[00:00:01] Speaker 02: Case number 18-1328, Douglas F. Carlson, petitioner versus postal regulatory clinician. [00:00:08] Speaker 02: Mr. Carlson for petitioner, Mr. Saltzman for respond. [00:00:21] Speaker 03: Good morning and may it please the court. [00:00:24] Speaker 03: I'm Doug Carlson. [00:00:26] Speaker 03: I am the petitioner proceeding pro se. [00:00:29] Speaker 03: I appreciate the court's decision to grant expedited consideration of this appeal and I would like to reserve three minutes for rebuttal. [00:00:37] Speaker 03: In October 2018, the Postal Service announced an increase in the basic price to mail a first-cost letter from 50 cents to 55 cents. [00:00:46] Speaker 03: This five-cent increase is the largest in history, and as a percentage, this 10% increase is the largest since the 10.2% increase in 1991. [00:00:54] Speaker 03: In 2006, Congress enacted the Postal Accountability and Enhancement Act. [00:01:01] Speaker 03: The Act required the Postal Regulatory Commission to create, by regulation, a system for regulating market-dominant rates, including first-class mail. [00:01:11] Speaker 03: Congress required the PRC to design a regulatory system that achieved nine specific objectives listed in Section 3622b and took into account 14 factors listed in Section 3622c. [00:01:26] Speaker 03: Pricing flexibility is only one of the objectives and factors. [00:01:31] Speaker 03: We're here today because the PRC failed to create an operator regulatory system that applies the nine objectives and 14 factors. [00:01:40] Speaker 03: The PRC failed on two levels. [00:01:43] Speaker 01: First, the PRC's regulations... To be clear, you're here challenging the specific price increase. [00:01:49] Speaker 01: Yes. [00:01:50] Speaker 01: You'd be out of time to make a facial challenge to that regulatory system they adopted, wouldn't you? [00:01:56] Speaker 01: I'm sorry, can you... You'd be out of time. [00:01:57] Speaker 01: They adopted the regulatory system [00:02:00] Speaker 01: You're outside the statute of limitations for that. [00:02:02] Speaker 01: You can only attack it as applied through this rate increase, correct? [00:02:07] Speaker 03: That's correct. [00:02:08] Speaker 03: I'm attacking the regulatory system through this increase. [00:02:11] Speaker 01: And then just to be clear on one thing, which I assume is obvious, but we always have to confirm our standing in the case. [00:02:18] Speaker 01: I assume you are a purchaser of first class stamps? [00:02:21] Speaker 03: Yes, I am a mailer. [00:02:23] Speaker 02: And so I'm agreed by order number 4875. [00:02:34] Speaker 03: Well, I believe that the underlying regulation does not properly implement the statute. [00:02:40] Speaker 03: This Court certainly can decide the case on those grounds, but if the regulation is deemed to be valid because it does allow the Commission the discretion to consider Section 3622 B and C issues, the Commission abused its discretion and the order was arbitrary and capricious. [00:02:58] Speaker 02: Do you believe that the challenge to the underlying framework regulation is properly before us now? [00:03:04] Speaker 03: I do because the Commission used its regulatory scheme to issue Order 4875 and to decide the case on this increase. [00:03:17] Speaker 00: So it's an as-applied challenge. [00:03:20] Speaker 00: It's an as-of-five challenge. [00:03:22] Speaker 03: That's right. [00:03:23] Speaker 03: That's right. [00:03:24] Speaker 03: And the Supreme Court did say that a regulation's age is no antidote to clearing consistency with the statute in Brown v. Gardner. [00:03:31] Speaker 03: So even though this issue hasn't come up to the best of my knowledge in the last 12 or 13 years, this also is a unique case because the Postal Service implemented [00:03:44] Speaker 03: an increase of 10% for first-class mail, first-class letters, stamped first-class letters, and that's more than four times the CPI. [00:03:53] Speaker 03: And that has not been a typical result, or I'm not sure it's ever happened since the PAEA has been implemented, except in the one case that the Commission cites and it's brief. [00:04:03] Speaker 03: So I think the expectation of Congress when the statute was implemented was that the Postal Service generally would follow the CPI, but they were allowed to make some deviations. [00:04:17] Speaker 03: But here we have 10% increase for stamp first-class letters. [00:04:21] Speaker 03: and less than 1% for pre-sort letters, and that's a major difference, and so it shouldn't be surprising that this case has triggered a question about the underlying regulatory scheme and how the commission's implemented it. [00:04:35] Speaker 04: The statute clearly requires consideration of these objectives, system objectives, but [00:04:49] Speaker 04: where does it clearly require consideration of those objectives in the ex ante approval of a rate increase as opposed to in various other contexts like the 10 year study, the one year assessment, or the response to a complaint? [00:05:15] Speaker 03: And so the system itself to regulate the rates has to consider the objectives and factors in 3622B and C. And so if not, the way the commissions design the system, the only place that that system can consider those issues is in reviewing a particular price increase that the Postal Service has announced. [00:05:38] Speaker 04: Well, but they can do that just as well. [00:05:41] Speaker 04: As I understand it, they review, by statute, they have to review the rate increases every year in a more detailed proceeding where they have more time, they have more information, they have remedial authority to adjust prices if they find that the increase was too much. [00:06:04] Speaker 04: Why couldn't the commission channel this set of issues [00:06:08] Speaker 04: to that form of review rather than this quick and dirty 45 day separate review on the front end. [00:06:18] Speaker 03: Well I think they could if the statute had been written that way and I think it's worth imagining what would the statute have looked like if Congress didn't want the commission considering section 3622 B and C issues in the context [00:06:31] Speaker 03: of a particular increase. [00:06:32] Speaker 03: Congress could have established a price cap mechanism. [00:06:36] Speaker 03: Congress could have said that the rate shall meet the objectives in 3622B and the factors in 3622C. [00:06:43] Speaker 03: The commission shall establish a system for regulating rates and the statute would provide for the annual compliance determination and the complaint process. [00:06:51] Speaker 03: If the statute had been written that way, then I think the answer to your question would be clear. [00:06:56] Speaker 03: It's not required. [00:06:57] Speaker 03: A review of these objectives and factors is not required when the Postal Service is actually seeking an increase. [00:07:03] Speaker 03: But that's not what the statute says. [00:07:05] Speaker 03: The statute says that the system must take into account the objectives and factors and the annual compliance determination [00:07:13] Speaker 03: and the complaint process are separately established, congressionally established statutory procedures. [00:07:19] Speaker 01: Do you know if in those annual compliance reviews, do they actually go back and at that point take all the complaints that came in before the rate was adopted and [00:07:31] Speaker 01: analyze them and go through them and address them or not? [00:07:34] Speaker 03: I believe that the Commission seeks public comment during the annual compliance determination and perhaps on its own also can look at the rates. [00:07:42] Speaker 03: I believe there have been some rates that have been adjusted under the annual compliance determination. [00:07:49] Speaker 01: But they've already got a bunch of public comment from the comments [00:07:53] Speaker 01: at the rate adoption stage, right? [00:07:55] Speaker 01: Like you commented before this rate came in, and other people did as well. [00:08:00] Speaker 01: And to the extent they say, we'll deal with that later, do they take those comments from the rate making stage and deal with them automatically at the annual compliance review stage, or do you have to comment again? [00:08:13] Speaker 03: I certainly don't know that they automatically would review negative comments that came in during the first phase in the annual compliance determination. [00:08:22] Speaker 03: I certainly would comment again. [00:08:24] Speaker 03: I wouldn't take the chance personally that they would remember my comments. [00:08:28] Speaker 01: Right, but if it's part of this system, one would think you wouldn't have to comment again, that they would carry those concerns through and be obligated to address them. [00:08:37] Speaker 03: I agree with Your Honor, but I don't know that they [00:08:40] Speaker 01: You don't know one way or the other. [00:08:42] Speaker 03: I don't know that they do. [00:08:43] Speaker 03: I certainly would comment again. [00:08:45] Speaker 03: And I think the problem with the annual compliance determination is that it's a year late. [00:08:51] Speaker 03: It's for rates that were in effect in the prior fiscal year, and the mailers have already paid. [00:08:56] Speaker 01: So this one came into effect in January? [00:08:59] Speaker 03: January 2019. [00:08:59] Speaker 01: And the annual compliance review is December, November, December? [00:09:05] Speaker 03: I think it starts in December and runs for a few months thereafter. [00:09:10] Speaker 03: So the mailers have paid the rates, they're not entitled to refunds, and this is hundreds of millions of dollars a year that the general public and small business may be paying improperly as a result of rates that may be unlawful. [00:09:23] Speaker 03: So I believe in the fairest reading of the statute is that Congress wanted some consideration in this regulatory [00:09:32] Speaker 03: system for considering objectives and factors. [00:09:35] Speaker 02: What do you make of the fact, Mr. Carlson, that there are these objectives and factors that shall be considered in establishing the system, but then there are also specific requirements? [00:09:44] Speaker 02: The requirements seem to be what is focused on more in the framework regulation. [00:09:48] Speaker 02: What do you make of that? [00:09:49] Speaker 03: Well, I read the requirements as minimum features of the commission's regulatory system. [00:09:55] Speaker 03: So it has to allow for review within 45 days. [00:09:59] Speaker 03: And I don't have chapter and verse memorized, but whatever else is in section 3622. [00:10:04] Speaker 03: Those are minimum requirements, minimum features of the system. [00:10:08] Speaker 03: But the commission is given great latitude otherwise to design a system. [00:10:13] Speaker 03: And Congress was clear in the Senate report [00:10:16] Speaker 03: that they want to leave it to the Commission, who has better expertise on developing this regulatory system. [00:10:23] Speaker 03: And my concern with the statutory structure is that the Commission has disregarded an important instruction in that legislation, which is to develop a system that considers the objectives and factors. [00:10:39] Speaker 03: Thank you. [00:10:49] Speaker 05: May it please the court, Joshua Salzman on behalf of the commission. [00:10:53] Speaker 05: I'd like to begin, actually, where Judge Katzis was asking that line of inquiry, because I think that that really highlights the central issue in this case, which is the requirements of the statute itself. [00:11:08] Speaker 05: Congress gave the commission in Section 3622A a broad grant of rulemaking discretion and imposed a few requirements. [00:11:18] Speaker 05: The only requirement for the [00:11:22] Speaker 05: 45-day pre-implementation review, however, is found in 3622 D1C. [00:11:29] Speaker 05: And specifically, what it says is during that 45-day period, the commission is supposed to check for compliance with the price cap. [00:11:36] Speaker 05: Beyond that, there are no sections. [00:11:38] Speaker 01: So that's not what it says. [00:11:39] Speaker 01: It says not later than 45 days before it goes into effect. [00:11:43] Speaker 01: So you actually have all the time in the world as long as you're done. [00:11:47] Speaker 01: And in fact, you didn't do all this in a 45-day period. [00:11:51] Speaker 01: Your decision came out in November, which was about 75 days before the rate took effect. [00:11:57] Speaker 01: So I don't understand this 45 days of compressed time. [00:12:00] Speaker 05: Sure. [00:12:01] Speaker 05: And there was some discussion about how that statutory language should be understood at the time that the Commission was first adopting its regulations. [00:12:10] Speaker 05: If you go back to order number 26, which was the first notice of proposed rulemaking here, there was discussion of whether or not the 45 days should be, whether [00:12:21] Speaker 05: That was just a minimum requirement on the postal service or whether that was something the commission itself was supposed to strive to act within. [00:12:29] Speaker 05: And what the commission determined, particularly acting against the backdrop of the PAEA, which was designed to get away from the evils of the shortcomings of the old system. [00:12:40] Speaker 01: No, I get that argument. [00:12:41] Speaker 01: Mine is different. [00:12:43] Speaker 01: As I read your argument, it's we only have 45 days to do this review. [00:12:49] Speaker 01: And some of the statute says, it says not later than 45 days before, which means you have all the time in the world as long as you're done by 45 days before implementation. [00:13:01] Speaker 01: And so in part of your scheme, you could say, Postal Service, you need to give us six months notice before you do this, and we'll have all the time in the world. [00:13:10] Speaker 01: So I just, I haven't understood [00:13:12] Speaker 01: And you didn't do everything within 45 days in this case. [00:13:16] Speaker 01: They started in October. [00:13:18] Speaker 01: You had a decision in November, which, as I said, was like 75 days before the rates came into effect. [00:13:24] Speaker 01: So I don't understand what your point is about this 45 days. [00:13:28] Speaker 01: You don't have a compressed time frame, and you haven't treated it as such. [00:13:30] Speaker 05: We certainly have a compressed time frame under the regulations themselves. [00:13:34] Speaker 05: The regulations require, and this is in 39 CFR 3010.11, it says within 14 days after the close of the public comment period, the commission is supposed to issue an order that determines at least whether or not the rates comply with the... So that may be a self-inflicted harm. [00:13:54] Speaker 01: If you want to tie yourselves to that kind of time frame, [00:14:00] Speaker 01: then you better be able to do all the work that needs to be done within that time frame. [00:14:05] Speaker 01: But it seems odd for an agency to say, we know we have tons of time, but we're going to adopt a regulation that jams everything up. [00:14:13] Speaker 01: And they were going to use that as the reason for not making the qualitative decision in advance. [00:14:18] Speaker 05: I think the commission very reasonably against the backdrop of the PAEA and the legislative history makes quite clear that the goal of this was to give the reason there was this reform, the reason there was a move [00:14:31] Speaker 05: away from the old regime under the 1970 Act was because that process was too cumbersome and that the Commission understood that Congress's intent was for the Commission to introduce a new streamlined procedure that would allow the Postal Service to be more nimble to react to change market conditions. [00:14:50] Speaker 02: But that is not what the statute says, right? [00:14:52] Speaker 02: That might be in the legislative history or in some of the post-enactment legislative history that's been cited, but it's not in the statute itself. [00:14:59] Speaker 02: which has a very different type of time frame scheme? [00:15:02] Speaker 05: Well, I think what the statute itself, as I think I heard Mr. Carlson concede at the end there, imposes relatively few strictures. [00:15:10] Speaker 05: So even if you were going to say, given that we are in a Chevron framework here and the court has consistently applied Chevron to commission regulations and commission orders with under the PAEA, [00:15:22] Speaker 05: I think as long as we this is a reasonable interpretation of the statute, then that then I think there wouldn't be any basis for invalidating it and given the express grant of rulemaking authority and 3622 a but notice and comment the commission went through that's detailed in order number 26 and 43. [00:15:41] Speaker 05: What you see is that the Commission was striving to implement what it understood to be Congress's intent into creating a better system. [00:15:47] Speaker 01: There's a big difference between taking 18 months like you did before, like things could before, like it really dried out, and jamming yourself up on 14 days, right? [00:15:57] Speaker 01: There's got to be something in between there. [00:16:01] Speaker 01: And so, you said, reasonableness review, and I guess I'm asking you, is it reasonable [00:16:06] Speaker 01: for the agency to in a case like this where there's serious qualitative challenges under the qualitative factors challenges to the rate to go we don't have time to set to put itself in a box that says we don't have time I do your honor I think the Commission has struck a reasonable balance here what the statute requires is only consideration of the quantity of one quantitative factor the price cap [00:16:33] Speaker 05: in the pre-implementation review period. [00:16:35] Speaker 05: The commission went further. [00:16:37] Speaker 05: The commission said, we're going to have other quantitative factors. [00:16:41] Speaker 05: We're also going to leave open a fail-safe, a break-open in case of emergency. [00:16:45] Speaker 05: This is an extreme case involving blatant disregard, where we will, on qualitative basis, disapprove a rate on the front end. [00:16:52] Speaker 01: So you agree, but to be clear, you don't dispute that you have to apply the qualitative factors to the rates. [00:16:59] Speaker 01: It's just a question of when, before or after. [00:17:02] Speaker 05: I think that there needs to be consideration at some point, and there is consideration under the current scheme, as I think a majority of the person. [00:17:09] Speaker 01: Okay, but you have to consider those for a rate, and it's just a before or after decision. [00:17:13] Speaker 01: That's what you want the deference to. [00:17:16] Speaker 05: The Commission has consistently said it will consider this, but that the primary time to consider this is through those two post-review mechanisms, the annual compliance review and the complaint procedure. [00:17:26] Speaker 01: Okay, so the complaint review is not actually a review unless someone asks you to review. [00:17:30] Speaker 01: That's complete passivity, right? [00:17:32] Speaker 01: If no one files a complaint, you wouldn't review at all? [00:17:34] Speaker 05: Sure, but if Mr. Carlson had on January 21st... No, no, no. [00:17:36] Speaker 01: Let me clear what your scheme is here. [00:17:38] Speaker 01: So your scheme is we have to look at both quantitative and qualitative. [00:17:43] Speaker 00: Yes, Your Honor. [00:17:44] Speaker 01: We'll look at these quantitative ones before. [00:17:46] Speaker 01: And if there's something that seems to be blatant disregard qualitatively, we'll do that before. [00:17:53] Speaker 01: Otherwise, we're going to do it after, but we're only going to do it after... put aside the annual review for a second, if someone asks. [00:18:00] Speaker 01: Well, or under the annual review. [00:18:02] Speaker 01: Put that aside. [00:18:03] Speaker 01: So I'm trying to figure out if the complaint process does any work for you. [00:18:07] Speaker 01: If the statute requires you to look at qualitative factors and you say, we'll only do it later if someone asks, would that satisfy the statute? [00:18:15] Speaker 05: So we're pretending that the annual review doesn't exist. [00:18:19] Speaker 01: I'm just asking you whether the complaint process does anything to help you. [00:18:22] Speaker 05: I think it absolutely does, Your Honor, because it allows people who are subject to unfair, any interested member of the public, if you look at this is 3662. [00:18:31] Speaker 01: It puts a burden on the public to prove a violation of the qualitative factors rather than the burden [00:18:37] Speaker 01: as I thought you had said it was, on the Postal Commission to find compliance in the first instance with qualitative factors. [00:18:43] Speaker 01: That's what the complaint process does. [00:18:44] Speaker 05: If I said that, I didn't mean to. [00:18:46] Speaker 01: That's what a complaint process does. [00:18:47] Speaker 01: We'll do nothing unless you come and ask us. [00:18:50] Speaker 05: Sure, but in terms of what Congress envisioned here [00:18:52] Speaker 05: Congress intended to give the Postal Service more pricing flexibility within the rate cap. [00:18:57] Speaker 05: So I don't think that the idea that there should be a presumption that the Postal Service has to prove compliance on the front end is an appropriate way of thinking about this. [00:19:05] Speaker 05: What we have here is a system that allows any time and raise a complaint. [00:19:11] Speaker 02: You go ahead. [00:19:12] Speaker 02: Sorry, but I mean, the statute also puts a burden on the commission to devise a system which shall consider the objectives and factors, right? [00:19:19] Speaker 02: That's not a burden on the public to prove that through an ex post complaint process. [00:19:24] Speaker 05: So the statute says to divide as a broad grant of discretion to devise a modern system for postal rate regulation. [00:19:31] Speaker 05: The commission considers this on the front end by has left itself leeway consistently to consider this in the 45 day window. [00:19:39] Speaker 05: And then the commission can and does [00:19:41] Speaker 05: consider this in the context of the annual review. [00:19:44] Speaker 02: But pricing flexibility, which is the factor you said you most focused on, I mean, that's just one of the factors and objectives, right? [00:19:51] Speaker 05: Absolutely. [00:19:52] Speaker 05: But again, in the context of the annual review, the commission is going to check for compliance with all of the requirements of Chapter 36. [00:19:59] Speaker 05: The requirements of Chapter 36 include all of the objectives and factors. [00:20:04] Speaker 05: And indeed, the commission has in the past, in the context [00:20:08] Speaker 05: of one of these annual rate review proceedings, determined that a commission, that a postal rate was not in compliance with qualitative factors, and has rejected it on that basis. [00:20:21] Speaker 05: And it reached this court, actually. [00:20:24] Speaker 05: The case was USPS versus Postal Regulatory Commission 676, F3rd, 1105. [00:20:31] Speaker 05: Similarly, the commission has used the complaint process. [00:20:35] Speaker 01: So in that case, [00:20:36] Speaker 01: Or in any of these cases, you heard my question to Mr. Carlson. [00:20:39] Speaker 01: So you've got commenters who have already objected on qualitative factors to this price increase. [00:20:45] Speaker 01: Do you, in your annual compliance review, go back and say, okay, now it's time to answer those and deal with those? [00:20:52] Speaker 01: Do they have to comment again during the notice period that you have for annual compliance review? [00:20:56] Speaker 05: So my understanding is that there's not an automatic process by which the complaints are transferred over, but there is a new opportunity for public comment within the statute under section 3653, subsection A. And moreover, the commission itself... So it sounds like it's not part of this system. [00:21:14] Speaker 05: But the Commission also has an independent obligation, irrespective of the comments, to check for compliance at that stage with the requirements of Chapter 36. [00:21:23] Speaker 05: So the Commission's review isn't limited to what's raised by public comment. [00:21:28] Speaker 05: The Commission has the ability to sua sponte consider any question of whether the rates are operating in compliance with Chapter 36. [00:21:36] Speaker 02: Why is it reasonable, though, to leave that to the annual review? [00:21:39] Speaker 02: as opposed to on the front end. [00:21:40] Speaker 02: I mean, it seems to be the argument is because we have to do this in 45 days. [00:21:44] Speaker 02: But as Judge Millett pointed out, I mean, that's not what the statute says. [00:21:47] Speaker 05: So there's a trade-off that's going to happen here between whether you're going to vet the rates as closely and as rigorously as possible on the front end before they're allowed to take effect, which has definitely certain benefits for the public, but also comes at substantial cost to the Postal Service. [00:22:04] Speaker 05: Or you can allow the Postal Service to implement the rate change and then [00:22:08] Speaker 05: review on the back end and still provide an opportunity. [00:22:13] Speaker 05: The old system under the 1970 Act struck the balance extremely in one direction. [00:22:18] Speaker 05: It said we're going to go through 18 months of litigation to decide what the rates are. [00:22:23] Speaker 05: And Congress found that that hamstrung the Postal Service too much and deprived it of the ability to respond to changing events. [00:22:31] Speaker 05: The PAEA represents an attempt to strike a new balance. [00:22:35] Speaker 05: Are there costs to that? [00:22:36] Speaker 05: Yes, there are. [00:22:37] Speaker 05: But again, there's costs in the other direction as well. [00:22:40] Speaker 05: And the trade-off that I think the PAEA envisions and certainly the Commission's implementation is reasonable and consistent with the text of the PAEA was to say... Can I ask you about the annual compliance review? [00:22:51] Speaker 01: Because that's reviewing a lot of stuff. [00:22:53] Speaker 01: And rates are just one thing, I take it, that's reviewed annually. [00:22:56] Speaker 01: It's all kinds of... [00:22:58] Speaker 01: Postal service operations. [00:22:59] Speaker 05: There are other things that are the subject of the report. [00:23:02] Speaker 01: Right. [00:23:02] Speaker 01: And that whole review process takes about how long? [00:23:05] Speaker 05: So the way it works is the Postal Service submits a report and then the PRC has 90 days from the submission of that report to complete its review. [00:23:18] Speaker 05: But at that point, it has the benefit, if I may, Your Honor, of having seen the rates in operation for a year, it's dealing with real data, and also has had more time with the rates in existence, which helps facilitate the process. [00:23:30] Speaker 01: But how much – I mean, how big a role is rates normally in the annual compliance review? [00:23:35] Speaker 01: How much time is spent on that versus all of the other things that are listed in the statute for them to address? [00:23:40] Speaker 05: I'm not sure about that, Your Honor, but I do know that there is precedent of the Commission identifying rates that happened in the 2010 annual compliance determination that, as I mentioned, ultimately found its way to this court in that USPS versus PRC case I cited before. [00:23:59] Speaker 05: This is something the Commission does. [00:24:01] Speaker 05: And that's the mechanism through which the Commission has decided it can best strike the balance between giving the Postal Service the pricing flexibility and the ability to change rates in response to changing conditions while still ensuring that the 3622 factors are in objective service. [00:24:20] Speaker 02: Can you point to something in the statute that suggests this has to be done in a quick time frame that the trade-off Congress made is in favor of doing this quickly? [00:24:30] Speaker 05: And to be clear, I'm just going to speak to statutory text now, and then the legislative history and the comments that the Commission received during the regulation process, I think, overwhelmingly support that position. [00:24:44] Speaker 05: But in terms of the text itself, I think the best I have is 3622D1, which [00:24:50] Speaker 05: that says has that 45 day. [00:24:52] Speaker 02: But all that says is that the commission has to do all of these things not later than 45 days, which includes not just providing notice, but also the review of the commission. [00:25:02] Speaker 02: All of that has to happen before 45 days. [00:25:10] Speaker 05: I understand that, Your Honor, but again, once you – this Court has repeatedly cited the Senate report, for example. [00:25:16] Speaker 05: Mr. Carlson invoked it as well in understanding the PAEA. [00:25:20] Speaker 05: That Senate report, I think, gives substantial additional support for the idea that the Commission was supposed to move quickly here [00:25:29] Speaker 05: The commission then, reasonably after going through notice and comment, I understand that this isn't legislative history even and that's something else, but the lead sponsors of that legislation were among the commenters and many others who came in and said that there was an expectation that the commission would use the pre-implementation review process primarily for the price cap and that then there would be other opportunities. [00:25:51] Speaker 02: Congress didn't say any of that in the statute, right? [00:25:53] Speaker 02: All they were concerned was that the public would have 45 days before any finalized rate went into effect. [00:25:59] Speaker 02: That's all the statute says. [00:26:00] Speaker 05: That's all that's in the statute, but the statute also then grants substantial discretion under 4622A to the commission to devise a system. [00:26:08] Speaker 05: So even if [00:26:09] Speaker 05: We're going to ignore the Senate report, ignore all the public comments that Commission got. [00:26:15] Speaker 05: Ultimately, at the end of the day, the question is, is this inconsistent with the statute? [00:26:20] Speaker 05: Is there anything here that's contrary to statute? [00:26:22] Speaker 05: And I really haven't seen Mr. Carlson say anything that says there's anything in the statute, as Your Honor says, let's focus just on 3622. [00:26:30] Speaker 05: There's nothing in 3622 that says the pre-implementation review period discussed in 3622D must include an evaluation of the factors and objectives under B and C. And moreover, even if the statute had such requirement, and I'd submit that it doesn't, I'd note that the commission in this case did perform [00:26:52] Speaker 05: It admittedly cursory, but it did look at those factors. [00:26:56] Speaker 05: The commission's rules do require the postal service in its notice that it submits with the proposed rate change. [00:27:03] Speaker 05: This is in 39 CFR 3010.12 B7. [00:27:08] Speaker 05: One of the things the postal service is required to do in its notice is include a discussion that says, [00:27:13] Speaker 05: Here is how our proposed rate change conforms to the factors and objectives, thereby allowing the Commission to at least take a quick look and to identify those cases of weight and disregard. [00:27:23] Speaker 04: Could I ask, if we're done with this line, suppose you're right about the statute. [00:27:30] Speaker 04: You still have a final order that's subject to APA review, which includes a duty to explain and respond to comments. [00:27:41] Speaker 04: And the rationale you put out [00:27:44] Speaker 04: was that a five cent increase would be convenient because people don't have to count pennies or whatever. [00:27:51] Speaker 04: And there were some pretty powerful [00:27:54] Speaker 04: objections to that in the comment period and there was essentially no discussion of it in the final agency order. [00:28:03] Speaker 04: So why isn't it arbitrary and capricious for that reason? [00:28:07] Speaker 05: So I want to be clear here. [00:28:08] Speaker 05: I'm counsel for the Postal Regulatory Commission, not for the Postal Service. [00:28:12] Speaker 05: The thing about the pennies and the five cent increments, that was in the submission that I referenced a moment ago that was made [00:28:21] Speaker 05: by the Postal Service in their notice to the Commission itself. [00:28:26] Speaker 05: The Commission didn't expressly adopt that, but in terms of getting at your underlying question here, the reason I think that the Commission's order is fine here is because of the way the regulations are structured. [00:28:38] Speaker 05: And in particular, all of the regulations I'm going to cite are in 39 CFR 3010. [00:28:44] Speaker 05: This is going to be .11 subsection D. [00:28:47] Speaker 05: and subsection K. And what subsection D says is the commission's order. [00:28:52] Speaker 05: 11. [00:28:53] Speaker 05: 11. [00:28:56] Speaker 05: And then it's subsection D says at a minimum, the commission's going to decide the quantitative elements. [00:29:04] Speaker 05: It's not going to necessarily discuss anything else. [00:29:07] Speaker 05: And then on top of that, in subsection K, what the commission says is if we do discuss anything else, that is not our final word on the matter. [00:29:17] Speaker 05: by any means, and is not preclusive of revisiting the issue. [00:29:22] Speaker 05: So I think the structure is set up to facilitate the FAST review, and that if Mr. Carlson, instead of filing this appeal, on January 21st, had filed a complaint, that would have teed this process out. [00:29:34] Speaker 04: So it's not only consideration of the qualitative statutory factors that they can defer. [00:29:43] Speaker 04: your theory is they can also defer consideration of just any old comments that come in? [00:29:54] Speaker 05: What I'm saying is that the commission's order is the final order of the commission on the quantitative factors. [00:30:05] Speaker 04: The commission also... I mean, is this a merits argument or a [00:30:11] Speaker 04: finality, jurisdictional kind of argument? [00:30:14] Speaker 05: I think the strong form of it would be to frame it into the latter. [00:30:18] Speaker 05: I think we've argued it more as the former. [00:30:22] Speaker 05: But in either sense, when you're dealing with a circumstance where the commission has said the overwhelming focus in order after order, what the commission has said is we view the 45-day period as principally a chance to discuss the quantitative factors. [00:30:39] Speaker 05: the regulations urge commenters, the public commenters, to focus their comments on the quantitative factors. [00:30:46] Speaker 05: As a fail-safe, the Commission has also said we want to leave open our ability in the event of blatant disregard to [00:30:56] Speaker 05: consider other things at that stage as well. [00:30:59] Speaker 05: We understand that review is going to be cursory. [00:31:01] Speaker 05: We understand our views are going to be preliminary. [00:31:04] Speaker 05: We will accept public comment on this. [00:31:06] Speaker 05: I think it's in subsection C of that. [00:31:09] Speaker 05: I think it's in 11B or 11C. [00:31:11] Speaker 05: It says that the public can [00:31:17] Speaker 05: is encouraged to focus their comments on quantitative. [00:31:20] Speaker 05: We will take comments on the other. [00:31:22] Speaker 05: But anything we do at this stage is necessarily tentative because it's only two weeks. [00:31:27] Speaker 05: If there's something really bad, if as was the case in order number 191, there's an attempt to raise one rate by more than $200,000, a 963% increase, that's the kind of situation where it's sufficiently [00:31:44] Speaker 05: red flag that the Commission will act then, but otherwise it is deferring the issue. [00:31:48] Speaker 04: I hear you, but it sounds a little bit like the upshot of that regulation is that the Commission is trying to exempt itself from the strictures of reasoned decision-making. [00:32:08] Speaker 05: I don't think it is, Your Honor. [00:32:09] Speaker 05: I think what the Commission is trying to do is strike a balance. [00:32:12] Speaker 05: The Commission absolutely understands the need to engage in reasoned decision-making and has provided opportunities through the – and there are opportunities through both the complete procedure and the notice and comment with the annual compliance review where the Commission has to engage with the commenters on [00:32:29] Speaker 05: things like the qualitative factors. [00:32:31] Speaker 05: What the Commission wanted to do, and all of this is explained in the rulemakings at Order 26 and Order 43, was to focus the pre-implementation review on the quantitative factors, which is wholly consistent with the statute, and then to just leave itself a little room. [00:32:49] Speaker 05: And the fact that the Commission chose to accept public comment here [00:32:53] Speaker 05: I don't think was necessarily. [00:32:55] Speaker 01: What's the test for a little room? [00:32:57] Speaker 01: What is the test for blatant disregard? [00:32:59] Speaker 01: I get the 2,000, but it can't just be a big number. [00:33:05] Speaker 01: If they had, they came to you and said, we like nickels. [00:33:12] Speaker 01: We like nickels. [00:33:13] Speaker 01: We'd like more nickels in the register drawer. [00:33:16] Speaker 01: We're going with a five cent increase. [00:33:19] Speaker 01: And the commission blew by it just like it did here. [00:33:23] Speaker 01: Would that be blatant disregard that they should have caught up from? [00:33:27] Speaker 05: Not necessarily, Your Honor. [00:33:29] Speaker 05: Again, I want to emphasize that the Postal Service here, by the way, said more than just, we think, five cents is easy. [00:33:37] Speaker 05: If you read JA-9 to JA-11, the Postal Service explained why it was structuring rates the way it did. [00:33:44] Speaker 05: It wanted to increase the difference between metered letters and stamped letters because it recognized that [00:33:51] Speaker 05: The Postal Service covers its costs better in the context of metered letters and was trying to steer customers towards metered letters. [00:33:59] Speaker 01: Let's say we want to retain those non-presort customers, which I assume is not metered customers. [00:34:08] Speaker 01: What's a non-presort customer? [00:34:10] Speaker 01: Is that someone who pays with nickels? [00:34:12] Speaker 05: I don't believe so, Your Honor. [00:34:14] Speaker 01: What's a non-presort? [00:34:16] Speaker 05: My understanding, and I'm hesitant here because we're going a little bit beyond my knowledge. [00:34:21] Speaker 01: Well, this is the page you referred me to. [00:34:23] Speaker 05: It is. [00:34:23] Speaker 05: And I just want to emphasize, the only point I was trying to make here was that the Postal Service provided an additional explanation. [00:34:32] Speaker 05: It identified customers it thought were at risk for electronic diversion. [00:34:36] Speaker 05: It emphasized that it was trying to help small businesses. [00:34:39] Speaker 05: There were other comments made in there in terms of pre-sort. [00:34:42] Speaker 05: My understanding is you can [00:34:45] Speaker 05: put a stamp on a letter, you can use a postage meter to pay for a letter, or the customer can do some of the work of sorting the letters. [00:34:53] Speaker 05: What you're talking about, mass mailers that can come forward. [00:34:56] Speaker 05: So I think there's a universe of people who use postage meters, but are not pre-sort customers. [00:35:02] Speaker 05: But again, this is where now at the outer perimeter of my understanding here, and I hesitate to go. [00:35:07] Speaker 02: Imagine this as a general principle, though, in other regulatory contexts. [00:35:11] Speaker 02: I mean, is it? [00:35:13] Speaker 02: Is it really the case that a statute can set out a number of factors and an agency can write a regulation saying we're going to focus on some factors today and we're going to put up other factors later? [00:35:23] Speaker 02: So think about, for instance, like in the EPA context, could you have a statute that says look at the best available science and costs and the agency says we'll just look at costs up front and maybe after the regulation goes into effect we'll take a look at the science? [00:35:36] Speaker 02: Can you think of another context where this would be reasoned? [00:35:40] Speaker 05: I can't, but I think that doesn't describe this case. [00:35:42] Speaker 05: And the reason it doesn't describe this case is it's not that the commission has said we will consider some factors and objectives in detail on the front end. [00:35:51] Speaker 02: There's been almost no factors and objectives. [00:35:53] Speaker 05: Right, it does it. [00:35:54] Speaker 05: What it considers on the front end are other statutory requirements. [00:35:57] Speaker 05: It considers the price cap, which is in 3622D. [00:36:01] Speaker 05: It considers the work share rates, which are in 3622E, and one other quantitative factor that's also part of a separate statutory provision. [00:36:10] Speaker 05: So the commission isn't cherry picking [00:36:12] Speaker 05: objectives and factors to consider in the pre-implementation stage. [00:36:16] Speaker 05: And one of the commission's orders that we've cited actually details the fact that the reason it prioritizes these three elements, and I believe it's order number 536, is because it views them as freestanding, that they are separate requirements that are not just part of objectives and factors that have to be applied in conjunction with each other and balanced against each other. [00:36:37] Speaker 05: That's a difficult, detailed process. [00:36:39] Speaker 02: Whereas a work share- Which Congress says that the commission [00:36:42] Speaker 02: shall devise a system that takes those into account. [00:36:45] Speaker 05: And it did. [00:36:45] Speaker 05: The question is just the pre-implementation review phase here. [00:36:48] Speaker 04: For the pre-implementation review, the focus is overwhelmingly on those three quantitative elements that are not found in 3622B or C. Suppose the Commission had passed a regulation which said, please submit whatever comments you want [00:37:10] Speaker 04: in the pre-implementation review, but we will only consider the hard quantitative requirements, and we will not, we will neither address nor explain anything else. [00:37:24] Speaker 04: We'll just take those comments and put them in the file and look at them in the annual review. [00:37:31] Speaker 04: Would that be lawful? [00:37:33] Speaker 05: I can't think of why that would be, it certainly wouldn't be inconsistent with the statute here, and I, [00:37:40] Speaker 05: I don't think it would be a problem under the Administrative Procedures Act to the extent that the ultimate action, assuming that it is lawful, and I think I've explained at length why it is, that for the Commission to focus the 45-day review period on the quantitative factors. [00:37:57] Speaker 05: I don't see why, once the commission agrees to accept a public comment, it necessarily imposes on itself a requirement to respond to every one of those comments. [00:38:07] Speaker 05: Just as the commission has imposed on the postal service a responsibility in that subsection, the regulation 12B7, to submit a discussion of the factors and objectives. [00:38:19] Speaker 05: But in doing that, the commission wasn't intending to bind itself to then review. [00:38:25] Speaker 05: That didn't become a back door. [00:38:27] Speaker 05: for imposing on itself an obligation to review the qualitative factors. [00:38:31] Speaker 04: Yeah, I guess the theory would be it's the APA that imposes the obligation and that makes the final order reviewable. [00:38:40] Speaker 04: And it's just a little bit odd. [00:38:45] Speaker 04: The way the regulation works, the notice has to address all of the qualitative factors. [00:38:55] Speaker 04: and the comments can address all of the qualitative factors. [00:39:03] Speaker 04: It seems like you've started pretty far down the road of at least creating the duty to explain. [00:39:09] Speaker 05: So in order number 43 explained why it was doing it this way. [00:39:12] Speaker 05: And what the commission said in order number 43 is we can't be sure on the front end what's going to be significant. [00:39:19] Speaker 05: We know we have a short window. [00:39:21] Speaker 05: We're pretty sure in the vast majority of cases that means we're just going to focus on the quantitative. [00:39:27] Speaker 05: We want to have the ability, in order to respect the objectives and factors, we want to have at least the opportunity to do something. [00:39:33] Speaker 04: It's an escape valve for the 900% case. [00:39:37] Speaker 04: Yes. [00:39:39] Speaker 01: Is there a definition of what counts as blatant disregard? [00:39:42] Speaker 01: I think we can all go and have a percentage that has a lot of zeros pointed, but that surely is not a meaningful standard. [00:39:49] Speaker 01: What's a meaningful standard? [00:39:53] Speaker 05: This is going to be developed through adjudication. [00:39:55] Speaker 05: There's not a regulation that spells it out. [00:39:57] Speaker 05: There's only been one instance so far that is- Had a lot of zeros. [00:40:02] Speaker 05: Had a lot of zeros. [00:40:02] Speaker 05: And this case, which involves a rate increase that's just a couple of pennies above what Mr. Carlson- That's a lot, a couple of pennies. [00:40:12] Speaker 01: I understand it can be, but- Would just flatly reading the statutory text wrong, if they said, we think [00:40:21] Speaker 01: that one of these factors means Congress wants us to divide by five. [00:40:28] Speaker 01: They picked some factor and they said, we think that one means Congress wants us to divide by five. [00:40:34] Speaker 01: I'm not saying whether you could, I'm saying they think Congress has directed us to divide by five. [00:40:39] Speaker 01: And of course, I don't think anyone would say there's a Chevron step one command to divide by five here, right? [00:40:45] Speaker 01: It would just be a total misreading of the statute. [00:40:49] Speaker 01: Would that be caught under blatant disregard or does it really have to be so in their face with lots and lots of zeros? [00:40:56] Speaker 01: That's the best they can do before it takes effect? [00:40:59] Speaker 05: Again, this is something the commission is developing through adjudication. [00:41:03] Speaker 05: There's been one case. [00:41:05] Speaker 01: It doesn't give me a lot of comfort to know whether that's really, you're calling it a safety valve. [00:41:11] Speaker 01: I'm not sure what kind of safety valve it is to the extent we're supposed to factor that into [00:41:16] Speaker 01: analysis. [00:41:17] Speaker 05: Well, there are two ways. [00:41:19] Speaker 05: The fact that there's only been one case could be read one of two ways. [00:41:22] Speaker 05: One is that it's not a meaningful safety valve, or for the most part, the postal service has been submitting rates that respect the or at least are within shabby distance. [00:41:33] Speaker 01: You can't tell us which that is because you don't know what it means. [00:41:36] Speaker 01: Commission doesn't know what it means. [00:41:38] Speaker 05: No, that's not what I'm saying at all, Your Honor. [00:41:40] Speaker 05: What I'm saying is that there has been one instance in the past where it was sufficiently blatant that the Commission felt that it was a special circumstance that compelled action at the pre-implementation phase. [00:41:53] Speaker 01: If you can't tell him that his totally misreading statutory tax would not count as blatant disregard. [00:41:58] Speaker 05: I'm honestly not sure. [00:42:00] Speaker 05: I need to understand the full context of what else the Postal Service was saying in support of the rate change. [00:42:08] Speaker 05: If the rate change was zero, [00:42:13] Speaker 05: because the Postal Service misunderstood the statute. [00:42:17] Speaker 05: I don't think the Commission would necessarily strike down the zero rate change just because there had been a change in the statute. [00:42:23] Speaker 05: Ultimately what the Commission's job is to do is to review the overall, and keep in mind we're talking about just one rate [00:42:30] Speaker 05: what the commission calls one rate sell out of a very much larger attempt to change rates here. [00:42:37] Speaker 05: And it analyzes, looks at them in totem, first of all for compliance with the quantitative factors. [00:42:42] Speaker 05: On the front end, it is going to take a quick look or has at least left itself the right or the opportunity to take a quick look to see if there's something egregious on a qualitative factor. [00:42:54] Speaker 05: And then it'll do the review on the back end either through [00:42:57] Speaker 01: If you wanted to split up the time, the pre and post implementation review, what is the reason basis for saying that post implementation review is going to come as much as a year later, as opposed to simply saying after it takes effect within the next 30 or 60 days? [00:43:15] Speaker 01: Did they give an explanation for why they couldn't have a system like that? [00:43:20] Speaker 05: I don't remember any commenters suggesting that system. [00:43:24] Speaker 01: Well, as you said, they're the experts. [00:43:26] Speaker 01: They can think of things themselves. [00:43:27] Speaker 01: They can. [00:43:28] Speaker 05: I don't see anything in the statute that requires it. [00:43:30] Speaker 05: One of the benefits. [00:43:31] Speaker 01: What caused them to go all the way to the annual compliance review rather than, normally, if an agency was going to split it up and had the reasons that you've advanced reasons, they've advanced reasons that you've shared with us. [00:43:43] Speaker 01: Like, OK, we can't do it then. [00:43:45] Speaker 01: But normally, then what happens is they do it shortly thereafter. [00:43:48] Speaker 01: And there seems to be. [00:43:51] Speaker 05: So the annual compliance review comes from the statute. [00:43:59] Speaker 05: It's in 39 USC 3653. [00:44:03] Speaker 05: They also recognize that if there are interested parties, and Mr. Carlson could be one, there certainly have been commercial interests in the past who've been interested parties who feel that the issue is sufficiently pressing that they can raise it through the complaint procedure, which doesn't have any delay on it and can be invoked at any time. [00:44:19] Speaker 05: And again, Mr. Carlson [00:44:20] Speaker 05: could have put this before the commission a few months ago already. [00:44:26] Speaker 01: So I think the answer is the commission just didn't consider doing it sooner on its own? [00:44:31] Speaker 05: I'm not aware of anything. [00:44:33] Speaker 05: I'm not recalling anything in the commission orders where that was a proposal that was actually discussed. [00:44:39] Speaker 04: Could I ask you just before we finish up about the notice? [00:44:44] Speaker 04: Because regardless of what you must consider by statute, [00:44:50] Speaker 04: The regulation requires the notice to address the qualitative factors, how the rate adjustment helps achieve the objectives and the factors. [00:45:03] Speaker 04: It does, Your Honor. [00:45:04] Speaker 04: So that notice seemed, relative to that requirement, the notice seemed pretty thin to me. [00:45:12] Speaker 05: Um, so I there's a discussion in two places j a nine to 11 and then again on j a 31. [00:45:20] Speaker 05: There is discussion by the Postal Service Center notice of these factors and maybe [00:45:28] Speaker 05: It could have been more fulsome, but I don't think that means that the commission's decision not to block this at the pre-implementation stage makes the commission's order here arbitrary and capricious. [00:45:40] Speaker 05: I think what the commission's order says is that we have considered the comments here, we've looked at the Postal Service's notice, and we think that this ultimately falls within the bounds of the pricing flexibility. [00:45:52] Speaker 04: So the commission, even if the notice [00:45:56] Speaker 04: Even if the Postal Service violated that regulations, just assume for the sake of argument, with the notice, the Commission could still lawfully approve a rate increase. [00:46:13] Speaker 04: pre-implementation. [00:46:15] Speaker 05: I would take issue with, I don't agree with the initial. [00:46:19] Speaker 04: I understand. [00:46:19] Speaker 05: I understand. [00:46:21] Speaker 05: I think it would be a tougher case if the Postal Service had submitted nothing. [00:46:25] Speaker 05: If there was just on the face of it a defect in the notice such that there was nothing that even purported to be the B7 statement. [00:46:34] Speaker 05: I think in practice what would probably happen there is there is room for iteration in all of this and it's likely the Commission would have gone back to the Postal Service and identified that. [00:46:43] Speaker 05: But here where you have something that absolutely is a discussion of the [00:46:50] Speaker 05: requirements and factors. [00:46:51] Speaker 05: And there's, B7 is not written at a level that requires, again, we're talking about changing many hundreds of rates here. [00:46:57] Speaker 05: It doesn't require a level of granular discussion of each individual rate and a justification for each rate under the objectives and factors. [00:47:06] Speaker 05: It talks about the overall price change as needing to be consistent with objectives and factors. [00:47:10] Speaker 05: So I think here, the commission did not violate, did not engage in unreasoned decision making and accepting that submission. [00:47:19] Speaker 01: I just had one more question about the blatant disregard. [00:47:22] Speaker 01: The prior example, I think, was it like a thousand percent increase? [00:47:27] Speaker 05: 963%. [00:47:30] Speaker 01: Was that a violation of a quantitative standard? [00:47:33] Speaker 05: It was not. [00:47:34] Speaker 05: The commission expressly found that the rate change here, the overall rate change, because keep in mind that operates at what's called the class level. [00:47:42] Speaker 05: It's several steps up from the individual rates here. [00:47:46] Speaker 05: But the overall changes complied with the statute on a quantitative basis. [00:47:50] Speaker 05: It matched the price cap. [00:47:51] Speaker 05: and the other quantitative factors. [00:47:53] Speaker 05: But what had happened here was the Postal Service singled out a very small group of mailers, it was a professional group of mailing agents, and had increased their rates by nearly tenfold, and this was a $226,000 increase. [00:48:12] Speaker 05: And so because [00:48:14] Speaker 05: the price cap operates at the class level, even though you have this gigantic increase for one small unit, the overall group, the overall change. [00:48:24] Speaker 01: I'm concerned it was purely quantitative. [00:48:26] Speaker 01: What? [00:48:27] Speaker 01: And how much was getting assigned to one unit within that classification. [00:48:31] Speaker 01: It was still sort of an allocation of the quantitative pain, I suppose. [00:48:36] Speaker 05: Right. [00:48:36] Speaker 05: But when you summed it all up, the quantitative requirements were met. [00:48:40] Speaker 05: The change, as submitted by the Postal Service, was consistent with the price cap. [00:48:44] Speaker 01: I understand, but just to be clear, it was just a quantitative, how they assigned it within the classification. [00:48:49] Speaker 01: It was the number that was the problem. [00:48:52] Speaker 05: So it was the number of the, what are one number? [00:48:55] Speaker 01: Putting all the burden under one unit, or too much of the burden under one, I think the classification has all these different pieces. [00:49:02] Speaker 01: Yeah. [00:49:03] Speaker 01: So whatever you want to call them, they put it all in this one box, as opposed to spreading the pain. [00:49:07] Speaker 05: That was certainly a piece of it. [00:49:09] Speaker 05: It was described as one of the things that the Postal Service is not supposed to engage in is unfair discrimination. [00:49:17] Speaker 05: And it was unfair discrimination by singling out this one discrete group of mailers for this much, much higher rate. [00:49:28] Speaker 01: Thank you. [00:49:29] Speaker 05: Thank you, Your Honors. [00:49:36] Speaker 03: Your Honor, this case is a blatant disregard case. [00:49:39] Speaker 03: The Postal Service singled out the general public and small business mailers for a record large increase, and the Postal Service blatantly disregarded at least three factors. [00:49:52] Speaker 03: The assertion that five cents [00:49:54] Speaker 03: rounding Lisa's simplicity of structure was thoroughly debunked by the comments. [00:50:02] Speaker 03: The Postal Service ignored the effect of the rate increase on the general public except by noting that the additional allowance rate would drop so therefore 3% of the mail would pay a lower rate and 97% would pay a higher rate and somehow that was supposed to mitigate the effect on the general public. [00:50:19] Speaker 03: And also one of the objectives to create predictability and stability in rates. [00:50:24] Speaker 03: There was a comment from a large mailing association that said that the pre-sort mailers can expect higher increases in the years in which the single piece rate may not see an increase. [00:50:36] Speaker 03: So instead of [00:50:37] Speaker 03: The prior state where the rates were generally increasing by the amount of the CPI, now we have a big increase for the general public, small increase for presort mailers. [00:50:47] Speaker 03: Maybe next year it's no increase for the general public and a larger increase for presort mailers and then at some point the cycle will flip. [00:50:54] Speaker 03: So predictability and stability, which were very important, are now being undermined. [00:51:00] Speaker 03: On the point of Chevron, [00:51:03] Speaker 03: The commission would be entitled to deference on how it implements the statute and how it designs this regulatory system. [00:51:11] Speaker 03: For instance, does it have one round of comments or two? [00:51:14] Speaker 03: Or how does it interpret these statutory factors? [00:51:18] Speaker 03: But the commission's not entitled to deference on whether it implements the requirement for the system to consider the factors. [00:51:27] Speaker 03: So I believe I have one more [00:51:30] Speaker 03: minute coming for my rebuttal. [00:51:33] Speaker 03: So on the legislative history question, the Senate report is very clear that the Senate was aware, that Congress was aware of the 45-day period. [00:51:46] Speaker 03: The 45-day period is short, and they expected the Commission to deal with it through regulations. [00:51:52] Speaker 03: I would encourage the Court to look at the Commission's orders where they established this system, and it's remarkable [00:51:58] Speaker 01: the inferences or claims about congressional intent that the... Is part of your concern that when you talk about blatant disregard, I'm just trying to understand your argument, is it also that you think the, under the APA, the APA requires the commission to respond to the comments that come in in a more timely fashion? [00:52:23] Speaker 01: Well, I believe a review... To the annual compliance review? [00:52:26] Speaker 03: I believe a reasoned explanation in the order of proving the price increase is at minimum necessary. [00:52:34] Speaker 01: So before, you think it has to all be done pre-implementation? [00:52:37] Speaker 03: That's right, at least a response to the comments that explains why the Commission does or doesn't think they meet the blatant disregard standard. [00:52:47] Speaker 03: And so I think in the commission's orders, they just make claims about what Congress supposedly wanted. [00:52:52] Speaker 03: And there's no evidence for it. [00:52:55] Speaker 03: There's no evidence in any of legislative history that we've seen. [00:52:58] Speaker 03: And so it's led us to this position where the system doesn't consider the statutory factors until it's far too late. [00:53:07] Speaker 03: And justice delayed is justice denied. [00:53:09] Speaker 03: Thank you. [00:53:09] Speaker 01: Thank you. [00:53:11] Speaker 01: The case is submitted.