Antitrust Claims Against Postal Service Returned To Sender By Federal Judge

A Colorado federal judge has dismissed class action antitrust claims brought against the United States Postal Service for allegedly forcing post offices to buy mailing labels from a designated vendor.

Judge John L. Kane of the U.S. District Court for the District of Colorado ruled in TOG Inc. et al. v. United States Postal Service et al. that the claims were barred by the federal statutory immunity that permits antitrust claims against the Postal Service only when the claims involve products that are not reserved to the Postal Service as part of its monopoly for the carriage of stamped mail.

The claims against the Postal Service were made by two private companies that operate as Contract Postal Units (“CPUs”), which enter into contracts with the Postal Service to provide postal services to the public.  Plaintiffs TOG Inc. and Wild Harvest LLC assert that the Postal Service violated antitrust laws by forcing them to purchase mailing labels from a specific vendor.

The Postal Service provides metering devices to the CPUs for the production of labels and stamps that are used to mail packages and letters.  The Postal Service requires CPUs to purchase blank labels for the metering devices from approved sources.  The plaintiffs allege that they were forced to buy labels at exorbitant prices from Innovation Group Inc., which was the only approved source.

The court dismissed the antitrust claims, finding that under the Postal Service Act, the metering devices and labels should not be considered “products” that are not reserved to the Postal Service for its stamped mail monopoly.  The court reasoned that because the Postal Service contracts with the CPUs to help fulfill its universal service mandate, the functions that the CPUs perform fall under the mail monopoly as functions that facilitate the carriage of mail.