National Postal Policy Council v. Postal Regulatory Commission, No. 17-1276 (D.C. Cir. 2021)
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The 2006 Postal Accountability and Enhancement Act, 120 Stat. 3198, directed the Postal Regulatory Commission (PRC) to establish a rate-making system to govern the prices set by the U.S. Postal Service for its market-dominant products. The Act forbids rates from increasing faster than the rate of inflation. PRC was required to assess after 10 years whether the system had achieved nine objectives; if not, then PRC could modify the rate-making system or adopt an alternative one. In 2017, PRC found that the existing rate-making system was deficient and had not maintained the Postal Service’s financial stability. After extensive review, it adopted a new system in 2020, which retains the price cap generally but allows above-inflation rate increases to target specific costs, 85 Fed. Reg. 81,124 (Order 5763).
The D.C. Circuit rejected a challenge to Order 5763. PCR acted within its authority under the Accountability Act, and its predictive judgments and economic conclusions satisfy the Administrative Procedure Act’s requirement of reasoned decision-making. The Act's terms permit PCR to either make minor changes to the rate-making system or replace it altogether, including with a system inconsistent with the price cap.
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