In the Matter of the Petition by ) March 30, 1995 ) RICHARD S. LANE ) Vice President ) Suite 150 ) 1055 South Wells Avenue ) Reno, NV 89502-2550 ) ) ) Denial of Application for Second-Class ) Mail Privileges for LANE GUIDE ) P. S. Docket No. 39/44 APPEARANCE FOR PETITIONER: Richard S. Lane Vice President 1055 S. Wells Avenue, Suite 150 Reno, NV 89502-2550 APPEARANCE FOR COMPLAINANT: Jeffrey H. Zelkowitz, Esq. Law Department United States Postal Service Washington, DC 20260-1146
POSTAL SERVICE DECISION
Petitioner, Richard S. Lane, has appealed from an Initial Decision of an Administrative Law Judge which upholds a ruling of the Director, Office of Classification and Rates Administration, that the publication Lane Guide does not qualify for second-class mail privileges because it is not a "periodical publication" under §422.1 of the Domestic Mail Manual (DMM).1 Respondent, United States Postal Service, opposes the appeal, contending that the Administrative Law Judge's conclusion is correct.
Background
The facts are not in dispute.2 Lane Guide is a looseleaf directory containing an alphabetical listing of financial institutions for use in the credit, lending and financial industry in five western states. Subscribers to Lane Guide initially receive a binder, indexed separator pages and four or five previous issues which comprise the current and complete compilation.3 Updates to Lane Guide are issued every two months and each update consists of replacement pages for approximately one-fourth of the entire directory.4
Petitioner applied for second-class mail privileges for Lane Guide as a general publication but his application was initially denied by the Regional Rates and Classification Center and thereafter by the Director, Office of Classification and Rates Administration. The Director denied the application on the grounds that Lane Guide is published only once and not issued regularly thereafter according to any frequency because the updates are not issues of the publication, as such, but rather are parts being added to it.5 Petitioner appealed the Director's denial to the Administrative Law Judge. Relying on prior administrative decisions6 the Administrative Law Judge issued an Initial Decision in which she concluded that Lane Guide is not a periodical because the update issues function as an integral part of a larger text and are more like a book than a periodical. Petitioner timely appealed the Administrative Law Judge's Initial Decision to the Judicial Officer.
Discussion
On appeal Petitioner contends that Lane Guide meets all of the DMM and statutory requirements for a "periodical publication" and therefore should be granted second-class mail privileges. Petitioner also argues the decision in Prentice-Hall, Inc.,7 on which the Administrative Law Judge primarily relied has been overturned by two Federal Court decisions8 and that other looseleaf publications very similar to Lane Guide have been granted second-class privileges by the Postal Service.
Respondent argues that the Administrative Law Judge properly analyzed the specific characteristics of Lane Guide and correctly applied the principles established in prior Postal Service decisions. Therefore, Respondent contends that the Administrative Law Judge's conclusion that Lane Guide is not entitled to second-class mail privileges should be affirmed.
The parties have stipulated that for the purposes of this proceeding Lane Guide complies with all second-class eligibility requirements with the exception of DMM §422.1 which requires a publication to be a "periodical publication" in order to qualify for second-class rates.9 The parties have further stipulated that Lane Guide does not qualify as a "periodical publication" under DMM §422.11(b)(1)(2) or (3).10 As a result the parties agree that the only issue to be decided in this proceeding is whether Lane Guide is a periodical publication as defined in DMM §422.11(a).
DMM 422.11(a) defines a periodical publication as:
". . .a publication published at a stated frequency with the intent to continue publication indefinitely. The primary distribution of each issue must be made before that of each succeeding issue. The primary purpose of a periodical must be the transmission of information. A periodical may consist of original or reprinted articles on a single topic or variety of topics, listings, photographs, illustrations, graphs, a combination of advertising and nonadvertising matter, comic strips, legal notices, editorial material, cartoons, or other subject matter. A periodical must also exhibit continuity from issue to issue. Continuity may be evidenced by serialization of articles or by successive issues carrying the same style, format, theme, or subject matter."
Petitioner correctly points out that in accordance with the DMM definition Lane Guide is published at a stated frequency, with the intent to continue publication indefinitely and that each issue is distributed before each succeeding issue. Petitioner also points out that the purpose of Lane Guide is to transmit information in the form of listings and that it exhibits continuity by having the same style, format and subject matter in each of its bi-monthly issues. Thus, Petitioner contends that Lane Guide complies with all of the requirements of DMM §422.11(a) and is therefore entitled to be mailed at second-class rates.
It is true that Lane Guide complies with the technical requirements for second-class publications. However, compliance with the technical requirements of the Postal Service statute and implementing regulations is not in itself sufficient for a publication to qualify for second-class privileges. In Houghton v. Payne11 the Supreme Court concluded that a publication must not only meet technical statutory requirements, but in addition must be a "periodical in the ordinary meaning of the term."12 Although the Court did not fully define the term periodical, it did conclude that the publications it was reviewing met the technical second-class requirements then in existence, but were nonetheless books rather than periodicals and therefore not entitled to second-class mail privileges. The Court reaffirmed the position that a publication must be a periodical in the ordinary meaning of the term in order to qualify for second-class mail privileges in Smith v. Hitchcock,13 and lower courts citing Houghton have more recently arrived at this same conclusion.14
Prior administrative decisions15 have also relied on Houghton v. Payne in determining whether publications were periodicals under the Postal Service statute and implementing regulations. Relying on those cases the Administrative Law Judge in this case concluded that Lane Guide functions as an integral part of a larger text and therefore is not a periodical under DMM §422.1 even though the bi-monthly updates are distributed periodically. The Administrative Law Judge's conclusion is supported by the record despite Petitioner's arguments to the contrary. Indeed an analysis of the publication and its bi-monthly updates establishes, as the Administrative Law Judge found, that Lane Guide is more like a book than a periodical publication, such as a magazine.16 As a result, the updates are not entitled to be mailed at second-class rates.
Petitioner contends that the prior administrative decision the Administrative Law Judge found most persuasive in arriving at her conclusion, Prentice-Hall, Inc., is of questionable precedent because the cases on which it relies17 were "overturned" by two court decisions. However, the court decisions18 Petitioner refers to, were concerned with the original article content of the publications being considered and only on this issue did they reverse the Postal Service decisions. The courts did not depart from the Houghton v. Payne principle that a publication must not only have the feature of periodicity, but must also be a periodical in the ordinary meaning of the term.19 The two additional cases cited by Petitioner as supporting its position, Institute for Scientific Information20 and H. W. Wilson,21 like Standard Rate22 and National Auto,23 concerned the original article requirement and did not alter the case-by-case analysis required by Houghton to determine whether a publication is a periodical in the ordinary meaning of the term. Thus, the Houghton principle continues as a threshold requirement for qualification for second-class rates.
Petitioner's contention that other publications similar to Lane Guide have been granted second-class privileges is also not persuasive because each publication must be examined to determine whether it meets the technical requirements of the Postal Service statute and regulations and is otherwise a periodical in the ordinary meaning of the term.24 Therefore, no conclusion can be drawn from the second-class status of other periodicals.
Conclusion
After consideration of the entire record, it is concluded that Lane Guide does not qualify for second-class mail privileges under DMM §422.1. Accordingly, Petitioner's appeal from the Initial Decision of the Administrative Law Judge is denied.
James A. Cohen Judicial Officer