Call for dismissal in USPS postal retail lawsuit

US Postal Service retail technology partner IGI has called on courts in Colorado to dismiss a class action suit brought by contracted postal counter operators, challenging restrictions on which mailing labels they can use. Papers filed this week by lawyers on behalf of Innovations Group, Inc. (IGI) stated that federal antitrust laws do not apply in the case, filed by two US Postal Service Contract Postal Unit (CPU) operators back in July.

The CPU operators, who could represent up to 1,500 other operators if they joined the class action suit, are demanding the right to purchase mailing labels other than those proscribed by the Postal Service.

TOG, Inc., and Wild Harvest LLC, who respectively run contracted postal retail counters in Texas and Colorado, claim USPS is breaking US trade laws by allowing its CPUs to sell only mailing labels from one supplier, IGI.

IGI

IGI – Innovations Group, Inc. – is a consortium of companies including software firm Escher, Hewlett-Packard, Pitney Bowes and CODEplus, which has provided an electronic point-of-sale management system called the Contract Access Retail System (CARS) for hundreds of USPS CPUs since 2007.

The IGI label rolls, used for applying postage to mailpieces, are provided “at substantially higher prices” than could be obtained on the open market, the lawsuit suggests.

The CPU operators argue that since the IGI contract was signed in 2007, other suppliers can now provide mailing labels for use in the CARS printers, but USPS has approved only IGI labels.

They suggest that requiring contracted post offices to use only the IGI labels is a violation of US competition rules.

The lawsuit from the CPU operators suggests that about 1,500 contracted post offices in the US run the CARS system, which involves USPS providing the equipment to weight items, calculate and apply postage, then compensating the CPU operators based on their performance.

USPS warned its CARS CPU operators back in December not to buy any mailing labels other than the IGI rolls.

“Immune”

This week, IGI’s lawyers Husch Blackwell told the District Court of Colorado that the USPS contract with the consortium was awarded in 2007 after a competitive tender process. It said federal regulations require only approved label rolls to be used in the CARS system, and that IGI’s labels had been the only ones to be fully tested and approved by USPS.

IGI said in its filing that USPS was “immune” from federal antitrust laws according to rules designed to prevent private individuals influencing government action.

The filing  concluded that the CPU operators had failed to show why they should not be restricted to the IGI mailing labels.

“While Plaintiffs may regret that they entered into contracts that require them to obtain USPS CARS System labels from whoever USPS authorizes, they have alleged no basis that would, in effect, allow the Court to renegotiate these contracts for them,” concluded the IGI filing.

• Article amended (3.36pm GMT 28th September) to clarify that this week’s court filing came from IGI’s legal representatives, not those of USPS.