In the Matter of the Petition by DOW JONES & COMPANY, INC., 30 Broad Street, New York, New York 10004 Revocation of Second-Class Mail Privileges for "WALL STREET JOURNAL" at Palo Alto, California, Dallas, Texas, and Chicago, Illinois P.S. Docket No. 1/11June 26, 1973
W. Gilbert Faulk, Jr., Esq., House Counsel, South Brunswick, New Jersey, and Robert S. Potter, Esq., of Patterson, Belkapn& Webb, New York, New York, for Petitioner Arthur S. Cahn, Esq., Law Department, U.S. Postal Service, for Respondent. Before: John Lewis, Administrative Law Judge
This proceeding was initiated by the filing of a petition, pursuant to Section 954.8 of the Rules of Practice in Proceedings Relative to the Denial, Suspension or Revocation of Second-Class Mail Privileges, by the above-named publisher (referred to herein as Petitioner) appealing a ruling made by the Director, Office of Mail Classification, of the United States Postal Service (referred to herein as Respondent), revoking Petitioner's second-class ,mail privileges for the above-named publication at the above locations on the ground that it was not entitled to an original, second-class entry permit at said locations. Following the filing of an answer to said petition by Respondent, and the convening of a pre-hearing conference, a hearing for the reception of evidence was held before the undersigned, at which testimony and other evidence was held before the undersigned, at which testimony and other evidence were offered in support of and in opposition to the petition. Both parties participated in the hearing and were afforded full opportunity to be heard and to examine and cross-examine witnesses. The Director of the Office of Mail Classification testified on behalf of Respondent, and Petitioner called its Vice President for Finance. Following the close of the reception of evidence, proposed findings of fact and conclusions of law were submitted by both parties.
After having carefully reviewed the evidence in this proceeding, and the proposed findings and conclusions submitted by the parties,1/ and based upon the entire record, the undersigned makes the following:
FINDINGS OF FACT
1. The publication here at issue, The Wall Street Journal (sometimes referred to herein as WSJ), is a daily newspaper which is published by the above-named Petitioner. Said newspaper is published in four editions, an "Eastern", a "Pacific Coast", a "Midwest", and a "Southwest" Edition. Petitioner also publishes Barron's (a weekly magazine) and The National Observer (a weekly newspaper), and operates the Dow Jones News Service.
2. Petitioner is a collector and disseminator of news. The Wall Street Journal is an authorized trade name used by it for the publication here at issue. Neither the WSJ, nor any of the various editions thereof, is operated as a separate corporate or business entity. Petitioner's administrative and publishing headquarters are located at 30 Broad Street, New York, New York 10004. At such place are located its principal operating and managing officials, including the news department, the advertising sales organization, and the news dealer sales organization.
3. The managing editor of the WSJ, including all of its editions, is located at Petitioner's headquarters office in New York, as are the senior associate editor (whose primary function is the preparation of the editorial pages of the paper), and the news editor. News stories are written by reporters all over the United States and overseas, and are sent to the national news desk and editor in New York. Once a story has been passed by the editor in New York, it is processed through a computer and sent out for use by the various editions of the WSJ. Certain news articles are designated as "must" articles, and are required to appear in all editions of the paper. In the case of other articles the local make-up editors of the regional editions are given some discretion as to their insertion. Some are designated as "try" articles, which are to be used provided there is enough space in the local edition; while others are designated as "if" articles, which the local editor may use if he needs them to fill in space left over after the insertion of advertising copy. The actual printing of the various regional editions takes place at nine different printing plants located through out the country. The Eastern Edition is printed in Chicopee, Massachusetts; South Brunswick, New Jersey; and Silver Spring, Maryland. The Midwest Edition is printed in Chicago and Highland, Illinois, and in Cleveland, Ohio. The Southwest Edition is printed in Dallas, Texas, and the Pacific Coast Edition is printed in Palo Alto and Riverside, California. Each printing plant maintains a list of the subscribers to which it mails the particular edition printed by it.
4. The front page and a number of the inside pages of all of the editions of the WSJ are substantially identical. The principal difference on the front page of each edition is that appearing on the dateline below the name "THE WALL STREET JOURNAL", where there appears in small type the name of the particular edition, i.e., "Midwest", "Eastern", etc. At least 90% of the news content of each of the editions is identical. The principal difference in content between the various editions is in advertising matter. Each edition carries both national and regional advertising. While the national advertising is identical in each issue, there is a substantial amount of regional advertising which differs in each of the regional editions. The amount of regional advertising in each of the editions varies from a low of 24% in the Southwest Edition to 53% in the Eastern Edition. The amount of advertising content as compared to news content varies among the editions, from a low of 47% advertising content in the Southwest Edition to a high of 59% in the Eastern Edition. Advertising rates charged vary between the different editions. Due to differences in the volume of advertising carried, the number of pages in the editions may differ. Thus, a particular edition of the Eastern Edition may contain 16 pages and that of the Southwest Edition 12 pages.
5. The principal reason for the differences in the news content of the various editions (such differences totalling less than 10% of news and editorial content) arises from differences in the amount of advertising content carried by the various editions. For example, an advertisement appearing on a particular page of the Eastern Edition may occupy one quarter of the page, while an advertisement on the same page of the Midwest Edition may be only one-eighth of a page. The regional make-up editor will use various of the discretionary articles which he has received to fill in the page. However, the basic paper is made up in New York and the stories sent to all of the plants have been originally approved by the editors in New York, although some of them may have originated with reported in the regional areas. The reporters in the field collect stories not merely for the WSJ but for the Dow Jones News Service as well, which is also operated by Petitioner. The regional editors report to the managing editor of the WSJ in New York.
6. The WSJ is referred to in Petitioner's corporate reports and in its advertising literature as "The Only National Daily" or as "The Only National Business Daily" (RX 16, 20, 23).2/ Its vice president who testified at the hearing herein characterized the paper as follows (Tr. 94):
"I consider the Wall Street Journal as the only national business daily, made up of four different editions."
When asked if he considered each edition a separate newspaper, he testified that he considered each one a separate newspaper "for advertising" purposes, i.e., "We keep them that way for ABC [Audit Bureau of Circulation! and we sell it that way" viz., for regional advertising purposes, but that "for news no, maybe. Basically no."
7. The WSJ received its original second-class mailing permit at New York, New York in 1889. It received a further original-entry permit for its Pacific Coast Edition at San Francisco in 1929. Such permit was transferred to Palo Alto, California in 1967, when it began printing such edition at its Palo Alto plant. An original-entry second-class mailing permit for the Southwest Edition of the WSJ was issued in 1948, when Petitioner began printing such edition in Dallas. An original-entry permit for the Midwest Edition was obtained in 1951, when Petitioner acquired the Chicago Journal of Commerce which had had a second-class permit since 1920. Petitioner's permit was originally issued under the publication name of "Chicago Journal of Commerce Edition of the Wall Street Journal," and was later changed to the name "The Wall Street Journal--Midwest Edition."
8. Except to the limited extent hereafter noted, the record does not disclose the basis on which Petitioner received an original, as distinguished from an additional, entry permit for the three regional editions of the WSJ here involved. With respect to the Southwest Edition, it appears that Petitioner initially communicated with the Classification Section of the New York City Post Office on the subject of "additional entry at Dallas, Texas by reason of a new plant which we 9are! establishing in that city." However, Petitioner ascertained (apparently from post office officials) that "if we were to obtain additional entry at Dallas . . . it would not be allowable to mail copies to any subscribers in Texas from New York City."
Consequently, Petitioner notified the Assistant Postmaster General in charge of Mail Classification that (PX 1-C):
"For this reason it was decided to apply for an independent entry at Dallas, Texas. The entry in question to be in no way connected with that at New York City. Our Pacific Coast Edition . . . was entered originally on such an additional entry, wholly independent of our entry at New York City."
The Assistant Postmaster General thereafter notified the Postmaster at Dallas, to whom Petitioner had also written, in part as follows (PX 1-D):
"If the publishers desire to have a new newspaper admitted to the second-class of mail matter at your post office entitled the 'Southwest Edition of the Wall Street Journal,' they should maintain in Dallas a 'known office of publication' for the publication as defined in Section 525, P. L. and R., at which the business of the publication will be transacted during the usual business hours and where records of the publication will be kept in order that their claimed circulation can readily be established.
"If they are in position to meet the requirements of the law in the above respects and the publication in circulation and otherwise meet the other require- ments governing the second-class of mail matter, it is suggested that they file through your post office an application for admission of the publication to the second-class of mail matter at your post office."
Following the filing of an application on April 30, 1948, the Assistant Postmaster General authorized the Postmaster at Dallas to admit "The Wall Street Journal--Southwest Edition" to second-class mail as of May 1, 1948. Such admission was based on submission by Petitioner of a copy of "The Wall Street Journal--Southwest Edition" for May 3, 1948 (PX 1-E).
9. The original-entry permit for the Midwest Edition was issued in the name of the publication "Chicago Journal of Commerce Edition of the Wall Street Journal." as a replacement for the second-class permit granted to "Chicago Journal of Commerce and LaSalle Street Journal" (PX 2-K). However, the Postmaster at Chicago subsequently called to the attention of the Assistant Postmaster General that one of the editions of the paper carried the name "Chicago Journal of Commerce Edition of The Wall Street Journal," while another read "The Wall Street Journal" with the words "Chicago Journal of Commerce Edition" printed in small letters on the date line. The Assistant Postmaster General notified the Postmaster at Chicago by letter dated July 3, 1951, in part, as follows (PX 2-L);
"Explain to the publishers that the 'Chicago Journal of Commerce Edition of the Wall Street Journal' is entered as second-class matter at your office as a separate and independent publication. It is not classified as being merely an edition of 'The Wall Street Journal' published in New York City. All copies of the Chicago publication must show the title under which it is entered as second-class matter, including the copies of the two editions of such publication, regardless whom the subscribers might be.
"However, there would be no objection to having the Chicago publication reentered as second-class matter under a new title, such as, 'The Wall Street Journal Chicago Edition' provided such title will be shown on the first page and inside pages of all copies of each issue . . . This would be similar to the preparation of copies of 'The Wall Street Journal Southwest Edition' which has a second-class entry at Dallas, Texas as a separate and independent publication."
Petitioner was so notified by the Chicago Postmaster and thereafter applied for and received a second-class, original-entry permit for "The Wall Street Journal, Midwest Edition."
10. In none of the situations above discussed, in which a regional edition was granted a second-class, original-entry permit, does it appear from the record that the Post Office made any comparison between the contents of such edition and that of the Eastern Edition, or any other edition of the WSJ, to determine the extent of similarity in content between or among such editions.3/ The first instance in which it appears that this occurred was in connection with an application for an original-entry permit at the Washington, D. C. Post Office in 1955. In connection with this application Petitioner was advised that "the Post Office Department has questioned as to whether this should not have been an application for an additional entry instead of an original entry" (PX 4-A). In this connection, Petitioner was asked to advise the Washington Post Office as to "the names of the cities which have an original entry, other than New York, New York," and whether "the contents of the Wall Street Journal printed and mailed in any other city." Petitioner responded by letter dated July 11, 1955, advising the Washington, D. C. Postmaster as to the original-entry permits issued at San Francisco, Dallas, and Chicago, and stating that the "papers published at the different points are similar, but not identical" (PX 4-B). Petitioner described certain of the differences between the editions, including the inclusion in the Midwest and Pacific Editions of full stock market reports of the exchanges in those areas, and certain differences in advertising content. Following the submission of this information to it, the Division of Mail Classification of the Post Office Department notified the Washington Postmaster as follows (PX 4-C):
"It appears from the information submitted by the publishers that the publication which is to be published in this city will not be prepared as a separate and independent publication from the newspaper published by them at New York.
"It is suggested that the publishers apply by letter to the postmaster at New York for its additional entry at Washington as previously mentioned.
* * * * *
"Consideration will still be given to original second-class entry of this publication if the publishers clearly show that it is a separate publication from the paper now issued in New York."
Petitioner was notified of this decision and was requested to submit a copy of the first Washington issue, together with a copy of the New York issue, so that "final action may be taken upon your application" (PX 4-D). The record does not disclose that it ever did so, or that it pursued its effort for an original-entry permit in Washington.
11. Petitioner was notified of Respondent's decision to revoke the second-class permits for the Southwest, Midwest and Pacific Editions by three separate notices, each dated July 14, 1971. The reason given for the proposed revocation was that the regional editions "do not constitute a separate and independent publication from the copies of this publication mailed" at the other locations where second-class permits had been issued. Petitioner was further notified that:
"Postal laws and regulations do not provide for an original second-class entry for mailing editions of publications."
Following a request for reconsideration of said ruling by the Director of the Office of Mail Classification, Petitioner was notified on or about August 6, 1971, that said ruling was confirmed. A petition appealing said ruling was thereafter filed by Petitioner.
12. Prior to 1968 the in-county rate for mailing publications with original-entry permits and those with additional-entry permits was identical. However, since that time the rate charged for mailing from an additional-entry point is less favorable than that from an original-entry point. The additional postage which would be required to be paid by Petitioner for the mailing of the three regional editions here involved under additional-entry permits, as compared to the present postage paid under multiple original-entry permits, was estimated to be approximately $1,500 a day. So far as appears from the record, Petitioner is the only publisher in the United States to have been granted an original-entry permit for regional editions of its publication. There are other publications which have more than one geographic edition, but none such editions is mailed under a separate original-entry permit.
CONTENTIONS AND CONCLUSIONS
1. The basis for the proposed revocation of the second-class mailing permits for Petitioner's regional editions of the Wall Street Journal, other than the Eastern Edition, is that such editions do not constitute separate and independent publications, but are merely separate editions of a single newspaper, The Wall Street Journal. It is Respondent's position that under the Postal laws and regulations, only one original second-class entry permit may be granted for a single newspaper or publication. Respondent apparently contends that the original granting of original-entry permits to the three regional editions was erroneous.
2. Petitioner has advanced a series of separate, but sometimes overlapping, contentions as to why the second-class mailing permits for the three regional editions in question should not be revoked. These are as follows: (a) Each regional edition is, in fact, a separate publication within the meaning of the statue; (b) each edition has been considered a separate publication for many years under the Post Officer's administrative interpretation of the statute and its regulations; (c) the doctrine of equitable estoppel precludes the Postal Service from revoking the permits in question since there has been no change in the various editions of the WSJ and no change in the law from the time of the granting of the permits; (d) the statute and the regulations do not limit a publication to only one original-entry permit; (e) an original-entry permit once granted may not be revoked unless the second-class mail privilege is itself revoked; and (f) revocation of the original-entry permits granted for the various regional editions would violate the First Amendment of the Constitution. The undersigned now turns to a consideration of the merits of these contentions.
A. Regional Editions as Separate Publications
3. Petitioner's contention that the three regional editions here at issue are separate publications is based primarily on differences in the content of the various editions, both in advertising and in news content. As previously found, the principal difference between the regional editions is in advertising content. Such difference consists entirely in regional advertising, which accounts for approximately 12 1/2% to 30% of the total content of each of the various editions.4/ While this may be regarded as constituting a not insignificant difference in content as between each of the editions, it does not justify treating each of the editions as a separate periodical publication for purposes of the mail classification statute and regulations. The qualification of a publication for second-class entry as a "newspaper" or "other periodical publication" derives from its news and editorial content, not its advertising. The latter is a disqualifying, rather than a positive factor, in a newspaper's entitlement to second-class entry. Thus, where a publication has more than 75% advertising in more than one-half of its issues during any 12 month period, its permit may be revoked under Section 4352(c) of 39 U.S. Code, and where it is designed primarily for advertising it is not entitled to be admitted as second-class mail under Section 4354(c) of 39 U.S. Code. Consequently, a difference in advertising content between various editions of a publication (even though their total advertising content may not be sufficient to disqualify them from second-class entry) is not properly a factor to be considered in determining whether such editions may be regarded as separate publications for purposes of qualifying for separate second-class original-entry permits.
4. Insofar as news content in the various editions is concerned, Petitioner concedes that "the news content is basically the same" (Proposed Findings ar 8). However, it cites some differences in news articles and the fact that the Midwest and Pacific Editions, respectively, carry the full listings on the Midwest and Pacific Coast exchanges. In my opinion, the differences in news content are not of such magnitude as to justify considering less than 10% of the news content of the various editions. Aside from the fuller regional stock listing in the Pacific and Midwest Editions, the differences arise not from any effort on the part of local editors to give their editions a local orientation (the various editions actually being slanted primarily to news of a national scope), but to the need of the local editors for "filler" articles to balance off, or fill in, empty spaces resulting from differences in the amount of advertising carried by each of the editions. The filler articles come primarily from the "non-must" news articles that have been approved by the news staff in New York. In many instances they do not even involve articles which are of a peculiarly local nature. Thus, while Petitioner cites an article on "Wisconsin Cheese" which appeared in a particular issue of the Midwest Edition, the differences in the Southwest Edition of the same date involve such items as "Canada Had Budgetary Deficit," having no special relationship to the Southwest business market (PX 6-D).
5. In my opinion the Wall Street Journal is a single, unitary publication which is published at the headquarters office in New York. That is where the main news and editorial staff is located and where the essential format of the newspaper is formulated. Such discretion as the regional staff possesses is secondary and derivative, and is not such as to constitute their finished product a separate publication. Petitioner's vice president who testified in this proceeding recognized that the Wall Street Journal was essentially one newspaper as far as its news and editorial content are concerned, although he claimed that the various editions might be considered as separate publications for advertising purposes based on differences in advertising content and rates. Whether or not separate editions of a newspaper are separate and distinct publications is a question of fact. Where the news content is substantially the same and the name is the same, except for the addition in small letters of the name of the local edition, the various editions of a paper would normally be considered to be one newspaper. See Rosewater v. Pinzensham , 38 Neb. 835; 57 N.W. 563,567 (Sup. Ct. Neb., 1894).
6. In addition to relying on the above-discussed differences in content between the various editions, Petitioner also cites the differences in physical location where the various editions are "published" and where their list of subscribers are maintained. The different locations referred to by Petitioner are actually the different plants where the editions are printed. Except for the Southwest Edition, which is printed in Dallas, the other editions are printed in multiple plants within each regional area. The fact that a newspaper is printed at multiple locations does not, in my opinion, justify considering each location as a separate place of publication. While Petitioner refers to its editions as being "published" in each of the local plants, it makes no claim that the copies printed outside of the plant where the regional office is located are separate publications. The publication of a newspaper involves essentially the composing of its news and editorial content for dissemination to the public. The physical "printing" of a newspaper is not synonymous with publishing it. Ackerman v. Globe-Democrate Publishing Company , 368 S.W. 2d 469,478 (Sup. Ct. Mo., 1963). Many newspapers are printed in job shops by independent entrepreneurs. The principal publishing activities of the Wall Street Journal occur in New York where its news and editorial staff is located and where the essential format of the newspaper is formulated, and not in the local printing plants which maintain lists of subscribers, or in the regional offices where some minor composing activities take place.
B. Editions Treated as Separate Publications by Administrative Interpretation of Post Office
7. Petitioner contends that the Postal Service's predecessor, the Post Office Department, treated the various editions of the WSJ as separate publications for many years, and that such treatment constitutes (Proposed Findings ar 8):
". . . a practical construction of a statute [which! is given great weight by the courts and will not be disturbed except for very cogent and persuasive reasons. See Bingler v. Johnson , 394 U.S. 741 (1969); Udall v. Tallmon , 380 U.S. 1 (1965); Cory v. Fauber , 63 U.S. 709 (1960); F.T.C. v. Mandel Bros. , 359 U.S. 385 (1959)."
Such contention is related to Petitioner's succeeding argument that the Postal Service is equitably estopped from denying its past interpretation concerning the status of the various editions of the WSJ.
8. Petitioner's contention that the Post Office has, by administrative interpretation, treated the various editions of the WSJ as separate publications is based principally on the correspon- dence heretofore cited, in which second-class, original-entry permits were issued to Petitioner for the Southwest and Midwest Editions. Petitioner contends that such correspondence:
". . . makes it quite clear that the Post Office Department has treated each edition of The Wall Street Journal as a separate publication and has been fully aware that The Wall Street Journal has more than one original entry."
For the reasons hereafter noted, the correspondence cited by Petitioner cannot be considered as tantamount to a ruling by the Post Office Department that the various editions are, in fact and in law, separate editions for mail classification purposes. Moreover, such correspondence has no application in support of the principle of law for which Petitioner cites it.
9. In connection with the issuance of a second-class, original-entry permit for the Southwest Edition, a letter of the Third Assistant Postmaster General dated April 23, 1948, to the Postmaster at Dallas contains the following statement, which Petitioner cites in support of its position that the Post Office Department has treated each edition of the WSJ as a separate publication (PX 1-D):
"If the publishers desire to have a new newspaper admitted to the second class of mail matter at your post office entitled the 'Southwest Edition of the Wall Street Journal,' they should maintain in Dallas a 'known office of publication' for the publication as defined in Section 525, P. L. and R. . ."
I do not interpret such statement as constituting an opinion that the Dallas Edition is, in fact, a separate newspaper or publication, but rather that if Petitioner does, in fact, publish it as a "new newspaper" from a "known office of publication" in Dallas, it is entitled to second-class entry. However, it does not appear from the record that the contents of the Southwest Edition were ever analyzed and compared with the Eastern Edition to determine whether they could be considered separate publications. Nor does it appear that any analysis was made of Petitioner's activities in Dallas so as to determine whether the activities conducted at the putative "office of publication" could be considered to be a publishing of the edition in Dallas. Why such analysis was not made is not apparent from the record. One possibility suggested as to why the permit was issued without such analysis is that since there was no difference between the original entry and additional entry rates, and since Petitioner preferred an original-entry permit, the Post Office sought to accommodate it by accepting Petitioner's ipse dixit that it was planning to publish a "new newspaper" in Dallas.
10. The correspondence cited by Petitioner with regard to a ruling having been made by the Post Office Department as to the separate existence of the Midwest Edition, as a different newspaper, is that in which the Postmaster at Chicago in a letter dated June 11, 1951, advised Petitioner that (PX 2-M):
"We were directed to inform you that there would be no objection to having the Chicago publication reentered as second class matter under a new title, such as 'The Wall Street Journal Chicago Edition,' provided such title will be shown on the front page and inside pages of all copies of each edition . . . The Assistant Postmaster General advises that this would be similar to the preparation of copies of 'The Wall Street Journal Southwest Edition,' which has a second-class entry at Dallas, Texas, as a separate and independent publication."
Such statement must be read in the light of the fact that Petitioner had previously been permitted to transfer the second-class, original- entry permit of the "Chicago Journal of Commerce and LaSalle Street Journal" when it acquired that publication. However, while it used the name "Chicago Journal of Commerce Edition of the Wall Street Journal" on one edition, it began using the name "Wall Street Journal, Chicago Edition" on another. Consequently, the above-quoted letter was sent for the purpose of advising Petitioner that it would have to be consistent with that under which the permit was issued. However, as in the case of the Dallas situation, there is nothing to show that any analysis and comparison of the editions was made to determine whether they were, in fact, separate publications.
11. The first time that the Post Office specifically focused on the question of whether any of the editions of the WSJ was so similar in content to the New York Edition as to constitute it part of a single publication, was in connection with an application by Petitioner for an original-entry permit for an edition which it proposed to publish in Washington, D. C. Petitioner was advised by the Washington Postmaster, by letter dated June 29, 1955, that "the Post Office Department has questioned as to whether this should not have been an application for an additional-entry instead of an original-entry." Petitioner was also asked in the same letter to advise the Washington Postmaster "if the contents of The Wall Street Journal printed and mailed in New York are the same as the contents of The Wall Street Journal printed and mailed in any other city" (PX 4-A). Petitioner responded by advising the Washington Postmaster that it had original entries at San Francisco, Dallas and Chicago, and that the "papers published at the different points are similar, but not identical." Among the differences noted in the letter were the carrying of complete stock quotations of the Midwest stock exchange in the Midwest Edition, differences in regional advertising carried in the three regional editions, and "certain news items which at times appear in the Dallas paper, for example, and not in the others." Based on this information, Petitioner was advised by the Washington Postmaster by letter dated August 23, 1955, that "the Department is not entirely satisfied that there will be enough difference between the New York and Washington Editions to justify approving an original entry here." While the letter suggested that it might still be possible to obtain a separate original entry and Petitioner was requested to submit a copy of the first edition to be published in Washington together with a copy of the New York issue, it does not appear that Petitioner saw fit to further pursue the matter.
12. In my opinion, the correspondence relied upon by Petitioner cannot be considered as an authoritative agency ruling by the Post Office on the specific issue here presented, viz., whether their separate editions of a newspaper whose principal publishing functions are carried on in New York City, and whose news and editorial content are substantially identical, can be considered to be a separate publication merely because they are printed in different locations, contain different local advertising, and bear a different subsidiary edition name. Given the fact that there was no difference in the applicable rate for original entry and additional entry, the Post Office had no occasion to squarely face the issue with which it is confronted in this proceeding, and it appears to have deferred to the publisher's preference as between original and additional entry. On the one and only occasion when the issue was presented, the ruling made was contrary to that now urged by Petitioner.
13. In any event, assuming arguendo that the issuance of the earlier permits may be regarded as a ruling by the Post Office Department that it considered the separate editions to be separate publications, such fact does not establish a precedent of the type cited by Petitioner in which the courts have held that "a practical construction of a statute is [to be! given great weight . . . and will not be disturbed except for very cogent and persuasive reasons."
The principle cited by Petitioner is one which has been enunciated by the courts in cases in which an agency has sought to defend or uphold a long-standing and consistently applied interpretation or regulation. So far as I am aware, it has never been applied to prevent an agency from receding from, or changing, a ruling or regulation which it has come to regard as inappropriate or erroneous. While a change in agency position may be relevent to the question of equitable estoppel (which Petitioner has also cited as a separate defense, and which is hereinafter considered), the former agency position cannot be used to lock the agency into such position in perpetuity under the principle of statutory construction cited by Petitioner. Such an application of the principle is, in my opinion, inapposite.
C. Equitable Estoppel
14. Petitioner contends that since there has been no change in any of the editions or in the law since the original entries were granted, the Postal Service is equitably estopped from withdrawing the original-entry permits which it granted to the various editions of the WSJ. Petitioner cites several decisions arising under the Internal Revenue Act and Regulations, which it contends hold that the doctrine of equitable estoppel prevents a change in an earlier ruling given to a taxpayer concerning his tax liability.
In my opinion, the doctrine of equitable estoppel has no application in the instant proceeding, for two principal reasons, (a) there has been no showing of detrimental reliance upon the earlier decisions to grant original-entry permits to the three regional editions, and (b) the doctrine of equitable estoppel does not prevent an agency from changing its position to correct an error of law. In Bornstein v. United States , 345F 2d 558,563, cited by Petitioner, the court held that: "Detrimental reliance is an essential ingredient of estoppel." The record fails to establish any detrimental reliance by Petitioner on the earlier grant of original-entry permits by the Post Office Department. If anything, Petitioner benefited by such permits during the period it held them. There is nothing to indicate that it would not have entered such areas if it had not received the original-entry permits. More importantly, however, even if it be assumed that Petitioner relied on the earlier rulings to its detriment "the doctrine of equitable estoppel does not prevent the [Agency! from changing [its! position to correct an error of law." Bornstein v. United States , supra ; Automobile Club of Michigan v. Commissioner of Internal Revenue , 353 U.S. 180.
D. Entitlement of Single Publication to Multiple Original Entries
16. Petitioner contends that neither the statute nor the regulations thereunder limit a single publication to one original entry. Section 4352(a) of 39 U.S. Code, which is cited by Petitioner, provides in pertinent part as follows:
"Upon application in the form prescribed by him the Postmaster General shall enter as second class mail, at the Post Office where the office of publications is maintained , any publication which is entitled under sections 4353-4357 of this title to be classified as second class mail. A publication entered at one post office may also, upon application, be entered by him at another post office." (Emphasis added.)
Petitioner argues that "since The Wall Street Journal is published in nine locations, it is entitled to original entry at the location of each publishing office."
17. In my opinion the language of the statute contemplates the granting of only one original-entry permit to a single publication. The reference in the statute to the granting of a permit "at the Post Office where the office of publication is maintained" (emphasis added) contemplates, in my opinion, the limiting of the original-entry permit to a single, specific post office, viz., "the Post Office where the office of publication is maintained." That office will normally be the office where the basic publishing activities are conducted. While a newspaper may maintain other offices where it carries on printing and other business activities, these are not the office of publication. The fact that the statute provides for the issuance of additional permits ar other post offices, after the publication has received its original permit at the office of publication, tends to corroborate the foregoing interpretation, that the statute contemplates the issuance of only a single original-entry permit. As will be hereinafter noted, this is the interpretation given to the statute by agency regulation. There is no merit to Petitioner's contention that the various editions of the WSJ are published at each of the locations where it maintains a printing plant. The mechanical printing operations are not, as I have previously found, of the essence of the publication of a newspaper. The regional offices are likewise not the office of publication of the various editions of The Wall Street Journal.
18. Whatever ambiguity may exist in the statute concerning the nature of the permit to be issued at a Post Office other than the one of original entry, is clarified in Section 132.33 of the Postal Service Manual. That section provides that "after a publication has obtained second-class mail privileges," the publisher "may apply for permission to mail at additional entry post office where the publication has been granted original second-class entry and mail privileges." Such application is required to be filed "at the post office where the publication has original second-class entry."
19. Petitioner argues that the use of the word "copies" in the regulation, rather than the word "publication" requires that the regulation be interpreted as referring to copies of an original publication, and that the issues of a separate edition are not "copies" within the meaning of the regulation. Thus, Petitioner suggests that while the newspapers printed in Silver Spring, Maryland, and Chicopee, Massachussetts, are "copies" of the Eastern Edition of the paper which has an original-entry permit in New York, the papers mailed in Chicago, Dallas and Palo Alto are not copies, but are the original newspapers. In my opinion, there is no merit whatsoever to such contention. It makes no difference whether what is being mailed is an exact copy of the newspaper published at a different original-entry point or is a copy of an edition of the newspaper printed at an additional-entry point. Both are "copies" within the contemplation of the regulation. No special significance can be attached to the use of the word "copies" in the regulation, rather than the word "publication." The statute itself refers to the entry of a "publication" at an additional post office. The regulation was intended to implement the statute by providing a procedure for obtaining such a permit. In using the word "copies," in referring to that for which an additional-entry permit may be sought, it was not intended to draw a distinction between issues of the publication which are exact duplicates of the original entry newspaper and those which are separate editions.
20. While Petitioner's argument and citation of authorities concerning the weight to be given to the practical construction of a statute by those administering it is, as previously found, inapposite in the sitation in which it was advanced, such argument is appropriate in connection with the Postal Service's regulation pertaining to additional entry. The Postal Service Manual is, in effect, a practical construction of the statute by the Postal Service and its predecessor, the Post Office Department. To the extent that there is any ambiguity in Section 4352 of 39 U.S. Code concerning a publication's entitlement to only one original-entry permit. Section 132.33 of the Postal Service Manual has made it clear that any further entry granted to a particular publication will be an "additional entry." This has been the construction of the statute by the Postal Service and its predecessor agency for many years, and Congress was aware of it when it approved changes in second-class rates in recent years (U.S. Code and Administrative News, 90th Cong., 1st Sess., 1967, at 2266-67). As noted by Petitioner, the courts have given great weight to the contemporaneous construction of an ambiguous statute by the officials charged with its enforcement, particularly where such statute was enacted or amended with knowledge by Congress of such administrative interpretation.
E. Revocation of Original-Entry Permits Without Loss of Second-Class Mail Privileges
21. Petitioner argues that since Section 4352(b) of 39 U.S. Code provides that a second-class mail permit may be revoked only where the Postmaster General determines "that the publication is no longer entitled to be entered as second-class mail," and since Respondent does not question Petitioner's entitlement to second-class mail status for the three regional editions, but merely their original-entry status, its permits cannot be revoked. In a rebuttal memorandum filed by it, Respondent asserts that it does indeed seek to revoke Petitioner's second-class permits, and not merely its original entry status. In a response to such memorandum, Petitioner argues that its second-class permits cannot be revoked without a showing that it has failed to meet the requirements for second-class entry which are laid down under Section 4354 of 39 U.S. Code.
22. Contrary to Petitioner's contention, Respondent does question Petitioner's entitlement to separate second-class entry as to the three regional editions. While it may be that Petitioner could hereafter successfully apply for and receive additional entry permits for these editions on the basis of the fact that it now possesses a second-class, original-entry permit for The Wall Street Journal at New York, this does not preclude the Postmaster General from seeking to revoke the separate second-class permits granted for the three regional editions. While it may be that Petitioner could hereafter successfully apply for and receive additional entry permits for these editions on the basis of the fact that it now possesses a second-class, original-entry permit for The Wall Street Journal at New York, this does not preclude the Postmaster General from seeking to revoke the separate second-class permits granted for the three regional editions. As has heretofore been determined, only one original-entry permit may be issued for a single publication under Section 4352(a) of the statute and Section 132.33 of the Postal Service Manual. Consequently, if the Postmaster General should determine that the regional editions of The Wall Street Journal are parts of The Wall Street Journal which received the original second-class permit, it is within his power under the statute to seek to revoke the other three permits. To do so it is not necessary to show that the three regional editions do not meet any of the conditions specified in Section 4354 of the statute. Without determining at this time whether the editions do or do not meet the requirements of Section 4354, the permits issued for them may now be revoked upon a determination that they are not separate publications from that which received the original second-class permit. A finding that they are not separate publications under subsection (a) of Section 4352 of the statute would be tantamount to a determination, under sub-section (b) thereof, that they are no longer entitled to be entered as second-class matter.
F. Constitutional Issue
23. Petitioner contends that revocation of its second-class permits would violate the First Amendment of the Constitution since it would result in a "hugh additional cost" to it. This, it argues, "would constitute an undue burden on the freedom of the press since it may limit the Publisher's ability to compete regionally with other elements of the press."
24. Although neither the Administrative Law Judge nor the Judicial Officer is authorized to determine the constitutionality of the statute more the validity of the Postal Service regulations (39 CFR 222.11(c) and (d) (2)), it may be observed that the record fails to establish that the loss of Petitioner's original-entry permits will result in an increase in costs of such magnitude as to prevent it from competing regionally with other elements of the press. Moreover, the record shows that no other publisher of a national publication with regional editions has a separate original-entry permit for such editions. The same is true of daily newspapers, such as the New York Times and the New York Daily News, which have different geographic editions. No reason has been cited by Petitioner why its editions should receive different or preferential treatment to that accorded other publications with separate regional or geographic editions.
FINAL CONCLUSIONS OF LAW
1. Under Section 4352 of 39 U.S. Code and Section 132.33 of the Postal Service Manual a single publication is entitled to only one second-class original-entry mail permit.
2. The Pacific Coast, Midwest and Southwest regional editions of The Wall Street Journal do not constitute separate and independent publications from The Wall Street Journal which originally received a second-class original-entry permit at New York, New York. Consequently, such regional editions are not entitled to separate, second-class original-entry permits.
3. Respondent correctly revoked Petitioner's separate, second-class original-entry permits for the three foregoing regional editions of Petitioner's publication at Palo Alto, California; Chicago, Illinois; and Dallas, Texas. Such decision is accordingly affirmed, but it is recommended that the effective date thereof be stayed to the extent hereinafter provided.
4. Since Petitioner may be entitled to additional-entry permits for the three above-named regional editions and the issuance thereof may result in a substantial saving over the cost of mailing same from the post office of original entry, it is recommended that the effective date of the revocation of Petitioner's original-entry permits for such editions be stayed until 30 days after the rendering of a final decision of affirmance herein by the Judicial Officer. In the event Petitioner shall file application for additional-entry permits within said 30-day period, it is recommended that the effective date of the revocation be further stayed until final disposition thereof by Respondent.
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1/ Proposed findings not herein adopted, either in the form
proposed or in substance, are rejected as not supported by the
evidence or as involving immaterial matters.
2/ The following abbreviations are used in referring to the
evidence in the record: "Tr." for the transcript of testimony; "PX"
for Petitioner's exhibits, and "RX" for Respondent's exhibits.