From Law 360

(July 27, 2012) Two private U.S. Postal Service operators filed a class action accusing the postal system of violating antitrust laws by forcing them to buy labels only from government contractor Innovations Group Inc.

According to TOG Inc. and Wild Harvest LLC, so-called contract postal units that provide USPS services from private locations, the postal service buys all of the hardware that CPUs use for weighing and printing — called a contract access retail system — through a contract with Innovations Group.

(July 03, 2013) A Colorado federal judge tossed antitrust claims Wednesday in a class action alleging that the United States Postal Services violated competition law by forcing contracted post offices to buy mailing labels from a designated vendor.

The judge ruled that the USPS isn’t defined as a “person” under federal laws and that a federal postal law doesn’t extend to postal activities such as the metering of mail by contract postal units.  via LAW 360

Here is a little more info:

USPS argued that the postal service can only be sued for antitrust violations in areas where it offers a product that competes with private sellers like FedEx Corp. and United Parcel Service Inc.

In UNITED STATES POSTAL SERVICE v. FLAMINGO INDUSTRIES (USA) LTD. et al., the Supreme Court held that while Congress clearly intended some waiver of immunity by its inclusion of the “sue and be sued” clause in the Postal Reorganization Act (39 U.S.C. § 401), it did not intend for substantive antitrust doctrines to reach the USPS. (applying a two-part analysis to claims against federal entities where a waiver of immunity is in question; the Court considers (1) whether there is a waiver of immunity for actions against the federal entity, and if there is (2) whether the substantive doctrine originating the claim is meant to apply to the federal entity)). The Postal Accountability and Enhancement Act of 2006 (PAEA) partially overrides Flamingo by making the USPS a “person” for the purposes of antitrust laws “[t]o the extent that the Postal Service, or other Federal agency acting on behalf of or in concert with the Postal Service, engages in conduct with respect to any product which is not reserved to the United States under section 1696 of title 18.” 39 U.S.C. § 409(e). Section 1696, of course , prohibits the private express of stamped mail, establishing the postal monopoly for its carriage and conveyance

The PAEA waives sovereign immunity for the USPS for any conduct relating to products “not reserved to [the government]” under the postal monopoly created by 18 U.S.C. § 1696. 39 U.S.C. 409(e). The USPS operates under an absolute requirement to provide “postal services” to all communities the United States, and is provided with the powers necessary to achieve that task. As previously stated, Congress defines “postal services” as the “delivery of letters, printed matter, or mailable packages, including acceptance, collection, sorting, transportation, or other functions ancillary thereto.” No reasonable reading of the PAEA or its legal history supports the contention that Congress meant to subject the USPS to antitrust lawsuits for products and postal services which the USPS is required by law to provide under its universal service mandate. Assuming arguendo that Plaintiffs’ correctly identified the (1) the CARS System; (2) postage; (3) prepayment of postage; and (4) additional materials and services necessary to running a CPU as “products” under the PAEA, the question would then be whether those “products” fall within the statutory postal monopoly.

The USPS provides CARS Systems to CARS CPUs. These devices allow the CPUs to provide metered postage for letters and packages. The USPS contracts with CPUs as a means of fulfilling its service obligations, much in the same way it contracts with utility companies and other services which enable the functions of the USPS. This contract, the CARS System, and the CARS CPU itself are clearly ancillary functions to the delivery of mail under the meaning of 39 U.S.C. §102(5) in that they enable the carriage of mail and fall within the statutory mail monopoly and universal service obligation. As the generation of CARS labels is a means or activity also ancillary to the delivery of mail, this reasoning applies equally to blank label rolls, and services necessary to perform this function and services necessary for running a CPU. Such materials are merely components of the CARS CPU and the hardware necessary to effect its mail delivery function.

Postage and prepayment of postage are indicia of payment for postal services. Only the USPS or its agents can issue postage , 39 U.S. C. § 404(a)(4), and a letter cannot be sent without postage. Postage plainly enables the carriage of mail and therefore falls within the postal monopoly and universal service mandate as an ancillary function under § 102(5).

The court stated further that  even if Mail Contractors could characterize (1) the CARS System; (2) postage; (3) prepayment of postage; and (4) additional materials and services necessary to running a CPU as “products” within the scope of 39 U.S.C. § 409(e), those products would fall within the statutory mail monopoly and therefore beyond the reach of the antitrust laws even after the PAEA’s enactment.

And finally the court stated the USPS is not a person under the Meyer standard or the PAEA based on its conduct in imposing or altering the terms of its contracts with CPUs. While the USPS’s conduct in changing the playing field with regard to blank label roll sourcing and IGI’s strong-arm tactics in getting CPUs to purchase those rolls at supra competitive prices may subject either or both to other causes of action under the PAEA or other statutory or common law theories of relief, they do not subject either to antitrust liability on the grounds alleged.