[Federal Register Volume 76, Number 163 (Tuesday, August 23, 2011)]
[Notices]
[Pages 52718-52720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21415]


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POSTAL REGULATORY COMMISSION

[Docket No. C2011-2; Order No. 808]


Complaint About Postal Services

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: San Francisco, in its municipal capacity, has filed a formal 
complaint alleging that there deficiencies in the Postal Service's 
delivery of mail to residents of certain multi-unit buildings, and that 
the Postal Service is therefore not acting in conformance with 
statutory requirements. This document identifies the grounds for the 
complaint, reviews key developments, and addresses certain procedural 
matters, including authorization of settlement negotiations.

DATES: The settlement coordinator's report is due September 15, 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:

I. Introduction
II. Postal Service Pleadings
III. Statutory Alternatives for Commission Action
IV. Analysis and Written Determination
V. Ordering Paragraphs

I. Introduction

A. Procedural Context

    The instant Complaint was filed with the Commission on May 18, 
2011.\1\ It involves two statutory claims about the mode of delivery 
the Postal Service provides to residents of single-room occupancy 
buildings (SROs) in San Francisco, California.
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    \1\ Complaint of the City and County of San Francisco, May 18, 
2011 (Complaint).
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    The impetus for the Complaint stems from three developments that 
span more than 5 years. The first was a growing concern, on the part of 
the City and County of San Francisco (San Francisco or Complainant) 
about the reliability and security of mail delivery to residents of 
SROs. Delivery to SROs generally occurs under Postal Service 
regulations specifying the ``single-point'' mode of delivery for 
hotels, schools and similar places. This means a letter carrier 
typically leaves a mail bag at or in the building, such as at the 
doorstep, in the lobby or at a central desk.\2\ Building management is 
responsible for delivering the mail to residents and for handling other 
tasks, such as forwarding. This contrasts with centralized delivery, 
where a letter carrier delivers mail pursuant to a regulation covering 
the residents of a multi-unit building, such as an apartment building, 
via individual, locked mailboxes.\3\
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    \2\ See POM Sec.  615.2 (single-point delivery).
    \3\ See POM Sec.  631.45 (centralized delivery).
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    2006 ordinance. The second development was San Francisco's 
adoption, in 2006, of an ordinance aimed at addressing its concerns 
about SRO mail delivery. Complaint at 2. The ordinance required SRO 
owners to install (by the end of 2007) individual, secure, Postal 
Service-compliant mailboxes for each resident. San Francisco asserts 
that prior to adoption of the ordinance, there was at least one 
conversation with a Postal Service employee indicating that 
installation of Postal Service-approved mailbox installations in SROs 
would result in a

[[Page 52719]]

switch from single-point delivery to centralized delivery.
    Following adoption of the ordinance, some SRO owners installed 
individual mailboxes and the Postal Service apparently began delivering 
mail to residents of these SROs via centralized delivery. However, this 
practice was later reviewed (as part of a broader evaluation) and found 
to be contrary to the postal regulation that establishes single-point 
delivery as the appropriate mode of delivery for SROs. The Postal 
Service informed a city official that it would continue to deliver mail 
via centralized delivery to SROs where individual mailboxes had been 
installed, but would use single-point delivery for all others, 
including those that installed individual mailboxes in the future. See 
id. Exh. 1 at 1-2.
    Federal lawsuit. The third development was San Francisco's filing 
of a Federal lawsuit in 2009. The grounds, in brief, were that the 
Postal Service's post-ordinance actions raise constitutional questions 
and regulatory (title 39) issues.\4\ The court dismissed the regulatory 
issues (finding them within the Commission's purview), but retained 
jurisdiction over the constitutional claims. At this point, the record 
shows that the Federal lawsuit is still pending. A lengthy discovery 
phase is nearing an end; dispositive motions are to be heard by October 
13, 2011; and a trial date has been set for January 9, 2012. See Answer 
of the United States Postal Service, August 8, 2011, Exh. 1 (Answer).
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    \4\ City of San Francisco, et al. v. United States Postal 
Service, N.D. Cal. (1964).
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B. The Commission's Section 3662 Jurisdiction

    Commission jurisdiction over formal complaints is set out in 
section 3662(a). This section provides:

    Any interested person * * * who believes 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 this chapter 
(or regulations promulgated under any of those provisions) may lodge 
a complaint with the Postal Regulatory Commission * * *.

39 U.S.C. 3662(a).
    San Francisco generally claims that there are deficiencies in the 
Postal Service's delivery of mail to most SRO residents in California, 
and that these deficiencies cause harm to the affected residents and to 
San Francisco. Complaint at 1. For purposes of establishing Commission 
jurisdiction, it relies on two of the provisions identified in section 
3662: sections 401(2) and 403(c). Section 401(2) grants the Postal 
Service, as one of its general powers, the authority to adopt, amend, 
and repeal any rules and regulations necessary to the execution of its 
statutory functions, to the extent such rules and regulations are not 
inconsistent with title 39. 39 U.S.C. 401(2). Section 403(c) states 
that in providing services under title 39 ``the Postal Service shall 
not, except as specifically authorized in this title, make any undue or 
unreasonable discrimination among users of the mails, nor shall it 
grant any undue or unreasonable preferences to any such user.'' 39 
U.S.C. 403(c).

C. The Nexus Between Complainant's Assertions and Section 3662 
Jurisdiction

    The asserted link to section 401(2). San Francisco's reading of 
postal regulations leads it to conclude that mail delivery to residents 
of SROs should be provided under centralized delivery regulations, 
rather than under regulations for single-point delivery, assuming the 
SRO has individual, locked mailboxes. It maintains that the Postal 
Service erroneously classifies SROs under the delivery regulation for 
hotels and schools, and is therefore failing to enforce its own 
regulations. Complaint at 16.
    The asserted link to section 403(c). San Francisco asserts that the 
Postal Service's decision to use single-point delivery for residents of 
SROs reflects their socioeconomic status, especially relative to 
apartment dwellers, and unfounded assumptions about the transience of 
SRO residents, and therefore unduly discriminates against SRO residents 
and grants an undue preference to apartment dwellers in violation of 39 
U.S.C. 403(c). Id. at 12.

II. Postal Service Pleadings

    On June 7, 2011, the Postal Service filed a motion seeking 
dismissal of count 1 of the two-count Complaint.\5\ The basis was lack 
of jurisdiction under section 401(2). The Postal Service did not seek 
dismissal of count 2, stating instead that the Complainant arguably set 
out a claim with respect to undue discrimination. Id. at 2. The 
Complainant filed an opposition to the Motion.\6\ The Commission 
granted the Motion, in part, by striking allegations in count 1 that 
correspondence between the San Francisco Postmaster and a city official 
had not been adopted pursuant to Federal rulemaking procedures.\7\ This 
disposition led to the filing of the Postal Service's Answer on August 
8, 2011.
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    \5\ Motion of United States Postal Service for Partial Dismissal 
of the Complaint, June 7, 2011 (Motion).
    \6\ City and County of San Francisco's Answer in Opposition to 
Motion of United States Postal Service for Partial Dismissal of the 
Complaint, June 15, 2011.
    \7\ Order Granting, in Part, Postal Service Motion To Dismiss 
Count 1, July 29, 2011.
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    In its Answer, the Postal Service serially addresses each 
paragraph, providing responses that admit, deny, disclaim sufficient 
knowledge to the assertion, or state no response is needed. With 
respect to points central to the Complaint, it denies that San 
Francisco has alleged any ``deficiencies'' in mail delivery service and 
that ``the socioeconomic circumstances of delivery customers matter 
when making decisions about the appropriate mode of delivery.'' Answer 
at 1-2. The Postal Service also denies the applicability of POM 631.45, 
contending the controlling regulation is POM 615.2, Mail Addressed to 
Persons at Hotels, Schools, and Similar Places. Id. at 4. It adds that 
San Francisco has not made any showing, as required under POM 631.6 
(Conversion of Mode of Delivery) that conversion to another mode of 
delivery is warranted. Id.
    Significantly, the Postal Service also states that it ``would not 
object to delivering mail at those locations by placing it into a 
locked receptacle * * *.'' Id. at 3.

III. Statutory Alternatives for Commission Action

    The Commission has two affirmative alternatives for handling a 
section 3662 complaint under section 3662(b). One is to begin 
proceedings upon a finding that the complaint raises material issues of 
fact or law. 39 U.S.C. 3662(b)(1)(A)(i).\8\ The other alternative is to 
issue an order dismissing the complaint. 39 U.S.C. 3662(b)(1)(A)(ii). 
Action under either alternative is to be taken within 90 days and 
supported by a written statement setting forth the basis for the 
determination. 39 U.S.C. 3662(b)(1) and 3662(b)(1)(B).
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    \8\ The statute does not specify the precise nature of the 
proceedings.
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IV. Analysis and Written Determination

    The parties recognize that the Postal Service's current delivery 
practices do differentiate between residents of many SROs in San 
Francisco and apartment dwellers. Thus, the current issue before the 
Commission is whether the pleadings indicate that there are material 
questions of fact and law on this point.
    In its Complaint, San Francisco concludes that in light of the 
parties' inability to resolve their dispute during mediation associated 
with the Federal

[[Page 52720]]

lawsuit, it believes that additional steps to settle this matter prior 
to the filing of this Complaint would have been futile. Complaint at 
15-16. However, as referenced above, the Postal Service Answer contains 
what appears to be a good faith offer to address the concerns that 
initially motivated this controversy by providing a new delivery option 
for residents of most SROs in San Francisco: delivery of the mail to a 
locked receptacle, with management continuing to be responsible from 
that point. The Commission views the Postal Service's offer as an 
attempt to appropriately balance the concerns of the Complainant (for 
more security and reliability in mail delivery) and the Postal Service 
(for efficiency and effectiveness, including the cost implications of 
adding numerous delivery points at an especially critical financial 
time).\9\
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    \9\ San Francisco states that 18,000 San Franciscans live in 
SROs. Id. at 6.
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    The Commission therefore defers action on this Complaint and 
directs that the parties begin settlement negotiations based on the 
Postal Service's offer. Pursuant to 39 U.S.C. 505, the Commission 
designates James Waclawski as officer of the Commission (Public 
Representative) to represent the interests of the public. The Public 
Representative shall also serve as settlement coordinator. The 
Commission strongly believes that all concerned would be best served by 
a negotiated settlement of this matter. It directs the Public 
Representative to file a report on the progress of settlement within 30 
days of the issuance of this order.

V. Ordering Paragraphs

    It is ordered:
    1. The Commission defers its decision on whether the Complaint of 
the City and County of San Francisco presents material questions of 
fact and law, pending settlement discussions between the parties.
    2. The Commission directs the Complainant and the Postal Service to 
immediately engage in settlement negotiations with the goal of 
expeditiously resolving this controversy based on the Postal Service's 
offer.
    3. The Commission, pursuant to section 505, appoints James 
Waclawski to serve as Public Representative in this proceeding and to 
serve as settlement coordinator.
    4. The Commission directs the settlement coordinator to file a 
report within 30 days of the date of this order.
    5. The Commission directs the Secretary of the Commission to 
arrange for publication of this order in the Federal Register.

    By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2011-21415 Filed 8-22-11; 8:45 am]
BILLING CODE 7710-FW-P