In the Matter of the Petition by ) May 3, 1976 ) THE NATIONAL RIFLE ASSOCIATION OF ) AMERICA ) 1600 Rhode Island Avenue, N.W. ) P.S. Docket No. 4/169 Washington, D.C. 20036 ) ) Appealing the Proposed (1) Revocation of ) Nonprofit Third-Class Permit Authorized ) at Washington, D.C.; and Special Second- ) Class Mail Privileges for "THE AMERICAN ) RIFLEMAN"; and (2) Denial of Special ) Second-Class Mail Privileges for "THE ) AMERICAN HUNTER" ) APPEARANCES: Jo V. Morgan, Jr., Esq. Jacqueline M. Saue, Esq. 815 15th Street, N.W. Washington, D.C. for Petitioner Arthur S. Cahn, Esq. Gerald E. Cerasale, Esq. Law Department U. S. Postal Service Washington, D.C. for Respondent Lussier, Edward F.
The instant proceeding is presently before the undersigned on appeal by the National Rifle Association, the Petitioner herein, from an Initial Decision rendered by Chief Administrative Law Judge William A. Duvall. The case has its origins in the decision of the Manager of the Mail Classification Division, Rates and Classification Department of the United States Postal Service, to 1) revoke the Petitioner's nonprofit third class permit, 2) deny Petitioner's application for special second-class rates for "The American Hunter" and 3) revoke the special second-class rate at the time authorized for "The American Rifleman." After receiving final notice of these actions Petitioner, following the normal procedure in such cases, instituted an action in the Federal
District Court to have the decisions set aside. 1/ The Court, while holding that the Constitution does not require a trial type adversary hearing in the normal course of decision on eligibility for special second and third class mail rates, considered it appropriate, in the exercise of its equity powers, to order the case remanded for an adversary hearing before an Administrative Law Judge and any administrative appeal therefrom. 2/ The first part of that procedure culminated in Judge Duvall's Initial Decision; the second, in this final Postal Service Decision.
Petitioner's Appeal Brief is appropriately concise and to the point. It takes exception to three findings of fact and one conclusion of law in the Initial Decision, to the failure to find a section of the postal regulations invalid, and to the admission of the testimony of Respondent's sole witness.
The following two findings of fact to which exception is taken relate to the issue of whether the National Rifle Association is primarily an educational, scientific or philanthropic organization for purposes of being entitled to the special rates available to such organizations:
"2. Petitioner is not primarily an educational, scientific or philanthropic organization within the meaning of Sections 4359 and 4452, Title 39 United States Code and § 132.1(b)(2) and 134.5 of Title 39, Code of Federal Regulations.
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"4. Petitioner primarily is a sportsman's organization for persons interested in shooting and hunting. Petitioner provides incidental educational and training programs, among other reasons, to meet the needs and wishes of its members, to attract new members, and to provide training for police, security officers, members of the Armed Forces and civilians."
Petitioner contends that the above-quoted findings are the result of two underlying errors in the Initial Decision. The first it asserts to be the thought that "a sportsman's organization for persons interested in shooting and hunting" is somehow inconsistent with being an educational, scientific or philanthropic organization. The second, it asserts to be insufficient attention given to the facts found on pages 19 - 34 of the Initial Decision, which result Petitioner attributes to the Initial Decision's emphasis upon the secondary issue whether NRA is an "action" organization within the meaning of the postal regulations. 3/
Respondent, on the other hand, maintains that the primary purpose of the National Rifle Association is to protect what NRA considers to be the rights of sportsman gun owners, pointing to the prominence given this aim in its various publications and reports and in its membership drives. Each party understandably emphasizes those aspects of the record which tend to support its particular viewpoint.
The Initial Decision at pages 19 through 34 recites a summary of the testimony of Petitioner's witnesses at the hearing which Petitioner contends was ignored by Judge Duvall and should lead the reader to anticipate exactly the opposite conclusion than that reached in the two findings quoted above. It should be added, however, that the Initial Decision also states at page 35 that "The foregoing review of the evidence adduced at the hearing sets forth the position of the Petitioner as it was presented in its direct testimony, and as fully as permitted by the time strictures within which this case is conducted. As to the true nature and character of the NRA, it describes itself in its bylaws as 'the oldest national sportsman's organization in the United States' ((Pet. Ex. E-6) * * *". Far from ignoring Petitioner's testimony and exhibits it appears clear that Judge Duvall considered them in reaching his decision.
There is little evidence to support a determination that Petitioner would qualify as either a scientific or philanthropic organization, the major argument resting rather with the educational attributes of the NRA. In this connection the regulation defining a qualified educational organization reads as follows:
"2. Educational. A nonprofit organization whose primary purpose is: The instruction or training of the individual for the purpose of improving or developing his capabilities; or the instruction of the public on subjects beneficial to the community. An organization may be educational even though it advocates a particular position or viewpoint so long as it presents a sufficiently full and fair exposition of the pertinent facts to permit an individual or the public to form an independent opinion or conclusion. On the other hand, an organization is not educational if its principal function is the mere presentation of unsupported opinion.
(i) The following are examples of organizations which are educational:
(a) An organization, such as a primary or secondary school, a college, or a professional or trade school, which has a regularly scheduled curriculum, a regular faculty, and a regularly enrolled body of students in attendance at a place where the educational activities are regularly carried on;
(b) An organization whose activities consist of presenting public discussion groups, forums, panels, lectures, or other similar programs. Such programs may be on radio or television;
(c) An organization which presents a course of instruction by means of correspondence or through the utilization of television or radio;
(d) Museums, zoos, planetariums, symphony orchestras, and other similar organizations."
Respondent cites Hazen v. National Rifle Association, 101 F.2d 432 (1938), a case Judge Duvall expressly declined to rely upon, urging that "The importance of Hazen is not so much the Court's conclusion that the NRA is not an educational organization as is the analysis employed by the court in reaching the result that it did" 4/ (Appeal Brief page 5). Since Hazen there have been amendments to Petitioner's Certificate of Incorporation and Bylaws which Petitioner contends, and Respondent disputes, are substantial. Detailed analysis of all the facts appropriate for consideration in determining applicability of Hazen to the instant case is not supplied and it suffices to note that Hazen is not held out as controlling and was not relied upon in the Initial Decision. It should also be pointed out, however, that no inference should be drawn thereby that a change in the Certificate of Incorporation or Bylaws would necessarily be conclusive since the actual activities must also be given due weight in evaluating an organization's primary purpose.
Petitioner relies upon a number of Internal Revenue Service rulings cited also in its trial brief, in which various organizations relating to sporting activities were held to be educational organizations and exempt as such under the federal tax regulations, for the proposition that a sportsman's organization may also be primarily an educational organization. 5/ I do not read the Initial Decision as holding otherwise but rather as concluding that the NRA is not primarily an educational, scientific or philanthropic organization. Serving to illustrate the point are Judge Duvall's statements at page 36 of the Initial Decision and again in Finding of Fact No. 4, quoted above, that the educational and training programs are incidental. This does not mean that they are not both worthwhile and substantial, and in fact the Initial Decision so indicates, but rather that they do not establish the primary purpose of the organization when all else is considered.
Respondent contends, and Petitioner's Exhibit G-8 confirms, that the NRA does not emphasize educational, scientific or philanthropic activities in its membership drives but stresses rather the protection of the rights of gun owners. Likewise the record clearly reveals that its extensive legislative actions have been devoted to the same aim. It was stipulated in fact that in its own literature NRA does not characterize itself as an educational, scientific or philanthropic organization. In evidence as Respondent's Exhibit R-23 is a Motion to Intervene filed by NRA in the case of Fund for Animals et al. v. Kent Frazzell et al., Civil Action No. 75-1597, a lawsuit in the Federal District Court in Washington, D.C., in which Petitioner describes itself in the following terms:
"N.R.A. is a non-profit organization having more than one million members devoted to protecting the sporting and economic interests of its members in hunting and sport shooting. Many members who hunt or are involved in the manufacture and sale of arms and ammunition, decoys, apparel, and other products and services dependent on sport hunting would suffer serious injury, economic and otherwise, if the water-fowl season were postponed, cancelled or otherwise limited. So their interest in this action is substantial and not necessarily that of the Government. The Government's position might well not fairly represent the sporting and economic interest of the members of the N.R.A. and could possibly be antagonistic to their interests."
The self-characterizations, or lack of them, are of course not the last word but they are entitled to some weight in the circumstances where Petitioner is claiming its primary character as being that of an educational, scientific or philanthropic organization.
Petitioner's Exhibit F-1 which is its analysis of expenses for 1975 provides another measure by which to consider the question. The deficiencies in this exhibit, all in favor of Petitioner, were commented upon in the Initial Decision and need no amplification here. It may simply be noted that if the costs of fund raising for Petitioner's legislative action activities is added, as noted by Judge Duvall at page 45 of the Initial Decision, the major portion of Petitioner's expenses fall within "non-qualified" activities. This result prevails without making additional upward adjustments to the "non-qualified" activities, which the record would indicate, although not in exact amount, would be appropriate to get a true picture.
The basic issue in the instant case boils down to whether the NRA is primarily an educational, scientific or philanthropic organization in theory and in fact. The matter is not so crystal clear as Respondent's Brief would have it but my review of the record persuades me that Judge Duvall was correct on this important point. The exceptions to the Findings of Fact Nos. 2 and 4 are accordingly disallowed.
Next Petitioner takes exception to Finding of Fact No. 3 and Conclusion of Law No. 1 in the Initial Decision which deal with the "action organization" issue as follows:
"3. A substantial part of Petitioner's activities consists of attempting to influence legislation by propaganda or otherwise by contacting, or urging the public to contact, members of a legislative body for the purpose of proposing, supporting, or opposing legislation, although the accomplishment of its main or primary purpose does not depend upon legislation.
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"1. Petitioner is an 'action organization' within the meaning of § 134.5(c)(1) of Title 39, Code of Federal Regulations."
The only dispute as to the facts raised by Petitioner's Appeal Brief is with the Initial Decision's inclusion, for purposes of determining "action" activities, of the cost of fund raising for the NRA's legislative action program since the fund raising was handled by a professional fund raiser and kept in a special fund. This appears to be a distinction without a difference since expenditures to carry on substantive activities are properly an indication of the activity. The finding was made by Judge Duvall to correct an otherwise incorrect impression which would be gained from examination of Petitioner's Exhibit F-1 which omitted these expenses entirely in analyzing what Petitioner considered "action" activities versus "qualified" and non-qualified activities.
Petitioner's principal legal argument with respect to the issue of whether its "action" activities are substantial is based upon Seasongood v. Commissioner, 227 F.2d 907 (6th Cir. 1955), a case discussed in the Initial Decision and found, in my opinion properly so, not requiring the exclusion of contact with NRA members in determining the extent of "action" activity. The court in Seasongood appeared to rely more upon the absence of lobbying activities associated with the contacts than upon the fact that some of the contacts were with members of the organization. Even so Petitioner does not address itself in its appeal to the significant finding in the Initial Decision that "Even if the 1 million members of the NRA do not constitute the 'public' for the purposes of this case, the contacting of 12 million non-members, and 'maybe more than that', removes any doubt as to whether Petitioner contacts the public" (Initial Decision page 40). Seasongood is hardly controlling when one compares the factual differences between that and the instant case and particularly the discussion on pages 40 through 46 of the Initial Decision. The conclusion that a substantial part of Petitioner's activities are devoted to attempting to influence legislation has ample support in the record. Accordingly, the exceptions to Finding of Fact 3 and Conclusion of Law 1 are disallowed.
Petitioner also takes exception to the failure of Judge Duvall to rule on the validity of the postal regulation found at 39 C.F.R. § 134.5(c) which defines and excludes an "action" organization from qualification for the special rates. This exception must be disallowed. In addition to the cases cited by Judge Duvall in the Initial Decision to support his position, 39 C.F.R. § 224.1(c)(5)(G)(iii) and (iv)(B) expressly provide that the Judicial Officer and the Administrative Law Judges of the Postal Service do "not determine the constitutionality of statutes nor the validity of postal regulations."
Petitioner's last exception relates to the admission of the testimony of Mr. Proud but goes to the weight to be given to his testimony rather than its admissibility. There is no indication that the Initial Decision relied, or had any need to rely, upon this witness' opinion regarding Petitioner's qualifications for the special rates. Judge Duvall's rulings on the objections made at the time to the witness' testimony appear proper. In any event the exception is immaterial. It is accordingly disallowed for all the above reasons.
Petitioner's exceptions to the Initial Decision having been considered and disallowed, the Initial Decision is hereby affirmed.
1/ Petitioner represented in the Court proceeding that authorization for the special second and third class mailing privileges would amount to a savings to it of approximately $900,000 annually. The excess paid by NRA since revocation of the special rates is being held in escrow pending final disposition of the case (Memorandum Opinion, Feb. 2, 1976, National Rifle Association v. United States Postal Service, Civil Action No. 75-303, Dist. Ct. D.C.).
2/ Under the procedures set forth in 39 Code of Federal Regulations Part 954.
3/ Although resolution of either issue adverse to Petitioner compels the result of upholding the Manager's actions, Petitioner places greatest emphasis upon reversal of these findings regarding its character as an educational, scientific or philanthropic organization in view of its strong belief that the second issue with respect to its being an "action" organization will be ultimately resolved in its favor by a court determination holding invalid the "action" organization regulation.