Taking on the USPS

The postal rate increase was implemented in January, but that’s not stopping the Alliance of Nonprofit Mailers from trying to overturn the price hike. On April 14, the U.S. Circuit Court of Appeals for the D.C. Circuit will hear oral arguments from the Alliance, the U.S. Postal Service, and other parties in the Alliance’s appeal against the rate case.

In the appeal, the Alliance seeks “to correct the unfair increases that were imposed on nonprofit mailers,” says executive director Neal Denton. While commercial catalogers’ rates rose 4.5% on average, nonprofit catalogers’ rates jumped 15%-18% on average. The Alliance suit also challenges the entire rate increase, contending that the USPS could have finished its current fiscal year with a ñ550 million profit even without a rate hike.

The Alliance had filed its suit in July 1998, and in August it motioned to expedite the appeal so that it could be heard before January; the court rejected the motion, however. Nonetheless, the Alliance hopes that the court will return the rate case, which the U.S. Postal Service Board of Governors approved in July, to the Postal Rate Commission for reevaluation and possible rejection. The latter would mean that the old rates would be-at least temporarily-reinstated.

USPS attorneys refuse to comment while the case is pending. But Denton believes his group has a 50-50 chance of winning. As Alliance legal counsel David Levy, a partner with Washington law firm Sidley & Austin, points out, one of the judges, Douglas Ginsburg, has overturned several decisions by the Federal Communications Commission.

But many others believe the USPS has nothing to worry about. “I don’t think it will succeed,” says Walter Bernheimer II, president of Wellesley, MA-based consultancy Bernheimer Associates. “And even if the Alliance does win, by the time the court does anything about it, the matter will be irrelevant.”–PM

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