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WESTWOOD PROMOTIONS, INC. v. USPS

May 18, 1989

WESTWOOD PROMOTIONS, INC., Plaintiff,
v.
UNITED STATES POSTAL SERVICE, Defendant


James B. Moran, United States District Judge.


The opinion of the court was delivered by: MORAN

JAMES B. MORAN, UNITED STATES DISTRICT JUDGE

 Plaintiff Westwood Promotions, Inc. (Westwood) brought this action against defendant United States Postal Service (U.S.P.S. or Postal Service) seeking a refund of $ 160,449.83 for postage paid for certain bulk class mailings. In its three-count complaint, Westwood alleges that the Postal Service (1) misclassified certain of Westwood's mailings, resulting in an overcharge; (2) arbitrarily and capriciously refused Westwood's claim for a refund, in violation of procedures stated in Section 143 of the Domestic Mail Manual (D.M.M.); *fn1" and (3) was unjustly enriched by denying Westwood's refund claim. Defendant now moves to dismiss this complaint under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted or, alternatively, moves for summary judgment pursuant to Fed.R.Civ.P. 56(b). For the reasons stated below, we grant defendant's motion to dismiss.

 FACTS

 Plaintiff is engaged in advertising, promoting and selling records, tapes and cassettes of music, to consumers. Between July 1983 and June 1986 plaintiff was engaged in its business in Lombard, Illinois, and mailed packages -- some of which weighed 16 ounces or less -- at the Lombard Post Office. Until May 1986 defendant classified these mailings as regular fourth class mail, and Westwood paid the appropriate postage. *fn2" Defendant subsequently informed plaintiff that these mailings were eligible for the special fourth class rate provided Westwood pre-sorted its mailings to the three-number zip code corresponding to destination bulk mail centers. Plaintiff sorted the mailings and took advantage of this lower rate from May 1986 to June 1986.

 In June 1986 Westwood moved to Colorado Springs, Colorado, and attempted to use the special fourth class bulk rate at the Colorado Springs Post Office. It was at this time that plaintiff first learned that mailings under 16 ounces qualified for lower third class bulk rates, with no significant changes in Westwood's pre-sorting requirements. *fn3"

 Westwood contends that had it known about the third class mail costs during the period it mailed material from Lombard, it would have, and could have, complied with the pre-sort requirements in order to qualify for the lower rate. Plaintiff then filed a refund claim with the Lombard postmaster. Defendant contended that plaintiff knew about pre-sort options and did not pre-sort. The claim was denied. Plaintiff appealed the denial to the Chicago Regional Rate and Classification Center and the claim was again denied. Westwood then filed this action.

 DISCUSSION

 On a motion to dismiss for lack of subject matter jurisdiction, the party seeking to invoke this court's jurisdiction has the burden of establishing the jurisdictional requirements. Kontos v. United States Department of Labor, 826 F.2d 573, 576 (7th Cir. 1987); Marks v. Turnage, 680 F. Supp. 1241, 1243 (N.D.Ill. 1988). Plaintiff claims this court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1331, 1339, 39 U.S.C. § 409(a) and D.M.M. § 147.221. Defendant argues that these statutes do not provide a basis for jurisdiction by themselves, without an independent basis for finding a cause of action against the Postal Service.

 I. Jurisdiction Under 28 U.S.C. §§ 1331, 1339 and 39 U.S.C. § 409(a).

 Westwood points to three cases where courts have found jurisdiction under similar circumstances. Defendant argues that the facts in these cases are distinguishable. Because of the relative lack of precedents on this issue we will review the relevant cases in detail.

 In Schreiber v. United States, 129 F.2d 836 (7th Cir. 1942), the plaintiffs sued for a refund of extra postage paid for first class mail when they were entitled to mail the material as third class mail. The plaintiffs had previously protested the classification and filed claims for refunds. The Schreiber plaintiffs relied on the Tucker Act, presently codified as 28 U.S.C. § 1346(a)(2), not the postal refund statute, as their jurisdictional basis. The appellate court found that the district court did have jurisdiction to consider a suit for refund for a non-tort claim. Id. at 837-39.

 The dissent, on the other hand, would have denied jurisdiction based on the then refund statute, 39 U.S.C.A. § 300 (West 1928), which left the refund decision to the discretion of the Postmaster General. Id. at 840 (Minton, J., dissenting).

 The facts in the second case relied on by Westwood were similar. In Christian Beacon v. United States, 322 F.2d 512 (3d Cir. 1963), the court found that a cause of action for refund was barred by the statute of limitations. However, without any analysis, the appellate court stated that they had "no doubt that . . . the district court would have jurisdiction ...


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