal Service. The Postal 
Service would have an opportunity to oppose any request for additional 
interrogatories.
    The Commission is not persuaded that the proposals by GCA and NNA 
should be adopted. Their proposals address a potential problem--non-
responsive, incomplete, or ambiguous Postal Service answers to 
interrogatories--that has a remedy other than follow-up 
interrogatories. That remedy is to seek an order compelling responsive, 
complete, and clear answers. Such remedy avoids an unnecessary use of 
follow-up interrogatories, thereby permitting the participant to take 
full advantage of the 25 interrogatories that it can serve as a matter 
of right. In seeking such a remedy, the participant could, if 
appropriate in the circumstances presented, request that any follow-up 
requests that it reserved would not have to be served until the Postal 
Service complies with the initial request. Assuming a motion to compel 
is filed in good faith, an order denying a motion to compel would also 
establish a deadline for service of any remaining follow-up requests 
that the participant was eligible to serve.
    In no event will a participant be able to serve more than 25 
interrogatories without prior Commission approval. That prohibition 
applies regardless of whether the interrogatory is an initial or a 
follow-up interrogatory. The Commission agrees with the Postal Service 
that NNA's proposal to permit one set of an unlimited number of follow-
up interrogatories as a matter of right could frustrate the objective 
of completing N-cases within 90 days.
    (b) Criteria for counting subparts as separate requests. The 
Commission's proposed interrogatory rule provides that an interrogatory 
with subparts that are logically and factually subsumed within and 
necessarily related to the primary question will be counted as one 
interrogatory. Proposed Sec.  3001.87(a). The purpose of this provision 
is to prevent the 25-interrogatory limit from unfairly restricting the 
ability of participants to engage in discovery. Without this provision, 
all parts of a multi-part interrogatory would be counted as individual 
interrogatories. For example, without this provision, an interrogatory 
that asked for a witness's (a) name; (b) address; (c) telephone number; 
and (d) email address, would count as four interrogatories toward the 
25-interrogatory limit. This result would be patently unfair and 
contrary to the result intended by the 25-interrogatory limit.
    While GCA agrees with the salutary intent of this provision, it 
points to certain potential uncertainties and difficulties with the 
language used by the Commission. It notes that a literal application of 
the requirement that subparts be both logically ``and'' factually 
subsumed with an interrogatory would be unduly restrictive. GCA 
Comments at 3-4. It also argues that use of the word ``necessarily'' 
could cause similar

[[Page 33402]]

problems. Id. at 4. Finally, it asserts that the term ``primary 
question'' requires clarification. To remedy these alleged 
deficiencies, GCA proposes specific modifications to proposed Sec.  
3001.87(a). Id. at 4-5.
    In its comments, the Postal Service suggests that the Commission 
explicitly state that Rule 33(a)(1) of the FRCP is the source of the 
standard for determining whether subparts of interrogatories are to be 
considered separate requests. Postal Service Comments at 40. The Postal 
Service asserts that such explicit recognition will provide 
``transparency about the standards and precedents that may be brought 
to bear on matters concerning the 25-interrogatory limit.'' Id.
    In her reply comments, the Public Representative encourages the 
Commission to consider GCA's suggested alternative for ``the proposed 
`logically and factually' related premise for subparts to primary 
interrogatories.'' PR Reply Comments at 10.
    The Commission agrees with GCA and the Public Representative that 
the ``logically and factually'' related premise is too restrictive and 
should be changed to a ``logically or factually'' related premise. 
However, the Commission does not agree that the word ``necessarily'' or 
the term ``primary question'' requires modification or further 
clarification in the proposed rule. As revised, Sec.  3001.87(a) will 
provide that an interrogatory with subparts that are logically or 
factually subsumed within and necessarily related to the primary 
question will be counted as one interrogatory. As urged by the Postal 
Service, this formulation will adopt the practice of federal courts 
which operate under Rule 33 of the FRCP. Trevino v. ACB Am., Inc., 232 
F.R.D. 612, 614 (N.D. Cal. 2006) (noting ``courts generally agree that 
`interrogatory subparts are to be counted as one interrogatory . . . if 
they are logically or factually subsumed within and necessarily related 
to the primary question.' [citations omitted].'').
    (c) Restrictions on circumvention of the limit. The Postal Service 
seeks to prevent participants from circumventing the limit on the 
number of interrogatories by fragmenting their participation. Postal 
Service Comments at 32-35. An example of such a potential circumvention 
would be a national union which seeks to participate though multiple 
union locals, each of which would ostensibly be able to serve up to 25 
interrogatories, thereby circumventing the intended limitation. Similar 
opportunities would appear to be available to trade associations and 
other formal or informal groups of participants. The Postal Service's 
proposed cure would be to amend rule 20(e) of the Commission's 
generally applicable rules of practice (which are expressly made 
applicable to the N-case rules being adopted by this Order) to add 
discovery to the list of activities that the Commission or a presiding 
officer may require be undertaken jointly with another participant. GCA 
endorses this proposal. GCA Reply Comments at 10 n.16 and accompanying 
text. The Commission agrees with the Postal Service that such 
circumvention is to be prohibited and therefore grants the suggested 
modification to rule 20(e) of the rules of practice.
    (d) The opportunity to serve institutional interrogatories on the 
Postal Service. In its comments, GCA expresses concern over the 
reference in Sec.  3001.87(a) to ``sequentially numbered 
interrogatories, by witness[.]'' GCA Comments at 5. It cites the 
usefulness of institutional interrogatories in past proceedings and 
seeks clarification that the reference to interrogatories ``by 
witness'' will not preclude the future ability to serve institutional 
interrogatories. It also seeks advice regarding the form in which such 
interrogatories should be directed to the Postal Service. Id. The 
Postal Service does not believe GCA's concerns are well-founded, but 
offers a proposed clarification to the language of Sec.  3001.87(a) as 
a means of allaying those concerns. Postal Service Reply Comments at 
27. The Commission interprets the clarification proposed by the Postal 
Service as responsive to GCA's concerns and adopts that clarification 
to confirm the continued availability of institutional interrogatories 
as a formal discovery mechanism.
    The availability of opportunities to exceed the limit. The adoption 
of any limit on the number of interrogatories a participant may serve 
on the Postal Service creates the possibility, noted by Mr. Popkin, 
that there will be an increase in the number of discovery motions. 
Popkin Comments at 3. By itself, that possibility does not preclude 
adoption of a limit on the number of interrogatories, particularly when 
there appears to be a general recognition that such a limit is a 
reasonable tradeoff balancing the interests of the parties and taking 
into account the other safeguards built into the new rules. See section 
IV.H.2.b., supra. It remains to be seen in particular cases whether the 
25-interrogatory limit will produce an unacceptably high increase in 
the number of discovery motions. Should that be the case, the 
Commission will address the problem either by rulings in specific cases 
or by revisiting the 25-interrogatory limit as a general matter. In the 
meantime, the Commission is not persuaded that the possibility of an 
increase in the number of discovery motions precludes adoption of the 
25-interrogatory limit.
c. Can the limit on interrogatories expedite N-cases and permit 
development of an adequate record?
    Generally, the most time-consuming phase of N-cases has been the 
discovery phase. Any changes that reduce the amount of discovery can be 
expected to shorten the time needed to complete an N-case. 
Nevertheless, in the context of advocating the adoption of Commission-
Led Discovery, the Postal Service argues that the proposed 25-
interrogatory limit will be ineffective. Postal Service Comments at 10-
12. To support its claim, the Postal Service hypothesizes a case in 
which five participants each propound 25 interrogatories, as well as 
document production requests and requests for admission. The resulting 
discovery burden, it asserts, will effectively undermine the goal of 
completing an N-case within 90 days. Id. at 8. Although GCA views the 
Postal Service's hypothetical as ``somewhat extreme,'' it accepts the 
hypothetical on the grounds that ``procedural rules should be robust 
enough to deal with extreme as well as routine cases.'' GCA Reply 
Comments at 4. GCA nevertheless proceeds to assert that the alternative 
proposed by the Postal Service, i.e., Commission-Led Discovery, has 
equally, if not more, serious practical and legal shortcomings. Id. at 
4-9.
    The Commission concludes that a 25-interrogatory limit can 
contribute to the expedition of N-cases. It reaches that conclusion 
notwithstanding the possibility that in at least in some cases, the 25-
interrogatory limit will not preclude service of a substantial number 
of interrogatories on the Postal Service. With the limit, participants 
will have a clear incentive to limit the number of interrogatories they 
serve. Without the limit, there is little incentive, if any, to pare 
back the number of interrogatories they propound.
    Of equal importance is the need to develop an adequate record for 
decision. While the 25-interrogatory limit will be challenging, it will 
not preclude the development of an adequate record. The scope of N-
cases is being narrowed and the need for information to support 
alternative proposals eliminated. Moreover, interrogatories are not the 
only means for assembling relevant information for use as evidence.

[[Page 33403]]

Participants will have access to information by means of pre-filing 
conferences; the Postal Service's request; technical conferences; and 
other discovery mechanisms, such as requests for production and 
requests for admission. Finally, the utility of interrogatories is 
being preserved by permitting interrogatories to contain appropriate 
subparts that do not count against the 25-interrogatory limit and by 
permitting participants to request the opportunity to serve more than 
25 interrogatories.
    For the interrogatory limit to achieve the dual objectives of 
expediting the issuance of advisory opinions while, at the same time, 
permitting the development of an adequate record, it will be necessary 
for the Commission to participate even more actively in managing N-case 
discovery. The Commission is prepared to accept that burden in order to 
ensure that both objectives are achieved.
3. Discovery-Requests for Production
    Proposed Sec.  3001.88 authorizes participants to request the 
production of documents or things.\37\ This section is patterned 
largely on sections (a) and (b) of existing Sec.  3001.27. See 39 CFR 
3001.27(a) and (b). The differences are that proposed Sec.  3001.88: 
(1) Applies only to requests for production from the Postal Service; 
(2) the time period for answering is shortened; and (3) the mechanism 
authorizing objections, motions to compel, and compelled answers is 
replaced by the new procedure called a motion to be excused from 
answering. Compare Sec.  3001.27(c), (d), and (e) with proposed Sec.  
3001.88(b)(2) and (c). Neither existing Sec.  3001.27, nor proposed 
Sec.  3001.88, places any numerical limits on requests for production.
---------------------------------------------------------------------------

    \37\ The Public Representative notes that although the body of 
the proposed rule provides for the production of both ``documents'' 
and ``things,'' the rule's heading refers only to ``documents.'' To 
avoid future confusion over the intended scope of the rule, the 
heading will be revised to include a reference to ``things.'' The 
Commission is also correcting section (b)(1) of Sec.  3001.88 to 
provide for the filing of answers within 7 days of a request for 
production. This change is necessary for consistency with the 
discovery rules for interrogatories and requests for admissions. See 
proposed Sec. Sec.  3001.87(b)(4) and 3001.89(b)(1).
---------------------------------------------------------------------------

    As already noted, supra, the Commission is amending proposed Sec.  
3001.88 to apply to requests for production directed to any 
participant, not just the Postal Service. The proposed time period for 
answering and the new procedure for seeking to avoid production (the 
motion to be excused from answering) are being approved as proposed.
    In her comments, the Public Representative raises essentially two 
points. First, the Public Representative states that although 
procedures for requesting the production of documents or things are of 
long standing, they ``have seen relatively little use at the 
Commission'' (except, perhaps, in complaint proceedings) and should 
therefore not be used as justification for limiting the number of 
interrogatories. PR Comments at 21. Second, the Public Representative 
asserts that the Commission has confused requests for production of 
documents with interrogatories that request the production of data. Id. 
at 21-24. The Public Representative's proposed remedy would be to 
consider creation of a new ``hybrid'' discovery request outside the 
scope of this rulemaking proceeding. Id. at 23.
    The Postal Service responds to the latter contention by arguing 
that participants have an obligation to designate their discovery 
requests properly as either interrogatories or requests for production. 
See Postal Service Reply Comments at 14. The Postal Service states 
further that the courts routinely deal with ambiguous or improperly 
designated discovery requests using established legal principles. Id. 
at 14-15.
    Regardless of whether requests for production have been widely used 
at the Commission, that discovery mechanism is well-established and 
will remain available to participants in N-cases. It is therefore 
proper for the Commission to rely on the availability of that discovery 
mechanism, as well as other potential avenues of discovery, as 
justification for limiting the number of interrogatories.
    With respect to the Public Representative's second point, the 
Commission agrees with the Postal Service that a new ``hybrid'' 
discovery device is unnecessary. Instead, the Commission will continue 
to observe the discovery principles embodied in the FRCP as interpreted 
and applied by the courts. This includes the principles for dealing 
with ambiguous or improperly designated discovery requests.
4. Discovery--Requests for Admission
    Proposed Sec.  3001.89 authorizes participants to request the 
admission of facts. This section, like proposed Sec.  3001.88, is 
patterned largely on an existing Commission rule of practice. In this 
case, the model is found in sections (a) and (b) of existing Sec.  
3001.28. See 39 CFR 3001.28(a) and (b). The differences are that 
proposed Sec.  3001.89: (1) Applies only to requests for production 
from the Postal Service; (2) the time period for answering is 
shortened; and (3) the mechanism authorizing objections, motions to 
compel, and compelled answers is replaced by the new procedure called a 
motion to be excused from answering. Compare Sec.  3001.28(c), (d), and 
(e) with proposed Sec.  3001.89(b)(3) and (c). Neither existing Sec.  
3001.28, nor proposed Sec.  3001.89, places any numerical limits on 
requests for production.
    As already noted, supra, the Commission is amending proposed Sec.  
3001.89 to apply to requests for admission directed to any participant, 
not just the Postal Service. The proposed time period for answering and 
the new procedure for seeking to avoid production (the motion to be 
excused from answering) are being approved as proposed.
    As she argued with respect to proposed Sec.  3001.88 dealing with 
requests for production of documents or things, the Public 
Representative argues that the opportunity to request admissions has 
not been widely used and therefore should not be used as justification 
for limiting the number of interrogatories. PR Comments at 21.
    Once again, the Commission concludes that the opportunity to 
request the admission of relevant facts is an appropriate 
justification, at least in part, for placing a limit on the number of 
interrogatories. It is a well-established discovery mechanism whether 
or not participants have used it extensively.
    While requests for admission are an appropriate complement to 
written interrogatories, the Commission would caution participants that 
requests for admission and interrogatories ``are not interchangeable 
procedures'' and that ``interrogatories disguised as requests for 
admissions in an attempt to circumvent a . . . rule limiting the number 
of interrogatories is an abuse of the discovery process.'' In re 
Olympia Holding Corp. v. Belt Concepts of Am., Inc., 189 B.R. 846, 853 
(Bankr. M.D. Fla. 1995) (citations omitted).

I. Testimony

    Rebuttal testimony. The proposed rules limit the scope of 
participant rebuttal testimony to the Postal Service's proposal. 
Rebuttal cases proposing or seeking to address alternatives to the 
Postal Service's proposal would no longer be permitted. Order No. 1738 
at 20.
    Valpak asserts that the limitation in scope is a violation of the 
APA. It maintains that the Commission does not have the authority under 
the APA to tell mailers what information can be included in their 
rebuttal testimony.

[[Page 33404]]

According to Valpak, any effort to limit the scope of rebuttal 
testimony in previous N-cases would have impaired the Commission's work 
and led to a less meaningful advisory opinion. Valpak Comments at 9-10. 
Valpak also contends that expedited deadlines for rebuttal testimony 
will reduce the quality of such testimony because participants will not 
have sufficient time to analyze the Postal Service's case. It suggests 
that the Commission modify the rules to provide that if the Postal 
Service requests to file surrebuttal testimony, the Commission suspend 
the 90-day rule for as long as it takes to receive and evaluate that 
testimony. Id. at 10-11.
    The Commission does not intend the proposed scope limitation to 
prevent participants from criticizing the merits of the Postal 
Service's proposal or from identifying alternatives to the change in 
the nature of services. The Commission does, however, draw a 
distinction between the identification of potential alternatives and 
the presentation of a full case as to why the alternative proposals are 
superior. The latter scenario is best evaluated by the Commission in a 
special study or public inquiry, as such proceedings will continue to 
have no time limits and permit more thorough analysis. The final rules 
will be clarified to reflect this distinction.
    The shortened deadlines in the procedural schedule may be 
challenging for all participants, as well as for the Commission. 
Notwithstanding, the expedited deadlines in and of themselves are 
expected neither to deprive participants of their ability to analyze 
the Postal Service's proposal nor the Postal Service and its supporters 
of their ability to respond to rebuttal cases. The Commission is 
persuaded that other informal information exchanges built into the 
procedural schedule, such as the pre-filing conference and the 
mandatory technical conference, will allow participants to begin 
crafting their rebuttal cases earlier in the process.
    The Public Representative suggests that participants who do not 
intend to file rebuttal or surrebuttal testimony be required to file 
notice with the Commission to that effect. PR Comments at 27. She also 
recommends that the following additional information be included in 
every notice of intent to file rebuttal testimony: (1) The number of 
pieces of testimony (clarifying that ``testimony'' may be more than 
one); (2) the subject matter of the testimony; (3) whether the 
testimony will be accompanied by supporting library references or 
exhibits, to the extent known; (4) the name and position or title of 
the witness; and (5) confirmation of witness availability. Id. The need 
for additional information in participants' notice of intent to file 
rebuttal testimony has not been clearly established. The Commission 
will retain the language of the proposed rule and not include 
additional filing requirements.
    Surrebuttal testimony. The filing of surrebuttal testimony would 
only be permitted if participants file a formal request, and if the 
Commission determines that exceptional circumstances warrant such a 
filing. Surrebuttal testimony will be limited in scope to the Postal 
Service's proposal and the relevant rebuttal testimony. Order No. 1738 
at 20-21.
    The Public Representative does not support the exceptional 
circumstances standard because she states that this may impose undue 
constraints on the Postal Service, as a participant offering 
surrebuttal testimony presumably deems it essential to his or her case. 
PR Comments at 28. The Postal Service agrees with the Public 
Representative. Postal Service Reply Comments at 5. It states that 
surrebuttal is its opportunity to correct inaccurate or misleading 
aspects of testimony by critics of its proposal, and limiting this 
information could deprive the Commission of important insight about its 
service change proposal as well as hinder the Postal Service's ability 
to shoulder its burden of proof. Id.
    The Commission recognizes that the exceptional circumstances 
standard presents a higher standard for the Postal Service to overcome 
in order to present surrebuttal testimony than the good cause standard 
required of participants requesting to extend the procedural schedule. 
However, because the Postal Service also is the proponent for 
expediency in N-cases, it would be held to a higher standard than mere 
good cause for requesting to file surrebuttal testimony. The Commission 
notes that briefs and reply briefs may also be used to correct 
misleading or inaccurate information about the Postal Service's 
proposal. Similarly, if meaningful customer feedback is obtained from 
these informal information exchanges, the Postal Service should be able 
to anticipate whether it will need to file a surrebuttal case well in 
advance of the deadline set forth in the procedural schedule.

J. Hearings

    Back-to-back hearings. In Order No. 1738, the Commission proposed a 
back-to-back hearing process for N-cases. Hearings would be scheduled 
continuously in the following order: (1) Hearings on the Postal 
Service's direct case; (2) hearings on participant rebuttal testimony, 
if any; and (3) hearings on surrebuttal testimony, if any. Order No. 
1738 at 21. The pro forma schedule presents several options for the 
commencement of hearings depending on whether rebuttal and surrebuttal 
cases are requested. Id.
    Valpak believes that the back-to-back hearing model is unworkable 
because ``it is highly likely a participant would not have a full 
understanding of the Postal Service case until the end of cross-
examination, with no time to prepare and file a rebuttal case, if rules 
provide for back-to-back hearings.'' Valpak Comments at 11. The Postal 
Service suggests that the Commission scale back further and require an 
affirmative showing of need before allowing oral hearings. Postal 
Service Comments at 23. The Public Representative points out that 
serial hearings are likely to ``tax the resources of the Postal 
Service, the Commission, and all other participants'' but ``defers to 
the Commission and the Postal Service on the advisability of this 
provision, as they stand to be most affected by its introduction, 
especially in terms of insuring [sic] availability.'' PR Comments at 
29.
    As with other steps in the procedural schedule, the Commission 
recognizes and acknowledges the difficulties inherent in preparation 
for and attendance of back-to-back hearings. However, when taken in 
conjunction with the other procedural steps intended to provide 
participants with ample opportunity for obtaining information early in 
the process, the Commission believes that the sequential hearing 
process will be workable for all parties.
    The Commission's current rule on oral argument--39 CFR 3001.37--
remains unchanged. The Commission will clarify that oral argument has 
not historically been part of N-cases and, although parties may request 
oral argument under the procedures set forth in Sec.  3001.37, the 
Commission would only grant such requests upon an appropriate showing 
of need by the presenting party.
    Field hearings. The proposed rules call for the elimination of 
field hearings in most instances. Order No. 1738 at 10. Commenter 
reaction was mixed on this point.
    NNA asserts that field hearings are essential in many cases to 
provide a better understanding of how communities are impacted by a 
nature of service change. It states that these hearings are more 
convenient, less

[[Page 33405]]

intimidating, and more approachable to participants outside the 
Washington, DC area and reflect a recognition by the Commission that 
policy deliberations not be confined to the DC area. NNA Comments at 3.
    GCA does not disagree with the proposed rules because they leave 
open the possibility that field hearings may still be held when 
genuinely useful. It suggests that, in the event that field hearings 
are found to be useful in a particular case, the Commission not require 
the Commissioners to preside at them en banc. Because field hearings do 
not produce record evidence, GCA proposes the Commission delegate a 
Commission staff member to preside in order to satisfy the APA 
provision. GCA Comments at 9.
    Valpak notes that it proposed abolition of field hearings in its 
comments in response to Order No. 1309. It asserts that in Docket No. 
N2011-1, field hearings prolonged the docket without creating useful 
record evidence for the Commission. Valpak Comments at 11.
    The Postal Service reiterates its contention that field hearings 
are inappropriate for most N-cases, causing expense and delay that is 
not commensurate to the non-evidentiary information obtained from 
conducting them. It recommends the Commission formalize its intentions 
to eliminate the use of field hearings in most cases by including a 
rule that prescribes the conditions for their use in exceptional cases. 
It also suggests the Commission clarify in its rules that statements in 
field hearings possess the status of informal comments and not record 
evidence. Postal Service Comments at 41.
    The Commission appreciates commenter input about the value of field 
hearings in past N-cases. However, it is persuaded that, in all but the 
most exceptional cases, their value does not outweigh the expense and 
delay inherent in conducting them. With the advent of recent 
technological advances, interested parties at some distance from 
Washington, DC now have the option of teleconferencing or 
videoconferencing into live hearings. It is amending proposed Sec.  
3001.92 to state that, upon showing of exceptional need or utility for 
a field hearing, the Commission may consider modifying the procedural 
schedule to provide for such hearings.

K. Briefs

    In Order No. 1738, the Commission proposed a 14,000 word limit for 
initial briefs, to be filed 7 days following the conclusion of 
hearings. Reply briefs would be limited to 7,000 words and are due no 
later than 7 days after the date initial briefs are filed. Order No. 
1738 at 22.
    Valpak asserts that the rule unfairly impacts mailers because the 
Postal Service has an unlimited amount of words to explain and describe 
its initial proposal. Valpak Comments at 12. The Postal Service argues 
that a uniform word limit is inherently unfair because the Postal 
Service is tasked with replying to all participants' critiques. It 
states that the Commission should expect that briefs from the Postal 
Service should require more words than briefs from other participants. 
Postal Service Comments at 44. The Public Representative does not 
oppose word limits on briefs but urges the Commission to excuse the 
Postal Service from adhering to those limits as the proponent of the 
proposed change. PR Comments at 30.
    The Public Representative also proposes allowing any intervenor to 
file a Statement of Position to provide a means for interested parties 
to submit their comments to the Commission in a less formal and 
technical manner than is required by the proposed rules. The Postal 
Service disagrees with the Public Representative's proposal, contending 
that if the Commission were to provide for this alternative, ``there 
would be little to stop all N-case participants from choosing the 
easier path, no matter how much more difficult it might make the 
Commission's task of evaluating the record.'' Postal Service Reply 
Comments at 24.
    The Commission believes that the word limitations on briefs would 
not adversely impact participants' rights to present their arguments to 
the Commission. In specific cases, the Commission may adjust word 
limitations by request of a participant or on its own motion. It will 
also modify the final rule to increase the word limit on the Postal 
Service's briefs to 21,000 words and 10,500 words for the initial and 
reply briefs, respectively. The final rule will also clarify that 
tables of cases, tables of citations, and appendices are not considered 
part of the word count for purposes of the limitation.
    Additionally, the Commission will incorporate the Public 
Representative's suggestion for including a less formal filing option 
for parties who may not be familiar or able to comply with the 
Commission's briefing rules. Such participants may file a Statement of 
Position, which will allow them to express their views about the Postal 
Service's proposal and point to those parts of the existing record that 
support their position. Only ``participants'' (i.e., parties to the 
proceeding) will be eligible to file Statements of Position. Statements 
of Position are intended to provide less experienced participants with 
an opportunity to file an ``informal brief'' that need not comply with 
the technical requirements of a formal legal brief. Statements of 
Position will not be exempt from the scope limitations of initial and 
reply briefs and should be limited to the issues raised on the record 
concerning the Postal Service's proposal. Statements of Position will 
not be a permissible avenue for a participant to attempt to introduce 
new evidentiary material into the record.

V. Section-by-Section Analysis of the Rules

    Part 3001, subpart D, of title 39, Code of Federal Regulations is 
deleted and replaced in its entirety with new procedural rules 
applicable to Postal Service requests for advisory opinions on proposed 
changes in the nature of postal services.
    Section 3001.71 replaces current Sec.  3001.71. New Sec.  3001.71 
makes the rules in subpart D applicable to requests by the Postal 
Service pursuant to 39 U.S.C. 3661 for Commission advisory opinions on 
proposed changes in the nature of postal services.
    Section 3001.72 is a new section that provides that, in the absence 
of a determination of good cause, advisory opinions in nature of 
service proceedings will be issued not later than 90 days following the 
filing of the Postal Service's request for an advisory opinion. Section 
3001.72 also provides for Commission authorization of special studies 
of issues arising out of nature of service proceedings.
    Section 3001.73 is a new section that provides for the use of 
calendar days in computing time periods under subpart D.
    Section 3001.74 replaces current Sec.  3001.75. New Sec.  3001.74 
concerns service of the Postal Service's request for an advisory 
opinion.
    Section 3001.75 is a new section that establishes shortened 
deadlines for the filing of motions and answers to motions in N-cases. 
This section also establishes a procedure for filing motions to be 
excused from answering discovery requests and a procedure for 
requesting leave to file surrebuttal.
    Section 3001.80 is a new section that describes the contents of the 
notice and scheduling order to be issued by the Commission after the 
Postal Service files a request for an advisory opinion on proposed 
changes in the nature of postal services.
    Section 3001.81 is a new section containing pre-filing 
requirements. New Sec.  3001.81 requires the Postal Service to

[[Page 33406]]

engage in discussions with potentially affected persons before filing a 
request for an advisory opinion on proposed changes in the nature of 
postal services.
    Section 3001.82 replaces current Sec.  3001.72. New Sec.  3001.82 
establishes requirements for the filing of Postal Service requests for 
advisory opinions in N-cases.
    Section 3001.83 replaces current Sec.  3001.74. New Sec.  3001.83 
establishes requirements for the contents of requests for advisory 
opinions.
    Section 3001.84 replaces current Sec.  3001.73. New Sec.  3001.84 
establishes requirements for the filing by the Postal Service of 
prepared direct testimony with requests for advisory opinions.
    Section 3001.85 establishes a mandatory technical conference and 
the requirements for such conference.
    Sections 3001.86 through 3001.89 are new sections that establish 
expedited discovery procedures in N-cases.
    Section 3001.90 is a new section governing the filing of 
participant rebuttal cases that respond to the Postal Service's direct 
case.
    Section 3001.91 is a new section governing the filing of 
surrebuttal testimony that responds to rebuttal testimony filed under 
Sec.  3001.90.
    Section 3001.92 is a new section that prescribes procedures for 
hearings on the record in nature of service proceedings that differ 
from the procedures prescribed in Sec.  3001.30.
    Section 3001.93 is a new section that establishes page limitations 
for initial and reply briefs and provides for expedited briefing in 
nature of service proceedings.
    Appendix A to subpart D of part 3001, Pro Forma N-case Procedural 
Schedule is a new appendix to N-case rules that provides a template for 
use in establishing procedural schedules in individual cases.
    Section 3001.3 is amended to reflect the exclusion by Sec.  3001.71 
of specific subpart A rules of practice from use in N-cases.
    Section 3001.5(h) is amended to eliminate the distinction between 
participants and limited participators in N-cases.
    Section 3001.15 is amended to reflect that the computation of time 
periods of 5 days or less in proceedings conducted under subpart D 
includes Saturdays, Sundays, and Federal holidays.
    Section 3001.17 is amended to require the inclusion in notices of 
nature of service proceedings conducted under 39 CFR part 3001, subpart 
D of the procedural schedule required by 39 CFR 3001.80.
    Section 3001.20(d) is amended to shorten the time period for filing 
oppositions to notices of intervention that are submitted in nature of 
service proceedings conducted under 39 CFR part 3001, subpart D.
    Section 3001.20(e) is amended to include discovery among the 
activities that the Commission or presiding officer may require be 
conducted jointly by two or more intervenors. The last sentence of this 
rule is also modified to clarify the text from the previous version and 
improve readability.
    Section 3001.20a is amended to preclude participation in N-cases as 
a limited participator.
    Section 3001.31(e) is amended to shorten the period for designating 
evidence received in other Commission proceedings for entry into the N-
case record. The amended subsection also shortens the period for 
objecting to designations.
    Section 3001.31(k)(4) is amended to shorten the time periods for 
requesting entry into an N-case record of evidence received in another 
Commission proceeding and for expending responses to requests made 
pursuant to this section.

VI. Effective date

    The revisions to 39 CFR part 3001 set out below the Secretary's 
signature shall take effect 30 days following publication in the 
Federal Register.

VII. Ordering Paragraphs

    It is ordered:
    1. The Commission hereby amends and adopts rules of procedure for 
nature of service cases under 39 U.S.C. 3661 that follow the 
Secretary's signature as 39 CFR part 3001, subpart D.
    2. The Commission hereby adopts conforming amendments to 39 CFR 
part 3001, subpart A that follow the Secretary's signature.
    3. These rules shall take effect 30 days after publication of this 
order in the Federal Register.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

List of Subjects in 39 CFR Part 3001

    Administrative practice and procedure, Freedom of information, 
Postal Service, Sunshine Act.

    For the reasons discussed in the preamble, the Commission amends 
chapter III of title 39 of the Code of Federal Regulations as follows:

PART 3001--RULES OF PRACTICE AND PROCEDURE

0
1. The authority citation for part 3001 continues to read as follows:

    Authority: 39 U.S.C. 404(d); 503; 504; 3661.

Subpart A--Rules of General Applicability

0
2. Revise Sec.  3001.3 to read as follows:


Sec.  3001.3  Scope of rules.

    Except as otherwise provided in Sec.  3001.71, the rules of 
practice in this part are applicable to proceedings before the Postal 
Regulatory Commission under the Act, including those which involve a 
hearing on the record before the Commission or its designated presiding 
officer and, as specified in part 3005 of this chapter to the 
procedures for compelling the production of information by the Postal 
Service. They do not preclude the informal disposition of any matters 
coming before the Commission not required by statute to be determined 
upon notice and hearing.
0
3. In Sec.  3001.5, revise paragraph (h) to read as follows:


Sec.  3001.5  Definitions.

* * * * *
    (h) Participant means any party to the proceeding, including formal 
intervenors as described in Sec.  3001.20, and the Public 
Representative. In a proceeding that is not conducted under subpart D 
of this part, for purposes of Sec. Sec.  3001.11(e), 3001.12, 3001.21, 
3001.23, 3001.24, 3001.29, 3001.30, 3001.31, and 3001.32 only, the term 
participant includes persons who are limited participators.
* * * * *

0
4. Revise Sec.  3001.15 to read as follows:


Sec.  3001.15  Computation of time.

    Except as otherwise provided by law, in computing any period of 
time prescribed or allowed by this part, or by any notice, order, rule 
or regulation of the Commission or a presiding officer, the day of the 
act, event, or default after which the designated period of time begins 
to run is not to be included. The last day of the period so computed is 
to be included unless it is a Saturday, Sunday, or federal holiday, in 
which event the period runs until the end of the next day which is 
neither a Saturday, Sunday, nor a Federal holiday. Except in 
proceedings conducted under subpart D of this part, in computing a 
period of time which is 5 days or less, all Saturdays, Sundays and 
Federal holidays are to be excluded.

0
5. In Sec.  3001.17, amend by:
0
a. Removing the word ``and'' at the end of paragraph (c)(4);
0
b. Redesignating existing paragraph (c)(5) as paragraph (c)(6); and
0
c. Adding new paragraph (c)(5) to read as follows:

[[Page 33407]]

Sec.  3001.17  Notice of proceeding.

* * * * *
    (c) * * *
    (5) In proceedings under subpart D of this part involving Postal 
Service requests for issuance of an advisory opinion, the notice issued 
under this section shall include the procedural schedule provided for 
under Sec.  3001.80; and
* * * * *

0
6. In Sec.  3001.20, revise paragraphs (d) and (e) to read as follows:


Sec.  3001.20  Formal intervention.

* * * * *
    (d) Oppositions. (1) Except as otherwise provided in paragraph 
(d)(2) of this section, oppositions to notices of intervention may be 
filed by any participant in the proceeding no later than 10 days after 
the notice of intervention is filed.
    (2) Oppositions to notices of interventions in proceedings 
conducted under subpart D of this part may be filed by any participant 
in the proceeding no later than 3 days after the notice of intervention 
is filed.
    (3) Pending Commission action, an opposition to intervention shall, 
in all proceedings except those conducted under subpart D of this part, 
delay on a day-for-day basis the date for responses to discovery 
requests filed by that intervenor.
    (e) Effect of intervention. A person filing a notice of 
intervention shall be a party to the proceeding subject, however, to a 
determination by the Commission, either in response to an opposition, 
or sua sponte, that party status is not appropriate under the Act. 
Intervenors are also subject to the right of the Commission or the 
presiding officer as specified in Sec.  3001.24 to require two or more 
intervenors having substantially like interests and positions to join 
together for purposes of service of documents, presenting evidence, 
making and arguing motions and objections, propounding discovery, 
cross-examining witnesses, filing briefs, and presenting oral arguments 
to the Commission or presiding officer. No intervention shall be deemed 
to constitute a decision by the Commission that the intervenor is 
aggrieved for purposes of perfecting an appeal of any final order of 
the Commission.

0
7. In Sec.  3001.20a, revise the undesignated introductory paragraph to 
read as follows:


Sec.  3001.20a  Limited participation by persons not parties.

    Except for cases noticed for a proceeding under subpart D of this 
part, any person may, notwithstanding the provisions of Sec.  3001.20, 
appear as a limited participator in any case that is noticed for a 
proceeding pursuant to Sec.  3001.17(a) in accordance with the 
following provisions:
* * * * *

0
8. In Sec.  3001.31, revise paragraphs (e) and (k)(4) to read as 
follows:


Sec.  3001.31  Evidence.

* * * * *
    (e) Designation of evidence from other Commission dockets. (1) 
Participants may request that evidence received in other Commission 
proceedings be entered into the record of the current proceeding. These 
requests shall be made by motion, shall explain the purpose of the 
designation, and shall identify material by page and line or paragraph 
number.
    (2) In proceedings conducted under subpart D of this part, these 
requests must be made at least 6 days before the date for filing the 
participant's direct case. Oppositions to motions for designations and/
or requests for counter-designations shall be filed within 3 days. 
Oppositions to requests for counter-designations are due within 2 days.
    (3) In all other proceedings subject to this section, these 
requests must, in the absence of extraordinary circumstances, be made 
at least 28 days before the date for filing the participant's direct 
case. Oppositions to motions for designations and/or requests for 
counter-designations shall be filed within 14 days. Oppositions to 
requests for counter-designations are due within 7 days.
    (4) In all proceedings subject to this section, the moving 
participant must submit two copies of the identified material to the 
Secretary at the time requests for designations and counter-
designations are made.
* * * * *
    (k) * * *
    (4) Expedition. The offeror shall expedite responses to requests 
made pursuant to this section. Responses shall be served on the 
requesting party, and notice thereof filed with the Secretary in 
accordance with the provisions of Sec.  3001.12 no later than 3 days 
after a request is made under paragraph (e)(2) of this section or no 
later than 14 days after a request is made under paragraph (e)(3) of 
this section.

0
9. Revise subpart D of part 3001 to read as follows:
Subpart D--Rules Applicable to Requests for Changes in the Nature of 
Postal Services
Sec.
3001.71 Applicability.
3001.72 Advisory opinion and special studies.
3001.73 Computation of time.
3001.74 Service by the Postal Service.
3001.75 Motions.
3001.76-3001.79 [Reserved]
3001.80 Procedural schedule.
3001.81 Pre-filing requirements.
3001.82 Filing of formal requests.
3001.83 Contents of formal requests.
3001.84 Filing of prepared direct evidence.
3001.85 Mandatory technical conference.
3001.86 Discovery--in general.
3001.87 Interrogatories.
3001.88 Production of documents.
3001.89 Admissions.
3001.90 Rebuttal testimony.
3001.91 Surrebuttal testimony.
3001.92 Hearings.
3001.93 Initial and reply briefs.
Appendix A to Subpart D of Part 3001--Pro-Forma N-Case Procedural 
Schedule


Sec.  3001.71  Applicability.

    The rules in this subpart govern the procedure with regard to 
proposals of the Postal Service pursuant to 39 U.S.C. 3661 requesting 
from the Commission an advisory opinion on changes in the nature of 
postal services that will generally affect service on a nationwide or 
substantially nationwide basis. The Rules of General Applicability in 
subpart A of this part are also applicable to proceedings conducted 
pursuant to this subpart except that Sec.  3001.21 (Motions); Sec.  
3001.25 (Discovery--general policy); Sec.  3001.26 (Interrogatories for 
purposes of discovery); Sec.  3001.27 (Requests for production of 
documents or things for the purpose of discovery); Sec.  3001.30 
(Hearings); Sec.  3001.33 (Depositions) and Sec.  3001.34 (Briefs) do 
not apply in proceedings conducted under this subpart.


Sec.  3001.72  Advisory opinion and special studies.

    (a) Issuance of opinion. In the absence of a determination of good 
cause for extension, the Commission shall issue an advisory opinion in 
proceedings conducted under this subpart not later than 90 days 
following the filing of the Postal Service's request for an advisory 
opinion.
    (b) Special studies. Advisory opinions shall address the specific 
changes proposed by the Postal Service in the nature of postal 
services. If, in any proceeding, alternatives or related issues of 
significant importance arise, the Commission may, in its discretion, 
undertake an evaluation of such alternative or issues by means of 
special studies, public inquiry proceedings, or other appropriate 
means.


Sec.  3001.73  Computation of time.

    In computing any period of time prescribed or allowed by this 
subpart,

[[Page 33408]]

the term day means a calendar day unless explicitly specified 
otherwise. The last day of the period so computed is to be included 
unless it is a Saturday, Sunday, or Federal holiday for the Commission, 
in which event the period runs until the end of the next day which is 
neither a Saturday, Sunday, nor Federal holiday.


Sec.  3001.74  Service by the Postal Service.

    By filing its request electronically with the Commission, the 
Postal Service is deemed to have effectively served copies of its 
formal request and its prepared direct evidence upon those persons, 
including the officer of the Commission, who participated in the pre-
filing conference held under Sec.  3001.81. The Postal Service shall be 
required to serve hard copies of its formal request and prepared direct 
evidence only upon those persons who have notified the Postal Service, 
in writing, during the pre-filing conference(s), that they do not have 
access to the Commission's Web site.


Sec.  3001.75  Motions.

    (a) In general. (1) An application for an order or ruling not 
otherwise specifically provided for in this subpart shall be made by 
motion. A motion shall set forth with particularity the ruling or 
relief sought, the grounds and basis therefor, and the statutory or 
other authority relied upon, and shall be filed with the Secretary and 
served pursuant to the provisions of Sec. Sec.  3001.9 through 3001.12. 
A motion to dismiss proceedings or any other motion that involves a 
final determination of the proceeding, any motion under Sec.  3001.91, 
and a motion that seeks to extend the deadline for issuance of an 
advisory opinion shall be addressed to the Commission. After a 
presiding officer is designated in a proceeding, all other motions in 
that proceeding, except those filed under part 3007 of this chapter, 
shall be addressed to the presiding officer.
    (2) Within 5 days after a motion is filed, or such other period as 
the Commission or presiding officer in any proceeding under this 
subpart may establish, any participant to the proceeding may file and 
serve an answer in support of or in opposition to the motion pursuant 
to Sec. Sec.  3001.9 through 3001.12. Such an answer shall state with 
specificity the position of the participant with regard to the ruling 
or relief requested in the motion and the grounds and basis and 
statutory or other authority relied upon. Unless the Commission or 
presiding officer otherwise provides, no reply to an answer or any 
further responsive document shall be filed.
    (b) Motions to be excused from answering discovery requests. (1) A 
motion to be excused from answering discovery requests shall be filed 
with the Commission within 3 days of the filing of the interrogatory, 
request for production, or request for admission to which the motion is 
directed. If a motion to be excused from answering is made part of an 
interrogatory, request for production, or request for admission, the 
part to which objection is made shall be clearly identified. Claims of 
privilege shall identify the specific evidentiary privilege asserted 
and state the reasons for its applicability. Claims of undue burden 
shall state with particularity the effort that would be required to 
answer or respond to the request, providing estimates of costs and 
workhours required, to the extent possible.
    (2) An answer to a motion to be excused from answering a discovery 
request shall be filed within 2 days of the filing of the motion. The 
text of the discovery request and any answer previously provided by the 
Postal Service shall be included as an attachment to the answer.
    (3) Unless the Commission or presiding officer grants the motion to 
be excused from answering, the Postal Service shall answer the 
interrogatory, production request, or request for admission. Answers 
shall be filed in conformance with Sec. Sec.  3001.9 through 3001.12 
within 3 days of the date on which a motion to be excused from 
answering is denied.
    (4) The Commission or presiding officer may impose such terms and 
conditions as are just and may, for good cause, issue a protective 
order, including an order limiting or conditioning interrogatories, 
requests for production, and requests for admission as justice requires 
to protect the Postal Service from undue annoyance, embarrassment, 
oppression, or expense.
    (c) Motions to strike. Motions to strike are requests for 
extraordinary relief and are not substitutes for briefs or rebuttal 
evidence in a proceeding. A motion to strike testimony or exhibit 
materials must be submitted in writing at least 3 days before the 
scheduled appearance of a witness, unless good cause is shown. 
Responses to motions to strike are due within 2 days.
    (d) Motions for leave to file surrebuttal testimony. Motions for 
leave to file surrebuttal testimony submitted pursuant to Sec.  3001.91 
and any answers thereto must be filed on or before the dates provided 
in the procedural schedule established by the Commission.


Sec. Sec.  3001.76-3001.79  [Reserved]


Sec.  3001.80  Procedural schedule.

    (a) Notice. Subject to paragraph (b) of this section, the 
Commission shall include in the notice of proceeding issued under Sec.  
3001.17 a procedural schedule based upon the pro forma schedule set 
forth in Appendix A of this part. The procedural schedule shall 
include:
    (1) A deadline for notices of interventions;
    (2) The date(s) for the mandatory technical conference between the 
Postal Service, Commission staff, and interested parties;
    (3) The deadline for discovery on the Postal Service's direct case;
    (4) The deadline for responses to participant discovery on the 
Postal Service's case;
    (5) The deadline for participants to confirm their intent to file a 
rebuttal case;
    (6) The date for filing participant rebuttal testimony, if any;
    (7) The dates for filing motions for leave to file surrebuttal 
testimony and answers thereto;
    (8) The date for filing surrebuttal, if any;
    (9) The date(s) for hearings on the Postal Service's direct case, 
rebuttal testimony, and surrebuttal testimony, if any;
    (10) The date for filing initial briefs;
    (11) The date for filing reply briefs; and
    (12) A deadline for issuance of an advisory opinion which is 90 
days from the date of filing.
    (b) Changes for good cause. These dates are subject to change for 
good cause only.
    (c) Incomplete request. If at any time the Commission determines 
that the Postal Service's request is incomplete or that changes made 
subsequent to its filing significantly modify the request, the 
Commission may extend the deadlines established or take any other 
action as justice may require.


Sec.  3001.81  Pre-filing requirements.

    (a) Pre-filing conference required. Prior to the Postal Service 
filing a request that the Commission issue an advisory opinion on a 
proposed change in the nature of postal services subject to the 
procedures established in this subpart, the Postal Service shall 
conduct one or more pre-filing conference(s) with interested persons in 
the proceeding and shall make a good faith effort to address the 
concerns of such persons.

[[Page 33409]]

    (b) Purpose. The purpose of a pre-filing conference is to expedite 
consideration of the Postal Service's request for the issuance of 
advisory opinions by informing interested persons of the Postal 
Service's proposal; by providing an opportunity for interested persons 
to give feedback to the Postal Service that can be used by the Postal 
Service to modify or refine its proposal before it is filed at the 
Commission; and by identifying relevant issues and information needed 
to address those issues during proceedings at the Commission.
    (c) Rationale for the proposal. The Postal Service shall make 
available at the pre-filing conference a representative capable of 
discussing the policy rationale behind the Postal Service's proposal 
with interested persons.
    (d) Notice. The Postal Service shall file with the Commission a 
notice of its intent to conduct any pre-filing conference(s) at least 
10 days before the first scheduled conference. The notice filed by the 
Postal Service shall include a schedule of proposed date(s) and 
location(s) for the conference(s). Upon receipt of such notice, the 
Commission shall issue a notice of pre-filing conference(s), which 
shall be published in the Federal Register, and appoint a Public 
Representative.
    (e) Nature of conferences. Discussions during the pre-filing 
conference(s) shall be informal and off the record. No formal record 
will be created during a pre-filing conference.
    (f) Noncompliance. If the Postal Service's noncompliance with the 
requirements of the pre-filing conference under Sec.  3001.83(b)(4) is 
established by a participant, the Commission may, in its discretion, 
consider an extension of, or modification to, the procedural schedule.
    (g) Informal meetings. Interested persons may meet outside the 
context of a pre-filing conference, among themselves or with the Postal 
Service, individually or in groups, to discuss the proposed changes in 
the nature of postal services.


Sec.  3001.82  Filing of formal requests.

    Whenever the Postal Service determines to request that the 
Commission issue an advisory opinion on a proposed change in the nature 
of postal services subject to this subpart, the Postal Service shall 
file with the Commission a formal request for such an opinion in 
accordance with the requirements of Sec. Sec.  3001.9 through 3001.11 
and Sec.  3001.83. The request shall be filed not less than 90 days 
before the proposed effective date of the change in the nature of 
postal services involved. Within 5 days after the Postal Service has 
filed a formal request for an advisory opinion in accordance with this 
section, the Secretary shall lodge a notice thereof with the director 
of the Office of the Federal Register for publication in the Federal 
Register.


Sec.  3001.83  Contents of formal requests.

    (a) General requirements. A formal request filed under this subpart 
shall include such information and data and such statements of reasons 
and basis as are necessary and appropriate to fully inform the 
Commission and interested persons of the nature, scope, significance, 
and impact of the proposed change in the nature of postal services and 
to show that the change in the nature of postal services is in 
accordance with and conforms to the policies established under title 
39, United States Code.
    (b) Specific information. A formal request shall include:
    (1) A detailed statement of the present nature of the postal 
services proposed to be changed and the change proposed;
    (2) The proposed effective date for the proposed change in the 
nature of postal services;
    (3) A full and complete statement of the reasons and basis for the 
Postal Service's determination that the proposed change in the nature 
of postal services is in accordance with and conforms to the policies 
of title 39, United States Code;
    (4) A statement that the Postal Service has completed the pre-
filing conference(s) required by Sec.  3001.81, including the time and 
place of each conference and a certification that the Postal Service 
has made a good faith effort to address concerns of interested persons 
about the Postal Service's proposal raised at the pre-filing 
conference(s);
    (5) The prepared direct evidence required by Sec.  3001.84;
    (6) The name of an institutional witness capable of providing 
information relevant to the Postal Service's proposal that is not 
provided by other Postal Service witnesses; and
    (7) Confirmation that Postal Service witnesses, including its 
institutional witness, will be available for the mandatory technical 
conference provided for in Sec.  3001.85.
    (c) Additional information. The Commission may request additional 
information from the Postal Service concerning a formal request.
    (d) Reliance on prepared direct evidence. The Postal Service may 
incorporate detailed data, information, and statements of reason or 
basis contained in prepared direct evidence submitted under paragraph 
(b)(5) of this section into its formal request by reference to specific 
portions of the prepared direct evidence.


Sec.  3001.84  Filing of prepared direct evidence.

    As part of a formal request for an advisory opinion under this 
subpart, the Postal Service shall file all of the prepared direct 
evidence upon which it proposes to rely in the proceeding on the record 
before the Commission to establish that the proposed change in the 
nature of postal services is in accordance with and conforms to the 
policies of title 39, United States Code. Such prepared direct evidence 
shall be in the form of prepared written testimony and documentary 
exhibits which shall be filed in accordance with Sec.  3001.31.


Sec.  3001.85  Mandatory technical conference.

    (a) Date. A date for a mandatory technical conference shall be 
included in the procedural schedule required by Sec.  3001.80. The date 
for this technical conference shall be set based upon the pro forma 
schedule set forth in Appendix A to this subpart. The conference shall 
be held at the offices of the Commission.
    (b) Witnesses. The Postal Service shall make available at the 
technical conference each witness whose prepared direct testimony was 
filed pursuant to Sec.  3001.84. If the Postal Service seeks for any 
witness to be excused on the basis that the witness's testimony neither 
presents nor is based upon technical information, it shall make such a 
motion concurrent with its request.
    (c) Purpose. The purpose of the technical conference is to provide 
an informal, off-the-record opportunity for participants, the officer 
of the Commission representing the interests of the general public, and 
Commission staff to clarify technical issues and to identify and 
request information relevant to an evaluation of the nature of changes 
to postal services proposed by the Postal Service. The technical 
conference is not part of the formal record in the proceeding.
    (d) Relation to discovery process. Information obtained during the 
mandatory technical conference may be used to discover additional 
relevant information by means of the formal discovery mechanisms 
provided for in Sec. Sec.  3001.86 through 3001.89.
    (e) Record. Information obtained during, or as a result of, the 
mandatory technical conference is not part of the

[[Page 33410]]

decisional record unless admitted under the standards of Sec.  
3001.31(a).


Sec.  3001.86  Discovery--in general.

    (a) Purpose. The rules in this subpart allow discovery that is 
reasonably calculated to lead to admissible evidence during a 
proceeding. The notice and scheduling order issued pursuant to Sec.  
3001.80 shall provide that discovery will be scheduled to end at least 
3 days prior to the commencement of hearings.
    (b) Informal discovery. The discovery procedures in Sec.  3001.86 
and Sec. Sec.  3001.87 through 3001.89 are not exclusive. Participants 
are encouraged to engage in informal discovery whenever possible to 
clarify exhibits and testimony. The results of these efforts may be 
introduced into the record by stipulation, or by other appropriate 
means. In the interest of reducing motion practice, participants also 
are expected to use informal means to clarify questions and to identify 
portions of discovery requests considered overbroad or burdensome.
    (c) Failure to obey orders or rulings. If a participant fails to 
obey an order of the Commission or ruling of presiding officer to 
provide or permit discovery pursuant to this section or Sec. Sec.  
3001.86 through 3001.89, the Commission or the presiding officer may 
issue orders or rulings in regard to the failure as are just. These 
orders or rulings may, among other things:
    (1) Direct that certain designated facts are established for the 
purposes of the proceeding;
    (2) Prohibit a participant from introducing certain designated 
matters in evidence;
    (3) Strike certain evidence, requests, pleadings, or parts thereof; 
or,
    (4) Such other relief as the Commission deems appropriate.


Sec.  3001.87  Interrogatories.

    (a) Service and contents. In the interest of expedition and limited 
to information which appears reasonably calculated to lead to the 
discovery of admissible evidence, any participant in a proceeding may 
propound to any other participant no more than a total of 25 written, 
sequentially numbered interrogatories, by witness, requesting non-
privileged information relevant to the subject matter of the 
proceeding. An interrogatory with subparts that are logically or 
factually subsumed within and necessarily related to the primary 
question will be counted as one interrogatory. The respondent shall 
answer each interrogatory and furnish such information as is available. 
The participant propounding the interrogatories shall file them with 
the Commission in conformance with Sec. Sec.  3001.9 through 3001.12. 
Follow-up interrogatories to clarify or elaborate on the answer to an 
earlier discovery request may be filed after the period for intervenor 
discovery on the Postal Service case ends if the interrogatories are 
filed within 7 days of receipt of the answer to the previous 
interrogatory. In extraordinary circumstances, follow-up 
interrogatories may be filed not less than 6 days prior to the filing 
date for the participant's rebuttal or surrebuttal testimony.
    (b) Answers. (1) Answers to interrogatories shall be prepared so 
that they can be incorporated into the record as written cross-
examination. Each answer shall begin on a separate page, identify the 
individual responding and the relevant testimony number, if any, the 
participant who propounded the interrogatory, and the number and text 
of the question.
    (2) Each interrogatory shall be answered separately and fully in 
writing by the individual responsible for the answer, unless it is 
objected to, in which event the reasons for objection shall be stated 
in a motion to be excused from answering in the manner prescribed by 
paragraph (c) of this section.
    (3) An interrogatory otherwise proper is not necessarily 
objectionable because an answer would involve an opinion or contention 
that relates to fact or the application of law to fact.
    (4) Answers filed by a respondent shall be filed in conformance 
with Sec. Sec.  3001.9 through 3001.12 within 7 days of the filing of 
the interrogatories or within such other period as may be fixed by the 
Commission or presiding officer. Any other period fixed by the 
Commission or presiding officer shall end before the conclusion of the 
hearing.
    (c) Motion to be excused from answering. A respondent may, in lieu 
of answering an interrogatory, file a motion pursuant to Sec.  
3001.75(b) to be excused from answering.
    (d) Supplemental answers. A respondent has a duty to timely amend a 
prior answer if it obtains information upon the basis of which it knows 
that the answer was incorrect when made or is no longer true. A 
respondent shall serve supplemental answers to update or to correct 
responses whenever necessary, up until the date the answer could have 
been accepted into evidence as written cross-examination. A respondent 
shall indicate whether the answer merely supplements the previous 
answer to make it current or whether it is a complete replacement for 
the previous answer.


Sec.  3001.88  Production of documents.

    (a) Service and contents. (1) In the interest of expedition and 
limited to information which appears reasonably calculated to lead to 
the discovery of admissible evidence, any participant may serve on any 
other participant a request to produce and permit the participant 
making the request, or someone acting on behalf of the participant, to 
inspect and copy any designated documents or things that constitute or 
contain matters, not privileged, that are relevant to the subject 
matter involved in the proceeding and that are in the custody or 
control of the respondent.
    (2) The request shall set forth the items to be inspected either by 
individual item or category, and describe each item and category with 
reasonable particularity, and shall specify a reasonable time, place, 
and manner of making inspection. The participant requesting the 
production of documents or items shall file its request with the 
Commission in conformance with Sec. Sec.  3001.9 through 3001.12.
    (b) Answers. (1) The respondent shall file an answer to a request 
under paragraph (a) of this section with the Commission in conformance 
with Sec. Sec.  3001.9 through 3001.12 within 7 days after the request 
is filed, or within such other period as may be fixed by the Commission 
or presiding officer. The answer shall state, with respect to each item 
or category, whether inspection will be permitted as requested.
    (2) If the respondent objects to an item or category, it shall 
state the reasons for objection in a motion to be excused from 
answering as prescribed by paragraph (c) of this section.
    (c) Motions to be excused from answering. A respondent may, in lieu 
of answering a request for production, file a motion pursuant to Sec.  
3001.75(b) to be excused from answering.


Sec.  3001.89  Admissions.

    (a) Service and content. In the interest of expedition, any 
participant may serve upon any other participant a written request for 
the admission of any relevant, unprivileged facts, including the 
genuineness of any documents or exhibits to be presented in the 
hearing. The admission shall be for purposes of the pending proceeding 
only. The participant requesting the admission shall file its request 
with the Commission in conformance with Sec. Sec.  3001.9 through 
3001.12.
    (b) Answers. (1) A matter for which admission is requested shall be

[[Page 33411]]

separately set forth in the request and is deemed admitted unless, 
within 7 days after the request is filed, or within such other period 
as may be established by the Commission or presiding officer, the 
respondent files a written answer or motion to be excused from 
answering pursuant to paragraph (c) of this section. Answers to 
requests for admission shall be filed with the Commission in 
conformance with Sec. Sec.  3001.9 through 3001.12.
    (2) If the answer filed by the respondent does not admit a matter 
asserted in the participant's request, it must either specifically deny 
the matter or explain in detail why it cannot truthfully admit or deny 
the asserted matter. When good faith requires, the respondent must 
admit a portion of the asserted matter and either deny or qualify the 
remaining portion of such asserted matter. Lack of knowledge for 
failing to admit or deny can be invoked only after reasonable inquiry 
if the information already possessed or reasonably obtainable is 
insufficient to enable an admission or denial.
    (3) Grounds for objection to requests for admission must be stated. 
Objections cannot be based solely upon the ground that the request 
presents a genuine issue for trial.
    (c) Motion to be excused from answering. A respondent may, in lieu 
of answering a request for admission, file a motion pursuant to Sec.  
3001.75(b) to be excused from answering.


Sec.  3001.90  Rebuttal testimony.

    (a) Timing. Any participant may file rebuttal testimony on or 
before the date established for that purpose by the procedural schedule 
issued by the Commission pursuant to Sec.  3001.80. Hearing on rebuttal 
testimony shall proceed as set forth in the procedural schedule.
    (b) Limitations. The scope of rebuttal testimony shall be limited 
to material issues relevant to the specific proposal made by the Postal 
Service. Rebuttal testimony shall not propose, or seek to address, 
alternatives to the Postal Service's proposal.
    (c) Intent to file rebuttal testimony. If a participant wishes to 
file rebuttal testimony, it must file a document confirming its intent 
to file rebuttal testimony with the Commission by the date provided in 
the procedural schedule.
    (d) Adjustment of dates. If no participant files a confirmation of 
intent to file rebuttal testimony on or before the date established by 
the procedural schedule issued by the Commission pursuant to Sec.  
3001.80, the Commission may adjust other dates in the procedural 
schedule as it deems to be necessary and appropriate.


Sec.  3001.91  Surrebuttal testimony.

    (a) Scope. Surrebuttal testimony shall be limited to material 
issues relevant to the Postal Service's proposal and to the rebuttal 
testimony which the surrebuttal testimony seeks to address. Testimony 
that exceeds the scope of the Postal Service's proposal or rebuttal 
testimony shall not be permitted.
    (b) Motion for leave to file surrebuttal. A participant who wishes 
to file surrebuttal testimony must obtain prior approval by filing with 
the Commission a motion for leave to file surrebuttal pursuant to Sec.  
3001.75(d) on or before the date provided in the procedural schedule 
established by the Commission. The motion must summarize the 
surrebuttal testimony the participant wishes to file and must identify 
and explain exceptional circumstances that require the filing of such 
testimony. The moving participant bears the burden of demonstrating 
exceptional circumstances that warrant a grant of the motion. Answers 
to such motions may be filed as provided in Sec.  3001.75(d).
    (c) Deadline for filing surrebuttal authorized by the Commission. 
In the event the Commission grants the motion for leave to file 
surrebuttal testimony, the moving participant must file its proposed 
surrebuttal testimony by the date provided in the procedural schedule 
established pursuant to Sec.  3001.80.
    (d) Adjustment of procedural dates. If no participant files a 
motion for leave to file surrebuttal testimony, or if the Commission 
denies all such motions as may be filed, the remaining dates in the 
procedural schedule may be adjusted by the Commission as it deems to be 
necessary and appropriate.


Sec.  3001.92  Hearings.

    (a) Initiation. Hearings for the purpose of taking evidence shall 
be initiated by the issuance of a notice and scheduling order pursuant 
to Sec.  3001.80.
    (b) Presiding officer. All hearings shall be held before the 
Commission sitting en banc with a duly designated presiding officer.
    (c) Entering of appearances. The Commission or the presiding 
officer before whom the hearing is held will cause to be entered on the 
record all appearances together with a notation showing on whose behalf 
each such appearance has been made.
    (d) Order of procedure. In requests for advisory opinions before 
the Commission, the Postal Service shall be the first participant to 
present its case. Unless otherwise ordered by the Commission, the 
presiding officer shall direct the order of presentation of all other 
participants and issue such other procedural orders as may be necessary 
to assure the orderly and expeditious conclusion of the hearing.
    (e)(1) Presentations by participants. Each participant shall have 
the right in public hearings to present evidence relevant to the Postal 
Service's proposal, cross-examine (limited to testimony adverse to the 
participant conducting the cross-examination), object, move, and argue. 
The participant's presentation shall be in writing and may be 
accompanied by a trial brief or legal memoranda. (Legal memoranda on 
matters at issue will be welcome at any stage of the proceeding.) When 
objections to the admission or exclusion of evidence before the 
Commission or the presiding officer are made, the grounds relied upon 
shall be stated. Formal exceptions to rulings are unnecessary.
    (2) Written cross-examination. Written cross-examination will be 
utilized as a substitute for oral cross-examination whenever possible, 
particularly to introduce factual or statistical evidence. Designations 
of written cross-examination shall be served in accordance with 
Sec. Sec.  3001.9 through 3001.12 no later than 3 days before the 
scheduled appearance of a witness. Designations shall identify every 
item to be offered as evidence, listing the participant who initially 
posed the discovery request, the witness and/or party to whom the 
question was addressed (if different from the witness answering), the 
number of the request and, if more than one answer is provided, the 
dates of all answers to be included in the record. (For example, ``PR-
T1-17 to USPS witness Jones, answered by USPS witness Smith (March 1, 
1997) as updated (March 21, 1997)''). When a participant designates 
written cross-examination, two hard copies of the documents 
(unfastened, single-spaced, not hole-punched) to be included shall 
simultaneously be submitted to the Secretary of the Commission. The 
Secretary of the Commission shall prepare for the record a packet 
containing all materials designated for written cross-examination in a 
format that facilitates review by the witness and counsel. The witness 
will verify the answers and materials in the packet, and they will be 
entered into the transcript by the presiding officer. Counsel may 
object to written cross-examination at that time, and any designated 
answers or materials ruled objectionable will not be admitted into the 
record.

[[Page 33412]]

    (3) Oral cross-examination. Oral cross-examination will be 
permitted for clarifying written cross-examination and for testing 
assumptions, conclusions or other opinion evidence. Notices of intent 
to conduct oral cross-examination shall be filed 3 or more days before 
the announced appearance of the witness and shall include specific 
references to the subject matter to be examined and page references to 
the relevant direct testimony and exhibits. A participant intending to 
use complex numerical hypotheticals, or to question using intricate or 
extensive cross-references, shall provide adequately documented cross-
examination exhibits for the record. Copies of these exhibits shall be 
filed at least 2 days (including 1 working day) before the scheduled 
appearance of the witness. They may be filed online or delivered in 
hardcopy form to counsel for the witness, at the discretion of the 
participant. If a participant has obtained permission to receive 
service of documents in hardcopy form, hardcopy notices of intent to 
conduct oral cross-examination of witnesses for that participant shall 
be delivered to counsel for that participant and served 3 or more 
working days before the announced appearance of the witness. Cross-
examination exhibits shall be delivered to counsel for the witness at 
least 2 days (including 1 working day) before the scheduled appearance 
of the witness.
    (f) Limitations on presentation of the evidence. The taking of 
evidence shall proceed with all reasonable diligence and dispatch, and 
to that end, the Commission or the presiding officer may limit 
appropriately:
    (1) The number of witnesses to be heard upon any issue,
    (2) The examination by any participant to specific issues, and
    (3) The cross-examination of a witness to that required for a full 
and true disclosure of the facts necessary for exploration of the 
Postal Service's proposal, disposition of the proceeding, and the 
avoidance of irrelevant, immaterial, or unduly repetitious testimony.
    (g) Motions during hearing. Except as provided in Sec.  3001.75(a), 
after a hearing has commenced in a proceeding, a request may be made by 
motion to the presiding officer for any procedural ruling or relief 
desired. Such motions shall set forth the ruling or relief sought, and 
state the grounds therefore and statutory or other supporting 
authority. Motions made during hearings may be stated orally upon the 
record, except that the presiding officer may require that such motions 
be reduced to writing and filed separately. Any participant shall have 
the opportunity to answer or object to such motions at the time and in 
the manner directed by the presiding officer.
    (h) Rulings on motions. The presiding officer is authorized to rule 
upon any motion not reserved for decision by the Commission in Sec.  
3001.75(a). This section shall not preclude a presiding officer from 
referring any motion made in hearing to the Commission for ultimate 
determination.
    (i) Transcript corrections. Corrections to the transcript of a 
hearing shall not be requested except to correct a material substantive 
error in the transcription made at the hearing.
    (j) Field Hearings. Field hearings will not be held except upon a 
showing by any participant and determination by the Commission that 
there is exceptional need or utility for such a hearing which cannot be 
accomplished by alternative means.


Sec.  3001.93  Initial and reply briefs.

    (a) When filed. At the close of the taking of testimony in any 
proceeding, participants may file initial and reply briefs. The dates 
for filing initial and reply briefs shall be established in the 
procedural schedule issued pursuant to Sec.  3001.80. Such dates may be 
modified by subsequent order issued by the Commission or the presiding 
officer.
    (b) Contents. Each brief filed with the Commission shall be as 
concise as possible and shall include the following in the order 
indicated:
    (1) A subject index with page references, and a list of all cases 
and authorities relied upon, arranged alphabetically, with references 
to the pages where the citation appears;
    (2) A concise statement of the case from the viewpoint of the 
filing participant;
    (3) A clear, concise, and definitive statement of the position of 
the filing participant as to the Postal Service request;
    (4) A discussion of the evidence, reasons, and authorities relied 
upon with precise references to the record and the authorities; and
    (5) Proposed findings and conclusions with appropriate references 
to the record or the prior discussion of the evidence and authorities 
relied upon.
    (c) Length. Initial briefs filed by all participants other than the 
Postal Service shall not exceed 14,000 words. Initial briefs filed by 
the Postal Service shall not exceed 21,000 words. Reply briefs filed by 
all participants other than the Postal Service shall not exceed 7,000 
words. Reply briefs filed by the Postal Service shall not exceed 10,500 
words. All participants shall attest to the number of words contained 
in their brief. Tables of cases, tables of citations, and appendices 
shall not be considered as part of the word count.
    (d) Include by reference. Briefs before the Commission or a 
presiding officer shall be completely self-contained and shall not 
incorporate by reference any portion of any other brief, pleading, or 
document.
    (e) Excerpts from the record. Testimony and exhibits shall not be 
quoted or included in briefs except for short excerpts pertinent to the 
argument presented.
    (f) Filing and service. Briefs shall be filed in the form and 
manner and served as required by Sec. Sec.  3001.9 through 3001.12.
    (g) Statements of Position. As an alternative to filing a formal 
brief, a participant may file a Statement of Position. To the extent 
practicable, the contents of each Statement of Position should include 
a clear, concise, and definitive statement of the position of the 
filing participant as to the Postal Service request, as well as any 
points or factors in the existing record that support the participant's 
position. Statements of Position shall be limited to the existing 
record and shall not include any new evidentiary material.

Appendix A to Subpart D of Part 3001--Pro Forma N-Case Procedural 
Schedule

----------------------------------------------------------------------------------------------------------------
              Line                         Action                                Day number
----------------------------------------------------------------------------------------------------------------
1...............................  Pre-Filing               n/a.
                                   Consultations \1\.
2...............................  Commission Order \2\...  n/a.
3...............................  Filing of Postal         0.
                                   Service Request.
4...............................  Commission Notice and    1-3.
                                   Order \3\.
5...............................  Technical Conference...  10.
6...............................  Participant Discovery    28.
                                   on Postal Service Case
                                   Ends.
7...............................  Responses to             35.
                                   Participant Discovery
                                   on Postal Service Case.
8...............................  Participants Confirm     37.\4\
                                   Intent to File a
                                   Rebuttal Case.

[[Page 33413]]

 
9...............................  Filing of Rebuttal       42.
                                   Cases (if submitted).
10..............................  Deadline for Motions to  44.\5\
                                   Leave to File
                                   Surrebuttal.
11..............................  Deadline for Answers to  46.
                                   Motions for
                                   Surrebuttal.
12..............................  Filing of Surrebuttal    49.\6\
                                   Cases (if authorized).
13..............................  Hearings...............
                                  Hearings (with no        42-44.
                                   Rebuttal Cases).
                                  Hearings (with Rebuttal  49-51.
                                   Cases, but no requests
                                   for leave to file
                                   Surrebuttal Cases).
                                  Hearings (with Rebuttal  54-56.
                                   Cases and requests for
                                   leave to file
                                   Surrebuttal Cases).
14..............................  Initial Briefs.........  (7 days after conclusion of hearings).
15..............................  Reply Briefs...........  (7 days after filing of Initial Briefs).
16..............................  Target Issuance Date of  90.
                                   Advisory Opinion.
----------------------------------------------------------------------------------------------------------------
\1\ The Postal Service would initiate pre-filing consultations and would file a notice with the Commission of
  such consultations prior to their commencement.
\2\ This order would appoint a Public Representative.
\3\ This notice and order would announce the Postal Service request, set a deadline for interventions, set a
  date for a technical conference, and establish a procedural schedule.
\4\ If no participant elects to file a rebuttal case, hearings begin on Day 42.
\5\ If no surrebuttal cases are requested, hearings being on Day 49.
\6\ If one or more surrebuttal cases are requested (whether or not authorized by the Commission), hearings begin
  on Day 54.


    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2014-12430 Filed 6-9-14; 8:45 am]
BILLING CODE 7710-FW-P