In the Matter of the Petition by PREDICASTS, INC., 200 University Circle Research Center, 11001 Cedar Avenue, Cleveland, Ohio 44106, Revocation of Second-Class Mail Privileges for "F & S INDEX OF CORPORATIONS AND INDUSTRIES" P.S. Docket No. 3/66 October 31, 1975William A. Duvall Chief Administrative Law Judge
Kimber E. Vought, Esq., Sterling H. Schoen, Jr., Esq., and Robert M. Wurzman, Esq., Schnader, Harrison, Segal & Lewis, 1666 K Street, N.W., Washington, D.C., for Petitioner Michael J. Vandamm, Esq., Law Department, United States Postal Service, Washington, D.C., for Respondent
Before : William A. Duvall , Chief Administrative Law Judge
This proceeding was initiated by Petitioner pursuant to 39 C.F.R. Part 954 to contest the ruling of Respondent, represented by the Manager, Mail Classification Division, Finance Department, United States Postal Service (hereinafter sometimes referred to as the "Manager") which on May 8, 1974 annulled, subject to the outcome of this proceeding, the second-class mail privileges theretofore granted to Petitioner's publication, "F & S Index of Corporations and Industries" (hereinafter referred to as the "publication").
The reasons for this ruling were stated by the Manager as follows:
"Pursuant to section 132.211, Postal Service Manual, only newspapers and other periodical publications may be mailed at the second-class rates of postage. "Section 132.224, Postal Service Manual, provides that second-class publications must be originated and published for the purpose of disseminating information of a public character, or devoted to literature, the sciences, art or some special industry.
"A periodical, as ordinarily understood, is a publication appearing at stated intervals, each number of which contains a variety of original articles by different authors devoted either to general literature of some special branch of learning or to a special class of subjects. Ordinarily each number is incomplete in itself, and indicates a relation with prior or subsequent numbers of the same series. It implies a continuity of literary character, a connection between the articles appearing in them, whether they be successive chapters of the same story or novel, or essays upon subjects pertaining to general literature.
"The above definition of a periodical is based on the U.S. Supreme Court opinion in the case of Houghton v. Payne , 194 U.S. 88 (1904).
"We have examined copies of the February 26, March 5, 12, 19, 1974 issues of the 'F & S Index of Corporations and Industries.' The publication contains lists or indexes of sources of information on different industrial subjects. The publication is primarily an update service. Each subsequent publication provides updated, more recent sources of information on the various subject headings. Each fourth issue cumulates the three previous issues and provides a table of contents for future reference.
"The publication contains no original articles. It is, in fact, nothing more than a reference book or directory.
Accordingly, the publication is not a periodical. (See In the Matter of One-Spot Publishers, Inc. , P.O.D. Docket No. 1/231(1960) and In the Matter of R. R. Bowker Company , P.O.D. Docket No. 2/97 (1964))."
Petitioner took timely appeal from the proposed annulment.
Respondent filed an answer thereto. Petitioner filed answers to interrogatories proposed by Respondent. The facts stated in such answers, together with certain other facts, have been stipulated as facts in this proceeding (undated "Stipulation of Facts" filed 10/29/74).
A hearing in the matter was held on January 9 and 10, 1975. Both parties participated in the examination and cross-examination of witnesses and in the introduction of evidence. Following the hearing briefs were filed by the parties. In addition, Respondent filed proposed findings of fact and conclusions of law.
The principal issue, by agreement of the parties, is whether the publication is a periodical publication within the meaning of the laws and regulations governing second-class mail matter. Petitioner also raises the issue of lack of constitutional due process in its allegation that the Manager's action was based on unpublished standards (Tr. 1-4; Petr's Brief, pp. 26 et seq .).
Petitioner has continuously enjoyed second-class mail privileges for the publication since at least 1963 (Stipulation Nos. 1 and 2). The nature of the publication has not substantially changed since the initial grant of the second-class permit (Stipulation No. 3).
By letter dated May 8, 1974, the Manager notified the publisher that the publication's second-class mailing permit was revoked, essentially on the ground that it is not a "periodical publication" within the meaning of Section 132.211 of the Postal Service Manual (Stipulation No. 5).
The publication meets all other technical requirements of mailability for second-class mailing privileges established by statute, regulation and the Postal Service Manual (Stipulation No. 6).
The publication is published in four thirteen-weeks cycles per year typically sequenced as follows:
Three weekly issues, one monthly issue, three weekly issues, second monthly issue, four weekly issues, one quarterly issue. Each monthly issue cumulates the three previously issued weeklies and adds to it the fourth weekly new material. The quarterly issue cumulates the prior two monthly issues as well as the four weekly issues immediately preceding it and adds additional new weekly material. The four quarterly issues are combined into an annual issue which is not, however, sent by second-class mail (Answers to Interrogatories 4 and 5).
The parties have treated as typical of the publication the weekly, monthly and quarterly issues thereof introduced in evidence as Joint Exhibits 1, 2 and 3 which are, respectively, Volume 15, Nos. 29, 30 and 38.
The publication is divided into two sections headed, respectively, "Industries" and "Corporations." Under the section entitled "Industries" appear numerous major subject headings with a code number, e . g ., "Population Characteristics E 100"; "Monetary Activity E 500"; "Mining Extractive Industries 100"; "Petroleum and Energy Products 290." Under some major subject headings appear subheadings each of which also has a code number. Under the heading entitled "Corporations" appears a list of corporations in alphabetical order. Under the headings and subheadings in the "Industries" section and the names of the various corporations in the "Corporations" section appear one-line abstracts or summaries of information relating to the various industries and corporations appearing in articles in journals or newspapers. The source of such information is identified at the end of the one-line abstract or summary by the name, date and page number of the journal or newspaper from which such abstract or summary was made e . g ., (from Joint Exhibit No. 1):
"POPULATION CHARACTERISTICS E 100
Study indicates 40% of US population eligible for some form of
poverty assistance . N Y Times 7/2/74 p 10"
"PRODUCTION & BUSINESS ACTIVITY E 400
Economy begins stabilizing as inflation slows . Commerce
6/24/74 p 12"
"MINING & EXTRACTIVE INDUSTRIES 100
1001 METAL ORES
Critical importance of copper cited . Jrl Comm 6/26/74 p 7"
"AGRICULTURE, FORESTRY, FISHING 010
0101 AGRICULTURE
US food supply seen ample . N Y Times 7/5/74 p 1"
"EXXON
Ups gasoline prices $.014/gal. WSJ (Spr) 7/12/74 p 8"
"KAISER STEEL
Financial prospects for '74 seen excellent . Jrl Comm 6/27/74
p 3"
"LITTON INDUSTRIES
Shows POS scanner at Dallas Convention Center . Laser Rep 6/74
p 1"
In addition to the sections headed "Industries" and "Corporations," the monthly issue contains a table of contents naming the various industries and products covered. The quarterly issue contains a similar table of contents; two pages explaining how the publication is used; seven pages listing the journal and newspaper source materials by name, publisher, address, frequency of publication and price; and three pages consisting of an alphabetical guide to the Standard Industrial Classification, a hierarchical system for grouping related products.
Information contained in the publication is derived from approximately 750 publications (Joint Ex. 3) and each weekly issue contains approximately 2000 references thereto (Answer to Interrogatory No. 9). The one-line abstracts or summaries are original work prepared by abstractors employed by Petitioner. As many as 12 different abstracts may be made of information in articles containing extensive data or information (Tr. 1-55). These abstracts or summaries are not the titles or captions of articles appearing in the source publications. Rather they are abstracts or summaries of pieces of information appearing in such articles (Tr. 1-95).
The purpose of the publication described in its advertising (Ex. G to Ans. to Interrog. No. 7) is to enable subscribers to "retrieve articles simply and quickly" and to enable "the executive, investor and researcher to locate and keep abreast of analyses, opinions and newsworthy items appearing in a wide variety of publications" and to "quickly determine what has been published on a specific company or industry, and retrieve that information which is germane to his interest." By stipulation (Ans. to Interrog. No. 3) the parties are in agreement that the purpose of the publication, described somewhat differently, is "to disseminate information on current development and analysis of business, economic, technical, regulatory and other factors of public character affecting various industries."
Advertisements of the publication describe it variously as "vital for business article retrieval" (Ex. A to Ans. to Interrog. No. 7); as providing "fast systematic information retrieval" and as a complete guide to "the systematic retrieval of information needed for investment decisions, market strategy or research" (Ex. E to Ans. to Interrog. No. 7); as a "guarantee that you will be up-to-date on all materials that are available in the usual and the unusual sources of reference" (Ex. F to Ans. to Interrog. No. 7); as the "best tool for current information retrieval" (Ex. G to Ans. to Interrog. No. 7).
The publication is classified under the Library of Congress system as a reference work (Tr. 1-39).
The authority cited for the proposed revocation action is found in 39 C.F.R. 132.2(a)(1) (Postal Service Manual, 132.211) which provides as follows:
"Only newspapers and other periodical publications which meet the mailability criteria established in Part 123 may be mailed at second-class rates."
The mailability criteria referred to in the quoted provision are not involved in this proceeding because the parties have stipulated that they have been satisfied and that the only issue for determination, aside from the constitutional issue mentioned previously, is whether the publication is a periodical.
Respondent says that the publication is merely a list, index or reference work not containing a variety of original articles, complete in individual issues, and not possessing a continuity of literary character and, consequently, is not a "periodical" entitled to second-class mail privileges within the Supreme Court's definition of that term as stated in Houghton v. Payne , 194 U.S. 88, 97 (1904) as follows:
"A periodical, as ordinarily understood, is a publication appearing at stated intervals, each number of which contains a variety of original articles by different authors, devoted either to general literature of some special branch of learning or to a special class of subjects. Ordinarily each number is incomplete in itself, and indicates a relation with prior or subsequent numbers of the same series. It implies a continuity of literary character, a connection between the different numbers of the series in the nature of the articles appearing in them, whether they be successive chapters of the same story or novel or essays upon subjects pertaining to general literature."
Respondent further says the publication is primarily a tool for business information retrieval, a work principally intended for current reference.
With regard to the constitutional issue of lack of due process (absence of published standard) raised by Petitioner, Respondent says that such argument is groundless in that the test applied to the publication here is the same well-known standard which has been applied for seventy years in determining eligibility for second-class mailing privileges, referring to the Houghton v. Payne definition, supra .
Petitioner contends that the matter is resolved in its favor by Respondent's agreement that the publication meets all the technical requirements for second-class mailing privileges established by statute, regulation and the Postal Service Manual (Stipulation No. 6).
With regard to the application of Houghton v. Payne , supra , Petitioner says the main teaching of that decision, as emphasized in Smith v. Hitchcock , 226 U.S. 53 (1912), is that a publication is a periodical if it has continuity or "inherent periodicity."
Further, Petitioner says that whether a publication contains articles or not, or whether it reproduces material from other sources or not, is irrelevant if continuity exists; that the publications here do indeed betray a need for continuation, a requirement for being published periodically, thus meeting the Houghton v. Payne test, and requiring reversal of the action of the Manager in revoking the permit for second-class mailing privileges.
Finally, Petitioner argues that the Manager has violated the due process requirements of the Constitution of the United States by applying a standard for determining whether a publication is a periodical which has no basis either in statute or regulation, i . e ., that a publication to be a periodical must contain original articles by a variety of authors.
The wording of the stipulation as to the publication's meeting the technical requirements for second-class mailing privileges established by statute, regulation and the Postal Service Manual is such that it does not include an admission by Respondent that the publication is a periodical. Therefore, Petitioner's argument that the stipulation is dispositive of the case is rejected.
Petitioner's next major argument--that under the teaching of Houghton v. Payne and Smith v. Hitchcock , both supra , the publication is a periodical solely on the basis that it has continuity and inherent periodicity, is also rejected. The identical argument was made and rejected in Institute for Scientific Information, Inc. , P.S. Docket No. 2/60 et al ., Initial Decision, May 22, 1975, and Postal Service Decision, October 2, 1975.
It has been recognized for over 70 years that while 39 U.S. Code 4354 sets forth specific conditions which a "periodical publication" must meet in order to be able to obtain or retain second-class mail privileges, there is no definition in statute or regulation of the term "periodical publication." However, the definition formulated by the Supreme Court in Houghton v. Payne has been consistently followed by the courts and postal authorities. Its application by the Manager to the publication involved in this proceeding can hardly be said to constitute a violation of constitutional due process.
The Houghton v. Payne definition includes the requirement that each issue contain a variety of original articles by different authors. This is the principal ground on which the Manager revoked the second-class mailing privileges. Petitioner has not made a strong argument that the one-line abstracts or briefs constitute articles although it says they have "indicia" of articles such as composition, editorial technique and writing skill, mentioned by Respondent's witness, Mr. Harding (Tr. 1-18).
Although the one-line abstracts convey information, as asserted by Petitioner and acknowledged by Respondent's witness, Mrs. Kennedy, they do not constitute articles as that term is commonly understood. Rather, they constitute a useful guide, reference or index to articles in source journals or newspapers. As such they perform the principal purpose repeatedly stated in advertisements for the publication, i . e ., to enable subscribers to retrieve articles and to retrieve information in the fields covered by the publication. I do not find credible or persuasive the testimony of Petitioner's witness, Mr. Wolpert, that the word "retrieve" as used in such advertisements refers to the one-line information contained in the abstracts themselves. Although the needs of some users may be satisfied simply by reading the abstracts themselves, it is obvious from the advertisements and the very nature of the publication that it is intended to direct users to articles in other publications rather than to provide true article content in itself. Thus, the publication is not at all similar to "Readers' Digest," a magazine to which Petitioner attempts to analogize the publication.
Petitioner argues, based on the decision in Payne v. Railway Publishing Co. , 20 App. D. C. 581 (1902) and National Publishing Company, Inc. , P.O.D. Docket No. 3/5 (1969), involving transportation guides, that absence of articles does not render a publication unqualified for second-class privileges. This argument has been made and rejected repeatedly in proceedings of this nature not involving transportation guides. The transportation guides involved in the two cited decisions are exceptions to the general rule which the Court and Postal authorities, for reasons of public policy, saw fit to make. The treatment of transportation guides as "nondescript" publications has consistently been recognized as unique. Institute for Scientific Information , P.S. Docket Nos. 2/60 et al ., supra .
The cases cited by Petitioner in support of a definition of "periodical publication" different from that found in Houghton v. Payne are for the most part the same ones cited for the same argument in Institute for Scientific Information , supra , i . e ., American Art Agency , P.O.D. Docket No. 2/269; Publishers Development Corp. , P.O.D. Docket No. 2/247; Little, Brown & Co., Inc. , P.O.D. Docket No. 2/86; Surveys for Business, Inc. , P.O.D. Docket No. 3/37. In Institute for Scientific Information , the Judicial Officer distinguished these cases and concluded that "in light of the overwhelming precedent recognizing and applying the definition in Houghton v. Payne , these cases do not afford a sound basis for adopting the definition of a periodical which Petitioner here proposes."
1. Petitioner's publication is not a "periodical publication" within the meaning of 39 U.S. Code 4351 and 4354, and within the meaning of Section 132.2 of the Postal Service Manual.
2. The publication is, therefore, not eligible for carriage in the mails as second-class mail matter.
3. The decision by Respondent to annul or revoke the second-class mail permit previously in effect for the publication is hereby sustained.
4. Petitioner has not been deprived of constitutional due process.
Proposed findings of fact and conclusions of law submitted by the parties have been carefully considered. To the extent indicated herein they have been adopted; otherwise they have been rejected for reasons stated, or because they are contrary to or unsupported by the evidence, or because they are immaterial.