In the Matter of the Petition by ) October 29, 1975 ) NATIONAL AUTO RESEARCH PUBLICATIONS, ) INC. ) Box 758 ) Gainesville, Georgia 30501 ) P.S. Docket No. 2/131 ) Proposed Revocation of Second-Class ) Mail Privileges for "OFFICIAL USED ) CAR MARKET GUIDE BLACK BOOK" ) APPEARANCES: Marion Edwyn Harrison, Esq. Harrison, Lucey, Sagle & Solter Suite 500 1701 Pennsylvania Avenue, N.W. Washington, D.C. 20006 for Petitioner Grayson M. Poats, Esq. Law Department U. S. Postal Service Washington, D.C. 20260 for Respondent Lussier, Edward F.
This matter is on appeal by Respondent to the undersigned from an Initial Decision concluding that the above referenced publication, hereinafter referred to as the Black Book, is entitled to retain second-class mail privileges. The proceeding grew out of a notice by the Manager of the Mail Classification Division, Finance Department, U. S. Postal Service, proposing to revoke such privileges, subject to the administrative review procedure set forth in 39 Code of Federal Regulations § 954 which provides for an Initial Decision by an Administrative Law Judge and an appeal therefrom by either party to the Judicial Officer.
The Black Book, as more fully described in the Initial Decision, is in the form of a booklet 2 1/2 by 4 inches containing (in Respondent's Exhibit 2) 158 numbered pages listing wholesale auction prices for automobiles and trucks. It has 27,000 subscribers in the United States and 6,000 in Canada and is available at an annual subscription of $40 for 52 weekly issues. Its subscribers are primarily car dealers but include car leasing companies and financial institutions who wish to use it to estimate future value of cars from the price history of the car over several months. Some attorneys and accounting firms also subscribe. Advertisements for the Black Book (Petitioner's Exhibits 1, 2) offer a free copy to interested subscribers who request it on their letterhead.
The prices set forth in the Black Book come from auction observers who classify the condition of the particular car as extra clean, clean, average, or rough and record the price paid for it at the auction. The information is sent to Petitioner for study and collation since there may be numerous sales of one type of car in a certain condition and Black Book lists but one price (Tr. 83). While 37 different auctions are involved and approximately 40 different states are covered in Black Book editions, there are only four to seven (Tr. 89) basic editions of the Black Book as far as the actual prices are concerned. For example, the Black Book for Utah would have the Utah name on it but the prices listed might fit the Texas edition figures.
The issue, as stated by Counsel for Petitioner at the opening of the hearing, and agreed to by Counsel for Respondent, was whether the Black Book is a periodical within the purview of Houghton v. Payne, 194 U.S. 88 (Tr. 3, 4). After the hearing each party submitted a Brief and a Reply Brief. The Administrative Law Judge then offered the parties the opportunity to submit a Supplemental Brief in view of the issuance of the Amended Postal Service Decision in Florists' Transworld Delivery Association, P.S. Docket No. 1/167. Both parties took advantage of the offer. Neither the pleadings, nor the testimony, nor the Briefs discuss the issue of whether or not the Black Book is a newspaper. The Initial Decision concluded that the Black Book is not a periodical within the meaning of Houghton v. Payne but found Black Book entitled to second-class mail privileges on the basis that it was in fact a newspaper.
After the issuance of the Initial Decision the Respondent filed a motion requesting the Judicial Officer to order the presiding Administrative Law Judge to issue a decision limited to the issue of whether the Black Book was a periodical pointing out that "In the nearly twenty months of legal proceedings in this case, the above statement in the Initial Decision (i.e., that Black Book was in fact a newspaper) was the first time that the issue of whether 'Black Book' was a newspaper was raised." The motion was not granted, it being pointed out that the correctness of the decision as to the appropriate issue in the case as well as exceptions to any other findings or conclusions would be considered at one and the same time with Respondent's appeal. Respondent's Brief on Appeal takes exceptions to Conclusions of Law 9 through 13 of the Initial Decision, which deal with the newspaper issue, on essentially two grounds, the first being that the newspaper issue was not properly before the Administrative Law Judge, and the second being that the conclusion that the Black Book is a newspaper is unsupportable. 1/
The parties to this proceeding were represented throughout by Counsel, both able and experienced, and judging from the Briefs on file, fully cognizant of the previous decisions in this area of the law. The fact that they never raised the newspaper issue is not to be taken lightly. The problems with deciding a case on an issue not pleaded, tried or briefed by the parties are obvious, not the least of which being that the concept of fairness, no less applicable to the government than to the private litigant, is placed into question.
Petitioner contends that the newspaper issue was implicitly present as one of the "handful of alternatives" to Petitioner's theory of the case that Black Book is a periodical. It is clear from this record that the parties gave no thought to the "newspaper" classification as one applicable to Black Book. Under the circumstances, to state that this was a possible alternative seems to beg the question of its propriety as the deciding factor in the case. This is not to say that in a given situation a particular issue may not be obvious and both parties chargeable with its presence. The form and content of a publication may make it clear at a glance that it is what is commonly regarded as a newspaper but that is not the case with the Black Book. I see no more merit to the contention that the newspaper issue is implicit in every case, regardless of whether the parties raise it or not, than I would to the contention that every decision, rendered on the issue of the absence of Houghton v. Payne content in a publication, is defective absent a finding that the publication is also not a newspaper. The purpose of pleadings is to fairly apprise the parties, and the deciding body, what the dispute is all about. The trial and the Briefs are expected to do likewise.
A publisher who is advised that its publication fails to meet the Houghton v. Payne test for a periodical may always plead that it is a newspaper if that is its belief. If it does not see fit to do so in a timely fashion within the often extensive proceedings in such cases the matter should not be interjected for the first time at the decision stage as the basis for the ultimate result. Nor is there any compelling reason to extend the administrative proceedings for a retrial on this new issue.
If the Postal Service moves to revoke a second-class permit alleging as the ground therefor that the publication fails to meet a particular criteria required for qualification and loses on the point, it has lost its case and cannot, at an untimely point in the proceeding, raise an issue upon which it otherwise conceivably might have prevailed. Marvin Levin, P.S. Docket No. 1/28. Fairness dictates that the rule work both ways. See Soundings Northwest, P.S. Docket No. 3/97, and Ralph Petillo, P.S. Docket No. 3/132. The basis for such a result is not a superficial advancement of form over substance but rather the inability to fairly arrive at substance without fair opportunity to develop the record upon which the decision is based. The problem is that neither the presiding officer, nor the reviewing authority, knows, in such a situation, what kind of a record would have been made had the parties addressed themselves to the issue. One example of this is to be found in the fact that in a companion decision, 2/ issued the same day as the Initial Decision in the subject case, the same Administrative Law Judge found a competitor publication of Black Book not to be a periodical, an issue argued by the parties, and also not to be a newspaper, an issue not argued by the parties. The pending appeal before the undersigned in that case requests the opportunity to reopen the case and try the newspaper issue. One reason advanced for reopening is to disprove certain findings of fact regarding Black Book given by the Administrative Law Judge as a basis for distinguishing the results in the two cases. This merely highlights that the issue is a factual as well as a legal issue. Briefs on appeal may tend to cure the absence of legal argument in the first instance but by that time, the evidence, and in fact the whole evidentiary approach to the trial of the case, has often been fixed in mold.
While I would not conclude, as did the Initial Decision, that Black Book is a newspaper, 3/ I agree with the conclusion in the
Initial Decision that Black Book is not a periodical for the reasons stated therein. Petitioner's contention that its publication is neither an update service nor a reference book and therefore must be entitled to second class privileges whether classified as a newspaper or not is not convincing. The Administrative Law Judge held, correctly in my opinion, that Black Book did not meet the Houghton v. Payne definition of a periodical publication and that it did not fall within the type of nondescript publications such as railway guides that have been treated as periodicals. Having said this the periodical issue was resolved and it does not follow that it must, therefore, be given a designated classification by the Administrative Law Judge or otherwise be left "in limbo".
Respondent's first exception is allowed and, therefore, its second and third exceptions become immaterial. The result reached in the Initial Decision is reversed and the decision of the Manager of the Mail Classification Division is upheld.
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1/ Respondent actually separates the second ground into two exceptions, one being the contention that the factual record is insufficient to support the determination that the Black Book is a newspaper, and two being the contention that an analysis of the facts and law shows that the Black Book is not a newspaper.
2/ National Automobile Dealers Used Car Guide Co., P.S. Docket No. 2/183.
3/ The Initial Decision opines that recognizing Black Book as entitled to second-class mail privileges is in accord with the decision in Surveys for Business, Inc., P.O.D. Docket No. 3/37 (1970), which neither party discussed, although that decision did not address itself to the "newspaper" issue. The Initial Decision in Surveys for Business, Inc., not appealed, restricted itself to the limited issues raised (i.e., whether the publication lacked continuity, whether it disseminated information of a public character or devoted to some special industry and whether it was designed principally for advertising purposes) and is no precedent for the holding that under that factual situation the publication qualifies as a "newspaper". Likewise the reference to The Architect and Engineer, Inc., P.S. Docket No. 2/179(1974), wherein it was suggested that the newspaper issue, undecided in that case, could be raised in a proceeding against another publication, is of little help, unless one is to draw an inference that the absence of proof of following up on that suggestion establishes some sort of precedent, which I think it clearly does not.