United Parcel Service, Inc. v. PRC, No. 16-1354 (D.C. Cir. 2018)Annotate this Case
The DC Circuit denied petitions for review of the Commission's two orders directing the Postal Service to include among the "costs attributable" to competitive products those costs that would disappear were the Postal Service to stop offering those products for sale. Petitioner, UPS, argued that the cost attribution methodology the Commission used was both inconsistent with the statute that gives the Commission its regulatory authority and arbitrary and capricious. The court held that the orders did not conflict with the 2006 Postal Accountability and Enhancement Act, because the Commission's reading of "institutional costs" was reasonable; UPS failed to show that the Accountability Act unambiguously compelled a reading of "indirect postal costs" that included only those costs that were shared across products; and Chevron deference was appropriate in this case. The court also held that the orders were not arbitrary, capricious, nor an abuse of discretion, because the Commission properly recognized that its role was to carry out the particulars of the scheme Congress created, not to engineer specific market outcomes. Finally, the Commission's adoption of an incremental-cost approach to attribution was not arbitrary nor capricious.