Appeals Court remands exigency decision back to PRC

In a long anticipated decision, the D.C. Circuit of the U.S Court of Appeals today issued a ruling on the USPS v. PRC case on exigency. The court rejected both USPS claims that the exigent surcharge should go on forever, and mailer claims that the exigent increase was illegal because volume loss due to electronic diversion should have been anticipated. Instead, it sent the matter back to the PRC, indicating the $3.2 billion in exigent rate collections accounted only for one year of recession-caused volume loss and the USPS should be given longer than this to adjust to the “new normal” of lower mail volume.

Bottom line: we do not expect the previously announced mid-summer time frame for a “roll-back” of the exigent surcharge will now hold. While the PRC must determine what to do, we anticipate a longer period of exigency collections will result; thus the exigent surcharge will stay in play longer than the forecasted August 1 time frame for its end. On a positive note for mailers, the court rejected USPS arguments that the exigent surcharge should be made permanent.

There is no precedence to guide what happens next. The PRC will have to first determine how it will proceed on this matter. It is not held to any statutory deadline to make a decision. In fact, informal comments we have heard attributed to Commissioners indicate they felt the tight 90 day time frame they had to rule on this matter originally was unreasonably short given the complexities.

ACMA is still studying this issue and will stay involved as the process unfolds. In the meantime, we continue to work on issues surrounding the most recent rate change and associated work rule and postal regulation changes. Members can expect further updates on both in the near term.

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