Appeal of P.S. Docket No. 4/181 -- COMMERCE CLEARING HOUSE, INC. "ALL-STATE SALES TAX REPORTS", "ATOMIC ENERGY LAW REPORTS", "AUTOMOBILE LAW REPORTS", "BANKRUPTCY LAW REPORTS", "COMMON MARKET REPORTS", "CONGRESSIONAL INDEX", "CONTRACT APPEALS DECISIONS REPORTS", "CORPORATION LAW GUIDE", "FEDERAL BANKING LAW REPORTS", "FEDERAL CARRIERS REPORTS", "FEDERAL ESTATE AND GIFT TAX REPORTS", "FEDERAL EXCISE TAX REPORTS", "FEDERAL SECURITIES LAW REPORTS", "FEDERAL TAX ARTICLES", "FEDERAL TAX GUIDE REPORTS", "FOOD DRUG COSMETIC LAW REPORTS", "GOVERNMENT CONTRACTS REPORT", "INSTALLMENT CREDIT GUIDE", "INSURANCE LAW REPORTS", "LABOR ARBITRATION AWARDS", "LABOR LAW GUIDE", "LABOR LAW REPORTS", "MEDICARE AND MEDICAID GUIDE", "PAYROLL MANAGEMENT GUIDE", "PENSION PLAN GUIDE", "PRODUCTS LIABILITY REPORTS", "STANDARD FEDERAL TAX REPORTS", "STATE MOTOR CARRIER GUIDE", "STATE TAX GUIDE", "TAX COURT REPORTS", "TRADE REGULATION REPORTS", "UNEMPLOYMENT INSURANCE REPORTS", "U.S. SUPREME COURT BULLETIN", "UTILITIES LAW REPORTS", "WORKMEN'S COMPENSATION LAW REPORTS" "CONSUMER PRODUCT SAFETY GUIDE", "EMPLOYMENT SAFETY & HEALTH GUIDE", "ENERGY MANAGEMENT", "POLLUTION CONTROL GUIDE", "POVERTY LAW REPORTS"


 In the Matter of the Petition by

 COMMERCE CLEARING HOUSE, INC.,
 4025 West Peterson Avenue,
 Chicago, Illinois 60646

 Proposed Revocation of Second - Class Mail Privileges for
 "ALL-STATE SALES TAX REPORTS", "ATOMIC ENERGY LAW REPORTS",
 "AUTOMOBILE LAW REPORTS", "BANKRUPTCY LAW REPORTS",
 "COMMON MARKET REPORTS", "CONGRESSIONAL INDEX",
 "CONTRACT APPEALS DECISIONS REPORTS", "CORPORATION LAW GUIDE",
 "FEDERAL BANKING LAW REPORTS", "FEDERAL CARRIERS REPORTS",
 "FEDERAL ESTATE AND GIFT TAX REPORTS", "FEDERAL EXCISE TAX REPORTS",
 "FEDERAL SECURITIES LAW REPORTS", "FEDERAL TAX ARTICLES",
 "FEDERAL TAX GUIDE REPORTS", "FOOD DRUG COSMETIC LAW REPORTS",
 "GOVERNMENT CONTRACTS REPORT", "INSTALLMENT CREDIT GUIDE",
 "INSURANCE LAW REPORTS", "LABOR ARBITRATION AWARDS", "LABOR LAW GUIDE",
 "LABOR LAW REPORTS", "MEDICARE AND MEDICAID GUIDE",
 "PAYROLL MANAGEMENT GUIDE", "PENSION PLAN GUIDE", "PRODUCTS LIABILITY
 REPORTS", "STANDARD FEDERAL TAX REPORTS", "STATE MOTOR CARRIER GUIDE",
 "STATE TAX GUIDE", "TAX COURT REPORTS", "TRADE REGULATION REPORTS",
 "UNEMPLOYMENT INSURANCE REPORTS", "U.S. SUPREME COURT BULLETIN",
 "UTILITIES LAW REPORTS", "WORKMEN'S COMPENSATION LAW REPORTS"

 Denial of Application for Second-Class Mail Privileges for
 "CONSUMER PRODUCT SAFETY GUIDE", "EMPLOYMENT SAFETY & HEALTH GUIDE",
 "ENERGY MANAGEMENT", "POLLUTION CONTROL GUIDE", "POVERTY LAW REPORTS"

 P.S. Docket No. 4/181; 
 
 April 11, 1977
 
 Rudolf Sobernheim Administrative Law Judge

INITIAL DECISION FINDINGS OF FACT

APPEARANCES: Lee M. Mitchell, Esq. Sidley & Austin 1730 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 Respondent1. By letter, dated 24 February 1976, the Director of the Office of Mail Classification, Rates and Classification Department, Finance Group, U. S. Postal Service (hereinafter referred to as the "Director"), subject to the outcome of this proceeding revoked the second-class mail privileges of thirty-five (35) publications and denied five (5) applications for second-class mail privileges in respect of publications published by Commerce Clearing House, Inc., the petitioner herein. The publications involved are listed in the caption of this proceeding.

2. Petitioner appealed from the Director's ruling and its appeal was docketed on 29 March 1976. On 19 April 1976 petitioner filed its petition on appeal.

3. Respondent's answer was docketed on 4 May 1976.

4. On 29 June 1976 petitioner in anticipation of legislation affecting its claim to second-class mail privileges moved for suspension of the instant proceeding.

5. The motion was denied on 14 July 1976 and the denial was upheld by the Judicial Officer on interlocutory appeal on 2 August 1976. The Judicial Officer pointed out in his order that the applicable procedural rules (39 CFR Part 954) did not provide for such interlocutory appeals.

6. A pre-hearing conference was held on 20 July 1976 and on 21 July 1976 the presiding administrative law judge issued an order setting up an action schedule ending with the filing of reply briefs on or before 16 November 1976.

7. On 24 September 1976 the President of the United States approved Public Law 94-421, cited as the "Postal Reorganization Act Amendments of 1976", which amended in section 11 (90 Stat. 1311) section 3626 of Title 39, United States Code, as follows:

"Sec. 11. Section 3626 of title 39, United States Code, is amended by inserting '(a)' immediately before 'If the rates' and by adding at the end thereof the following new subsections:

'(b)(1) For the purposes of this title, the term "periodical publications", as used in former section 4351 of this title, includes (A) any catalog or other course listing, including mail announcements of legal texts which are part of post-bar admission education issued by any institution of higher education or by a nonprofit organization engaged in continuing legal education; and (B) any looseleaf page or report (including any index, instruction for filing, table, or sectional identifier which is an integral part of such report) which is designed as part of a loose-leaf reporting service concerning developments in the law or public policy.

'(2) Any material described in paragraph (1) of this subsection shall qualify to be entered and mailed as second class mail in accordance with the applicable provisions of former section 4352 through former section 4357 of this title.

'(3) For purposes of this subsection, the term "institution of higher education" has the meaning given it by section 1201(a) of the Higher Education Act of 1965 (20 U.S.C. 1141(a))....'."

8. On 1 October 1976 respondent, due to the passage of P.L. 94-421, moved for dismissal of this proceeding (P.S. Docket No. 4/181) without prejudice. The motion stated that second-class mail privileges, previously denied for five of petitioner's publications would be granted as of 24 September 1976, the date when P.L. 94-421 became law.

9. On 5 October 1976 the Chief Administrative Law Judge ordered this proceeding dismissed without prejudice and without further action on the part of the presiding officer unless on or before 15 October 1976 petitioner would file objection setting forth persuasive reasons why respondent's motion should not be granted.

10. The foregoing time period was extended to 22 October 1976 on which date petitioner filed its response to respondent's motion.

11. In its memorandum petitioner argued that the proceeding should be dismissed with prejudice to any new proceeding based on the grounds advanced herein by the Director and that the grants of second-class mail privileges previously denied should be effective retroactively to the date of the respective applications so as to enable petitioner to recover postage paid in excess of second class postage between the dates of application and of grant for the mailing of each of the five publications. The latter demand is based on the dual contention (i) that respondent's grants of second-class mail privileges to petitioner for its publications since 1943 testify to the proper interpretation of applicable postal law against the interpretation advanced by the Director in the ruling appealed from and (ii) that the 1976 amendments to the Postal Reorganization Act (P.L. 94-421) confirm petitioner's entitlement to second-class mail privileges for its publication, including the grant thereof in respect of the five additional publications, under the law as it stood prior to the enactment of P.L. 94-421.

12. Petitioner's brief recognizes that its right to the refund of excess postage, alleged to amount to about $139,500, is provided for in section 132.32 of the Postal Service Manual (PSM) and argues that a denial of the refund would also violate this regulation.

13. Respondent filed a reply to petitioner's brief on 24 November 1976 to which it attached copies of documents related to the legislative history of P.L. 94-421. It opposed dismissal with prejudice on the ground that no decision on the merits had been rendered, that petitioner was not entitled to second-class mail privileges for its publication prior to 24 September 1976 and that P.L. 94-421 did not grant petitioner second-class entry for any publication prior to the date when it became law.

14. Petitioner filed a further reply on 14 January 1977. Petitioner also submitted for the record copies of and excerpts from documents relating to or bearing on the legislative history of P.L. 94-421 and the prior state of the law.

15. None of petitioner's publications are part of the record as now constituted.

16. For reasons made apparent hereafter findings of fact on the legislative history of the statute are unnecessary in this proceeding. Such findings of fact were, however, made in the Further Initial Decision, rendered by me on remand from the Judicial Officer, in Prentice-Hall, Inc. and Executive Reports Corporation , P.S. Docket No. 4/80 and in Institute for Business Planning , P.S. Docket No. 4/79 and the parties are referred thereto.

17. No initial decision on the merits of the Director's action had been rendered prior to 24 September 1976.

CONCLUSIONS OF LAW

1. It is impossible to render a decision on the merits of the Director's action since none of the publications in issue are part of the record. Assuming that petitioner's publications resemble in all material respects those of Prentice-Hall, Inc. , and the other petitioners in P.S. Docket No. 4/79 and 4/80, the initial decision rendered therein would be determinative of the outcome of the instant proceeding. If petitioner's publications in fact differ in material respects from those in P.S. Docket Nos. 4/79 and 4/80 the record here does not disclose them.

2. Nor is it necessary, contrary to petitioner's request, to decide whether the Director's revocation and denial rulings were correct if either P.L. 94-421 had not been enacted or if the prior postal law were considered in the light of that statute and the relevant portions of its history.

3. For all parties are in accord and I agree that section 11 of P.L. 94-421 requires that the second-class mail privileges of petitioner as to which the Director's revocation action had not yet become final remain in effect and that the five applications for such privileges which the Director had denied be granted. The record indicates that respondent has already acted to accomplish this.

4. Petitioner's request for dismissal with prejudice as to the grounds asserted by the Director is not well taken. Petitioner contends that his action was invalid even if P.L. 94-421 had not been enacted but that contention has not been passed upon herein to date. Decision on it has become unnecessary solely because a specific provision for statutory relief, requested of Congress by looseleaf service publishers (see Statement of Cong. Ford of Michigan in H.R. debate of conference report on H.R. 8603 on 10 September 1976, Att'mts to Resp. Br., last page; see also Committee Print 94-20, 94th Cong., 2d Sess (Committee on P.O. and Civ. Serv., House of Representatives), p. 550, col. 2).

5. Hence, were the law to be changed in the future, respondent may well be entitled as well as required in the impartial enforcement of postal laws and regulations to raise the issues on which decision is now prevented by the enactment of P.L. 94-421. It is not, of course, to be anticipated that respondent will raise these issues as long as section 11 of P.L. 94-421 stands unchanged in the relevant respect and petitioner has not advanced any reason to assume otherwise.

6. In order to determine the second point raised by petitioner's partial opposition to the motion to dismiss it is not necessary to resort to the construction of P.L. 94-421.

7. As petitioner recognizes in its response to respondent's motion to dismiss, its excess postage refund claim rests on the established Postal Service rule that postage in excess of second-class postage, paid during the period of pendency of an application for second-class mail privileges, will be refunded to the publisher upon approval of the application. Postal Service Manual, sec. 132.32.

8. This section applies whether an application is initially granted by the Director or by decision of the Judicial Officer when an appeal from a denial is taken to him.

9. There appears no reason why this provision on which petitioner's right to the refund of excess postage rests should not be applied here. Respondent has focused its argument on the prospective operation of P.L. 94-421 but petitioner's right to the refund does not rest on general principles of prospective or retroactive operation of that statute. Respondent's argument does not refer to the cited Postal Service regulation and fails entirely to provide a reason for its inapplicability here.

10. It follows that with the grant of petitioner's applications for second-class mail privileges in respect of the five publications in issue here petitioner becomes entitled to the refund of excess postage under PSM 132.32.

11. Accordingly, respondent's motion to dismiss this proceeding without prejudice is granted and petitioner's request that it be granted with prejudice as to grounds of revocation or denial herein asserted is denied. Petitioner retains the second-class mail privileges previously granted and receives second-class mail privileges in respect of the five publications anent which applications were denied, subject to the refund benefit conferred upon it by Postal Service Manual section 132.32.