[00:00:04] Speaker 04:
The last case for this morning is 24-4041, Rapid Enterprises versus U.S.

[00:00:11] Speaker 04:
Postal Service.

[00:00:13] Speaker 04:
Counsel Propellant, if you'll make your appearance and proceed, please.

[00:00:17] Speaker 01:
Thank you, Your Honor.

[00:00:18] Speaker 01:
Scott Young on behalf of Rapid Enterprises, also known as Express One.

[00:00:25] Speaker 01:
This case involves a contract and alleged torts by the Postal Service against its contracting partner, Express One.

[00:00:33] Speaker 01:
Express One is a shipping reseller and it provides, it sold postal service products to various e-commerce platforms across the country.

[00:00:45] Speaker 01:
The postal service then engaged in a scheme to, in our view, steal this business.

[00:00:53] Speaker 01:
We don't believe this is mere allegation.

[00:00:55] Speaker 01:
We've included a slide deck

[00:00:57] Speaker 01:
in paragraph 67 through 76 of our complaint that walks through this exact scheme.

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And the scheme was pretty simple.

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In 2019, the USPS forced us to reform our contract.

[00:01:13] Speaker 01:
There were two critical changes to the contract.

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First, Express One would have to be an exclusive reseller of postal products, so there'd be no competition.

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And second, Express One would have to provide all of its confidential customer data to the Postal Service.

[00:01:29] Speaker 02:
How did they force your client to sign that contract?

[00:01:34] Speaker 01:
Well, they didn't force our client to sign the contract.

[00:01:38] Speaker 02:
Well, I thought you said they forced them to sign it.

[00:01:40] Speaker 01:
Then I misspoke or overstated, Your Honor.

[00:01:43] Speaker 01:
I mean, it's a contract between two parties.

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It's clearly drafted by Postal Service.

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We don't believe that they have equal bargaining power.

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They expressed one had done business with Postal for six years up to that point.

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There are a limited number of companies that they can go to in this business.

[00:02:04] Speaker 01:
So they weren't forced to, but in terms of how the court interprets the contract here, it was drafted by Postal Service.

[00:02:13] Speaker 01:
And, of course, we're at the 12B

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612 B1 stage and so the inferences related to the contract should go in our favor as the non-moving party.

[00:02:25] Speaker 02:
I'm not sure I follow that.

[00:02:27] Speaker 01:
Okay, let me try again then your honor I apologize.

[00:02:32] Speaker 01:
The Postal Service drafted the contract.

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There's no provision that says it was jointly drafted.

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They entered into the contract with 90-day termination on both sides.

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True.

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And they could have said, no, we're not going to do that.

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We're going to just go do something else.

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And they didn't.

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True.

[00:02:55] Speaker 02:
So just because one person benefited more now than you think the other person did,

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How does that void the contract?

[00:03:05] Speaker 01:
Well, we're not saying that it voided the contract.

[00:03:07] Speaker 01:
We're saying that it violated the contract.

[00:03:11] Speaker 01:
Sorry?

[00:03:11] Speaker 02:
I say if you knock out the main terms of the contract, it's going to be essentially voided.

[00:03:16] Speaker 01:
Well, the allegations of the breach of the contract are in paragraph 118 of our complaint.

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And the Postal Service has tried to make this just an argument about

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just the termination?

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Did they follow the termination language?

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And we've conceded that they complied with the termination language.

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But the way they breach the contract is through this scheme, and termination is one part of the scheme.

[00:03:44] Speaker 01:
They get our confidential customer data.

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They use it against us in violation of Section 1N of the contract that says how they're going to use this data.

[00:03:56] Speaker 01:
They use it

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to compete against us and create this competing platform, that's the violation.

[00:04:04] Speaker 02:
It's not that they... Well, that was after the contract was terminated though, wasn't it, that they would use any data that they had?

[00:04:11] Speaker 01:
I don't think that's after.

[00:04:12] Speaker 01:
I think they needed it before.

[00:04:14] Speaker 01:
I mean, that's why, again, we go back to the 2019

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reformation of the contract.

[00:04:19] Speaker 04:
Yes, but freely contracting parties can protect themselves against harm.

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And you had an opportunity to protect yourself against the evils that you're complaining about now.

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I mean, the termination

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is one aspect, as you rightly point out.

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But one of your claims, I guess count two, is violation of good faith and fair dealing.

[00:04:44] Speaker 04:
Well, you can't expand the terms of the contract under that provision, right?

[00:04:49] Speaker 01:
Well, certainly.

[00:04:50] Speaker 04:
Well, one of the provisions that you have conceded they could exercise under the contract is the right to terminate in 90 days, which they've done.

[00:04:57] Speaker 01:
Well, that's one provision of the contract.

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Another provision of the contract is section 1n.

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that expressly states what they can do with our confidential data.

[00:05:07] Speaker 04:
Does it say what they can't do with your confidential data?

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You can protect yourself to say, you can do this, but you can't do this, right?

[00:05:15] Speaker 01:
Correct.

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There could have been a term in that.

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But we're at the motion to dismiss stage, Your Honor.

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The government could have put a term in there that said, we can use this data in any way that we want.

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It didn't.

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It's a fair reading of Section 1N, and I'll just read it.

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for the court.

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It lists the data that we're required to give.

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And then it says, for the purposes of validating merchant and platform shipping volume and spend per product.

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It's a fair reading of that provision that they are not going to go use that data to compete against us.

[00:05:53] Speaker 04:
I have a hard time understanding why that is an exclusive reading of that provision.

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It says what we're going to do.

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I mean, and you know, of course we can talk about your other claims, but as it relates to the contract claims,

[00:06:06] Speaker 04:
It just seems to me that if you were concerned about that, if your client was concerned about that, they could protect themselves with respect to that by saying, you can do that.

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That's what you say you can do, but you can't do that.

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And then the line would have been, we will do it for only these purposes or something along those lines, which is not in there.

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And so I just have a hard time understanding why they breached that.

[00:06:31] Speaker 04:
Well, it breached the contract, which, you know, as Judge Kelly points out,

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They exercised the term as it relates to good faith and fair dealing.

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I take it then, if I'm understanding correctly, that they did not exercise good faith and fair dealing because they did something beyond what they said they would do.

[00:06:49] Speaker 01:
Well, I don't think it's beyond what they said they would do.

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They did something that no contracting party would contemplate.

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Our client did not contemplate when they provide them

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with all of their confidential data that part of what they're going to do was use that in this scheme to compete against them.

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And our allegations state that this scheme began in 2016.

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So this is in place as they are coming to us, forcing us in 2019, or I apologize, not forcing, not forcing, but they're coming to us and saying, hey, we want to reform the contract in 2019.

[00:07:30] Speaker 01:
They don't tell us this is part of a scheme that we're engaging in to get your data and in their own words, in their own words on the slide deck, disintermediate the resellers and recapture the reseller spread.

[00:07:46] Speaker 01:
Now, to me, and we've cited the precision pine case, this is the classic example of a breach of good faith and fair dealing.

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I can't contract with you

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for an ulterior motive to steal your business.

[00:07:59] Speaker 02:
Well, would it make any difference if this particular contract was done in 2019?

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Would it make any difference if in a month after it was signed, they had terminated the contract with 90 days notice instead of five years afterwards?

[00:08:18] Speaker 01:
That's an interesting question.

[00:08:19] Speaker 01:
I mean, potentially, it depends on what they do

[00:08:22] Speaker 01:
with this data that they're trying to get.

[00:08:25] Speaker 02:
Did anybody try to put in the contract that any data given to you pursuant to this paragraph will not be used after the contract terminates for any reason?

[00:08:37] Speaker 01:
Well, that language isn't in the contract, but I think that's a point that would come out in discovery.

[00:08:43] Speaker 01:
And that gets back to, we're here at a motion to dismiss stage.

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The inferences

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go in our favor at this stage?

[00:08:51] Speaker 02:
Well, but there's no inference.

[00:08:52] Speaker 02:
It's pretty clear.

[00:08:53] Speaker 02:
That's the problem I have.

[00:08:57] Speaker 01:
It was pretty clear.

[00:08:58] Speaker 01:
Can I just ask?

[00:08:59] Speaker 04:
Well, to follow up, at least as I understand Judge Kelly, what he's saying is that, and what I would say, I'll put the words in my mouth, what I would say is, yes, the inferences go in your favor, but that doesn't mean that we add words to the contract.

[00:09:13] Speaker 04:
It doesn't mean that, and to your point about

[00:09:16] Speaker 04:
who drafted the contract, and my recollection of that rule of contract interpretations, if there's ambiguity.

[00:09:23] Speaker 04:
Well, there's no ambiguity that it would be in the inferences would run in the favor of the person who didn't draft the contract.

[00:09:31] Speaker 04:
Well, there's no ambiguity where the provision says you can terminate within 90 days with written notice, and they gave you written notice, and they terminated within 90 days.

[00:09:40] Speaker 04:
There's nothing ambiguous about that.

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They exercised their rights under the contract.

[00:09:44] Speaker 01:
I agree there's nothing ambiguous about the termination.

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I think there's absolutely something ambiguous about what they can use our data for.

[00:09:53] Speaker 01:
I think there is a fair reading of Section 1N that does not allow them to use the data for the purpose they've used it for, and we've submitted evidence of that, not just pleadings, but it's, again, in their own slide deck, they state what they're using that data for.

[00:10:10] Speaker 01:
That isn't in the contract.

[00:10:11] Speaker 01:
That requires interpretation of Section 1N.

[00:10:14] Speaker 01:
It requires a court or a jury to say, I think you're allowed to do that, even though it's not included in there.

[00:10:22] Speaker 01:
Or a court to say, no, under Section 1n, you're limited to what those specific purposes are for the use of the data.

[00:10:33] Speaker 01:
So that does require an interpretation.

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And that's the real critical issue here.

[00:10:38] Speaker 01:
It's the misuse of the data.

[00:10:44] Speaker 02:
Now, your complaint was dismissed, correct, for lack of jurisdiction?

[00:10:49] Speaker 01:
Well, part of it was dismissed for lack of jurisdiction.

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The contract claims that we've been talking about were dismissed under 12b6.

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The payee claims and the tort claims were dismissed for lack of jurisdiction.

[00:11:01] Speaker 02:
And just briefly on those... And do you quarrel with that dismissal?

[00:11:04] Speaker 01:
Absolutely.

[00:11:07] Speaker 02:
Are you suggesting that PRC does not have mandatory

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exclusive jurisdiction over the claims?

[00:11:15] Speaker 01:
Yes, absolutely.

[00:11:17] Speaker 01:
So the reason for that, Your Honor, is because under 39 USC 409A, the district court has original jurisdiction over all these claims.

[00:11:28] Speaker 01:
The section that goes to the PRC is 3662.

[00:11:30] Speaker 01:
It arises under rate and service complaints section of the Postal Act.

[00:11:38] Speaker 01:
This is not a rate and service complaint issue.

[00:11:40] Speaker 01:
This is a

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significant contractual dispute.

[00:11:44] Speaker 01:
And the two cases that this court has decided on this issue about PRC jurisdiction, White and Bovard, both highlight this.

[00:11:54] Speaker 04:
White was about the... Don't they both cut against you if memory serves?

[00:11:58] Speaker 01:
I don't think so.

[00:11:59] Speaker 04:
Why not?

[00:12:00] Speaker 01:
Because they deal with postal service.

[00:12:03] Speaker 01:
They don't deal with the dispute about misappropriation of trade secrets like we have here.

[00:12:08] Speaker 01:
I mean, White is a complaint by

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a citizen about the refusal to hold mail and Bovard is about the change of mail service from the morning to the afternoon.

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Those are drastically different from the claims that are at issue here.

[00:12:25] Speaker 04:
Well, that's true, but why isn't this a service?

[00:12:28] Speaker 04:
I mean, the issue underlying is you were providing a service for the Postal Service.

[00:12:35] Speaker 04:
In your view, the scheme that the Postal Service undertook deprived you of the ability to undertake that service.

[00:12:42] Speaker 04:
Why isn't it a service complaint?

[00:12:43] Speaker 04:
It's not the one that's in White and Bovard, but why isn't it underlying at its essence a complaint about your treatment by the Postal Service relevant to service?

[00:12:53] Speaker 01:
Sure.

[00:12:54] Speaker 01:
Well, we are not complaining about postal service that was provided to us.

[00:13:01] Speaker 01:
We are not saying, hey, you shouldn't have brought, I don't like that you brought my mail in the morning or in the afternoon.

[00:13:08] Speaker 01:
We are a contracting partner engaged in a business worth tens of millions of dollars with the postal service.

[00:13:15] Speaker 01:
This is not about a rate complaint.

[00:13:18] Speaker 01:
This is not about postal service.

[00:13:22] Speaker 04:
I didn't mean to interrupt you.

[00:13:24] Speaker 04:
Go ahead.

[00:13:25] Speaker 01:
No, no, no.

[00:13:26] Speaker 04:
I guess the question then would become, does the language naturally preclude these kinds of complaints?

[00:13:37] Speaker 04:
I mean, the issue is not whether it's white or bouvard or it's like those.

[00:13:41] Speaker 04:
The issue is, does the word service, is there anything that would lead us to believe that that naturally

[00:13:47] Speaker 04:
excludes a category of activity that's going on here, because no, you're not complaining about the Postal Service doing something to you, but your contractual relationship relates to the service of the Postal Service that you're essentially doing for them.

[00:14:04] Speaker 04:
I mean, you're acting as essentially an entity that is doing something that, well, the essence of this suit, that if you weren't doing it, the Postal Service would be doing it.

[00:14:17] Speaker 01:
I would disagree with that, Your Honor.

[00:14:21] Speaker 01:
I think the critical language here actually is in the statute.

[00:14:25] Speaker 01:
It's 3662 says may go to the PRC.

[00:14:29] Speaker 01:
Original jurisdiction clearly under 39 USC 409A lies with the district court.

[00:14:35] Speaker 01:
So we're entitled to go to the district court.

[00:14:38] Speaker 01:
If you have a service complaint, whether or not it's read incredibly broadly, as Your Honor is questioning me about, or narrowly about,

[00:14:47] Speaker 01:
kind of the issues we see in White and Bovard, then an individual can go to the PRC, but they're not required to.

[00:14:55] Speaker 01:
It's permissive language, may.

[00:15:01] Speaker 01:
With that, Your Honors, I would submit unless you have additional questions for me.

[00:15:06] Speaker 04:
Thank you.

[00:15:06] Speaker 04:
Thank you, Counsel.

[00:15:06] Speaker 04:
Thank you.

[00:15:19] Speaker 00:
May it please the court, Tiffany Carney, on behalf of the appellee, the United States Postal Service.

[00:15:24] Speaker 00:
The lower court's two orders dismissing Express One's claims should be affirmed.

[00:15:28] Speaker 00:
Your Honors, this is a case about the Postal Service's decision to exercise its right to terminate a reseller contract after concluding that selling its own products to customers directly made more sense for the agency and the public.

[00:15:40] Speaker 00:
Express One appeals the dismissal of its claims, all of which are supported by overlapping

[00:15:45] Speaker 00:
in largely implausible allegations that the Postal Service improperly terminated the contract, misappropriated so-called business information, and developed a, quote, scheme to steal its business.

[00:15:56] Speaker 04:
Why don't we start with the payee claim and the argument about permissive language of May.

[00:16:02] Speaker 04:
Why doesn't that mean that they did not have to go to the Postal Regulatory Commission, but in fact, go to district court?

[00:16:09] Speaker 00:
The district court, I believe, correctly concluded that the word may here means that a grief party's decision to file a complaint is optional, but the path of which they seek that review is not.

[00:16:21] Speaker 00:
And it's in the language of the statute itself.

[00:16:24] Speaker 00:
We think this interpretation makes sense.

[00:16:26] Speaker 00:
When Congress revised this section in 2006 with the Postal Act, it was against the backdrop of many lower court and at least two federal circuit opinions, the LeMay decision and the Bovar decision in this court.

[00:16:38] Speaker 00:
holding that the PRC has exclusive jurisdiction over claims in that section.

[00:16:43] Speaker 00:
As held by the Supreme Court, when nearly all of the relevant judicial decisions give a term or concept a consistent judicial gloss, court should presume that Congress intended that term to have the same meaning in a later enacted statute.

[00:16:57] Speaker 04:
Our Bogart decision was not presidential, right?

[00:17:00] Speaker 00:
Correct, Your Honor.

[00:17:01] Speaker 00:
It's an unpublished decision.

[00:17:02] Speaker 00:
However, I understand under this court's rules

[00:17:05] Speaker 00:
If it is persuasive, then we can cite it.

[00:17:08] Speaker 04:
That's not what I was saying that for.

[00:17:11] Speaker 04:
What I was saying that for is if it's going to find a backdrop for what Congress did, presumably you would want a decision that actually speaks for the court.

[00:17:20] Speaker 00:
Correct, Your Honor.

[00:17:21] Speaker 00:
Ideally, that would be the situation.

[00:17:23] Speaker 00:
I think Congress, however, when looking at the decisions,

[00:17:26] Speaker 00:
Up until that point, I think largely, if almost entirely, had held that the PRC had exclusive jurisdiction over the old version of 3662.

[00:17:35] Speaker 00:
And in that old section, the word may was used there as well.

[00:17:39] Speaker 00:
So I think that's, I would also say that the LeMay case, the Eighth Circuit case, that was a published decision.

[00:17:45] Speaker 00:
Also, Your Honor, back to that point, the legislative history supports this interpretation.

[00:17:51] Speaker 00:
Senator Susan Collins, who introduced the Postal Act and sponsored it, described it as transforming the existing Postal Rate Commission into a Postal Regulatory Commission with enhanced authority to ensure that there's greater oversight over the Postal Service.

[00:18:06] Speaker 00:
And Senator Collins' interpretation of the bill is also supported in the statute itself.

[00:18:11] Speaker 00:
As you can see in the new Section 3662A, Congress added types of claims to PRC's

[00:18:17] Speaker 00:
jurisdiction.

[00:18:19] Speaker 00:
It added 4A claims, 101D, 412, and a list of them.

[00:18:24] Speaker 00:
Also, Your Honors, I point you to Chapter 5 of Title 39.

[00:18:27] Speaker 00:
That has to do with the PRC's authority.

[00:18:30] Speaker 00:
In 502A, Congress required that PRC commissioners have qualifications and expertise necessary

[00:18:35] Speaker 00:
to carry out the, and I'll quote here, enhanced responsibilities accorded to commissioners under the new Postal Act in 2006.

[00:18:42] Speaker 00:
These qualifications included professional standing and demonstrated expertise in economics, accounting, law, or public administration.

[00:18:51] Speaker 00:
So you can see this is new.

[00:18:52] Speaker 00:
This was new in the 2006 Act.

[00:18:54] Speaker 00:
They're providing additional requirements to be a commissioner on PRC.

[00:18:59] Speaker 00:
So with the prior decisions interpreting that section and with the enhanced qualifications,

[00:19:04] Speaker 00:
I think it's fair to say that Congress intended for the PRC to have exclusive jurisdiction and broader authority over complaints alleging 404A violations as well as other violations of the Act.

[00:19:14] Speaker 00:
Now since 2006, all federal appellate courts to consider this issue, including this court's recent decision in white and also the Federal Circuit's decision in Foster B. Pitney-Bowes have held that Section 3662 grants PRC exclusive jurisdiction to the postal act claims listed there.

[00:19:31] Speaker 00:
In each of these cases, the courts discern Congress's intent to channel claims to the PRC either by looking at the language of the statute itself or at both the language and the statute's legislative history.

[00:19:42] Speaker 00:
And I would also add that the Federal Circuit's decision in Foster v. Pennybose also dealt with allegations of 404A violations and still held that the plaintiff was required to first file those claims in the PRC first.

[00:19:55] Speaker 00:
Your Honor, Council for Express One mentioned 404A.

[00:19:58] Speaker 00:
I would say that there is an exception.

[00:20:00] Speaker 00:
Its grant of jurisdiction does not apply to exceptions otherwise provided in this title.

[00:20:06] Speaker 00:
And we would submit that section 3662A is one of those exceptions.

[00:20:10] Speaker 00:
There are other exceptions as well.

[00:20:12] Speaker 00:
409C provides that tort claims must be followed the Federal Tort Claims Act.

[00:20:20] Speaker 00:
So there are limitations to that grant of jurisdiction.

[00:20:25] Speaker 00:
Next, Your Honor, the court correctly held that the FDCA bars expressed one's misrepresentation and estoppel tort claims counts four in ten.

[00:20:35] Speaker 00:
FDCA governs all tort claims arising out of... Could you slow down just a little?

[00:20:41] Speaker 02:
I don't listen fast enough.

[00:20:44] Speaker 00:
Certainly, Your Honor.

[00:20:47] Speaker 00:
FDCA governs all tort claims arising out of activities of the Postal Service.

[00:20:51] Speaker 00:
That's under 39 USC 409C.

[00:20:54] Speaker 00:
And the Supreme Court has held a new stat and then reaffirmed in Block v. Neal that the FTCA 28 USC 2680H bars any claims against the government arising out of misrepresentation or deceit, which includes both negligent and intentional misrepresentation.

[00:21:13] Speaker 00:
Express 1's count 4 alleges the elements of the tort of misrepresentation.

[00:21:17] Speaker 00:
And given these allegations, the court's dismissal of that claim should be affirmed.

[00:21:24] Speaker 00:
Express 1's estoppel claim, Count 10, should likewise be dismissed.

[00:21:28] Speaker 00:
Express 1 alleges the same facts in support of Count 10 as it does in support of the misrepresentation claim.

[00:21:35] Speaker 00:
Specifically, Express 1 alleges that the Postal Service made representations

[00:21:39] Speaker 00:
US Postal Service knew the representations were false.

[00:21:43] Speaker 00:
Express 1's relied on those representations, and Express 1 suffered damages.

[00:21:48] Speaker 00:
As the Supreme Court held in Richmond, misrepresentation claims, framed as estoppel claims, are also barred under the FTCA.

[00:21:55] Speaker 00:
So that part of the decision should be affirmed.

[00:21:59] Speaker 00:
Next, the district court correctly held that Express 1 failed to exhaust its remedies before bringing its misappropriation tort claims, counts six through nine.

[00:22:09] Speaker 00:
Those claims, again, they track the elements of misappropriation under Utah law.

[00:22:14] Speaker 00:
They each allege that Express 1 had a protectable trade secret, and the secret was misappropriated by the Postal Service.

[00:22:21] Speaker 00:
Therefore, FTCA applies to these claims, and they are required to exhaust the remedies before they could bring them to district court.

[00:22:28] Speaker 03:
Council, can I ask you about that?

[00:22:29] Speaker 03:
The district court's orders, I recall, made reference to a recent Supreme Court opinion, Santos Zaccaria.

[00:22:37] Speaker 03:
But I don't see this came up in the briefs, but in that case, Supreme Court, looking at a different statute, held the exhaustion requirement was non-jurisdictional.

[00:22:45] Speaker 03:
It's a classic or quintessential claims processing rule.

[00:22:48] Speaker 03:
Do you think that case abrogates our precedents that say the FDCA exhaustion requirement is jurisdictional?

[00:22:54] Speaker 00:
I do not, Your Honor.

[00:22:55] Speaker 00:
I think, first, the Supreme Court's decision in Santos considered only whether Section 1252D1 of the immigration statute

[00:23:03] Speaker 00:
was jurisdictional.

[00:23:05] Speaker 00:
However, the FTCA, unlike the INA, that statute, it constitutes a waiver of the government's sovereign immunity.

[00:23:11] Speaker 00:
So the notice requirements established by the FTCA, those are typically strictly construed.

[00:23:16] Speaker 00:
I would also add that the district court recognized that the 10th Circuit, as you recognize, has yet to apply that decision outside the immigration context.

[00:23:24] Speaker 00:
I think more recently, this past November, in the case of Rowland v. Matavusian, 121 F, 4th, 1237,

[00:23:33] Speaker 00:
held that the FTCA's administrative exhaustion requirement continues to be jurisdictional, so I think this court's precedent, even after that decision, should be followed.

[00:23:42] Speaker 04:
Where did that case come from that you just cited, and is it in your brief?

[00:23:46] Speaker 00:
It's in the 10th Circuit in 2024, Rowland, 121, F, 4th, 1237.

[00:23:53] Speaker 04:
Is it in your brief?

[00:23:54] Speaker 00:
It's not, Your Honor.

[00:23:55] Speaker 00:
I believe it was decided after

[00:23:59] Speaker 04:
No fault, but could you just follow the 28J letter, please?

[00:24:02] Speaker 00:
28J, yes.

[00:24:03] Speaker 00:
Thank you.

[00:24:03] Speaker 00:
Yes, Your Honor.

[00:24:07] Speaker 00:
With respect to exhaustion, our position is that the express one had not met the exhaustion requirements.

[00:24:13] Speaker 00:
The letter to the pricing center did not meet the requirements under Postal Service Notice Regulations, which required the notice to be sent to either the torts... Is exhaustion jurisdictional or not?

[00:24:29] Speaker 00:
For the FTCA, yes, Your Honor, it is jurisdictional.

[00:24:32] Speaker 00:
Yes, Your Honor, it is jurisdictional in the FTCA, and I believe you can see that in the Bradley decision, which we did cite in our papers, but also more recently in that Rowland decision.

[00:24:45] Speaker 00:
The letter, again, we don't believe, followed the regulations of the Postal Service.

[00:24:52] Speaker 00:
Also, Your Honor, I would add that the some certain requirement was also not met, the letter to the Pricing Center

[00:24:58] Speaker 00:
If you look at that, it's an appendix 613 to 629.

[00:25:01] Speaker 00:
Nowhere does it reference the actual amount of damages.

[00:25:03] Speaker 00:
So under this court's decision in Bradley, that would not satisfy that part of the FTC exhaustion requirement.

[00:25:19] Speaker 00:
Your Honor, I can, the other two claims, the federal statute DTSA claim, the court should also dismiss this for an alternative reason.

[00:25:27] Speaker 00:
in that that statute was not intended to reach the Postal Service.

[00:25:32] Speaker 00:
As the district court correctly held, that statute indicates Congress did not intend to, district court correctly held that Congress did not intend to create a loophole to authorize plaintiff to sue the Postal Service for a misappropriation for tort that would otherwise be subject to the FDA's exhaustion requirement.

[00:25:51] Speaker 04:
What claim were you referencing?

[00:25:52] Speaker 00:
The DTSA claim, I believe it's a misappropriation of tort claim.

[00:25:56] Speaker 00:
alleged under a federal statute.

[00:25:59] Speaker 00:
Again, the allegations, they all track the same elements of a misappropriation and therefore believe they should fall under FTCA requirements.

[00:26:13] Speaker 00:
As far as the takings claim, Your Honor, I don't see the takings claim argument made in the opening brief.

[00:26:20] Speaker 00:
I would say that that alone, they've waived that claim.

[00:26:25] Speaker 00:
But with respect to that claim, it was only asserted against the United States.

[00:26:29] Speaker 00:
And any claim for damages over $10,000, it must be brought to the court of federal claims.

[00:26:38] Speaker 00:
And so that claim should be dismissed for that independent reason.

[00:26:42] Speaker 03:
Is that claim nine?

[00:26:44] Speaker 00:
It's claim nine.

[00:26:48] Speaker 00:
As far as the Marist decision, the 12b6 decision,

[00:26:53] Speaker 00:
For a breach of contract claim, Express 1 maintains that the Postal Service breached section 1N, the preamble, and 404A of the Postal Act.

[00:27:04] Speaker 00:
As the district court correctly held, 404A of the Postal Act was not incorporated into the contract itself.

[00:27:12] Speaker 00:
Under the court's, under decisions such as Northrop-Gumman, it's a Federal Circuit decision, any statute or document

[00:27:20] Speaker 00:
that's supposed to be incorporated into a contract and must identify, the contract must identify with detailed particularity and also make it express and clear that the parties intended to incorporate the statute, the regulation or the external document.

[00:27:36] Speaker 00:
And in this case, the contract does not do that.

[00:27:39] Speaker 00:
And so the court correctly held that that was not incorporated into the contract itself.

[00:27:44] Speaker 00:
The court also correctly held that Section 1N, there was no breach there.

[00:27:47] Speaker 00:
I think Your Honors have gotten to the heart of that issue.

[00:27:50] Speaker 00:
There was no duty provided or obligation required of the Postal Service in that section.

[00:27:57] Speaker 00:
The term itself just explains what the Postal Service would do with the information for purposes of validating merchant platform shipping volume.

[00:28:06] Speaker 00:
It does not otherwise restrict that information.

[00:28:08] Speaker 00:
I would also say it's not ambiguous, but to the extent there's any ambiguity, you would first look to other portions of the contract itself to understand that language.

[00:28:19] Speaker 00:
I think you can look at even just the confidentiality section.

[00:28:22] Speaker 00:
There, it doesn't define any information provided under the contract as

[00:28:27] Speaker 00:
as confidential or protected or a trade secret.

[00:28:31] Speaker 00:
It only provides for a way that the Postal Service could redact information if it chose to when it's submitted to the PRC.

[00:28:39] Speaker 00:
The express one also had an opportunity to raise any confidentiality concerns with the PRC when it was submitted there for approval and there's no indication or no allegation that it did so.

[00:28:51] Speaker 00:
So there's no expectation of any duty imposed on the Postal Service to restrict its use of that information.

[00:29:02] Speaker 00:
Just quickly, in terms of the implied duty of good faith, we also ask that this Court affirm that decision.

[00:29:11] Speaker 00:
The Court correctly looked at whether the implied duty asserted by Express 1 would expand its rights beyond the contract.

[00:29:18] Speaker 00:
and also whether Express One's expectations were reasonable in light of the contract's terms.

[00:29:24] Speaker 00:
I think there, again, and I think Chief Judge Holmes got to that issue that it's not, the expectations of Express One were not reasonable, given both there's an unconditional right to terminate, either party could do so with 90 days notice, so there's no expectation that the Postal Service would somehow continue the contract indefinitely or even until the end of the four-year term.

[00:29:47] Speaker 04:
Let me ask you this hypothetical and it's sort of general but applies to this case assuming that if we for the moment assume that the postal service did everything that essentially that they say you did.

[00:30:01] Speaker 04:
In other words, the postal and writ large, the postal service had a plan and its plan was to eventually take this over and they wanted the data.

[00:30:10] Speaker 04:
And so the postal service says, hey, express one, we want you to enter into a new agreement in 2019

[00:30:16] Speaker 04:
And we have exactly the terms that we have in this agreement now.

[00:30:21] Speaker 04:
Would the outcome in the district court have been any different?

[00:30:26] Speaker 00:
I do not think so, Your Honor.

[00:30:27] Speaker 00:
I think you got to the heart of the matter when you said these are two contracting parties to the extent, and I'm sorry, I'm over time.

[00:30:34] Speaker 00:
Please.

[00:30:36] Speaker 00:
You know express one believe that its data should not be used or should not be evaluated In terms of whether or not the postal service should choose to sell its products directly rather than through a reseller like express one It could do so I mean the terms of the contract are very clear as to the the discounts provided the information that was required under the contract if express one had concerns that could have

[00:30:59] Speaker 00:
raise them and alter the terms.

[00:31:00] Speaker 00:
So to the extent that the Postal Service planned to ultimately sell its products directly at some point in the future, I do not think that would be a breach of the implied duty.

[00:31:11] Speaker 04:
All right.

[00:31:15] Speaker 04:
Thank you, Council.

[00:31:16] Speaker 04:
The case is submitted.

[00:31:17] Speaker 04:
I pause this.

[00:31:20] Speaker 04:
Did you have additional time?

[00:31:21] Speaker 01:
I do.

[00:31:21] Speaker 01:
I think I've got seven seconds.

[00:31:23] Speaker 04:
I would not deprive you of seven seconds.

[00:31:25] Speaker 04:
In fact, if you give him 30, since the government went over a little, please.

[00:31:30] Speaker 04:
Great.

[00:31:32] Speaker 01:
Two quick points, Your Honor.

[00:31:33] Speaker 01:
First of all,

[00:31:34] Speaker 01:
The USPS Pricing and Classification Service Center is, quote, any office of the Postal Service for presentment.

[00:31:41] Speaker 01:
That's under 29 CFR 912.4.

[00:31:46] Speaker 01:
So we absolutely satisfied the FTCA presentment.

[00:31:49] Speaker 01:
This is a hyper-technical reading that they're advancing here.

[00:31:53] Speaker 01:
And second,

[00:31:54] Speaker 01:
Under the covenant of good faith and fair dealing, it just defies explanation that a contracting partner has to guess that the party it contracts with is not going to use the data they provide and compete against them.

[00:32:07] Speaker 01:
They didn't have the data.

[00:32:09] Speaker 01:
How else were they going to get it?

[00:32:11] Speaker 01:
Google?

[00:32:12] Speaker 01:
I mean, they didn't have this.

[00:32:13] Speaker 01:
They needed a source to get it.

[00:32:14] Speaker 01:
It was us.

[00:32:16] Speaker 04:
As to Count 9, do you accept that that's waived, this argument about the takings claim?

[00:32:22] Speaker 01:
The takings?

[00:32:24] Speaker 01:
I don't have an answer for that, Your Honor.

[00:32:26] Speaker 01:
I apologize.

[00:32:27] Speaker 01:
I should be better prepared to say that.

[00:32:30] Speaker 01:
So no, I don't.

[00:32:31] Speaker 01:
But I don't have a good response.

[00:32:34] Speaker 04:
OK.

[00:32:35] Speaker 04:
I'll take that.

[00:32:37] Speaker 01:
Thank you, Your Honor.

[00:32:38] Speaker 04:
Case is submitted.

[00:32:39] Speaker 04:
Thank you for your fine arguments.

[00:32:40] Speaker 04:
The court will be in recess until 9 AM tomorrow.

[00:32:43] Speaker 04:
Thank you.