Great Recession justified a limited postage increase, says D.C. Circuit

Postage stamps were not used before the 1840s. These two stamps from 1847 are among the first ones printed by the U.S. government.

Postage stamps were not used before the 1840s. These two stamps from 1847 are among the first ones printed by the U.S. government.

The Great Recession reduced the volume of mail that people were sending each other. This, in turn, prompted the U.S. Postal Service to ask its regulator for permission to increase its rates due to “extraordinary or exceptional circumstances.” (While the Postal Service is government-owned, it has a regulator.) 

Eventually, the regulator determined that the recession had indeed reduced mail volume and justified a temporary rate increase. But, the regulator added, the volume of mail was now permanently lower than before the recession—and this state of affairs was a “new normal” that didn’t justify a rate increase to recoup losses due to the permanent change in mail volume. This new normal was instead something to which the Postal Service had to adapt. 

The Postal Service now challenges its regulator’s determination that a new normal justifies only a limited increase in rates. The D.C. Circuit upholds that determination. But the regulator also said that it wouldn’t recognize the effects of the recession for more than a year beyond when they first appeared. This stopping point, the D.C. Circuit says, is arbitrary and must be vacated.

A group of nonprofit mailers also challenge the regulator’s determination. For their part, they say the regulator shouldn’t have allowed any rate increase at all. Citing the deference it must afford an administrative agency’s judgment, the court rejects this argument.