In the Matter of the Petition by ) October 7, 1971 ) ANTHONY E. WHYTE, Publisher ) AMR International, Inc. ) 280 Park Avenue ) New York, New York 10017 ) ) ) P.O.D. Docket No. 3/66 from the Proposed Revocation of Second- ) Class Mail Privileges of "AMR NEWS" ) APPEARANCES: Laurence I. Hewes, III, Esq. and John M. Burzio, Esq. Hydeman and Mason 1225 Nineteenth Street, N. W. Washington, D. C. 20036 for the Petitioner Arthur S. Cahn, Esq. Law Department United States Postal Service Washington, D. C. 20260 for the Respondent Wenchel, Adam G.
This matter involves an appeal by the Petitioner from the Initial Decision of the Chief Hearing Examiner sustaining the administrative decision to revoke the second class mail permit of Petitioner's publication "AMR News."
Pursuant to an application of the Petitioner for second-class mail privileges under 39 U.S.C. 4355 1/ as "a regularly incorporated institution of learning", the then Acting Director, Office of Mail Classification, on August 5, 1970, granted a permit effective June 22, 1970, authorizing the mailing of Petitioner's publication "AMR News" at second-class mail rates. However, on November 27, 1970, the Respondent notified Petitioner that the permit was to be annulled. A meeting between the parties and subsequent correspondence ensued, but on December 22, 1970, Respondent confirmed his earlier notice and this proceeding was thereupon commenced by Petitioner.
Section 4354 of title 39 U.S.C. is the general law for granting second-class mail permits. However, 39 U.S.C. 4355 authorizes second-class mail permits under more liberal conditions for publications of specified classes of organizations, including "a regularly incorporated institution of learning." The tentative revocation was predicated on Respondent's determinations that (1) Petitioner was not "a regularly incorporated institution of learning", and (2) "AMR News" did not have the essential nature of a periodical publication.
Initial Decision and Exceptions
Following a hearing and briefing, the Chief Hearing Examiner issued an Initial Decision in which he found that:
A. Petitioner is an institution of learning organized for profit,
B. The long continued administrative interpretation and policy of the Postal Service have been to adhere to the interpretation of the phrase "regularly incorporated institution of learning" set out in U.S. ex rel. Chicago Business College v. Payne, 20 App. D.C. 606 (1902) and Columbian Correspondence College v. Wynne, 25 App. D.C. 149 (1905) confining the phrase to non-profit organization, C. No valid reason exists for changing the interpretation; and
D. "AMR News" does not meet the recognized prerequisites of a periodical publication.
He thereupon concluded that:
"1. AMR International, Inc., is not 'a regularly incorporated institution of learning' within the meaning of 39 U.S. Code 4355(a)(1);
"2. The publication 'AMR NEWS' is not a periodical publication within the meaning of 39 U.S. Code 4351, 4354 and 4355;
"3. The action of Respondent in proposing to revoke the second-class mail permit applicable to AMR NEWS was correct and is sustained; and
"4. The second-class mail permit previously issued to AMR International, Inc., for the publication AMR NEWS should be revoked." (I.D., pp. 9 and 10)
Petitioner takes exceptions to all of the foregoing findings except A and to all the conclusions of law.
Regularly Incorporated Institution of Learning
The Respondent does not challenge Petitioner's compliance with the first three conditions of 39 U.S.C. 4354. 2/ On the other hand Petitioner does not claim that the publication meets the fifth condition of that section. Accordingly, only if Petitioner is within one of the classes of publishers who may obtain such permits under 39 U.S.C. 4355, can it retain its second-class mail permit. Petitioner asserts it is "a regularly incorporated institution of learning" within the meaning of 39 U.S.C.
"(a) Generally a mailable periodical publication is entitled to be entered and mailed as second class mail if it--
(1) is regularly issued at stated intervals as frequently as four times a year and bears a date of issue and is numbered consequently;
(2) is issued from a known office of publication;
(3) is formed of printed sheets; * * *"
4355(a)(1). 3/ Respondent denies Petitioner is such an institution; it does not deny that Petitioner is an institution of learning, but contends Petitioner as a "for-profit" institution of learning is not within the contemplation of 39 U.S.C. 4355(a)(1). Petitioner concedes it is a corporation organized "for-profit" but denies it is thereby precluded from qualifying under section 4355(a)(1).
Respondent views this matter as having been laid to rest almost 70 years ago by the Court of Appeals of the District of Columbia in the Chicago Business College and Columbian Correspondence College cases on which the Initial Decision relied.
Petitioner essentially summarizes its argument against this view as follows:
"The meaning of a statute cannot remain static and immutable. The law must be and is adaptable enough to take into account the changing needs of our society. Any institution of learning that provides instruction at the university or post-graduate level, whether a for-profit or a non-profit organization, comes within the contemporary, logical, and legal meaning of § 4355(a)(1)."
This argument equates the broad term "law" with "statute", one of its constituents. That law does indeed change has been recognized since the time of the Medes and Persians. Once the need for change has been established, however, the question remains as to how that change is to be accomplished. If the law is embodied in judicial decisions then the change is most frequently made by a subsequent decision and sometimes by legislation. If the law is a statute the change is normally accomplished by a further statutory enactment or judicial decision and, as the authorities cited by Petitioner establish, law in the form of regulations and decisions and practices of administrative agencies may be, and frequently are, changed by action of those agencies.
It is clear from the Chicago Business College and Columbian Correspondence College decisions that the court intended to make a definitive declaration of the meaning of the statute rather than
"(a) Mailable periodical publications meeting the first three conditions of section 4354(a) of this title are entitled to be entered and mailed as second class mail when they do not contain advertising other than that of the publisher and if they are--
(1) published by a regularly incorporated institution of learning; * * *" to hold that the administrative rule was within the scope of permissible application. Therefore, what is involved in this proceeding is whether the Postal Service should undertake to change section 4355(a)(1) through this proceeding. As discussed above, such a change should be accomplished by legislation or its equivalent under the procedures of Chapter 36 of title 39, United States Code, as revised by the Postal Reorganization Act.
In any event Petitioner has failed to demonstrate either the need or the desirability for a change in section 4355(a)(1) as it has been applied.
Petitioner emphasizes the increase in recent years in for-profit or proprietary organizations in the instructional field, and referring to the construction of the statute in the two D.C. Court of Appeals cases it argues:
"A continuation of that narrow interpretation is inconsistent with the broad purpose and intent of § 4355--to provide low postal rates for periodical publications so that information and knowledge may be broadly disseminated to the public. Moreover, the interpretation of § 4355(a)(1) advanced by AMR is consistent with the judicial decisions cited above and would entitle for-profit, as well as non-profit, 'institutions of learning' to second class mail privileges in furtherance of the basic intent of § 4355."
It is not at all clear that for-profit organizations devoted to post-secondary school instruction did not exist in 1894. 4/ Nevertheless, it is undoubtedly true that such organizations have grown in number and importance since 1894 and since the decision in Columbian. However, the court did not find the Congressional intent in enacting the predecessor of section 4355(a) to be "that knowledge and information in the areas of higher learning be disseminated across the widest possible spectrum". What the court found was a Congressional intent to give favored treatment to certain organizations that are "not conducted for individual gain." In the Chicago Business College case the Court says:
"* * * instruction in the higher branches of human knowledge is generally disseminated through those institutions of learning, popularly known as such, which owe their origin to
"* * * while instruction in the higher branches of human knowledge is generally disseminated through those institutions of learning, popularly known as such, * * * and are * * * not for private gain." 20 App. D.C. at page 613. (Underscoring supplied). private or public munificence and are established solely for the public good and not for private gain. That in this popular and ordinary sense the expression 'institution of learning,' used in the act of Congress of July 16, 1894, is to be understood, we think admits of no reasonable doubt. All the other organizations mentioned in the act to which the benefit of classification in the category of second-class mail matter is extended, are of a charitable, fraternal, or benevolent character, and none of them is conducted for individual gain." 20 App. D.C. at 613, 614. (Underscoring supplied)
Clearly, the court was not merely accepting the Postmaster General's interpretation as one of several reasonable interpretations. Rather, the court adopted a definitive construction of the law precluding the treatment of a "for-profit" organization as a "regularly incorporated institution of learning" within the meaning of the act of July 16, 1894.
In the various additions and modifications made to section 4355 and its predecessors Congress has continued to restrict this statute to organizations "not conducted for individual gain." This is consistent with public policy embodied in Federal and state tax and other statutes giving special treatment to non-profit organizations.
As Respondent points out, Congress in the 1912 5/ re-enactment of the law did not make any change relating to institutions of learning. Further, although Congress on four subsequent occasions 6/ made changes in other provisions of the law, it has never changed the term "regularly incorporated institution of learning."
We do not have to consider whether Congress should be considered as having confirmed the administrative and judicial construction of that phrase. It is, however, significant that Congress made no change when it had ample opportunity to do so. The failure negates any compelling reason for the Postal Service to do so in this proceeding.
The second issue involves Respondent's determination that "AMR News" is not a periodical publication because it is published for advertising purposes. It is clear that judged by the standards of
February 20, 1954, 68 Stat. 17
July 26, 1955, 69 Stat. 373
October 11, 1962, 76 Stat. 837 39 U.S.C. 4354 that publication would not be entitled to a second-class permit because it is designed both for advertising purposes and for free circulation in contravention of subsection (c) of section 4354. However, the issue of whether "AMR News" could be a periodical publication under section 4355 involves other considerations some of which are touched on in the briefs of the parties. In any event, since the publisher is not qualified under section 4355, it is unnecessary to decide whether the publication is barred from continuing as a second-class mail publication under the standards of section 4355.
The exceptions of Petitioner to findings and conclusions in the Initial Decision relating to the question of whether Petitioner is a regularly incorporated institution of learning are denied. It is unnecessary to pass on exceptions relating to the nature of the publication.
Accordingly, the annulment of the second-class mail permit for "AMR News" by the Director, Office of Mail Classification, under date of December 22, 1970, is affirmed.
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1/ 39 U.S.C. 4355, originated in the Act of July 16, 1894, was re-enacted by the Act of August 12, 1912 and codified as 39 U.S.C. (1926 ed) 229. It became section 4355 when title 39 was revised and re-enacted by the Act of September 2, 1960, P.L. 86-682. In addition, various amendments not material to this
proceeding, have been made to this law. Presently, as a result of the Postal Reorganization Act and actions taken thereunder, the provisions of section 4355 as well as section 4354 remain in force as part of the Postal Service regulations in title 39 C.F.R. 132. However, for consistency with references at earlier stages of this proceeding, the decision cites sections 4354 and 4355 of former title 39 United States Code rather than the corresponding provisions of the regulations. For the reasons set out at length on pages 2-4 of the Postal Service Decision of August 20, 1971, in Phyllis Johnson, P.O.D. Docket No. 3/59, the Postal Reorganization Act has no substantive or procedural impact on this proceeding.
2/ 39 U.S. Code 4354
3/ 39 U.S. Code 4355
4/ Chicago Business College implies that to some degree they did.