Complaint Proceeding

AGENCY:

Postal Regulatory Commission.

ACTION:

Notice.

SUMMARY:

The Commission is appointing a Presiding Officer to represent the interests of the general public and provide a public written intermediate decision including findings of fact and conclusions of law on the issues raised in this proceeding.

ADDRESSES:

Submit notices of intervention electronically via the Commission's Filing Online system at http://www.prc.gov. Persons interested in intervening who cannot submit their views electronically should contact the person identified in the FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 202-789-6820.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction

II. Background

III. Commission Analysis

IV. Ordering Paragraphs

I. Introduction

On June 17, 2024, Sai and Fiat Fiendum, Inc. (Complainants) filed a complaint with the Commission regarding the Postal Service's treatment of mail items for the blind (blind mail). On July 8, 2024, the Postal Service filed its Motion to Dismiss. In response, Complainants filed their “[m]otion for summary elevation, or extension and contingent withdrawal, and clarification,” requesting, amongst other relief, that the Commission extend the deadline to respond to the Motion to Dismiss. The Commission granted this extension. On August 5, 2024, Complainants filed their opposition.

For the reasons explained below, the Commission concludes that the Complaint raises an issue of material fact as to whether the Postal Service has violated 39 U.S.C. 403(c) in its treatment of blind mail for international mailers. The Commission determines that Complainants' remaining claims should be dismissed for a lack of jurisdiction due to Complainants' failure to state a claim for which relief can be granted.

II. Background

Complainant Sai is a blind American citizen living in the United Kingdom who is the President of Fiat Fiendum, Inc., the other named Complainant. Complaint at 3. Complainants explain that the Universal Postal Convention (UPC), to which the United States is a party, mandates that the international mailing of certain items for the blind be free. Id. Complainants allege that the Postal Service has abdicated its responsibilities under the UPC by putting unlawful conditions on the free mailing of items for the blind, thus violating international law as well as human rights law, anti-discrimination statutes, and the U.S. Constitution. See, e.g., Complaint at 11-21.

Complainants provide several examples of the manner in which the Postal Service is restricting the scope of free blind mail and describes how these restrictions harm blind mailers who, like them, need items shipped overseas. Complaint at 11-14. For instance, Complainants explain that a common item used by blind individuals is “a brailler—a specialized typewriter . . . that outputs braille embossing rather than ink.” Id. at 11. Complainants explain that this item is essential for blind individuals and is often only available from one U.S.-based company worldwide. Id. at 11-12. Complainants assert, however, that because of the size of these braillers, the Postal Service refuses to ship these items as free blind mail, in violation of UPC rules. Id. According to Complainants, “it is cost prohibitive to mail this internationally without blind mail,” particularly considering that blind people “are often quite poor” and cannot rely on economies of scale. Id. at 12. Complainants request that the Commission initiate proceedings, including a public hearing and settlement negotiations, that would ultimately lead to regulatory amendments to the International Mail Manual (IMM) and Domestic Mail Manual (DMM). Id. at 32-41.

In its Motion to Dismiss, the Postal Service classifies Complainants' allegations as four separate claims, summarized as follows: (1) a claim asserting that the Postal Service improperly failed to categorize blind mail as a standalone class of mail; (2) a claim that the Postal Service's treatment of blind mail violates international treaty law; (3) a claim that the Postal Service discriminates against customers with blindness in violation of the Rehabilitation Act and 39 U.S.C. 403(c); and (4) a claim that the Postal Service has committed Constitutional violations. Motion to Dismiss at 1-2. According to the Postal Service, the international treaty, discrimination, and Constitutional claims should be dismissed because they do not fall within the Commission's jurisdiction. Id. at 4-14, 17-20. The Postal Service states that the claim relating to mail classification fails because both logic and Congressional intent suggest that blind mail need not be its own class. Id. at 20-22.

Complainants respond that the Complaint provides adequate legal and factual grounds to deny the Motion to Dismiss. Complainants also argue that the Postal Service has refused to confer with them and that such a referral should result in sanctions against the Postal Service.

III. Commission Analysis

At present, the determinative issue is whether the Complaint raises genuine issues of material fact or law within the Commission's jurisdiction. The Commission has jurisdiction over complaints that meet the statutory requirements of 39 U.S.C. 3662(a). Within 90 days after receiving a complaint under section 3662(a), the Commission must either (1) begin proceedings on the complaint upon finding that such complaint raises material issues of fact or law; or (2) issue an order dismissing the complaint. The Commission must issue a written statement setting forth the bases of its determination. 39 U.S.C. 3662(b)(1)(B).

Section 3662(a) permits any interested person to file a complaint with the Commission if they believe the Postal Service is not operating in conformance with the requirements of 39 U.S.C. chapter 36; 39 U.S.C. 101(d), 401(2), 403(c), 404a, or 601; or any regulations promulgated under any of those provisions. In turn: section 101(d) requires postal rates to be established to apportion the costs of all postal operations to mail users on a fair and equitable basis; section 401(2) permits the Postal Service to adopt, amend, and repeal rules and regulations not inconsistent with title 39 as may be necessary to execute its functions under title 39 “and such other functions as may be assigned to the Postal Service under any provisions of law outside of” title 39; section 403(c) prohibits the Postal Service, except as specifically authorized under title 39, from making any undue or unreasonable discrimination among mail users when providing services and establishing classifications, rates, and fees until title 39, as well as granting any undue or unreasonable preferences to any mail user; section 404a, except as specifically authorized by law, prohibits the Postal Service from establishing rules or regulations that create unfair competition; compel the disclosure, transfer, or licensing of intellectual property to any third party; and offer services based on confidential information, without consent, unless substantially the same information is obtainable from an independent source; section 601 governs the carriage of letters out of the mails.

Chapter 36 contains provisions in title 39 relating to rates, classes, and services. The Commission has consistently held that its complaint jurisdiction is limited to complaints filed against the Postal Service that involve alleged violations of these five specific sections (or subsections) of title 39 or the provisions contained in chapter 36. Lacking jurisdiction over a given complaint, the Commission must dismiss the complaint.

A. As a Matter of Law, the Postal Service Has No Obligation To Create a Standalone Class for Blind Mail

Complainants allege that the Postal Service has “illegally” failed to classify blind mail as a separate and distinct class of mail. Complaint at 15. In response, the Postal Service asserts that this allegation fails to state a claim on which relief can be granted. Motion to Dismiss at 20. The Postal Service argues that the purpose of “classes” in the pricing system is to administer the price cap for market dominant products and that, because blind mail is shipped free, it is illogical to treat it as a separate class. Id. Indeed, the Postal Service explains that splitting blind mail into a distinct class would make it difficult for Congress to reimburse the Postal Service because the easiest way to calculate reimbursement is “through reference to published rates, which are themselves subject to the applicable price cap of the underlying analog class.” Id. at 20-21. Further, the Postal Service notes that Congress did not see fit to designate blind mail as a separate product offering in its initial regulatory structure. Id. at 21.

The Commission agrees that Complainants have failed to state a claim entitling them to relief. Though Complainants assert that the Postal Service must categorize blind mail as its own mail class, they do not identify any statute or regulation requiring such categorization. See Complaint at 15. As such, Complainants fail to affirmatively allege that “the Postal Service is not operating in conformance with the requirements of the provisions of sections 101(d), 401(2), 403(c), 404a, or 601, or [chapter 39] (or regulations promulgated under any of those provisions),” as required to state a claim under section 3662(a). As such, the claim related to the classification of blind mail must be dismissed.

B. The Commission Does Not Have Jurisdiction Over the UPC Claims and the UPC Does Not Create a Private Right of Action

As explained above, Complainants allege that the Postal Service's treatment of blind mail violates the UPC in numerous ways (for instance, by restricting its definition of who can receive free blind mail to exclude partially-sighted individuals, by restricting the weight for free blind mail, and by restricting free blind mail only to reading material). See Complaint at 22-31. In response, the Postal Service asserts that the Commission does not have jurisdiction to hear allegations that the Postal Service has violated international treaty law and, moreover, that the UPC does not create a private right of action for alleged treaty violations. Motion to Dismiss at 6. Specifically, the Postal Service argues that violations of the UPC do not fall within the Commission's jurisdiction under section 401(2) (specifying that the Postal Service may adopt rules “not inconsistent with [title 39]”) because the UPC is not affirmatively codified in title 39; rather, the statutes related to blind mail in title 39 are consistent with the rules laid out in the IMM. Id. at 5-14.

The Postal Service is correct that Complainants have not alleged any violations of section 401(2) (or otherwise) sufficient to raise Commission jurisdiction over its UPC Claims. As the Commission has previously stated, a claim falls within section 401(2) “only if the Postal Service adopted, amended, or repealed rules or regulations inconsistent with title 39.” Order No. 2377 at 6. “Section 401(2) is not a `catch all' provision over which the Commission enjoys unlimited jurisdiction pursuant to 39 U.S.C. [] 3662(a).” Here, Complainants alleged that the Postal Service violated the UPC—a separate and distinct set of rules not captured by section 401(2). As such, the Commission does not have jurisdiction to hear the UPC claims.

Even assuming for the sake of argument that the Commission could appropriately hear the UPC claims, they would necessarily fail because the UPC provides no private right of action for its violation. Unless the text of an international treaty explicitly states otherwise, the presumption is that “international agreements, even those directly benefiting private persons, generally do not create private rights or provide for a private cause of action in domestic courts.” Here, nothing in the text of the UPC provides for a cause of action in favor of private citizens. On the contrary, as the Postal Service notes, the Universal Postal Union (UPU) instead contemplates resolution disputes between countries (the parties to the UPU itself). As such, Complainants do not have the ability to bring a cause of action to the Commission for an alleged Postal Service violation of the UPC.

C. The Discrimination and Constitutional Claims Fail for Lack of Jurisdiction

1. Constitutional Claims

Complainants assert that the Postal Service is infringing on their First and Fourth Amendment rights by prohibiting free blind mail from containing advertisements or being used for “a profit-making transaction” and by opening blind mail to determine its eligibility. Complaint at 19-21. In response, the Postal Service asserts that nonconformance with the U.S. Constitution is not a basis for Commission jurisdiction under section 3662 and, as such, the Commission lacks jurisdiction to hear the Complainants' Constitutional claims. As previously discussed, the Postal Service is correct in noting that Commission jurisdiction is constrained to the five specific sections (or subsections) of title 39 enumerated in section 3662 and that Constitutional violations are not included therein. As such, Complainants' First and Fourth Amendment claims must be dismissed.

2. Discrimination Claims

Complainants also assert that all of their allegations constitute “human rights and disability discrimination” in violation of section 403(c) and the Rehabilitation Act. However, according to the Postal Service, the Complainants' allegations of disability discrimination also fail for lack of Commission jurisdiction. Motion to Dismiss at 17. Specifically, the Postal Service notes that the Complainants bring their discrimination claims under the Rehabilitation Act, but states that the Commission has already held that such claims are not proper under section 3662(a). Id. at 17-18. Further, the Postal Service asserts that Complainants have not properly alleged a claim of discrimination sufficient to invoke jurisdiction under 39 U.S.C. 403(c). Id. at 18.

In terms of the Rehabilitation Act claim, the Postal Service is correct that the Commission does not have jurisdiction to hear such claims. In Docket No. C2023-11, the Commission previously analyzed allegations that the Postal Service had violated the Rehabilitation Act by discriminating against a postal user based on her disability. See Order No. 6880 at 10. The Commission noted that “the Commission's complaint jurisdiction is limited to hearing allegations that the Postal Service is not operating in conformance with the requirements of 39 U.S.C. chapter 36” and that “claims related to . . . discrimination prohibited by 29 U.S.C. [] 701 et seq. [the Rehabilitation Act] . . . are alleged violations of statutes not specifically enumerated in 39 U.S.C. [] 3662(a).” Id. Therefore, the Commission dismissed such claims. Id. Likewise, the Commission does not have jurisdiction to hear Complainants' allegations that the Postal Service violated the Rehabilitation Act and thus such a claim must be dismissed.

However, Complainants' discrimination claim under 39 U.S.C. 403(c) must be analyzed differently. Citing to the Commission's decision in Docket No. C2020-2, the Postal Service correctly notes that in order to state a claim for violation of 39 U.S.C. 403(c), a complainant must allege that “(1) the complainant is receiving less favorable services than those provided to one or more other postal customers, (2) the complainant is similarly situated to those postal customers receiving more favorable service, and (3) there is no rational or legitimate basis for denying the complainant the more favorable service currently being provided to those similarly situated postal customers.” Motion to Dismiss at 18 (citing Order No. 6880 at 13-14). In turn, the Postal Service asserts that:

the FMFTB regulations confer benefits in favor of `blind and other handicapped persons' relative to the rest of the mailer population. The allegation that Complainants cannot send or receive advertisements free of charge just like all other mail users effectively defeats a section 403(c) claim since Complainants admit that they are not receiving less favorable services.

Id. n.66.

The Postal Service is correct that, had Complainants alleged that blind mailers are being discriminated against in relation to the larger mailing population as a whole, such a claim would necessarily fail. However, taken in the light most favorable to them, Complainants' allegations are instead that blind mail users outside of the United States are subject to less favorable ( i.e., more expensive) services than those located inside the United States (and that such treatment is illegitimate). See Complaint at 11, 13. For instance, the Complainants allege that, based on the IMM, they were prevented from using free blind mail to send and receive repaired canes from their U.S.-based manufacturer—a service they would have been able to take advantage of had they been located in the United States. Id. at 11. Similarly, they explain that if they “want something new, unusual, or bespoke, which [they] could get shipped to [them] for free in the US (and which the UPC requires be shipped to [them] for free in the UK too), [they] can't get it at all (or not without layers of intermediation, months of delay, and substantially increased costs).” Id. at 13. Therefore, Complainants have raised plausible allegations that the Postal Service has implemented rates that unfairly discriminate against foreign blind mailers.

This conclusion conforms with previous Commission precedent. In Docket No. R2018-1—a general Market Dominant rate case—the Chamber of Commerce argued that by setting mailing rates lower for foreign mailers than for American mailers, the Postal Service was violating section 403(c) by unreasonably discriminating against American mailers. The Commission determined that such concerns should instead be brought “under section 3662(a) of title 39 of the United States Code, which provides that any interested person who believes that the Postal Service is not operating in conformance with section 403(c) may lodge a complaint with the Commission in such form or manner that the Commission prescribes.” Order No. 4215 at 18. Here, Complainants have in fact brought their claims that the Postal Service is unfairly discriminating against them based on country of residence properly in a section 3662(a) proceeding.

The Postal Service may very well have a rational reason for treating international mailers differently than domestic mailers in terms of blind mail, but that is a material issue of fact not before the Commission on a motion to dismiss. At this juncture, the Complaint has raised a genuine issue of material fact and law—namely, whether the Postal Service's treatment of blind mail unreasonably discriminates against foreign mailers in violation of section 403(c). As such, the Commission shall begin proceedings on the Complaint. See39 U.S.C. 3662(b)(1)(A)(i). Pursuant to 39 CFR 3022.12(b) and 3022.14, the Postal Service is directed to file an answer to Complainants' Complaint, “Errata & Addenda,” and Second Addendum (consolidated as one superseding, amended complaint) within 10 days of this Order.

Pursuant to 39 CFR 3010.106, the Commission appoints Joseph K. Press to serve as presiding officer to ascertain the outstanding issues of material fact and law in this matter. Parties may request that the presiding officer obtain specific discovery but may not independently propound discovery. The presiding officer shall examine the disputed issues identified above and provide a public, written intermediate decision including findings of fact and conclusions of law on the issues raised in this proceeding. 39 CFR 3010.335. Pursuant to 39 CFR 3022.30(c), John Avila is designated as an officer of the Commission (Public Representative) to represent the interests of the general public in this proceeding.

IV. Ordering Paragraphs

It is ordered:

1. The Commission finds that the Complaint regarding blind mail, filed June 17, 2024, raises material issues of fact.

2. The United States Postal Service's Motion to Dismiss, filed July 8, 2024, is granted on all grounds except for the claim related to the alleged violation of 39 U.S.C. 403(c) as enumerated above.

3. Pursuant to 39 CFR 3022.12(b) and 3022.14, the Postal Service is directed to file an answer to Complainants' Complaint, “Errata & Addenda,” and Second Addendum (consolidated as one superseding, amended complaint) within 10 days of this Order.

4. Pursuant to 39 CFR 3010.106, the Commission appoints Joseph K. Press as a presiding officer in this proceeding.

5. Parties may request that the presiding officer obtain specific discovery but may not independently propound discovery.

6. Pursuant to 39 CFR 3022.30(c), John Avila is designated as an officer of the Commission (Public Representative) to represent the interests of the general public in this proceeding.

7. The presiding officer shall, pursuant to 39 CFR 3010.335, provide a public written intermediate decision including findings of fact and conclusions of law on the issues raised in this proceeding.

8. The Secretary shall arrange for publication of this order in the Federal Register .

[FR Doc. 2024-21271 Filed 9-18-24; 8:45 am]

BILLING CODE 7710-FW-P