Administrative Law

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?

|The Volokh Conspiracy |

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.

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  1. I once had to look into the issue of parties suing themselves in the foreclosure context: banks that hold a senior and junior lien sometimes join themselves as defendants. I found this law review article on the topic of the federal government: Article: United States v. United States: When Can the Federal Government Sue Itself?, 32 Wm. & Mary L. Rev. 893

    1. How does joining yourself get past _Lord v. Veazie_?

  2. It sounds as if Judge Rao is expressing regret about the precedents she has to follow, and would prefer that the President simply step in and order one of his agencies to give way to the other. But the court proceeding seems more likely to produce a well-balanced answer. It’s too bad that the executive branch has grown so large that one man can’t really grasp everything it is doing, but that is so.

    1. I sense Judge Rao is not a fan of much that has occurred in America since at least the mid-1800s.

    2. Also, even if I accept her unitary executive theory, why does it follow that one agency can’t sue another? The agencies themselves are the creation of Congress. Why can’t Congress say that one of the features of the agencies is they can be sued by other agencies?

      If the President intervened and said “I don’t want this suit to go forward”, I might agree with Rao that this might be binding over what Congress did. But absent such an intervention, why does this suit offend the Constitution?

  3. Why should not the President be able to order one of his subordinates to resolve the issue?

    What about the Attorney General or one of his subordinates. Although there is not particular organ equipped to arbitrate issues between agencies.

    1. I would think the president could resolve the issue, though I am not sure of a very direct method. It sounds like the issue here is more if the courts could resolve the issue at all.

      1. How?
        Does he take the time to do it himself?
        Does he appoint an arbitrator to hear both side out and make a decision?
        Does the president appoint his son in law to do it?
        But then Congress apparently expressly authorized the courts to hear these disputes.

  4. Nothing on Espinosa? IJ case, I thought y’all are involved in with that organization. IJ just had its biggest victory in years.

    1. Patience. It’s a big case with very fractured opinions. In addition to the majority decision, there are two concurrences and three dissents.

  5. Seems like the laws that established these agencies need to be better formulated to show authorities and responsibilities.

    1. How has 3.5 years of Trump not put conservatives off the unitary executive theory? How can you look at that guy and think “Yes, the country would definitely work better if a single person was in charge of everything!”

      1. Because he was elected by the people, who are sovereign in America.
        I guess you prefer unelected governance. How very Soviet of you.

        1. Insofar as the “people” are the source of the Constitution’s authority that’s correct. But he was also not preferred by a majority, or even plurality, of the people who voted.

          1. In football, sometimes the team with the most total offense still loses the game — because that isn’t the metric the rules use to determine the winner. Moaning about the popular vote strikes me as being somewhat less interesting than moaning about the losing football team having higher total offense.

            1. It’s less moaning than it is pointing out that the electoral college system has a real problem with claiming any sort of popular legitimacy. Any system where a candidate with far less than majority popular support can still be President is not a good one. Hopefully an unlikely scenario occurs where Trump wins the popular vote but loses the electors college so we can finally get rid of it.

              And the football analogy is horrible. Unlike the rules of football, the rules of choosing a powerful government official are actually important.

              1. Well, maybe you are the guy who will finally answer this question that I have repeatedly asked those moaning about the electoral college… And I’ve never gotten an answer so far.

                Here is the question: hardly any of our first-world peers select their head of government via a single nationwide popular vote. Quite a few have a parliamentary form of government, in which the prime minister is simply selected by the legislature, a process not that much different from the one used to select our speaker of the house. So why is it such a terrible thing that we don’t select ours via a nationwide popular vote either?

            2. If the issue is “Who did the rules declare the winner?” then your response would be valid. There’s no question that Trump and our hypothetical inferior-yardage team actually did win, and that their respective wins count under the rules.

              But if the issue is who the people actually wanted, then it seems rather odd to suggest that someone who had neither majority nor plurality support fits that description. Trump is the winner in spite of the people’s will, not because of it.

        2. So was Congress, so the President having been elected (not by the People, but by the Electoral College, incidentally) tells you exactly nothing about the merits of the unitary executive theory.

          Why on earth would you support an unelected judiciary stepping in to prevent the democratically elected Congress from making the laws it wants to make without a clear Constitutional mandate? It’s inventing a constitutional norm out of whole cloth to support one elected branch of government against the other. Why would you support that? Clearly the answer can’t be “because that gives good policy outcomes” because, like I said, Trump should have cured Republicans and Democrats alike from that idea. So then why?

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

    Better that than out in the parking lot with broken bottles…

    The purpose of independent commissions is to prevent direct Presidential intervention so the only recourse is court intervention.

  7. I would look at it the other way around: As long as both the plaintiff and the defendant have legal personality, I don’t see how the court can avoid its legal obligation to resolve something that’s clearly a “case or controversy” between two distinct legal persons.

    1. But the whole point is that they’re not two distinct legal persons. The iPhone division of Apple Inc. can’t sue the MacBook division.

      1. They can if they’re both separate corporations. Why couldn’t they?

  8. “When One Federal Agency Sues Another in Federal Court”
    Taxpayers foot the bill for government stupidity once again.

    1. That depends. If there’s a genuine legal question, putting it in front of an Article III court may well be the most cost effective and reliable way to get an answer. It’s either that or the OLC, but they have limited capacity too.

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