[Federal Register Volume 71, Number 74 (Tuesday, April 18, 2006)]
[Notices]
[Pages 19913-19915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-5774]


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POSTAL RATE COMMISSION

[Docket No. C2004-3; Order No. 1460]


Order and Notice of Proceeding

AGENCY: Postal Rate Commission.

ACTION: Order denying motion to dismiss and notice of proceeding.

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SUMMARY: This document announces the Commission's decision to institute 
a formal proceeding to consider issues raised in a complaint concerning 
stamped stationery. Conducting this proceeding will allow the 
Commission to determine whether the complaint raises any genuine issues 
of material fact and to make related determinations.

DATES: 1. Deadline for filing issue statements and notices of 
intervention: April 27, 2006. 2. Deadline for filing replies to issue 
statements: May 4, 2006.

ADDRESSES: File all documents referred to in this order electronically 
via the Commission's Filing Online system at http://www.prc.gov.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, 202-789-6820.

SUPPLEMENTARY INFORMATION: The Commission has before it a complaint 
filed by Douglas F. Carlson (Carlson or Complainant) concerning stamped 
stationery \1\ and a motion to dismiss the complaint filed by the 
Postal Service.\2\ The central issue presented by these pleadings is 
whether stamped stationery is a postal or philatelic product. If the 
former, it is subject to the Commission's jurisdiction; if the latter, 
it is not.
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    \1\ Douglas F. Carlson Complaint on Stamped Stationery, June 24, 
2004 (Complaint).
    \2\ Motion of the United States Postal Service to Dismiss 
Complaint, January 18, 2006 (Motion to Dismiss).
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    The Postal Service's motion to dismiss is denied. This should not, 
however, be read as a finding on the merits on the jurisdictional 
question presented. The pleadings raise mixed questions of fact and 
law. Based solely on the pleadings, the Commission is disinclined to 
determine whether or not genuine issues of material fact remain in 
dispute. Accordingly, by this order the Commission hereby notices the 
proceeding and, as discussed below, provides interested persons an 
opportunity to address whether or not genuine issues of material fact 
remain to be presented in this case. Following submission of responsive 
pleadings, the Commission will determine whether to proceed with or 
without hearing. If no genuine material issue of fact is presented, the 
Commission will establish a briefing schedule affording participants an 
opportunity to address the principal legal issue whether or not stamped 
stationery is a postal service.

I. Background

    The Complaint. In his Complaint, filed pursuant to 39 U.S.C. 3662, 
Carlson contends that stamped stationery is a postal service subject to 
the Commission's jurisdiction. The specific stationery in question 
consists of sheets of 6.25'' x 14.31'' paper imprinted with ``The Art 
of Disney: Friendship'' postage stamps or indicia. Each pre-stamped 
sheet has room for a message and address; the sheet is designed to be 
folded, sealed, and mailed.\3\
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    \3\ At the time the Complaint was filed, the stamped stationery 
sold in pads of 12 for $14.95, while the face value of the postage 
was $4.44. Complaint at 2, para. 8.
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    While Carlson makes several claims, the gravamen of his complaint 
is that stamped stationery is a postal service within the meaning of 39 
U.S.C. 3621, 3622, and 3623. Id. at 2, para. 10. In support, he 
compares stamped stationery to stamped envelopes and stamped cards, 
both of which are postal services. Id. at 3, paras. 14-15. He observes 
that section 960 of the Domestic Mail Classification Schedule (DMCS) is 
entitled ``Stamped Paper'' and that it includes stamped envelopes and 
stamped cards. Ibid. paras. 16-17. He contends that stamped stationery 
is a form of stamped paper within the meaning of section 960 of the 
DMCS. Ibid. para. 21. In addition, Carlson notes that the Postal 
Service describes

[[Page 19914]]

stamped stationery in terms of its value as a means for sending 
correspondence.\4\
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    \4\ Id. at 2, paras. 11-13. Complainant's remaining claims are 
derivatives of his principal claim that stamped stationery is a 
postal service. For example, he asserts that stamped stationery 
constitutes a change in the mail classification schedule and that 
the Postal Service is required to request a recommended decision 
from the Commission, pursuant to sections 3622 and 3623 of the Act, 
before either establishing a new classification for, or selling, 
stamped stationery. Id. at 4, paras. 22-24. This claim is true if 
stamped stationery is found to be a postal product. The claim is 
premised on the belief that stamped stationery is postal and thus 
does not go to the nature of the product (or service) itself. 
Accordingly, the Commission finds it unnecessary to address this 
claim in detail at this stage of the proceeding. Carlson's other 
derivative claims are that the rate or fee for stamped stationery is 
inconsistent with the Act and unduly discriminates against stamp 
collectors. Id. at 4-5, paras. 30-35. These claims, too, are 
premised on the assumption that stamped stationery is a postal 
product and, likewise, need not be addressed for purposes of this 
order. This is not to suggest, however, that claims do not raise 
factual or legal issues that may need to be addressed if the 
Commission concludes that stamped stationery is jurisdictional.
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    Pursuant to section 3662, Carlson requests that the Commission 
issue a recommended decision establishing fee and classification 
schedules for stamped stationery. Alternatively, he requests that, 
pursuant to section 3623(b), the Commission submit, on its own 
initiative, a recommended decision establishing a new classification 
for stamped stationery. Id. at 6.
    Informal procedures. Upon its review of the Complaint, the 
Commission elected to employ informal procedures in an effort to 
facilitate settlement.\5\ To that end, the director of the Office of 
the Consumer Advocate (OCA) was appointed settlement coordinator to 
facilitate efforts to resolve the Complaint informally.\6\ OCA was 
charged with reporting on the status of negotiations. Pending the 
outcome of the negotiations, the due date for the Postal Service's 
answer to the Complaint was postponed. In its second report, OCA 
informed the Commission that settlement could not be achieved.\7\ 
Subsequently, the Postal Service submitted its answer to the Complaint, 
contending, among other things, that ``[t]he stationery at issue is a 
philatelic item and mailing product which has much more in common with 
similar items over which the Commission does not assert jurisdiction 
than with the utilitarian stamped envelope product which is currently 
in the DMCS.'' \8\
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    \5\ PRC Order No. 1412, July 8, 2004, at 2.
    \6\ Notice Designating Settlement Coordinator, July 8, 2004.
    \7\ Office of the Consumer Advocate Second Report on the Status 
of Negotiations for Informal Resolution of Complaint, August 12, 
2004.
    \8\ Answer of United States Postal Service, August 31, 2004, at 
8 (Answer).
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    The Postal Service's Motion to Dismiss. Pursuant to Order No. 1449, 
the Postal Service recently filed a motion to dismiss the Complaint.\9\ 
At the outset, the Postal Service asserts that the sale of ``Disney 
stationery'' falls within its statutory authority to provide philatelic 
services.\10\ In support, it points to the Commission's decision in 
Docket No. R76-1 generally disclaiming jurisdiction over philatelic 
products. Id. at 1. Second, it argues that ``Disney stationery is 
intended to be a philatelic item,'' \11\ distinguishable by its design 
and artwork from ``utilitarian'' stamped envelopes and cards which, it 
contends, have little inherent artistic or philatelic value.\12\ Third, 
the Postal Service postulates that philatelic choices may be diminished 
if the Commission were to assert jurisdiction over Disney stationery, 
suggesting even the possibility that ``no such future issuances might 
be able to occur.'' Id. at 4-5. Alternatively, it notes that it could 
``avoid the process'' by selling unstamped stationery with a packet of 
stamps included. Id. at 5.
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    \9\ Motion to Dismiss, supra, January 18, 2006. See PRC Order 
No. 1449, Docket No. RM2004-1, January 4, 2006, at 30, n.88.
    \10\ Id. at 1. The Postal Service characterizes the Complaint as 
requesting the Commission to ``assert jurisdiction over The Art of 
Disney: Friendship stamped stationery.'' Ibid. To that end, the 
Postal Service uses the phrase ``Disney stationery,'' apparently 
reading the Complaint as limited to that issuance rather than to the 
issue of stamped stationery generally. The Commission does not read 
the Complaint so narrowly. To be sure, ``Disney stationery'' 
precipitated the Complaint. Carlson's arguments, however, concern 
stamped stationery generally, not that Disney stationery alone is a 
postal service. The relief requested, that the Commission recommend 
stamped stationery as a new classification, confirms this reading of 
the Complaint.
    \11\ Ibid.
    \12\ Id. at 2-3. In passing, the Postal Service argues that the 
caption to DMCS section 960, ``Stamped Paper'' has no substantive 
meaning beyond stamped envelopes and cards. Id. at 2.
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    Lastly, the Postal Service infers comparability between stamped 
stationery and packaging supplies. The Postal Service disputes that its 
encouragement of buyers to use stamped stationery to write letters has 
any jurisdictional consequences. It observes that the Postal Service 
also sells packaging supplies, ``presumably for the purpose of 
encouraging and making it easier for customers to send packages.'' 
Ibid. It concludes by noting that the Commission does not exercise 
jurisdiction over such supplies.
    Carlson's opposition. Carlson opposes the Postal Service's motion 
to dismiss.\13\ Citing the Commission's recently adopted definition of 
the term postal service, Carlson argues that stamped stationery is a 
postal service because it ``is incidental to the receipt, transmission, 
and delivery by the Postal Service of correspondence, including 
letters.'' \14\ In support of this contention, Carlson advances several 
arguments. First, he argues that the stamped stationery is specifically 
designed for mailing, including identifiable space for the mailing 
address and for a written message, and that, to facilitate mailing, it 
can be folded and sealed.\15\
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    \13\ Douglas F. Carlson Answer in Opposition to the Postal 
Service Motion to Dismiss Complaint, January 24, 2006 (Carlson 
Opposition).
    \14\ Id. at 4. As historical background, Carlson provides a 
brief discussion of the use and development of stamped and unstamped 
letter sheets. He contends that what the Postal Service now calls 
stamped stationery is known generically as letter sheets. 
Distinguishing between stamped and unstamped letter sheets, he 
indicates that stamped letter sheets were not used by the Post 
Office Department until 1861. Further, he states that the Disney 
stamped stationery was the first domestic stamped letter sheets 
issued in more than a century. He argues that stamped letter sheets 
(stamped stationery) are, along with stamped envelopes and stamped 
cards, forms of postal stationery. Id. at 2-4.
    \15\ Id. at 4. Carlson points to the Postal Service's own 
advertising, which trumpets the benefits of correspondence using 
stamped stationery, as corroboration that stamped stationery is a 
postal service. Id. at 4-5.
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    Second, Carlson contends that if stamped cards and stamped 
envelopes are postal services then stamped stationery must be as well. 
He discusses Postal Service witness Needham's testimony, sponsoring 
proposed fee increases in Docket No. R97-1, which detailed the benefits 
and value of stamped cards and stamped envelopes that facilitate the 
mailing of correspondence and letters. He contends that stamped 
stationery provides the same service incidental to the receipt, 
transmission, or delivery of correspondence as do these two 
acknowledged postal products. Id. at 5-6.
    Third, Carlson also distinguishes between products with pre-affixed 
postage, such as stamped stationery and stamped cards, and those, such 
as packaging supplies, plain envelopes, and post cards, without it. He 
argues that the pre-affixed postage is significant because it entitles 
the purchaser to mailing services, which are not available to 
purchasers of unstamped envelopes, cards, or packaging supplies. Id. at 
7-8.
    The balance of Carlson's Opposition responds to arguments that are 
largely peripheral to the central legal issue of whether stamped 
stationery is a postal service. These include, for example, the 
philatelic value associated with any postage item, including all postal 
stationery (id. at 10), and that for ratemaking purposes, the 
philatelic and

[[Page 19915]]

design value of stamped stationery are irrelevant. Id. at 11-12.

II. Proceedings

    Based on a review of the pleadings, the Commission concludes that 
the facts, as alleged in the pleadings, do not warrant a summary 
dismissal of the Complaint. In light of this finding, and given the 
failure of informal procedures to resolve the Complaint, the Commission 
finds it appropriate, under rule 86 of the Rules of Practice, to 
conduct a formal proceeding pursuant to section 3624 of the Act in this 
docket. In noticing the proceeding pursuant to rule 17, the Commission 
has made no determination of whether or not to hold hearings in this 
docket. That determination will be made after submission of the 
statements discussed below.
    Section 3662 provides that, in response to a complaint, the 
Commission may in its discretion hold a hearing. Generally, hearings 
are held only if genuine issues of material fact are presented. In this 
proceeding, the Commission is disinclined to rule on that issue based 
solely on the pleadings. Consequently, each participant shall be given 
an opportunity to address the question of whether or not genuine issues 
of material fact are presented in this case. Each participant 
addressing this issue should identify with specificity each issue of 
material fact, if any, it believes is presented along with the 
reason(s) it believes that issue is material. Such statements are due 
no later than April 27, 2006. Replies to such statements may be filed 
no later than May 4, 2006.
    Intervention. Any interested person may file a notice of 
intervention, consistent with the Commission's Rules of Practice, as a 
full or limited participator. See 39 CFR 3001.20 and 39 CFR 3001.20a. 
The notice of intervention shall be filed using the Internet (Filing 
Online) at the Commission's Web site (www.prc.gov), unless a waiver is 
obtained for hardcopy filing. See 39 CFR 3001.9(a) and 39 CFR 
3001.10(a). Notices of intervention are due no later than April 27, 
2006.
    Representation of the general public. Having noticed the 
proceeding, the Commission finds it appropriate that the interests of 
the general public be represented in this proceeding and thus the 
Commission designates Shelley S. Dreifuss, director of the Commission's 
Office of the Consumer Advocate, to represent those interests. Pursuant 
to this designation, Ms. Dreifuss will direct the activities of 
Commission personnel assigned to assist her and, upon request, will 
supply their names for the record. Neither Ms. Dreifuss nor any of the 
assigned personnel will participate in or provide advice on any 
Commission decision in this proceeding.

Ordering Paragraphs

    It is ordered:
    1. Statements of genuine issues of material fact as discussed in 
the body of this order are due no later than April 27, 2006. Replies 
may be filed on or before May 4, 2006.
    2. The deadline for filing notices of intervention is April 27, 
2006.
    3. Shelley S. Dreifuss, director of the Commission's Office of the 
Consumer Advocate, is designated to represent the interests of the 
general public.
    4. The Secretary shall arrange for publication of this notice and 
order in the Federal Register.

    Dated: April 13, 2006.
Steven W. Williams,
Secretary.
[FR Doc. E6-5774 Filed 4-17-06; 8:45 am]
BILLING CODE 7710-FW-P