USPS v. Flamingo Industries - Opinion Announcement

Argument of Speaker

Mr. Speaker: The opinion of the Court in No. 02-1290, United States Postal Service versus Flamingo Industries will be announced by Justice Kennedy.

Argument of Justice Kennedy

Mr. Kennedy: This is a case that requires us to consider whether the United Sates Postal Service is subject to liability under the federal antitrust laws.

And in this case, the Postal Service is the petitionary in this Court and Flamingo Industries, which is a corporation, is the respondent.

At one time Flamingo had been making mail sacks for the Postal Service.

Its contract was terminated at which point the Flamingo sued the Postal Service alleging various violations.

The relevant one here is the allegation that there was a violation of the federal antitrust laws, specifically the Sherman Act.

In the United States District Court, the court dismissed the antitrust’s claims but the Court of Appeals for the Ninth Circuit reversed.

The Court of Appeals said the Postal Service is subject to antitrust liability on certain conditions.

We granted certiorari and we now hold the Postal Service is not subject to antitrust liability, so we reverse the Court of Appeals.

The Postal Service was created by an act that we refer to as PRA.

That is the Postal Reorganization Act of 1971.

The PRA makes the Postal Service an independent establishment of the Executive Branch of the Government of the United States, that is the statutory phrase an independent establishment of the Executive Branch of the Government of the United Sates.

In an earlier decision in this Court, which is entitled Meyer versus FDIC, we said there is a two-step inquiry in cases like this: the first is whether there is a waiver of sovereign immunity against an agency of the government.

If there is, we ask the second question which is whether the substantive prohibitions of the Act in question do in fact apply to an agency of the government.

As to the first step, the PRA does provide that the Postal Service can sue and be sued in its official name.

So, there is a waiver of immunity that makes the Postal Service generally amenable to suit.

Still, there is no liability if the substantive law in question is not intended to reach the federal entity so, we must proceed to that second step.

Our examination of the Sherman Act and our decisions interpreting it lead us to hold that the Postal Service is not subject to antitrust liability.

The Sherman Act applies to persons -- that is the phrase used in the Act -- but the Postal Service is not a person separate and apart from the United States.

Its designation as an independent establishment of the Executive Branch is not consistent with the idea that it is an entity existing outside the government.

Absent an expressed statement from the Congress that the Postal Service can be sued for antitrust violations despite its governmental status, the Postal Service is not subject to antitrust liability, our conclusion is consistent with the nationwide public responsibilities of the Postal Service which has different goals, obligations, and powers form private corporations, and nor thus the fact that the Postal Service has lines of business beyond the scope of its mail monopoly show it is separate from the government under the antitrust laws.

The Postal Service, in both form and function, is not a separate person from the United States.

It is part of the government and does not control by antitrust laws.

The judgment of the Court of Appeals is reversed and our opinion is unanimous.