On Tuesday, May 24, the D.C. Circuit issued its decision in the exigency rate case appeal. The decision, while not the end of the litigation, is a major step in that direction. On the central issue in the case, the court agreed with the Postal Regulatory Commission ("PRC") and the mailers (including the Affordable Mail Alliance) that the requirement contained in the Postal Accountability and Enforcement Act of 2006 that an exigent increase be "due to" the exigent circumstances requires a causal nexus between the exigency and the increase. The court sent the case back to the PRC for more explanation of how close or tight the nexus must be, especially when the Postal Service's losses have multiple causes. The court emphasized that the PRC would have wide discretion in resolving this issue.
The Postal Regulatory Commission and Senator Collins expressed satisfaction with the decision yesterday. The PRC, citing the court's key finding, stated: "The commission is pleased that the court affirmed the commission's findings that a causal relationship must exist between the exigent circumstances and the amount of the proposed rate increases, and that the Postal Service failed to show that relationship. The case will be remanded to allow the commission to exercise its discretion to clarify to what extent the Postal Service must show how proposed rate increases relate to the exigent circumstance's impact on the Postal Service's finances."
Senator Susan Collins, who filed an amicus brief in the case urging the Court to uphold the Commission's decision to reject the requested rate hikes, on Tuesday called the decision "a win for American postal customers." She stated, "I am pleased the court correctly upheld the Postal Regulatory Commission's decision - and my belief - that the Postal Service needs to prove that the exigent circumstances caused the effects that it claims necessitated a rate increase above the rate of inflation."
The case will now return to the Commission for additional findings requested by the court. The court decision does not set a time limit for the PRC to issue a new decision. The Commission will establish a procedural schedule and has leeway to decide whether to solicit more comments from the parties.
The Mail Sender will prepare comments to the Commission if such an opportunity is provided. We agree with Senator Collins, who in her statement urged the PRC "to require that the nexus between the exigent circumstances and proposed rate hike be close" so as not to undermine the purpose of the 2006 statute to establish and maintain stable and affordable postal rates.