July 15, 1982 In The Matter of the Petition by VALERIE GOVIG Publisher 7106 Campfield Road Baltimore, MD 21207 Proposed Revocation of Second-Class Mail Privileges for "KITE LINES MAGAZINES" P.S. Docket No. 13/149 APPEARANCE FOR PETITIONER: Hurst R. Hessey, Esq. Ressey & Hessey 1311 Fidelity Building Baltimore, MD 21201 APPEARANCE FOR RESPONDENT: Joseph F. Wackerman, Esq. Law Department United States Postal Service Washington, DC 20260 BEFORE: Judge Edwin S. Bernstein
INITIAL DECISION
This is an appeal from a decision of the Director, Office of Mail Classification, U. S. Postal Service revoking second-class mailing privileges for "Kite Lines" because of its failure to be published at least four times a year as called for in its statement of frequency. Petitioner filed a timely appeal and Respondent filed a motion to dismiss the appeal. The parties waived a hearing but filed a stipulation of facts and applicable law. Petitioner elected not to file anything further. Respondent filed proposed findings of fact, proposed conclusions of law and memorandum of points and authorities on July 1, 1982.
FINDINGS OF FACT
The parties stipulated and I find:
1. Petitioner, Valerie Govig, is the publisher of "Kite Lines" magazine.
2. According to its statement of frequency "Kite Lines" is to be published four times a year.
3. "Kite Lines" was published three times in 1979, twice in 1980, and three times in 1981. No issues have been published in 1982 as of the date of the stipulation, June 11, 1982.
4. Petitioner was informed by the Mailing Permits Section of the Baltimore, Maryland Post Office in 1979 that she was required to publish at least four issues during each calendar year, her stated frequency, and that her failure to do so would lead to the revocation of her second-class permit.
5. Petitioner again was informed on January 7, 1980, that her failure to publish "Kite Lines" four issues per calendar year would lead to the revocation of her second-class permit.
6. On both occasions, Petitioner was afforded the opportunity to discuss the situation with Postal Service employees and she p~omised to publish "Kite Lines" as required in the future.
7. By letter dated August 28, 1981, Petitioner was informed cf the Director, Office of Mail Classification's decision revoking her second-class mail privileges for "Kite Lines" for failure to publish at least four times per calendar year, its stated frequency.
8. By letter dated September 17, 1981, Petitioner was informed of the Director, Office of Mail Classification's decision suspending the revocation and giving Petitioner until January 1, i982, to comply with the regulations in Domestic Mail Manual S421.
9. By letter dated May 11, 1982, Petitioner was informed of the Director, Office of Mail Classification's decision revoking second-class mailing privileges for "Kite Lines" for failure to be published on a regular basis of at least four times a year and failure to be issued as called for by its statement of frequency.
10. Petitioner does not allege in her Petition, as amended by the parties' stipulation, that she has complied with (a) the requirement of Domestic Mail Manual S421.21 that each second-class publication be issued at a regular frequency of at least four times per year or (b) the requirement of Domestic Mail Manual ~421.22 that each publication be published regularly as called for by the statement of frequency.
11. The parties agreed that the postal regulations governing this case are contained in Domestic Mail Manual SS421.21, 421.22, and 441.5.
12. In explaining why only three issues were mailed in 1981 Petitioner stated that she had hired Lewis Advertising Company, Inc. of Baltimore, Maryland to prepare and maintain mailing lists and tapes and to affix address labels to magazines for mailing. Lewis Advertising did not properly perform the job for which it had been hired, and, as a result, "Kite Lines" sustained substantial economic damages.
13. "Kite Lines" settled its claim against Lewis Advertising for the sum of $5,000.00.
14. The revocation of second-class mailing privileges for "Kite Lines" would be a severe economic hardship. The substantial difference in mailing costs between second-and third-class mailing would seriously handicap the chances for "Kite Lines" to recover financially and maintain its staff and frequency.
15. The parties agreed that if the revocation is affirmed, Petitioner, upon payment of appropriate fees, will be allowed to re-apply for second-class mailing privileges and will mail in 1982 under a deposit agreement by which Petitioner will pay third-class postage, but if Petitioner meets its minimum and stated frequencies, the Postal Service will refund the amount over that which would have been due under a valid second-class permit. This arrangement would, however, still require Petitioner to "put up" substantially more money for each mailing than would be necessary under second-class privileges.
16. "Kite Lines" is a major professional magazine in the world devoted solely to the adult art and sport of kiting (kite making and flying).
CONCLUSIONS OF LAW
Section 420 of the Domestic Mail Manual lists the four basic requirements for entry into the second-class of mail. Section 420.2, at issue here, states:
"421.2 Regular Issuance
.21 Each second-class publication must be issued at a regular frequency of at least four times per year. The publisher must determine the number of issues to be published each year and adopt a statement of frequency that will show at what regular intervals the issues will appear.
.22 All issues must be published regularly as called for by the statement of frequency. If the publisher wishes to change the number of issues scheduled or the statement of frequency, he must adopt a new statement of frequency by filing an application for second-class reentry (see 444). If a publication fails to maintain regular issuance according to its stated frequency, the postmaster will remind the publisher of the above requirements and request compliance. If irregular issuance continues, the Office of Mail Classification, USPS Headquarters, will revoke the publication's second-class mail privileges (see 441.5)."
This regulation was carried forward from section 4354 of former Title 39*/ and was originally placed into law by the Act of March 3, 1879, c. 180, §14, 20 Stat. 359, which read:
That the conditions upon which a publication shall be admitted to the second-class are as follows:
First. It must regularly be issued at stated intervals, as frequently as four times a year, and bear a date of issue, and be numbered consecutively.
Second. It must be issued from a known office of publication.
Third. It must be formed of printed paper sheets, without board, cloth, leather, or other substantial binding, such as distinguish printed books for preservation from periodical publications.
Fourth. It must be originated and published for the dissemination of information of a public character, or devoted to literature, the sciences, arts, or some special industry, and having a legitimate list of subscribers; Provided however. That nothing herein contained shall be so construed as to admit to the second-class rate regular publications designed primarily for advertising purposes, or for free circulation, or for circulation at nominal rates.
For over one hundred years, these four conditions have governed the threshold question of whether a mailable publication is entitled to be entered and mailed at second-class rates. Failure to publish four times per year or to meet the stated frequency of publication render a publication ineligible for second-class privileges. See, Zest Publishing Company, P.O.D. Docket No. 1/234, Initial Decision at 6, 11 (May 25, 1961), and Echo Magazine, P.O.D. Docket No. 1/219, Initial Decision at 2-3 (February 16, 1960). A claim to second-class privileges must be based on compliance with this provision.
The rules and regulations of an administrative agency governing proceedings before it, duly adopted and within the authority of the agency, are binding. As a general rule, agencies do not have the discretion to waive, suspend, or disregard such regulations. Service v. Dulles, 354 U.S. 363 (1957). Agencies may relax or modify their procedural rules adopted for the orderly transaction of business when in a given case the ends of justice require it. American Farm Lines v. Black Ball Freight Service, 397 U. S. 532 (1970). However, this is not such a case. Here the non-compliance is not a procedural formality, designed to insure the orderly transaction of business, but is an essential element of the appeal.
Petitioner is unable to allege compliance with the regulations entitling its publication to second-class status. Publication at a stated frequency and at least four times a year are mandatory requirements for a second-class permit. The merits of the publication are not at issue and neither the statute nor the regulations excuse non-compliance with these requirements because of financial problems or non-performance of work by others.
Therefore, the revocation of Petitioner's second-class privileges was proper and Respondent's Motion to Dismiss the Petition and its appeal is granted.
Edwin S. Bernstein Administrative Law Judge