Court tells USPS 49¢ stamp not permanent

By Bill McAllister, Washington Correspondent

A federal appeals court has told the United States Postal Service the 49¢ first-class stamp may have to go.

That’s the impact of a long-awaited court ruling that rejected the Postal Service’s pleas to make the 49¢ rate permanent.

Current first-class forever stamps, such as the Ferns coils, are valued at 49¢. They will always be good for the first-class letter rate, regardless of the length of the 49¢ rate period.

In a ruling by a three-judge panel, the U.S. Court of Appeals for the District of Columbia on June 5 upheld the Postal Regulatory Commission’s 2013 decision to approve a 4.3 percent emergency rate increase that boosted the first-class letter price to 49¢, but only for a limited time.

The Postal Service challenged that ruling, arguing that the business recession of 2008 have devastated mail volumes.

It argued that it needed long-term financial help to remain viable. In short, it argued that it needed to keep the 49¢ first-class stamp as a permanent rate.

The three-judge panel, which heard arguments on the case in September 2014, sided with the commission.

In a 20-page ruling, the court found “the commission sensibly concluded that the statutory exception allowing higher rates when needed to respond to extraordinary circumstances should only continue as long as those circumstances, in fact, remained extraordinary.”

The commission had suggested that “some of the effects of exigent circumstances may continue for the foreseeable future,” the court noted.

But that does not mean “those circumstances remain ‘extraordinary’ or ‘exceptional’ for just as long,” it said.

The commission has ways of determining when the exigent nature of the Postal Service’s crisis has ended, the court said.

The commission had argued it can find when the Postal Service returns to what it called “new normal.”

The ruling presents Postmaster General Megan Brennan with a serious financial issue, one she had said she would dread.

If the USPS is forced to cut back stamp prices, it will not have the funds to continue operating at current levels, it said.

A spokesman for the USPS said it was “gratified” that the appeals court did agree with how the commission should measure mail losses caused by the recession.

The court sided with the Postal Service, saying that some mail losses could be considered continuing, not just one-time losses.

“The continuation of the exigent pricing surcharge is critical to the Postal Service’s financial health, as the Commission recognized in its 2014 Financial Analysis which acknowledged the significant importance of the exigent rate surcharge that was implemented in January of 2014 ...” said Postal Service spokesman David Partenheimer.

That financial analysis report said: "The Postal Service’s liquidity will be adversely impacted if the exigent price increase expires, which would result in the reduction of most product prices.”

Stephen Kearney, executive director of the Alliance of Nonprofit Mailers, noted in a memo to his members that the court had “left unsaid” what would happen to the current rates.

“That important decision should be made by the PRC in short order,” he said.

There had been speculation that the Postal Service would have to change rates in August under the PRC’s initial ruling that the 49¢ rate would be temporary, lasting no more than two years.