ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 79-0644)
Before Gibbons and Higginbotham, Circuit Judges, and Ziegler,*fn* District Judge.
The United States Postal Service appeals from an order enjoining it, pending final hearing, from instituting on a temporary basis changes in rates and in the mail classification schedule relating to fourth class zone-rate parcel post, proposed by it in Postal Rate Commission Docket No. MC78-1.*fn1 The plaintiffs, United Parcel Service, Inc., a New York corporation, United Parcel Service, Inc., an Ohio corporation, and United Parcel Service of America, Inc., a Delaware corporation, (collectively UPS) are competitors of the Postal Service in the parcel delivery business who allege that the temporary institution of the proposed changes would violate express provisions of the Postal Reorganization Act, as amended by the Postal Reorganization Act Amendments of 1976.*fn2 We affirm the grant of preliminary injunction.
I. Facts and Procedural History
On September 8, 1978 the Postal Service filed with the Postal Rate Commission (the Commission) a document entitled "Request of the United States Postal Service for a Recommended Decision on Changes in the Domestic Mail Classification Schedule." The Commission thereafter published a notice of the filing and of the commencement of Commission Docket No. MC78-1 to consider this request.*fn3 UPS and others participated in proceedings in Commission Docket No. MC78-1. While that proceeding was still open the Postal Service announced that on February 25, 1979, it would place the changes proposed in the request into effect on a temporary basis. UPS then filed its Complaint and moved for a preliminary injunction. At the time of the hearing on UPS's motion for a preliminary injunction, and at the time of argument of this appeal, the Commission had not acted on the Postal Service request. We are advised, however, that on December 5, 1979, the Commission issued its Opinion and Recommended Decision in Docket No. MC78-1, in which it recommends to the Governors of the Postal Service (Governors) that they reject the proposed changes.*fn4 We have not been advised of any action by the Governors on the Commission's recommended decision.
The Postal Service request in MC78-1, had it gone into effect, would have established, in place of two subclasses of zone-rate parcel post currently in effect, four such subclasses. Thus the request would have left the single piece class and rate for parcel post unchanged, but would have changed the bulk parcel post class by reducing the packages tendered requirement from 300 to 50, and by subdividing the bulk parcel post class into three subclasses:
(1) new bulk rates and class for packages mailed within a Bulk Mailing Center Zone (intra-BMC zone);*fn5
(2) new bulk rates and class for packages mailed between Bulk Mailing Center zones (inter-BMC zone); and
(3) new class and rates for non-machinable parcels, with an added per package surcharge for such parcels.
Single piece parcel post is now available to all shippers on the basis of a rate schedule derived from the weight of each parcel and the distance of the zone to which the parcel is to be carried. Bulk parcel post is currently available only to shippers who tender a minimum of 300 parcels at one time and who meet certain other entry requirements. The bulk parcel post subclass permits large volume shippers to calculate postage based on the average weight of all parcels tendered for each zone rather than requiring that each parcel be weighed individually. The present bulk rate is the single parcel rate for a piece having a weight equal to the average weight per piece for each zone. There is presently no surcharge for non-machinable parcels. If the Request had become effective the per package rate for inter-BMC zone and intra-BMC zone bulk parcel post, which is now equal, on average, to the single piece parcel post rate, would, with limited exceptions, be substantially lower. Moreover, the new lower rates would be available to a greater number of bulk shippers because of the reduction of the bulk entry requirement from 300 to 50 packages. If the Request had become effective there also would have been for the first time a new class of parcels defined as non-machinable and surcharge of $1.50 over the single piece rate for each non-machinable parcel.
The February 15, 1979, announcement of the Postal Service that it would implement the proposed changes on February 25, 1979, relied for authority on section 3641(e) of the statute, which provides:
If the Postal Rate Commission does not transmit to the Governors within 90 days after the Postal Service has submitted, or within 30 days after the Postal Service has resubmitted, to the Commission a request for a recommended decision on a change in the mail classification schedule (after such schedule is established under section 3623 of this title), the Postal Service, upon 10 days' notice in the Federal Register, may place into effect temporary changes in the mail classification schedule in accordance with proposed changes under consideration by the Commission. Any temporary change shall be effective for a period ending not later than 30 days after the Commission has transmitted its recommended decision to the Governors.
39 U.S.C. § 3641(e). It was the Postal Service's position that its request in MC78-1 was for a change in the mail classification schedule, that the request had been before the Commission for over 90 days, and that the ...