In the Matter of the Petition by CREDIT BUREAU OF LOGAN, INC., P. O. Box 512, 150 South Main, Logan, Utah 84321 Proposed Revocation of Second-Class Mail Privileges for "PUBLIC RECORD BULLETIN" P.S. Docket No. 4/191 July 26, 1976 Quentin E. Grant Administrative Law Judge Preston, Harris, Harris and Preston, by George W. Preston, Esq. Logan, Utah for Petitioner Grayson M. Poats, Esq. United States Postal Service Washington, D.C. for Respondent Before: Quentin E. Grant, 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 of the Mail Classification Division, Finance Department, U.S. Postal Service (hereinafter the "Manager") which, on March 26, 1976 annulled, subject to the outcome of this proceeding, petitioner's second class mail privileges for its publication, Public Record Bulletin (hereinafter sometimes the "publication").
The reasons for the Manager's ruling were stated by him as follows:
"Section 132.226, Postal Service Manual, specifies that publications designed primarily for advertising purposes may not qualify for second-class privileges. They include those owned or controlled by individuals or business concerns, and conducted as an auxiliary to and essentially for the advancement of the main business or calling of those who own or control them.
"A purpose of the Credit Bureau of Logan, Inc., as specified in its Articles of Incorporation, is to establish, maintain and conduct a general credit rating agency, to carry on every branch of business usually transacted in connection therewith, including the obtaining and acquiring, by purchase or in any other lawful manner, information, statistics, facts, and circumstances of, relating to, or affecting the business, capital, debt, solvency, credit responsibility and commercial condition and standing of any and all individuals, firms, associations and corporations engaged in or connected with any business, occupation, industry or employment, and to dispose or sell, loan, pledge, hire, and use in any and all lawful ways the information, statistics, facts, and circumstances so obtained and acquired.
"The information printed in 'Public Record Bulletin' regarding warranty deeds, real estate mortgages, release of real estate mortgages, trust deeds, quit claim deeds, affidavit and death certificates, lease agreements, births registered, new cars and trucks registered, etc., is essentially for the advancement of the main business or calling of those who own or control 'Public Record Bulletin.'
"Since 'Public Record Bulletin' is owned or controlled by the Credit Bureau of Logan, Inc., and conducted as an auxiliary to and essentially for the advancement of the main business or calling of the Credit Bureau of Logan, inc., 'Public Record Bulletin' is not eligible for second-class mail privileges. (See Credit Bureau of Albuquerque, P.S. Docket No. 1/218, August 24, 1973.)"
Petitioner took timely appeal from the Manager's ruling. On April 28, 1976 the Manager issued a supplemental ruling stating, as an additional reason for the proposed annulment, that the publication is not a "newspaper or other periodical" within the meaning of Section 132.211 of the Postal Service Manual and, thus, is not qualified for second class mail privileges. The supplemental ruling also relied on the definition of "periodical" established by the Supreme Court in the case of Houghton v. Payne , 194 U.S. 88 (1904). 1/ Applying that definition, the Manager held that the publication is not a periodical because it does not contain a variety of original articles and because each issue is incomplete in itself.
A hearing was held in Salt Lake City, Utah, on May 20, 1976 at which both parties presented evidence. They have submitted proposed findings of fact and conclusions of law.
Petitioner's arguments in opposition to the proposed annulment are, briefly, as follows:
1. The publication is not designed primarily for advertising and is not conducted as an auxiliary to, and essentially for, the advancement of petitioner's main business or calling.
2. The publication is a newspaper catering to a specific industry.
1. Petitioner is incorporated under the Utah Business Corporation Act and is owned and managed by James H. Wilson (R-6; Tr. 36).
2. Petitioner operates three separate business departments: credit reporting, collections, and Public Record Bulletin , all within the scope of its articles of incorporation (R-6).
3. The Public Record Bulletin is published weekly. Subscriptions cost $7.50 per month, or $90.00 per year (Tr. 42). Subscriptions to the publications are available without subscriptions to petitioner's other services. There are 88 subscribers to the publication and 450 members of the credit reporting service. Petitioner was unable to furnish evidence as to the number of subscribers who are also members of the credit reporting service.
4. The publication consists of 12 to 16 printed pages (8 1/2 x 11 inches) bound together by two staples along the left margin. The front page carries the title in large print at the top. Directly beneath the title is the name "Credit Bureau of Logan" and Mr. Wilson's name and his designation as Manager. This is followed by the street address and phone number of the Credit Bureau. In the center of the front page, in large print, appear the words "News for the Credit Industry." To the upper left of that statement appear the words "Credit Reports" and to the upper right "Collection Service." The two logos on the front page of the "Bulletin" are those of the Associated Credit Bureau, Inc., an interbureau exchange, and the Association of American Collectors, Inc. (Tr. 56) "Credit Bureau of Logan", with its mailing address and phone number, is again printed at the bottom of the front page.
5. The publication is intended to disseminate public information to persons, or firms, in the credit granting industry and directly related industries. The FBI, Dun and Bradstreet and several attorneys are subscribers (Tr. 49, 58).
6. The contents of the publication are listings of certain public records filed in Cache, Box Elder and Rich Counties, Logan City, various local courts, and the office of the Secretary of State of Utah. Such records include deeds, mortgages and related documents, contract assignments, judgments, civil actions, birth and death registrations, marriage licenses, utility disconnects and reconnects, financing statements, new car and truck registrations, and petitions in bankruptcy.
7. The contents of each issue of the publication are completely different from the contents of other issues.
8. The publication contains no literary compositions, nonfictional prose, or consecutive text.
9. Petitioner's credit reporting department provides credit reports to member credit grantors from information petitioner has gathered and filed in a computer system. Petitioner's collection department collects delinquent accounts on a contingent fee basis.
10. Petitioner does not advertise the publication for sale or otherwise solicit subscriptions thereto. The publication sells itself largely by word of mouth (Tr. 41, 60).
11. Publication of the Public Record Bulletin , or publications of similar content, is not essential to the operation of petitioner's or other credit reporting and collection businesses (Tr. 24-26).
12. Petitioner publishes and sells the Public Record Bulletin for income (Tr. 57).
1. Postal Service Manual 132.226 provides, in pertinent part as follows:
"Publications designed primarily for advertising purposes may not qualify for second-class privileges. They include:
* * *
b. Those owned or controlled by individuals or business concerns and conducted as an auxiliary to and essentially for the advancement of the main business or calling of those who own or control them."
The statutory basis for the foregoing provision is found in former 39 U.S.C. 4354(c) which reads:
"(c) A periodical publication designed primarily for advertising purposes or for free circulation or for circulation at nominal rates is not entitled to be admitted as second class mail under this section."
2. It is obvious from the cover of the Public Record Bulletin that one of its purposes is advertising. However, based on the substantial subscription price, the limited circulation in comparison with membership in petitioner's credit reporting service, the testimony of its owner that its principal purpose is income production, and the fact that the publication contains no matter descriptive or laudatory of petitioner's credit reporting and collection businesses, I conclude that it is not published essentially for the advancement of petitioner's main business and, therefore, is not designed primarily for advertising purposes. Consequently, petitioner may not be denied second class mail privileges on that basis.
3. However, I conclude that the publication is not entitled to second class mail privileges because it is not a "newspaper or other periodical publication" within the meaning of Postal Service Manual 132.211. It contains no original articles so as to bring it within the Houghton v. Payne definition of periodical, supra . Further, whether viewed objectively or subjectively, it is not what would commonly be called a newspaper. As the Judicial Officer recently stated in his Decision on Motion for Reconsideration in National Auto Research Publications, Inc. , P.S. Docket No. 2/131 (March 12, 1976), "Nor is it 'unobjective' to base such a conclusion in large part upon the appearance of the publication. It is inconceivable to me that Congress, in enacting the Postal laws including 'newspapers' in the class of 'other periodicals' entitled to second-class mail privileges, had in mind anything like the type of publication here involved. Nor do I see in the few administrative cases dealing with the matter any precedent for so doing." I must take the same view with reference to the Public Record Bulletin .
4. The proposed findings of fact and conclusions of law submitted by the parties have been considered and adopted to the extent indicated. Otherwise, they are denied because they are not supported by evidence, are contrary to the evidence, or because they are immaterial to the decision.
5. Based on the foregoing findings of fact and conclusions of law, I find that petitioner is not entitled to second class mail privileges for its publication, Public Record Bulletin .
6. The ruling of the Manager, dated April 28, 1976, to annul petitioner's second class mail privileges because the publication is not a newspaper or other periodical within the meaning of 132.211, Postal Service Manual, was correct. Accordingly, petitioner's appeal from that ruling is denied. Such privileges should stand annulled.