[Federal Register Volume 76, Number 137 (Monday, July 18, 2011)]
[Notices]
[Pages 42140-42141]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-17924]


=======================================================================
-----------------------------------------------------------------------

POSTAL REGULATORY COMMISSION

[Docket No. R2010-4R; Order No. 757]


Rate Adjustment Remand

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Commission is noticing a proceeding to address the 
causation standard in exigent rate adjustments. This notice provides 
information on legal developments associated with this proceeding, 
addresses preliminary procedural matters, and invites public comment.

DATES: Comments are due: July 25, 2011; reply comments are due: August 
1, 2011.

ADDRESSES: Submit comments electronically by accessing the ``Filing 
Online'' link in the banner at the top of the Commission's Web site 
(http://www.prc.gov) or by directly accessing the Commission's Filing 
Online system at https://www.prc.gov/prc-pages/filing-online/login.aspx. Commenters who cannot submit their views electronically 
should contact the person identified in the FOR FURTHER INFORMATION 
CONTACT section as the source for case-related information for advice 
on alternatives to electronic filing.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
at 202-789-6820 (case-related information) or [email protected] 
(electronic filing assistance).

SUPPLEMENTARY INFORMATION:
    Regulatory History: 75 FR 40853 (July 14, 2010).
    On May 24, 2011, the United States Court of Appeals for the 
District of Columbia Circuit issued its opinion in United States Postal 
Service v. Postal Regulatory Commission, 640 F.3d 1263 (D.C. Cir. 
2011). The court denied in part and granted in part a Postal Service 
petition for review of the Commission's September 30, 2010 order 
denying a Postal Service request for an exigent rate adjustment under 
39 U.S.C. 3622(d)(1)(E).\1\ 640 F.3d at 1268.
---------------------------------------------------------------------------

    \1\ Order Denying Request for Exigent Rate Adjustments, 
September 30, 2010 (Order No. 547).
---------------------------------------------------------------------------

    On July 11, 2011, the court issued its mandate remanding the case 
to the Commission. The Commission is issuing this order to promptly 
establish procedures for receiving initial and reply comments that 
address the causation standard applicable to exigent rate adjustment 
requests submitted under 39 U.S.C. 3622(d)(1)(E).\2\
---------------------------------------------------------------------------

    \2\ Section 3622(d)(1)(E) provides in relevant part as follows:
    ``[R]ates may be adjusted on an expedited basis due to either 
extraordinary or exceptional circumstances, provided that the 
Commission determines * * * that such adjustment is reasonable and 
equitable and necessary to enable the Postal Service, under best 
practices of honest, efficient, and economical management, to 
maintain and continue the development of postal services of the kind 
and quality adapted to the needs of the United States.'' (emphasis 
added).
---------------------------------------------------------------------------

    Background. On July 6, 2010, the Postal Service filed a request for 
an exigent rate adjustment pursuant to 39 U.S.C. 3622(d)(1)(E).\3\ This 
was the first such request filed by the Postal Service. The Exigent 
Request alleged that ``extraordinary or exceptional circumstances'' had 
occurred--namely, the recent recession and related declines in mail 
volume--and that the Postal Service was entitled to an exigent rate 
adjustment. Id. at 6.
---------------------------------------------------------------------------

    \3\ Exigent Request of the United States Postal Service, July 6, 
2010 (Exigent Request).
---------------------------------------------------------------------------

    After holding public hearings and considering initial and reply 
comments filed by the Postal Service and other interested persons, the 
Commission issued Order No. 547 denying the Postal Service's Exigent 
Request. The Commission analyzed the plain meaning of ``due to'' in 
section 3622(d)(1)(E), interpreting the phrase as requiring that a 
``proposed adjustment * * * be causally related to the alleged 
extraordinary or exceptional circumstance.'' Order No. 547 at 54. The 
Commission found that the recent recession and its impact on postal

[[Page 42141]]

volumes qualified as an ``extraordinary or exceptional'' circumstance. 
Id. at 50. However, it ruled that the Postal Service had failed to 
demonstrate that the proposed rate adjustments were ``due to'' the 
``extraordinary or exceptional'' circumstance, as required by section 
3622(d)(1)(E), because it did not show how the rate increases related 
to exigent circumstances that purportedly gave rise to them. Id. at 53, 
60. Accordingly, the Commission denied the requested exigent rate 
adjustment. Id. at 87.
    The court's opinion. On appeal, the court affirmed the Commission's 
conclusion that the plain meaning of the words ``due to'' in section 
3622(d)(1)(E) requires a causal relationship between the amount of the 
requested adjustment and the impact of the extraordinary or exceptional 
circumstances.\4\ The court confirmed that, ``under the plain meaning 
of [section 3622(d)(1)(E)], a rate may be `adjusted on an expedited 
basis' only because of `extraordinary or exceptional circumstances.' '' 
Id. (emphasis in original).
---------------------------------------------------------------------------

    \4\ 640 F.3d at 1267 (``[W]e agree with the Commission that the 
plain meaning of `due to' mandates a causal relationship between the 
amount of a requested adjustment and the exigent circumstances' 
impact on the Postal Service.'').
---------------------------------------------------------------------------

    The court nevertheless concluded that the plain meaning of the 
``due to'' phrase does not adequately express how close the 
relationship between the proposed adjustment and the exigent 
circumstance must be.\5\ In the court's view, the ``due to'' phrase in 
section 3622(d)(1)(E) is ambiguous because the phrase can mean ``due in 
part to'' as well as ``due only to.'' Id. (emphasis in original).
---------------------------------------------------------------------------

    \5\ Id. at 1268 (``[A]lthough [`due to'] has a plain meaning 
regarding causal connection vel non, * * * it has no similar plain 
meaning regarding the closeness of the causal connection.'').
---------------------------------------------------------------------------

    Because the phrase ``due to'' is ambiguous as a standard of 
causation, the court held that the Commission could not properly reject 
the Exigent Request based on a plain meaning interpretation of the 
phrase.\6\ Thus, it granted the Postal Service's petition in part and 
remanded the case to the Commission to satisfy its obligation ``to fill 
the statutory gap by determining how closely the amount of the 
adjustments must match the amount of the revenue lost as a result of 
the exigent circumstances.'' Id.
---------------------------------------------------------------------------

    \6\ Id. The court rejected the Commission's plain meaning 
interpretation as ``requiring that the Postal Service match the 
amount of the proposed adjustments precisely to the amount of 
revenue lost as a result of the exigent circumstances.'' Id. 
(emphasis in original).
---------------------------------------------------------------------------

    The Commission's response. As directed by the court, the Commission 
will proceed to apply its expertise and interpret the phrase ``due to'' 
to determine how closely the amount of an exigent rate adjustment must 
match the amount of revenue lost as a result of an exigent 
circumstance. Id.; see Chevron, U.S.A., Inc. v. Natural Resources 
Defense Council, Inc., 467 U.S. 837, 842-43 (1984).
    The Commission establishes Docket No. R2010-4R to consider issues 
on remand. Docket Nos. R2010-4 and R2010-4R are part of the same 
proceeding. The Commission shall consider all documents filed to date 
in Docket No. R2010-4 as part of the record in Docket No. R2010-4R.
    To ensure that the Postal Service and other interested persons have 
an opportunity to make their views known regarding the proper 
interpretation of ``due to'' as the standard of causation in 39 U.S.C. 
3622(d)(1)(E), the Commission hereby provides for submission of initial 
and reply comments on this topic. Initial comments are due no later 
than July 25, 2011. Reply comments are due no later than August 1, 
2011. All comments and other documents related to issues on remand must 
be filed under Docket No. R2010-4R.

It is ordered:

    1. The Commission establishes Docket No. R2010-4R to consider 
issues on remand.
    2. James Waclawski will continue to serve as officer of the 
Commission (Public Representative) to represent the interests of the 
general public in this proceeding.
    3. Initial comments addressing the proper interpretation of ``due 
to'' as a standard of causation in 39 U.S.C. 3622(d)(1)(E) are due no 
later than July 25, 2011.
    4. Reply comments addressing matters raised in initial comments are 
due no later than August 1, 2011.
    5. All comments and other documents related to issues on remand 
must be filed under Docket No. R2010-4R.
    6. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2011-17924 Filed 7-15-11; 8:45 am]
BILLING CODE 7710-FW-P