When One Federal Agency Sues Another in Federal Court

If the U.S. Postal Service and the Postal Regulatory Commission disagree, does the case belong in federal court?

Today the U.S. Court of Appeals for the D.C. Circuit decided U.S. Postal Service v. Postal Regulatory Commission. In an opinion for the court, Judge Thomas Griffith resolved a dispute between these two agencies, holding that the PRC could order disclosure of certain financial data related to the sending of mail from foreign countries to the United States via Inbound Letter Post.

If you're like me, this case may seem a little odd, because one federal agency is suing another. It's federal government versus federal government, but not in the context of an interbranch dispute.  I am aware of this happening before, as when the Tennessee Valley Authority challenged the Environmental Protection Agency, but should this really be a thing? Should not an intrabranch dispute be resolved within that branch? Apparently not if one is an independent agency.

Judge Neomi Rao apparently had a similar thought. She concurred in Judge Griffith's holding, but also wrote a separate brief concurrence, which I reproduce below.

I join the court's opinion in full. I write separately to note the constitutional quandary raised by a federal court resolving a lawsuit between two Executive Branch agencies. On one side of this dispute, we have the United States Postal Service—"an independent establishment of the executive branch of the Government of the United States." 39 U.S.C. § 201. On the other, we have the Postal Regulatory Commission—"an independent establishment of the executive branch of the Government of the United States." Id. § 501. Litigating on behalf of the Commission, the Department of Justice has taken sides in a disagreement between two Executive Branch entities tasked with oversight and administration of the nation's mails.

This litigation stands in tension with Article II of the Constitution, which vests all executive power in the President and assigns him the duty to "take Care that the Laws be faithfully executed." U.S. CONST. art. II, §§ 1, 3. "Moreover, because agencies involved in intra-Executive Branch disputes are not adverse to one another (rather, they are both subordinate parts of a single organization headed by one CEO), such disputes do not appear to constitute a case or controversy for purposes of Article III." SEC v. FLRA, 568 F.3d 990, 997 (D.C. Cir. 2009) (Kavanaugh, J., concurring). The Constitution creates a unitary executive and limits federal courts to deciding the rights of individuals in properly presented cases and controversies. The posture of this case thus presents constitutional questions about the power of an Article III court to resolve a purely Article II dispute. The fact that Congress specifically created federal court jurisdiction between the Postal Service and the Commission, see 39 U.S.C. § 3663, does not necessarily eliminate the constitutional concern because Congress cannot expand federal court jurisdiction beyond the Article III judicial power. See Seminole Tribe of Fla. v. Fla., 517 U.S. 44, 65 (1996) (citing Marbury v. Madison, 1 Cranch 137 (1803)).

Our precedents are clear, however, that such disputes between "independent" agencies, such as the Postal Service and the Commission, are justiciable. See SEC v. FLRA, 568 F.3d at 997 (Kavanaugh, J., concurring) (collecting cases); see also USPS v. Postal Regulatory Comm'n, 886 F.3d 1253 (D.C. Cir. 2018). Therefore, I join the court's well-reasoned opinion in this case.