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7/10/1832: President Jackson vetoes the bill to recharter the Second Bank of the United States. He wrote that the bill was unconstitutional.
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7/10/1832: President Jackson vetoes the bill to recharter the Second Bank of the United States. He wrote that the bill was unconstitutional.
from Latest – Reason.com https://ift.tt/3k2RwZC
via IFTTT
In November 2020, George White sent his mother a birthday card from where he lives in Ohio to her home in Virginia. The typical United States Postal Service (USPS) promise is to get first-class mail to most destinations within three days.
White—as the president of an Ohio-based greeting card company, Up With Paper, that makes heavy use of the postal service—suspected that an on-time delivery wasn’t in the cards.
To be on the safe side, he mailed his mom’s birthday card a week early. It got there a week late.
“That was a bummer for me,” says White, who serves as the president of the Greeting Card Association, a trade group. It was also a bummer for his industry. The value of greeting cards rests on timely delivery of products commemorating particular dates, be they birthdays, graduations, or holidays. Late delivery, White says, “can lead to less greeting cards being purchased and mailed. Because if they’re not going to get it in time, what’s the point?”
White was far from the only one to experience late arriving mail in 2020. In the final months of that year, with tens of millions of people quarantining at home, Americans sent and ordered an unprecedented number of holiday packages. E-commerce, which relies on shipping services to deliver goods to customers, had been growing rapidly even before the pandemic, but COVID-19 moved retail online at an even faster pace.
Complaining about the post office has long been a national pastime. Years of declining paper mail volumes, persistent fiscal deficits, and a logistics network not optimized for package delivery were all challenges that predated COVID-19. The pandemic made them much worse.
At the same time, a record number of Americans voted by mail in what would become one of the most hotly contested presidential elections in U.S. history. Critics wondered if the troubled agency would be able to handle the added volume created by the additional mailed ballots, while some Democrats worried that then–President Donald Trump might use the government-run post to steal the election.
The combination of preexisting retail trends, increased package volume spurred by stay-at-home workers, and high-stakes political gamesmanship surrounding mail-in voting pushed the postal service nearly to the point of collapse. By late December, only about a third of first-class mail was getting to its destination on time in major East Coast metros such as New York, Philadelphia, and Baltimore. Libertarians and other critics who have long warned about the inefficiencies of a government-run postal monopoly could at least feel some vindication when they found their mailboxes empty.
“In my experience of 18 years following the postal service, we had the most high-salience, bizarrest postal politics moment ever,” says Kevin Kosar, a resident scholar at the American Enterprise Institute.
The dual crises of the election and the pandemic are now fading, but this affords the troubled agency little breathing room. With short-term fires extinguished, the USPS now must ask itself some existential long-term questions. Is the post office’s traditional business model finally falling apart?
March 2020 sparked a big change in Kate Murray’s business, Quick Brown Fox, a one-woman Brooklyn-based greeting card company. The retail stores she normally sold bulk orders of cards to were all shut down. Meanwhile, customers were stuck inside with little to do but shop online.
“Suddenly people were home and people were buying,” says Murray. So she pivoted. Instead of larger shipments to businesses, she started filling individual, direct-to-consumer orders. To make up for the drop-off in wholesale cards, she started to push higher-price-point candles and wrapping paper.
Her changing business model meant changes in how she interacted with the USPS. Concerns about going to a physical post office meant she had more packages picked up at her front door. Suppliers, too, ended up shipping more directly to her. More candles and fewer cards meant more packages, less first-class mail.
For Murray, these shifts in her business all proved manageable. She says she was pleased with the postal service during the pandemic. It was likely much less pleased with her.
The postal service’s massive logistics network is made up of 644,000 people staffing around 34,000 post offices, plus a few hundred annexes, hubs, and processing and distribution centers. It was primarily designed to get high-margin “flat mail” to 161 million addresses across the country.
“For most of the U.S. Postal Service’s history, letters, cards, and magazines were its bread and butter,” notes a USPS Office of the Inspector General (OIG) report from September 2020. “Its delivery infrastructure was primarily designed with mail in mind—from the vehicles to the facilities to the mailboxes.”
That business model has been in steady decline for over a decade, with paper mail volumes falling 45 percent between 2007 and today. In fiscal year 2020 alone, they fell 11 percent. In an age of near-universal email access and paperless billing for every imaginable service, mail you can fit in an envelope has become increasingly irrelevant.
Thanks to the rising popularity of e-commerce, however, packages are in greater demand than ever. An October customer survey by the USPS OIG found that the number of respondents who ordered a product online at least once per month rose to 81 percent in 2020, up from 57 percent in 2019. The number of packages handled by the service rose from 6 billion in fiscal year 2019 to a little over 7 billion in fiscal year 2020, a 19 percent increase. This is causing serious problems for the USPS.
“Paper mail and boxes are not the same thing,” Kosar says. He pointed to congressional testimony from Louis DeJoy in March, in which the postmaster general said that your average USPS tractor-trailer could carry 500,000 pieces of first-class mail…or about 5,000 packages.
It’s also a crowded field given the existence of private parcel rivals like FedEx and UPS.
Meanwhile, people’s reticence to visit physical post offices during the last year meant more mail had to be collected and dropped off at individual residential addresses, often in dense urban areas—where constrained space makes pick-ups and deliveries more difficult—or rural locations that private shippers don’t serve.
The sheer space all these packages took up put an incredible amount of strain on the system that needed to collect, sort, and ship them. One common utterance among USPS employees during the first few months of the pandemic was “every day is Christmas.” It wasn’t meant to be a happy saying.
During the actual 2020 Christmas rush, a surge of 1.1 billion holiday packages enveloped USPS, producing scenes of logistical horror across the country.
At one post office in Cleveland, drivers waited upward of 12 hours to pick up or drop off packages, according to News5, the local ABC affiliate. “Don’t be using the post office right now,” a USPS employee told the Philadelphia Inquirer, “because we can’t deliver the mail.” According to CNN, one processing facility was receiving 250,000 packages a day in December—so many that it had to open a fourth annex just to store them all.
The flood of bulky holiday packages was always going to prove a challenge for an agency designed to sort and deliver envelopes. But that challenge was made substantially more difficult by the fact that the agency had also been tasked with facilitating a high-stakes presidential election.
In August 2020, Twitter user Thomas Kennedy posted a picture of a number of blue USPS mail collection boxes wrapped in plastic and piled up on their sides behind a fence in what looked like a dump. “This is happening right before our eyes. They are sabotaging USPS to sabotage vote by mail,” he wrote.
In fact, the soon-to-go-viral image didn’t show discarded mailboxes, and it wasn’t taken at a dump. It showed mailboxes at a facility waiting to be refurbished. It nevertheless came at the perfect time to fuel paranoia that Trump, through his stooge DeJoy, was plotting to use the post office to steal the election.
In the days and weeks prior to that picture going viral, local news stories and social media had been filled with mostly accurate accounts of mailboxes being taken off the streets and sorting machines being decommissioned. These moves were part of cost-cutting operational changes being made by DeJoy, who took over as postmaster general in June 2020. They also reflected a long-running trend of USPS consolidating its mailboxes and facilities to reflect falling volumes of paper mail.
These run-of-the-mill changes, however, were happening at an unusual time: the 2020 election season, when partisan attitudes were running high and the country as a whole was gearing up—for the first time, thanks to the pandemic—for mass voting by mail. Adding fuel to the fire, both USPS officials and Trump made statements that gave the impression that the agency was either not up to the task of handling ballot mail or, alternatively, being deliberately sabotaged.
On the same day of Kennedy’s misleading viral tweet, for example, The Washington Post revealed that the Postal Service had in July sent 46 states letters warning that it couldn’t guarantee that all mail-in ballots requested or cast by state-set election deadlines could be delivered by USPS in time to be counted. During his daily pandemic press briefing two days prior, Trump had said that he would continue to oppose $25 billion in emergency funding for the USPS, without which the agency likely would not be able to ensure universal mail-in voting.
Days after Trump’s comments, the Postal Service announced it would stop removing mailboxes—an apparent attempt to tamp down the controversy. It didn’t work. House Speaker Nancy Pelosi (D–Calif.) and then–Senate Minority Leader Chuck Schumer (D–N.Y.) publicly demanded that Trump “immediately cease his assault on the Postal Service.” Reps. Ted Lieu (D–Calif.) and Hakeem Jeffries (D–N.Y.) asked the FBI to investigate whether the postmaster general had committed any actual crimes. And several Democratic state attorneys general filed a lawsuit to stop DeJoy’s operational changes.
An injunction granted in that suit by a U.S. district judge in Washington state restricted the Postal Service’s ability to make further changes in the run-up to the election. It also required that the USPS treat all election mail by first-class delivery standards.
In the end, worries that Trump would sabotage the election via the mail proved overblown. The movement of ballots and voter registration forms was one of the bright spots in the USPS’ performance during the pandemic: The agency managed to deliver 93.8 percent of election mail on time.
That was a better record than all other types of first-class mail, for which on-time delivery rates ranged from 91 percent for overnight mail to 78 percent for three-to-five-day deliveries last fall and winter. It was also an 11 percentage point improvement from its delivery of election mail during the 2018 midterms.
A USPS OIG report chalks up the agency’s success to “high-cost efforts such as extra transportation and overtime to improve delivery performance.” But the prioritization of ballots meant other types of mail ended up delayed, sometimes severely.
One byproduct of the lawsuit against DeJoy’s overhaul of USPS’ operations was a court order requiring the agency to release granular weekly data on its record delivering first-class mail on time. That data painted a bleak picture.
The Postal Service had given itself a performance goal of delivering about 95 percent of first-class mail to its destination on time in fiscal year 2020. Beginning in July, it had started to fall short of that goal, according to The New York Times‘ parsing of USPS data. By December, only about a third of first-class mail was arriving on time on much of the East Coast.
A USPS quarterly performance report covering October through December 2020 found that on-time rates for package service were 80 percent, well below the agency’s 90 percent on-time goal for packages in fiscal year 2020. (Yearly performance targets for fiscal year 2021 have yet to be established.)
Faring even worse were periodicals. Their on-time performance dipped to 69 percent in the first quarter of fiscal year 2021, down 16 percentage points from last fiscal year and a solid 21 percentage points below last year’s on-time goal.
These national numbers mask a lot of regional variation. The post office in Seattle was able to get 82.29 percent of periodicals to their destinations on time during the week of December 26. The Western New York District managed an on-time rate of 1.63 percent that same week.
One printer tells Reason that 30 percent of its customers reported delayed deliveries of at least 10 days, and some had their materials arrive as much as 80 days late. Barcodes that were supposed to let the printer track orders routinely went unscanned, and inquiries to the USPS about missing shipments only returned boilerplate apologies about how the postal service was “experiencing delays.”
Weekly papers, in particular, make heavy use of the mail given the difficulties of keeping a dedicated delivery team around for just one day a week, says Brett Wesner of Wesner Publications, a publisher of 12 small-circulation weekly newspapers in Oklahoma, Texas, and New Mexico. The years leading up to the pandemic had already seen service standards decline for out-of-state and out-of-county deliveries, he says. The pandemic was disastrous across the board. Papers that were supposed to arrive in November 2020 didn’t show up until April in some cases. Other times, subscribers wouldn’t receive papers for several weeks in a row and then have them all show up at once.
Murray, the greeting card maker, was able to cope with worsening delivery times by giving customers longer delivery dates for their orders. No such option exists for mailed periodicals that are supposed to reach customers on a regular date.
Delayed newspaper delivery also caused problems with advertisers, which include local governments publishing required public notices and event promoters, says Wesner, who also chairs the board of the National Newspaper Association. “In some circumstances, papers got delivered after the event that was being advertised, so obviously these advertisers were not interested in paying for advertising after the event,” he says.
His company heavily relies on rural post offices, which were even more acutely affected by USPS staffing issues than were other locations. When employees at these branches had to “quarantine, or someone got COVID,” Wesner says, “they didn’t have 50 people to rely on. At one post office, we actually had the janitor running the front desk, because she was the only one with a key to the front office.”
Reason itself saw a significant uptick in subscriber complaints about delayed or undelivered issues, with some people reporting bundles of magazines addressed to several other subscribers arriving at their doors.
The new year has eased the immediate crisis. As of early March, the weekly on-time rate for first-class mail had reached 84 percent, up from a weekly low of 62 percent during the Christmas season last year. But nothing has been done to resolve the USPS’ longer-running issues.
Those include chronic deficits, a growing number of packages entering a system financially and logistically designed to handle traditional paper mail, and mounting unfunded retiree and health care benefits.
In March, DeJoy released a 10-year plan designed to put the agency in the black by 2024 through a mix of service cuts, rate hikes, and shifting of employee compensation costs from the USPS’ balance sheet onto taxpayers. (He also wants to open more package sorting annexes and to revamp the agency’s vehicle fleet to handle more parcels.)
Under the plan, the Postal Service would have mail sent cross-country on USPS-owned trucks instead of privately owned planes. That would save the agency money but lengthen delivery times.
At the same time, the plan calls for raising postage rates. In 2006, the last year the postal service made a profit, sending a letter cost 39 cents. Prices have ticked up almost every year since, including a 10 percent jump from 50 to 55 cents in 2019 (the largest price increase since 1991).
The postmaster general has thus far declined to say exactly how much he wants to raise rates this time around. His 10-year plan says the agency can claim $24 billion more in revenue from expanded package delivery, the introduction of new products, and “price changes.” Industry officials interviewed by The Washington Post predicted rate hikes of up to 9 percent.
The USPS has about $120 billion in unfunded retiree benefit obligations, including $50 billion in unfunded pension obligations and $70 billion in retiree health care benefits. Now the postmaster general is asking Congress to end the requirement that USPS “pre-fund” its pension and health benefits (meaning it saves current revenue to cover future retirees’ costs) and to start requiring retired postal workers to enroll in Medicare. Currently, they can choose to keep the private health coverage they had while employed by the USPS.
If the USPS stops putting money down today to cover tomorrow’s retiree benefits, there are obvious risks for both postal workers, whose pensions would be less secure, and taxpayers, who could be called on to cover the costs of these unfunded obligations whenever the bill comes due.
The plan has landed with a thud for big senders of traditional flat mail. “I have not seen a business model like his, that promises worse service for higher prices, succeed,” says Wesner.
USPS’ plan to shift its emphasis to parcel service also concerns Kosar. “Do we really want the Postal Service to compete increasingly with the private sector?” he asks. “We do have private companies that deliver parcels—lots of them.”
Falling volumes of first-class mail and a growing package delivery market that’s already well-served by the private sector might lead some to ask whether we need a government-run postal service at all. Going back at least to the 19th century, the agency’s poor execution of its core mission has provoked complaints from customers for its slow service and high prices. Libertarians, too, have been at work on this issue for as long as we’ve been around.
The individualist anarchist Lysander Spooner, one of the earliest and most loquacious critics of a publicly run postal service, sought to set things right with his 1844 founding of a private postal competitor, the American Letter Mail Co. The U.S. government, none too thrilled with the downward pressure the company put on its monopoly prices, shut him down in 1851.
The company’s spirit nevertheless lives on in private package delivery services like FedEx and UPS, whose on-time rates were head-and-shoulders above USPS during the worst of the pandemic. (Part of the reason for this is that private carriers can hand off their hardest-to-deliver parcels to the USPS, which is legally required to serve every part of the country, even when it’s nowhere close to cost-effective to do so.)
Reason has been dreaming of a laissez faire postal system since its inception. A 1988 issue of the magazine explored how, and how quickly, we could turn the bloated, subsidized agency over to the free market before the fax machine destroyed it entirely. By 2009, Reason even suggested selling the USPS to Netflix, which could use its expertise shipping DVDs to customers’ doorsteps to cut down on persistent postal delays.
The unprecedented circumstances of the last year have exacerbated many of the post office’s problems. But Kosar says there’s still a lot of traditional mail that needs to be sent, from ballots to jury summons. And some rural parts of the country, he argues, are just not going to be adequately covered by a private company that has to turn a profit.
Voters themselves aren’t in a hurry to get rid of the agency, either. A survey by the USPS OIG found that 91 percent of respondents had a positive view of the Postal Service in 2020, an increase from previous years. The explicit inclusion of mail delivery in the U.S. Constitution, meanwhile, makes complete elimination even more difficult than it would be for other federal agencies (which history suggests are also not particularly easy to eliminate).
All of which means that most any vision for reform is likely to run into serious challenges. An overhaul intended to prioritize handling more packages would risk alienating the large customers most invested in the USPS’ flat mail services. Focusing on ever-declining paper mail would make the agency both less relevant to the public and more dependent on public subsidies. A host of countries not known for radical free market experiments, including the U.K., Germany, and the Netherlands, have either privatized their postal services or opened them up to private competition. But polling suggests trying something similar in the U.S. would be politically difficult.
Kosar argues it’s time for a rethinking of what we actually want from a government-run postal service. “We need to have a public conversation to get clear on what that would be,” he says. “We have to estimate the cost, and we have to figure out how to pay for it.”
But no matter which direction the Postal Service goes from here, the vision of an agency that provides a valuable service while sustaining itself without taxpayer subsidies appears doomed.
For more on the Postal Service, see “Postal Censorship and Surveillance: A Timeline” by Jesse Walker; “The USPS’ Semi-Secret Internet Surveillance Apparatus” by Elizabeth Nolan Brown; and “The Post Office Pension Ponzi Scheme” by Eric Boehm.
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In November 2020, George White sent his mother a birthday card from where he lives in Ohio to her home in Virginia. The typical United States Postal Service (USPS) promise is to get first-class mail to most destinations within three days.
White—as the president of an Ohio-based greeting card company, Up With Paper, that makes heavy use of the postal service—suspected that an on-time delivery wasn’t in the cards.
To be on the safe side, he mailed his mom’s birthday card a week early. It got there a week late.
“That was a bummer for me,” says White, who serves as the president of the Greeting Card Association, a trade group. It was also a bummer for his industry. The value of greeting cards rests on timely delivery of products commemorating particular dates, be they birthdays, graduations, or holidays. Late delivery, White says, “can lead to less greeting cards being purchased and mailed. Because if they’re not going to get it in time, what’s the point?”
White was far from the only one to experience late arriving mail in 2020. In the final months of that year, with tens of millions of people quarantining at home, Americans sent and ordered an unprecedented number of holiday packages. E-commerce, which relies on shipping services to deliver goods to customers, had been growing rapidly even before the pandemic, but COVID-19 moved retail online at an even faster pace.
Complaining about the post office has long been a national pastime. Years of declining paper mail volumes, persistent fiscal deficits, and a logistics network not optimized for package delivery were all challenges that predated COVID-19. The pandemic made them much worse.
At the same time, a record number of Americans voted by mail in what would become one of the most hotly contested presidential elections in U.S. history. Critics wondered if the troubled agency would be able to handle the added volume created by the additional mailed ballots, while some Democrats worried that then–President Donald Trump might use the government-run post to steal the election.
The combination of preexisting retail trends, increased package volume spurred by stay-at-home workers, and high-stakes political gamesmanship surrounding mail-in voting pushed the postal service nearly to the point of collapse. By late December, only about a third of first-class mail was getting to its destination on time in major East Coast metros such as New York, Philadelphia, and Baltimore. Libertarians and other critics who have long warned about the inefficiencies of a government-run postal monopoly could at least feel some vindication when they found their mailboxes empty.
“In my experience of 18 years following the postal service, we had the most high-salience, bizarrest postal politics moment ever,” says Kevin Kosar, a resident scholar at the American Enterprise Institute.
The dual crises of the election and the pandemic are now fading, but this affords the troubled agency little breathing room. With short-term fires extinguished, the USPS now must ask itself some existential long-term questions. Is the post office’s traditional business model finally falling apart?
March 2020 sparked a big change in Kate Murray’s business, Quick Brown Fox, a one-woman Brooklyn-based greeting card company. The retail stores she normally sold bulk orders of cards to were all shut down. Meanwhile, customers were stuck inside with little to do but shop online.
“Suddenly people were home and people were buying,” says Murray. So she pivoted. Instead of larger shipments to businesses, she started filling individual, direct-to-consumer orders. To make up for the drop-off in wholesale cards, she started to push higher-price-point candles and wrapping paper.
Her changing business model meant changes in how she interacted with the USPS. Concerns about going to a physical post office meant she had more packages picked up at her front door. Suppliers, too, ended up shipping more directly to her. More candles and fewer cards meant more packages, less first-class mail.
For Murray, these shifts in her business all proved manageable. She says she was pleased with the postal service during the pandemic. It was likely much less pleased with her.
The postal service’s massive logistics network is made up of 644,000 people staffing around 34,000 post offices, plus a few hundred annexes, hubs, and processing and distribution centers. It was primarily designed to get high-margin “flat mail” to 161 million addresses across the country.
“For most of the U.S. Postal Service’s history, letters, cards, and magazines were its bread and butter,” notes a USPS Office of the Inspector General (OIG) report from September 2020. “Its delivery infrastructure was primarily designed with mail in mind—from the vehicles to the facilities to the mailboxes.”
That business model has been in steady decline for over a decade, with paper mail volumes falling 45 percent between 2007 and today. In fiscal year 2020 alone, they fell 11 percent. In an age of near-universal email access and paperless billing for every imaginable service, mail you can fit in an envelope has become increasingly irrelevant.
Thanks to the rising popularity of e-commerce, however, packages are in greater demand than ever. An October customer survey by the USPS OIG found that the number of respondents who ordered a product online at least once per month rose to 81 percent in 2020, up from 57 percent in 2019. The number of packages handled by the service rose from 6 billion in fiscal year 2019 to a little over 7 billion in fiscal year 2020, a 19 percent increase. This is causing serious problems for the USPS.
“Paper mail and boxes are not the same thing,” Kosar says. He pointed to congressional testimony from Louis DeJoy in March, in which the postmaster general said that your average USPS tractor-trailer could carry 500,000 pieces of first-class mail…or about 5,000 packages.
It’s also a crowded field given the existence of private parcel rivals like FedEx and UPS.
Meanwhile, people’s reticence to visit physical post offices during the last year meant more mail had to be collected and dropped off at individual residential addresses, often in dense urban areas—where constrained space makes pick-ups and deliveries more difficult—or rural locations that private shippers don’t serve.
The sheer space all these packages took up put an incredible amount of strain on the system that needed to collect, sort, and ship them. One common utterance among USPS employees during the first few months of the pandemic was “every day is Christmas.” It wasn’t meant to be a happy saying.
During the actual 2020 Christmas rush, a surge of 1.1 billion holiday packages enveloped USPS, producing scenes of logistical horror across the country.
At one post office in Cleveland, drivers waited upward of 12 hours to pick up or drop off packages, according to News5, the local ABC affiliate. “Don’t be using the post office right now,” a USPS employee told the Philadelphia Inquirer, “because we can’t deliver the mail.” According to CNN, one processing facility was receiving 250,000 packages a day in December—so many that it had to open a fourth annex just to store them all.
The flood of bulky holiday packages was always going to prove a challenge for an agency designed to sort and deliver envelopes. But that challenge was made substantially more difficult by the fact that the agency had also been tasked with facilitating a high-stakes presidential election.
In August 2020, Twitter user Thomas Kennedy posted a picture of a number of blue USPS mail collection boxes wrapped in plastic and piled up on their sides behind a fence in what looked like a dump. “This is happening right before our eyes. They are sabotaging USPS to sabotage vote by mail,” he wrote.
In fact, the soon-to-go-viral image didn’t show discarded mailboxes, and it wasn’t taken at a dump. It showed mailboxes at a facility waiting to be refurbished. It nevertheless came at the perfect time to fuel paranoia that Trump, through his stooge DeJoy, was plotting to use the post office to steal the election.
In the days and weeks prior to that picture going viral, local news stories and social media had been filled with mostly accurate accounts of mailboxes being taken off the streets and sorting machines being decommissioned. These moves were part of cost-cutting operational changes being made by DeJoy, who took over as postmaster general in June 2020. They also reflected a long-running trend of USPS consolidating its mailboxes and facilities to reflect falling volumes of paper mail.
These run-of-the-mill changes, however, were happening at an unusual time: the 2020 election season, when partisan attitudes were running high and the country as a whole was gearing up—for the first time, thanks to the pandemic—for mass voting by mail. Adding fuel to the fire, both USPS officials and Trump made statements that gave the impression that the agency was either not up to the task of handling ballot mail or, alternatively, being deliberately sabotaged.
On the same day of Kennedy’s misleading viral tweet, for example, The Washington Post revealed that the Postal Service had in July sent 46 states letters warning that it couldn’t guarantee that all mail-in ballots requested or cast by state-set election deadlines could be delivered by USPS in time to be counted. During his daily pandemic press briefing two days prior, Trump had said that he would continue to oppose $25 billion in emergency funding for the USPS, without which the agency likely would not be able to ensure universal mail-in voting.
Days after Trump’s comments, the Postal Service announced it would stop removing mailboxes—an apparent attempt to tamp down the controversy. It didn’t work. House Speaker Nancy Pelosi (D–Calif.) and then–Senate Minority Leader Chuck Schumer (D–N.Y.) publicly demanded that Trump “immediately cease his assault on the Postal Service.” Reps. Ted Lieu (D–Calif.) and Hakeem Jeffries (D–N.Y.) asked the FBI to investigate whether the postmaster general had committed any actual crimes. And several Democratic state attorneys general filed a lawsuit to stop DeJoy’s operational changes.
An injunction granted in that suit by a U.S. district judge in Washington state restricted the Postal Service’s ability to make further changes in the run-up to the election. It also required that the USPS treat all election mail by first-class delivery standards.
In the end, worries that Trump would sabotage the election via the mail proved overblown. The movement of ballots and voter registration forms was one of the bright spots in the USPS’ performance during the pandemic: The agency managed to deliver 93.8 percent of election mail on time.
That was a better record than all other types of first-class mail, for which on-time delivery rates ranged from 91 percent for overnight mail to 78 percent for three-to-five-day deliveries last fall and winter. It was also an 11 percentage point improvement from its delivery of election mail during the 2018 midterms.
A USPS OIG report chalks up the agency’s success to “high-cost efforts such as extra transportation and overtime to improve delivery performance.” But the prioritization of ballots meant other types of mail ended up delayed, sometimes severely.
One byproduct of the lawsuit against DeJoy’s overhaul of USPS’ operations was a court order requiring the agency to release granular weekly data on its record delivering first-class mail on time. That data painted a bleak picture.
The Postal Service had given itself a performance goal of delivering about 95 percent of first-class mail to its destination on time in fiscal year 2020. Beginning in July, it had started to fall short of that goal, according to The New York Times‘ parsing of USPS data. By December, only about a third of first-class mail was arriving on time on much of the East Coast.
A USPS quarterly performance report covering October through December 2020 found that on-time rates for package service were 80 percent, well below the agency’s 90 percent on-time goal for packages in fiscal year 2020. (Yearly performance targets for fiscal year 2021 have yet to be established.)
Faring even worse were periodicals. Their on-time performance dipped to 69 percent in the first quarter of fiscal year 2021, down 16 percentage points from last fiscal year and a solid 21 percentage points below last year’s on-time goal.
These national numbers mask a lot of regional variation. The post office in Seattle was able to get 82.29 percent of periodicals to their destinations on time during the week of December 26. The Western New York District managed an on-time rate of 1.63 percent that same week.
One printer tells Reason that 30 percent of its customers reported delayed deliveries of at least 10 days, and some had their materials arrive as much as 80 days late. Barcodes that were supposed to let the printer track orders routinely went unscanned, and inquiries to the USPS about missing shipments only returned boilerplate apologies about how the postal service was “experiencing delays.”
Weekly papers, in particular, make heavy use of the mail given the difficulties of keeping a dedicated delivery team around for just one day a week, says Brett Wesner of Wesner Publications, a publisher of 12 small-circulation weekly newspapers in Oklahoma, Texas, and New Mexico. The years leading up to the pandemic had already seen service standards decline for out-of-state and out-of-county deliveries, he says. The pandemic was disastrous across the board. Papers that were supposed to arrive in November 2020 didn’t show up until April in some cases. Other times, subscribers wouldn’t receive papers for several weeks in a row and then have them all show up at once.
Murray, the greeting card maker, was able to cope with worsening delivery times by giving customers longer delivery dates for their orders. No such option exists for mailed periodicals that are supposed to reach customers on a regular date.
Delayed newspaper delivery also caused problems with advertisers, which include local governments publishing required public notices and event promoters, says Wesner, who also chairs the board of the National Newspaper Association. “In some circumstances, papers got delivered after the event that was being advertised, so obviously these advertisers were not interested in paying for advertising after the event,” he says.
His company heavily relies on rural post offices, which were even more acutely affected by USPS staffing issues than were other locations. When employees at these branches had to “quarantine, or someone got COVID,” Wesner says, “they didn’t have 50 people to rely on. At one post office, we actually had the janitor running the front desk, because she was the only one with a key to the front office.”
Reason itself saw a significant uptick in subscriber complaints about delayed or undelivered issues, with some people reporting bundles of magazines addressed to several other subscribers arriving at their doors.
The new year has eased the immediate crisis. As of early March, the weekly on-time rate for first-class mail had reached 84 percent, up from a weekly low of 62 percent during the Christmas season last year. But nothing has been done to resolve the USPS’ longer-running issues.
Those include chronic deficits, a growing number of packages entering a system financially and logistically designed to handle traditional paper mail, and mounting unfunded retiree and health care benefits.
In March, DeJoy released a 10-year plan designed to put the agency in the black by 2024 through a mix of service cuts, rate hikes, and shifting of employee compensation costs from the USPS’ balance sheet onto taxpayers. (He also wants to open more package sorting annexes and to revamp the agency’s vehicle fleet to handle more parcels.)
Under the plan, the Postal Service would have mail sent cross-country on USPS-owned trucks instead of privately owned planes. That would save the agency money but lengthen delivery times.
At the same time, the plan calls for raising postage rates. In 2006, the last year the postal service made a profit, sending a letter cost 39 cents. Prices have ticked up almost every year since, including a 10 percent jump from 50 to 55 cents in 2019 (the largest price increase since 1991).
The postmaster general has thus far declined to say exactly how much he wants to raise rates this time around. His 10-year plan says the agency can claim $24 billion more in revenue from expanded package delivery, the introduction of new products, and “price changes.” Industry officials interviewed by The Washington Post predicted rate hikes of up to 9 percent.
The USPS has about $120 billion in unfunded retiree benefit obligations, including $50 billion in unfunded pension obligations and $70 billion in retiree health care benefits. Now the postmaster general is asking Congress to end the requirement that USPS “pre-fund” its pension and health benefits (meaning it saves current revenue to cover future retirees’ costs) and to start requiring retired postal workers to enroll in Medicare. Currently, they can choose to keep the private health coverage they had while employed by the USPS.
If the USPS stops putting money down today to cover tomorrow’s retiree benefits, there are obvious risks for both postal workers, whose pensions would be less secure, and taxpayers, who could be called on to cover the costs of these unfunded obligations whenever the bill comes due.
The plan has landed with a thud for big senders of traditional flat mail. “I have not seen a business model like his, that promises worse service for higher prices, succeed,” says Wesner.
USPS’ plan to shift its emphasis to parcel service also concerns Kosar. “Do we really want the Postal Service to compete increasingly with the private sector?” he asks. “We do have private companies that deliver parcels—lots of them.”
Falling volumes of first-class mail and a growing package delivery market that’s already well-served by the private sector might lead some to ask whether we need a government-run postal service at all. Going back at least to the 19th century, the agency’s poor execution of its core mission has provoked complaints from customers for its slow service and high prices. Libertarians, too, have been at work on this issue for as long as we’ve been around.
The individualist anarchist Lysander Spooner, one of the earliest and most loquacious critics of a publicly run postal service, sought to set things right with his 1844 founding of a private postal competitor, the American Letter Mail Co. The U.S. government, none too thrilled with the downward pressure the company put on its monopoly prices, shut him down in 1851.
The company’s spirit nevertheless lives on in private package delivery services like FedEx and UPS, whose on-time rates were head-and-shoulders above USPS during the worst of the pandemic. (Part of the reason for this is that private carriers can hand off their hardest-to-deliver parcels to the USPS, which is legally required to serve every part of the country, even when it’s nowhere close to cost-effective to do so.)
Reason has been dreaming of a laissez faire postal system since its inception. A 1988 issue of the magazine explored how, and how quickly, we could turn the bloated, subsidized agency over to the free market before the fax machine destroyed it entirely. By 2009, Reason even suggested selling the USPS to Netflix, which could use its expertise shipping DVDs to customers’ doorsteps to cut down on persistent postal delays.
The unprecedented circumstances of the last year have exacerbated many of the post office’s problems. But Kosar says there’s still a lot of traditional mail that needs to be sent, from ballots to jury summons. And some rural parts of the country, he argues, are just not going to be adequately covered by a private company that has to turn a profit.
Voters themselves aren’t in a hurry to get rid of the agency, either. A survey by the USPS OIG found that 91 percent of respondents had a positive view of the Postal Service in 2020, an increase from previous years. The explicit inclusion of mail delivery in the U.S. Constitution, meanwhile, makes complete elimination even more difficult than it would be for other federal agencies (which history suggests are also not particularly easy to eliminate).
All of which means that most any vision for reform is likely to run into serious challenges. An overhaul intended to prioritize handling more packages would risk alienating the large customers most invested in the USPS’ flat mail services. Focusing on ever-declining paper mail would make the agency both less relevant to the public and more dependent on public subsidies. A host of countries not known for radical free market experiments, including the U.K., Germany, and the Netherlands, have either privatized their postal services or opened them up to private competition. But polling suggests trying something similar in the U.S. would be politically difficult.
Kosar argues it’s time for a rethinking of what we actually want from a government-run postal service. “We need to have a public conversation to get clear on what that would be,” he says. “We have to estimate the cost, and we have to figure out how to pay for it.”
But no matter which direction the Postal Service goes from here, the vision of an agency that provides a valuable service while sustaining itself without taxpayer subsidies appears doomed.
For more on the Postal Service, see “Postal Censorship and Surveillance: A Timeline” by Jesse Walker; “The USPS’ Semi-Secret Internet Surveillance Apparatus” by Elizabeth Nolan Brown; and “The Post Office Pension Ponzi Scheme” by Eric Boehm.
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In 1994, Congress restructured the Social Security Administration (SSA). For the prior five decades, the single-member Commissioner could be removed at will. But 42 U.S.C. § 902(a)(3) granted the Commissioner a fixed six-year term, and tenure protections. He could “be removed from office only pursuant to a finding by the President of neglect of duty or malfeasance in office. At the time, OLC Head Walter Dellinger wrote that the restrictions present a “serous constitutional question.” President Clinton issued a signing statement, asking Congress to enact a “corrective amendment.” Congress took no such action.
For the past quarter century, the SSA Commissioner has served with tenure protections. And, as far as I am aware, there has never been an attempt to fire the SSA Commissioner. Until Friday, July 9. President Biden fired Commissioner Andrew Saul, a Trump holdover who was appointed to a six-year term in 2019. And, according to reports, Saul said he isn’t leaving. He said, “I consider myself the term-protected Commissioner of Social Security.” Saul plans to be at work Monday morning–though he will work remotely from New York. Not since the bizarre Leandra English debacle at the CFPB have there been two people laying claim to a federal position.
On July 8–the day before Saul was fired–the Office of Legal Counsel published an opinion on this exact issue. What perfect timing! Acting OLC Head Dawn Johnsen concluded that “The President may remove the Commissioner of Social Security at will notwithstanding the statutory limitation on removal in 42 U.S.C. § 902(a)(3).” At some point before July 8, the White House Deputy Counsel asked OLC “about the scope of the President’s constitutional authority to remove” the SSA Commissioner. And OLC gave just the answer the Counsel was looking for: in light of Seila Law and Collins, the single-director SSA head cannot have for-cause tenure protections. I think that conclusion is correct.
This opinion should not come as a surprise. The analysis was telegraphed in both Seila Law and Collins. In Seila Law, Chief Justice Roberts made a feeble effort to distinguish the CFPB head with the SSA head:
In addition, unlike the CFPB, the SSA lacks the authority to bring enforcement actions against private parties. Its role is largely limited to adjudicating claims for Social Security benefits.
But that distinction had a one-year expiration date. Collins declared unconstitutional the FHFA’s structure. In a footnote, the Court bid adieu to the SSA Commissioner’s tenure protections:
Amicus warns that if the Court holds that the Recovery Act’s removal restriction violates the Constitution, the decision will “call into question many other aspects of the Federal Government.” Brief for Court-Appointed Amicus Curiae 47. Amicus points to the Social Security Administration, the Office of Special Counsel, the Comptroller, “multi-member agencies for which the chair is nominated by the President and confirmed by the Senate to a fixed term,” and the Civil Service. Id., at 48 (emphasis deleted). None of these agencies is before us, and we do not comment on the constitutionality of any removal restriction that applies to their officers.
Amicus Aaron Nielson was exactly right. Justice Kagan sounded a similar warning in her dissent:
The SSA has a single head with for-cause removal protection; so a betting person might wager that the agency’s removal provision is next on the chopping block.
The SSA head didn’t even make it a month after Collins. And President Biden was the executioner.
In light of these two precedents, OLC reached the correct conclusion:
But we think that under Collins and Seila Law, the combination of features of the SSA—a single Commissioner whose term extends longer than the President’s, the immense scope of the agency’s programs, the Commissioner’s broad power to affect beneficiaries and the public fisc, and the SSA’s largely unparalleled structure—means that the President need not heed the Commissioner’s statutory tenure protection in 42 U.S.C. § 902(a)(3).
I could not find the phrase “need not heed” in any Attorney General Opinions. As best as I can tell, this phrase is novel. In 1994, Dellinger phrase the concept a bit differently: “there are circumstances in which the President may appropriately decline to enforce a statute that he views as unconstitutional.” But Johnsen simply said the President “need not heed” the statutory protections. In other words, the President can simply ignore the tenure protections. Thus, the President can fire the Commissioner at will, without having to show cause.
But to be more precise, OLC would sever the unconstitutional tenure protections from the remainder of the statute:
We think it clear that the SSA Commissioner’s removal protection is severable from the remainder of the SSA organic statute, just as the Court in Seila Law determined that the removal protection provision for the CFPB Director was severable from the remainder of the Dodd-Frank Act.
It is strange for the executive branch to engage in a severability analysis. Unlike the courts, the President is not a disinterested party. And he has every interest in aggrandizing the maximum power for himself. Here, OLC performed that surgical excision. The SSA keeps all of its powers, but now the President can remove the Commissioner at will. This version of the law was certainly not the statute Congress enacted. But it was the version President Clinton, and now President Biden prefer.
What happens next? Saul may file seek a writ of quo waranto to determine who is the correct head of SSA. (Sam Bray wrote about this ancient writ in the context of the CFPB back in 2017). This approach could seek some sort of emergency ruling that would quickly put him back in power. Or, at some point, the executive branch will cut off Saul’s salary. And Saul could then sue for backpay. William Humphrey chose this latter route after FDR fired him. The downside of this second path is that Saul would not be reinstated. I’ve long questioned whether a Court would even have the power to reinstate an officer who was improperly removed. Then again, if the tenure protections were valid, and Biden failed to comply with the for-cause protections, then Saul would have never been removed in the first place. So there is no need to order any reinstatement. Justice Thomas hints at the converse of this approach in his Collins concurrence.
Right now, Chief Justice Roberts is no doubt salivating: he gets to rule in favor of President Biden, hold the structure of the SSA is unconstitutional, and avoid having to declare anything else invalid. A dream case for the Chief! But what about poor Justice Kagan? She will have to follow Collins because of stare decisis. She even predicted that the SSA Commissioner will fall. But she won’t like it.
One final note. We still do not have a nominee for Assistant Attorney General of OLC. Dawn Johnsen has been acting now for several months. Back in the Obama administration, Republicans blocked her nomination to OLC head. It is only fitting that she issued a monumentally significant opinion, in an acting capacity. There is a paragraph on page 8 that pays homage to Justice Kagan’s Seila Law dissent. But OLC quickly turns around and embraces the Chief’s majority opinion. The unitary executive abides.
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In 1994, Congress restructured the Social Security Administration (SSA). For the prior five decades, the single-member Commissioner could be removed at will. But 42 U.S.C. § 902(a)(3) granted the Commissioner a fixed six-year term, and tenure protections. He could “be removed from office only pursuant to a finding by the President of neglect of duty or malfeasance in office. At the time, OLC Head Walter Dellinger wrote that the restrictions present a “serous constitutional question.” President Clinton issued a signing statement, asking Congress to enact a “corrective amendment.” Congress took no such action.
For the past quarter century, the SSA Commissioner has served with tenure protections. And, as far as I am aware, there has never been an attempt to fire the SSA Commissioner. Until Friday, July 9. President Biden fired Commissioner Andrew Saul, a Trump holdover who was appointed to a six-year term in 2019. And, according to reports, Saul said he isn’t leaving. He said, “I consider myself the term-protected Commissioner of Social Security.” Saul plans to be at work Monday morning–though he will work remotely from New York. Not since the bizarre Leandra English debacle at the CFPB have there been two people laying claim to a federal position.
On July 8–the day before Saul was fired–the Office of Legal Counsel published an opinion on this exact issue. What perfect timing! Acting OLC Head Dawn Johnsen concluded that “The President may remove the Commissioner of Social Security at will notwithstanding the statutory limitation on removal in 42 U.S.C. § 902(a)(3).” At some point before July 8, the White House Deputy Counsel asked OLC “about the scope of the President’s constitutional authority to remove” the SSA Commissioner. And OLC gave just the answer the Counsel was looking for: in light of Seila Law and Collins, the single-director SSA head cannot have for-cause tenure protections. I think that conclusion is correct.
This opinion should not come as a surprise. The analysis was telegraphed in both Seila Law and Collins. In Seila Law, Chief Justice Roberts made a feeble effort to distinguish the CFPB head with the SSA head:
In addition, unlike the CFPB, the SSA lacks the authority to bring enforcement actions against private parties. Its role is largely limited to adjudicating claims for Social Security benefits.
But that distinction had a one-year expiration date. Collins declared unconstitutional the FHFA’s structure. In a footnote, the Court bid adieu to the SSA Commissioner’s tenure protections:
Amicus warns that if the Court holds that the Recovery Act’s removal restriction violates the Constitution, the decision will “call into question many other aspects of the Federal Government.” Brief for Court-Appointed Amicus Curiae 47. Amicus points to the Social Security Administration, the Office of Special Counsel, the Comptroller, “multi-member agencies for which the chair is nominated by the President and confirmed by the Senate to a fixed term,” and the Civil Service. Id., at 48 (emphasis deleted). None of these agencies is before us, and we do not comment on the constitutionality of any removal restriction that applies to their officers.
Amicus Aaron Nielson was exactly right. Justice Kagan sounded a similar warning in her dissent:
The SSA has a single head with for-cause removal protection; so a betting person might wager that the agency’s removal provision is next on the chopping block.
The SSA head didn’t even make it a month after Collins. And President Biden was the executioner.
In light of these two precedents, OLC reached the correct conclusion:
But we think that under Collins and Seila Law, the combination of features of the SSA—a single Commissioner whose term extends longer than the President’s, the immense scope of the agency’s programs, the Commissioner’s broad power to affect beneficiaries and the public fisc, and the SSA’s largely unparalleled structure—means that the President need not heed the Commissioner’s statutory tenure protection in 42 U.S.C. § 902(a)(3).
I could not find the phrase “need not heed” in any Attorney General Opinions. As best as I can tell, this phrase is novel. In 1994, Dellinger phrase the concept a bit differently: “there are circumstances in which the President may appropriately decline to enforce a statute that he views as unconstitutional.” But Johnsen simply said the President “need not heed” the statutory protections. In other words, the President can simply ignore the tenure protections. Thus, the President can fire the Commissioner at will, without having to show cause.
But to be more precise, OLC would sever the unconstitutional tenure protections from the remainder of the statute:
We think it clear that the SSA Commissioner’s removal protection is severable from the remainder of the SSA organic statute, just as the Court in Seila Law determined that the removal protection provision for the CFPB Director was severable from the remainder of the Dodd-Frank Act.
It is strange for the executive branch to engage in a severability analysis. Unlike the courts, the President is not a disinterested party. And he has every interest in aggrandizing the maximum power for himself. Here, OLC performed that surgical excision. The SSA keeps all of its powers, but now the President can remove the Commissioner at will. This version of the law was certainly not the statute Congress enacted. But it was the version President Clinton, and now President Biden prefer.
What happens next? Saul may file seek a writ of quo waranto to determine who is the correct head of SSA. (Sam Bray wrote about this ancient writ in the context of the CFPB back in 2017). This approach could seek some sort of emergency ruling that would quickly put him back in power. Or, at some point, the executive branch will cut off Saul’s salary. And Saul could then sue for backpay. William Humphrey chose this latter route after FDR fired him. The downside of this second path is that Saul would not be reinstated. I’ve long questioned whether a Court would even have the power to reinstate an officer who was improperly removed. Then again, if the tenure protections were valid, and Biden failed to comply with the for-cause protections, then Saul would have never been removed in the first place. So there is no need to order any reinstatement. Justice Thomas hints at the converse of this approach in his Collins concurrence.
Right now, Chief Justice Roberts is no doubt salivating: he gets to rule in favor of President Biden, hold the structure of the SSA is unconstitutional, and avoid having to declare anything else invalid. A dream case for the Chief! But what about poor Justice Kagan? She will have to follow Collins because of stare decisis. She even predicted that the SSA Commissioner will fall. But she won’t like it.
One final note. We still do not have a nominee for Assistant Attorney General of OLC. Dawn Johnsen has been acting now for several months. Back in the Obama administration, Republicans blocked her nomination to OLC head. It is only fitting that she issued a monumentally significant opinion, in an acting capacity. There is a paragraph on page 8 that pays homage to Justice Kagan’s Seila Law dissent. But OLC quickly turns around and embraces the Chief’s majority opinion. The unitary executive abides.
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From Magistrate Judge Barbara Moses’s decision yesterday in Bronx Conservatory of Music, Inc. v. Kwoka & Bronx School for Music, Inc.:
In its complaint …, Bronx Conservatory, a music school, alleges that Kwoka, its former Executive Director, took confidential information with him (on a Bronx Conservatory laptop) when he left his employment in 2020, and thereafter used that information to establish a competing music school—Bronx School—and to lure away both students and faculty from Bronx Conservatory. Plaintiff asserts claims against both defendants for misappropriation of trade secrets, copyright infringement, unfair competition, conversion, and unjust enrichment, and against Kwoka for breach of fiduciary duty.
In their responsive pleading, defendants deny the material allegations of the complaint, interpose numerous affirmative defenses, and assert five counterclaims [including] for “sexual harassment of Philip Kwoka” …. [P]laintiff proposes to redact [the sexual harassment counterclaim] almost in its entirety—including, apparently, its caption, quoted in the preceding sentence. Plaintiff argues that the material allegations comprising that sexual harassment counterclaim should be hidden from public view because they are “scandalous and unsupported,” because plaintiff believes the counterclaim was asserted “without legitimate purpose, and solely for its in terrorem effect” and because it is “unrelated to the case-in-chief” and thus this Court is “not likely to have pendent jurisdiction.” …
The parties’ pleadings, including answers and counterclaims, are unquestionably judicial documents [to which a “heavy” presumption of public access attaches]…. Moreover, in this case the allegations sought to be redacted are neither peripheral nor tangential to the fourth counterclaim but, rather, lie at its “very heart,” such that permitting only the redacted version to remain unsealed would keep the public wholly in the dark as to the nature of a claim that has been asserted by Kwoka, denied by Bronx Conservatory, and is now pending before this Court for resolution. “In such situations, the public cannot ‘have confidence in the [Court’s] administration of justice’ without being able to see the specific allegations underlying the case.” …
[Nor has] Bronx Conservatory … met its burden of demonstrating “countervailing factors,” “competing considerations,” or “higher values,” sufficient to overcome the presumption of access…. Bronx Conservatory does not cite (and this Court has not found) any case, in this jurisdiction or elsewhere, in which an employer accused of sexual harassment has succeeded in sealing the pleading containing that accusation on any of the grounds asserted here.
To the contrary: it is well-settled that “[g]eneralized concern[s] of adverse publicity” and reputational injury—the only potential harms articulated in plaintiff’s letter-motion—cannot justify an order sealing a core judicial document…. “[T]he natural desire of parties to shield prejudicial information contained in judicial records … cannot be accommodated by courts without seriously undermining the tradition of an open judicial system.” Thus, “the courts generally reject negative publicity ‘as a basis for overcoming the strong presumption of public access to [the allegedly prejudicial] items.'”
{By the same token, the fact that the unredacted counterclaim could embarrass or harm the reputation of the individual Bronx Conservatory executive who allegedly perpetrated the harassment (presently a non-party, but identified by name in the counterclaim) is an insufficient reason to seal a core judicial document. See, e.g., Oliver v. New York State Police (N.D.N.Y. 2020) (denying motion to seal, inter alia, documents describing “Plaintiff’s complaint that an investigator with whom she worked had sexually harassed her”); Lytle v. JPMorgan Chase (S.D.N.Y. 2011) (denying motion to redact, from internal investigatory documents, “the names of the individuals whose conduct JPMC investigated in response to Lytle’s complaints regarding alleged harassment and discrimination”); Ottati v. City of Amsterdam (N.D.N.Y. 2010) (granting motion, made after the filing of summary judgment motions in a sex discrimination case, to unseal, inter alia, the defendant’s internal investigatory report into plaintiff’s allegations).}
Similarly, plaintiff’s assertion that Kwoka’s allegations are false cannot justify an order sealing those allegations. Whether they are true or false is precisely the question that the parties have placed before this Court. Thus, it has long been understood that “[t]he question of public access to the contested documents is … completely separate from the merits of the underlying action.”
Finally, plaintiff’s assertion that this Court lacks “pendent” (supplemental) jurisdiction over the fourth counterclaim is misplaced. Moreover, plaintiff’s reliance on the “jurisdictional infirmity” of the fourth counterclaim as a basis for sealing it, is self-defeating…. [P]laintiff has not made any motion to dismiss that counterclaim on jurisdictional grounds. Should it do so, this Court would be required to analyze the allegations made in the challenged pleading to determine the motion. This, in turn, would render the pleading a judicial document subject to a strong presumption of public access. Likewise, plaintiff’s assumption that the fourth counterclaim could remain sealed if it made and won a motion to dismiss that counterclaim, is mistaken. “[T]he Second Circuit has rejected the contention that the presumption of access is dependent upon the disposition of the underlying motion.”
{The Court’s supplemental jurisdiction is limited to “claims that are so related to claims in the action within [the Court’s] original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” Whether Kwoka’s sexual harassment counterclaim meets this standard may be debatable. However, Kwoka brought that counterclaim pursuant to, inter alia, Title VII of the Civil Rights Act of 1964, Title VII claims come within the Court’s original jurisdiction, rendering a supplemental jurisdiction analysis unnecessary.}
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From Magistrate Judge Barbara Moses’s decision yesterday in Bronx Conservatory of Music, Inc. v. Kwoka & Bronx School for Music, Inc.:
In its complaint …, Bronx Conservatory, a music school, alleges that Kwoka, its former Executive Director, took confidential information with him (on a Bronx Conservatory laptop) when he left his employment in 2020, and thereafter used that information to establish a competing music school—Bronx School—and to lure away both students and faculty from Bronx Conservatory. Plaintiff asserts claims against both defendants for misappropriation of trade secrets, copyright infringement, unfair competition, conversion, and unjust enrichment, and against Kwoka for breach of fiduciary duty.
In their responsive pleading, defendants deny the material allegations of the complaint, interpose numerous affirmative defenses, and assert five counterclaims [including] for “sexual harassment of Philip Kwoka” …. [P]laintiff proposes to redact [the sexual harassment counterclaim] almost in its entirety—including, apparently, its caption, quoted in the preceding sentence. Plaintiff argues that the material allegations comprising that sexual harassment counterclaim should be hidden from public view because they are “scandalous and unsupported,” because plaintiff believes the counterclaim was asserted “without legitimate purpose, and solely for its in terrorem effect” and because it is “unrelated to the case-in-chief” and thus this Court is “not likely to have pendent jurisdiction.” …
The parties’ pleadings, including answers and counterclaims, are unquestionably judicial documents [to which a “heavy” presumption of public access attaches]…. Moreover, in this case the allegations sought to be redacted are neither peripheral nor tangential to the fourth counterclaim but, rather, lie at its “very heart,” such that permitting only the redacted version to remain unsealed would keep the public wholly in the dark as to the nature of a claim that has been asserted by Kwoka, denied by Bronx Conservatory, and is now pending before this Court for resolution. “In such situations, the public cannot ‘have confidence in the [Court’s] administration of justice’ without being able to see the specific allegations underlying the case.” …
[Nor has] Bronx Conservatory … met its burden of demonstrating “countervailing factors,” “competing considerations,” or “higher values,” sufficient to overcome the presumption of access…. Bronx Conservatory does not cite (and this Court has not found) any case, in this jurisdiction or elsewhere, in which an employer accused of sexual harassment has succeeded in sealing the pleading containing that accusation on any of the grounds asserted here.
To the contrary: it is well-settled that “[g]eneralized concern[s] of adverse publicity” and reputational injury—the only potential harms articulated in plaintiff’s letter-motion—cannot justify an order sealing a core judicial document…. “[T]he natural desire of parties to shield prejudicial information contained in judicial records … cannot be accommodated by courts without seriously undermining the tradition of an open judicial system.” Thus, “the courts generally reject negative publicity ‘as a basis for overcoming the strong presumption of public access to [the allegedly prejudicial] items.'”
{By the same token, the fact that the unredacted counterclaim could embarrass or harm the reputation of the individual Bronx Conservatory executive who allegedly perpetrated the harassment (presently a non-party, but identified by name in the counterclaim) is an insufficient reason to seal a core judicial document. See, e.g., Oliver v. New York State Police (N.D.N.Y. 2020) (denying motion to seal, inter alia, documents describing “Plaintiff’s complaint that an investigator with whom she worked had sexually harassed her”); Lytle v. JPMorgan Chase (S.D.N.Y. 2011) (denying motion to redact, from internal investigatory documents, “the names of the individuals whose conduct JPMC investigated in response to Lytle’s complaints regarding alleged harassment and discrimination”); Ottati v. City of Amsterdam (N.D.N.Y. 2010) (granting motion, made after the filing of summary judgment motions in a sex discrimination case, to unseal, inter alia, the defendant’s internal investigatory report into plaintiff’s allegations).}
Similarly, plaintiff’s assertion that Kwoka’s allegations are false cannot justify an order sealing those allegations. Whether they are true or false is precisely the question that the parties have placed before this Court. Thus, it has long been understood that “[t]he question of public access to the contested documents is … completely separate from the merits of the underlying action.”
Finally, plaintiff’s assertion that this Court lacks “pendent” (supplemental) jurisdiction over the fourth counterclaim is misplaced. Moreover, plaintiff’s reliance on the “jurisdictional infirmity” of the fourth counterclaim as a basis for sealing it, is self-defeating…. [P]laintiff has not made any motion to dismiss that counterclaim on jurisdictional grounds. Should it do so, this Court would be required to analyze the allegations made in the challenged pleading to determine the motion. This, in turn, would render the pleading a judicial document subject to a strong presumption of public access. Likewise, plaintiff’s assumption that the fourth counterclaim could remain sealed if it made and won a motion to dismiss that counterclaim, is mistaken. “[T]he Second Circuit has rejected the contention that the presumption of access is dependent upon the disposition of the underlying motion.”
{The Court’s supplemental jurisdiction is limited to “claims that are so related to claims in the action within [the Court’s] original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” Whether Kwoka’s sexual harassment counterclaim meets this standard may be debatable. However, Kwoka brought that counterclaim pursuant to, inter alia, Title VII of the Civil Rights Act of 1964, Title VII claims come within the Court’s original jurisdiction, rendering a supplemental jurisdiction analysis unnecessary.}
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Just saw this for the first time in a complaint filed by a Montana lawyer; Black’s Law Dictionary reports that it means “for the plaintiff,” but a Westlaw search uncovered a mere seven cases mentioning this, six from 1793 to 1835 and one from 2019. So I wouldn’t recommend using it; but at least now we know what it means when we come across it.
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Another excerpt from the First Amendment section of my Social Media as Common Carriers? article (see also this thread); recall that the key First Amendment argument is in this post, which relies on the PruneYard, Turner, and Rumsfeld precedents—this post explains why certain other precedents don’t apply here.
[* * *]
Now of course requiring that material be included within a coherent speech product—a newspaper, a parade, a fundraising pitch—is generally unconstitutional, not because it involves compelled hosting as such, but because it interferes with the host’s own speech. To quote Rumsfeld, the problem in those cases was “that the complaining speaker’s own message was affected by the speech it was forced to accommodate”:
[B]ecause “every participating unit affects the message conveyed by the [parade’s] private organizers,” a law dictating that a particular group must be included in the parade “alter[s] the expressive content of th[e] parade.” As a result, we held [in Hurley v. Irish-American Gay, Lesbian & Bisexual Group of Boston, Inc.] that the State’s public accommodation law, as applied to a private parade, “violates the fundamental rule of protection under the First Amendment, that a speaker has the autonomy to choose the content of his own message.”[146]
Likewise,
Hurley explains this right to create a coherent speech product well. In Hurley, the Court held that a parade could not be required to include floats that the organizers disapproved of:
Since every participating unit affects the message conveyed by the private organizers, the state courts’ application of the statute produced an order essentially requiring petitioners to alter the expressive content of their parade.[152]
Though “in spite of excluding some applicants, the [parade organizer] is rather lenient in admitting participants,”[153] the parade still had a broad general message, presumably having to do with “what merits celebration on [St. Patrick’s Day].”[154]
Yet PruneYard, Turner, and Rumsfeld show that some hosting mandates are not seen as interfering with a coherent speech product. As the Pacific Gas & Electric Co. v. Public Utilities Commission plurality noted, “[n]otably absent from PruneYard was any concern that [compelled hosting of public speech] might affect the shopping center owner’s exercise of his own right to speak.”[155]
Similarly, in Rumsfeld, the Court didn’t view the aggregate of all the recruiting on the law school campus as a coherent speech product the way a parade might be. “A law school’s recruiting services”—here, presumably referring to the sum of all the recruiting—”lack the expressive quality of a parade, a newsletter, or the editorial page of a newspaper.”[156] “[A]ccommodating the military’s message does not affect the law schools’ speech, because the schools are not speaking when they host interviews and recruiting receptions.”[157]
The military recruiters, of course, were themselves speaking; their own recruiting pitches surely had at least as much “expressive quality” as did the fundraising pitches in Riley.[158] But the law schools weren’t the ones speaking, because they weren’t like parade organizers, creating a coherent whole out of all the recruiting interviews—they were merely “host[s],” “not speak[ers].” A law school’s “accommodation of a military recruiter’s message is not compelled speech because the accommodation does not sufficiently interfere with any message of the school.”[159]
Likewise with Turner, which Hurley expressly distinguished:
[W]hen dissemination of a view contrary to one’s own is forced upon a speaker intimately connected with the communication advanced, the speaker’s right to autonomy over the message is compromised….
Unlike the programming offered on various channels by a cable network, the parade does not consist of individual, unrelated segments that happen to be transmitted together for individual selection by members of the audience. Although each parade unit generally identifies itself, each is understood to contribute something to a common theme, and accordingly there is no customary practice whereby private sponsors disavow “any identity of viewpoint” between themselves and the selected participants…. [T]he parade’s overall message is distilled from the individual presentations along the way, and each unit’s expression is perceived by spectators as part of the whole.[160]
That “the programming offered on various channels by a cable network” “consist[s] of individual, unrelated segments that happen to be transmitted together for individual selection by members of the audience”[161] could equally be said of the recruiting in various law school rooms in Rumsfeld, or the leafleters’ and signature gatherers’ speech in various places at the mall in PruneYard.
Likewise for Twitter letting people go to individual pages such as http://twitter.com/RealDonaldTrump, Facebook letting people to go to individual Facebook pages, YouTube letting people view individual videos, and the like. There too the pages are “individual, unrelated segments that happen to be [hosted] together for individual selection by members of the audience.” The platforms are hardly “intimately connected” with the hundreds of millions of pages they host. All the Tweets on Twitter, posts on Facebook, or videos on YouTube lack any “common theme” or “overall message.”[162] There are no “spectators” to “the whole” of Twitter, Facebook, or YouTube, except perhaps a few computer-assisted researchers.
I do think that a platform’s recommendations count as the platform’s own speech (see p. 71). The conversations that a platform facilitates between users may likewise count as a coherent speech product (see p. 72). But the pages or feeds that a platform hosts, and that users visit or subscribe to as they prefer, are properly seen as “individual, unrelated segments that happen to be transmitted together for individual selection by members of the audience.”
Nor is the coherent speech product doctrine triggered merely by property being “intentionally designed to provide a specific experience to users.”[163] Shopping malls, after all, routinely try to provide a specific experience for their customers—an experience of happy consumption, often mixed with socializing with fellow consumers, and undiluted by possibly offensive political expression. Universities may try to provide a specific experience for their students, for instance an experience of exposure to what they view as inclusiveness and social justice, undiluted by recruiters for institutions that discriminate based on sexual orientation
Yet this doesn’t give those entities a right to exclude speakers that they see as inconsistent with that experience: The sum of all the sights and sounds in a mall, or all the channels on a cable system, or all the speech available from outside speakers in a university, doesn’t qualify as a coherent speech product over which the property owner has the constitutional right of editorial choice.
Indeed, under the California law approved in PruneYard, a shopping mall may not even exclude anti-abortion protesters who display gruesome images of aborted fetuses—surely something that interferes with the “experience” that the mall is generally trying to provide its customers.[164] Likewise, a shopping mall doubtless wants to create an “experience” in which all its shops are presented positively. Yet it may be required to tolerate leafleters who urge customers to boycott one of the shops.[165]
[146] 547 U.S. at 63-64. The Rumsfeld Court also pointed out that a speech compulsion could also be a speech restriction because it takes up space that could otherwise be used by other speech: “In Tornillo, we recognized that ‘the compelled printing of a reply … tak[es] up space that could be devoted to other material the newspaper may have preferred to print,’ and therefore concluded that this right-of-reply statute infringed the newspaper editors’ freedom of speech by altering the message the paper wished to express.” Id. at 64. “[I]n Pacific Gas,” “the utility company regularly included its newsletter … in its billing envelope,” so “when the state agency ordered the utility to send a third-party newsletter four times a year, it interfered with the utility’s ability to communicate its own message in its newsletter.” Id. (cleaned up).
[147] See PruneYard, 447 U.S. at 98 (internal quotation marks omitted).
[148] Miami Herald Co. v. Tornillo, 418 U.S. 241, 241 (1974); see also Turner, 512 U.S., at 655 (distinguishing Miami Herald as having involved a statute that “exact[ed a] content-based penalty” on such criticisms of candidates).
[149] Riley, 487 U.S. at 795.
[150] McIntyre v. Ohio Elections Comm’n, 514 U.S. 334, 342 (1995).
[151] Nat. Inst. of Fam. & Life Advocates v. Becerra, 138 S. Ct. 2361, 2371 (2018).
[152] Hurley v. Irish-Am. Gay, Lesbian & Bisexual Grp. of Boston, 515 U.S. 557, 572–73 (1995).
[153] Id. at 569.
[154] Id. at 574.
[155] 475 U.S. 1, 12 (1986) (plurality opin.).
[156] Rumsfeld v. FAIR, 547 U.S. 47, 64 (2006).
[157] Id.
[158] See id. at 65 (discussing “speech by recruiters”); Thomas v. Collins, 323 U.S. 516, 532 (1945) (recognizing that a union organizer’s “right thus to discuss, and inform people concerning, the advantages and disadvantages of unions and joining them is protected … as part of free speech,” logic that would also apply to urging people to join the military); Village of Schaumburg v. Citizens for a Better Env’t, 444 U.S. 620, 632 (1980) (treating fundraising pitches as protected speech, because they involve “communication of information, the dissemination and propagation of views and ideas, and the advocacy of causes”). The District Court in Rumsfeld had “determin[ed] that recruiting is conduct and not speech,” 547 U.S. at 53, but the Supreme Court didn’t endorse that position; it labeled law schools’ decisions to include or exclude recruiters “conduct,” id. at 60, but didn’t label as conduct the “speech by recruiters,” id. at 65.
[159] Id.
[160] Id. at 576.
[161] Hurley, 515 U.S. at 580.
[162] One could describe the overall content of Twitter as being “all things posted by Twitter users,” or perhaps “things that people throughout the world think are worth discussing, and that don’t run afoul of Twitter Rules.” But that is still not a “common theme” or an “overall message,” just as all the channels distributed on a cable system lack a common theme or overall message. Szóka & Barthold, supra note 10, argue that social media sites have a “common theme” in the sense of seeing themselves “as ‘a place for expression,’ one that ‘give[s] people a voice'” (Facebook) and aiming “to enable people to ‘participate in the public conversation freely and safely'” (Twitter). But under that definition, all property owners could have the First Amendment right to be free an access mandate—a shopping mall could say that it is “a place for shopping, enjoyment, and friendly conversations,” a cable system could say that it is “a place for high-quality television,” and a university could say that it is “a place for speech free of discrimination based on sexual orientation.” PruneYard, Turner, and Rumsfeld tell us that these general and largely vacuous statements of common theme cannot suffice to defeat an access mandate.
[163] Bhagwat, supra note 71, at __.
[164] Ctr. for Bio-Ethical Reform, Inc. v. Irvine Co., LLC, 249 Cal. Rptr. 3d 391, 399 (App. 2019). The mall specifically argued that it was trying to create “family-oriented centers” to which parents would be willing to bring or send their children; yet the court concluded that the PruneYard right of access applied even so. Id. at 400.
And this sort of result is entirely consistent with the California law scheme that the U.S. Supreme Court upheld against First Amendment challenge in PruneYard: The U.S. Supreme Court noted that California law let platforms “restrict expressive activity by adopting time, place, and manner regulations that will minimize any interference with its commercial functions,” 447 U.S. at 83, and by then it was clear that “time, place, and manner regulations” referred to content-neutral restrictions. See, e.g., Consol. Edison Co. of N.Y. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 530, 536 (1980) (“a constitutionally permissible time, place, or manner restriction may not be based upon either the content or subject matter of speech”); see also U.S. Postal Serv. v. Council of Greenburgh Civic Associations, 453 U.S. 114, 132 (1981) (“This Court has long recognized the validity of reasonable time, place, and manner regulations on such a forum so long as the regulation is content-neutral, serves a significant governmental interest, and leaves open adequate alternative channels for communication.”); Erznoznik v. City of Jacksonville, 422 U.S. 205, 209 (1975) (noting the general constitutionality of “reasonable time, place, and manner regulations,” but distinguishing rules that “undertake[] selectively to shield the public from some kinds of speech on the ground that they are more offensive than others” can’t be justified under that theory).
[165] Fashion Valley Mall, LLC v. NLRB, 172 P.3d 742, 870 (Cal. 2007) (rejecting the argument that the mall “‘has the right to prohibit speech that interferes with the intended purpose of the Mall,’ which is to promote ‘the sale of merchandise and services to the shopping public'”).
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