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540 U.S. 736•UNITED STATES POSTAL SERVICE v. FLAMINGO INDUSTRIES (USA) LTD. et al.
540 U.S. 736Supreme Court of the United StatesFeb 25, 2004
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736 OCTOBER TERM, 2003
Syllabus
UNITED STATES POSTAL SERVICE v. FLAMINGO
INDUSTRIES (USA) LTD. et al.
certiorari to the united states court of appeals for
the ninth circuit
No. 02–1290. Argued December 1, 2003—Decided February 25, 2004
After their contract to make mail sacks for the United States Postal Serv-
ice was terminated, respondents brought this suit alleging, inter alia,
that the Postal Service had sought to suppress competition and create
a monopoly in mail sack production. The District Court dismissed the
antitrust claims, concluding that the Postal Service is not subject
to liability under federal antitrust law. The Ninth Circuit reversed,
holding that the Postal Service can be liable but that it has a limited
immunity from antitrust liability for conduct undertaken at Congress’
command.
Held: The Postal Service is not subject to antitrust liability. In both
form and function, it is not a separate antitrust person from the United
States but is part of the Government, and so is not controlled by the
antitrust laws. Pp. 739–748.
(a) The waiver of immunity from suit provided by the Postal Reorga-
nization Act (PRA)—which gives the Postal Service the power “to sue
and be sued in its official name,” 39 U. S. C. § 401—does not suffice by
its own terms to subject the Postal Service to liability under the Sher-
man Act. The two-step analysis of FDIC v. Meyer, 510 U. S. 471, 484,
applies here. Meyer’s first step is met because the PRA’s sue-and-be-
sued clause effects a waiver of sovereign immunity for actions against
the Postal Service. However, Meyer’s second step for finding liabil-
ity—whether the Sherman Act’s substantive prohibitions apply to the
Postal Service—is not satisfied. The Sherman Act imposes liability on
any “person,” defined “to include corporations and associations existing
under or authorized by the laws of . . . the United States.” 15 U. S. C.
§ 7. In holding that the United States is not a person authorized to
bring a treble-damages claim for its own alleged antitrust injury under
the Sherman Act, United States v. Cooper Corp., 312 U. S. 600, 606–607,
this Court observed that, if the definition of “person” included the
United States, the Government would be exposed to liability as an anti-
trust defendant, a result Congress could not have intended, id., at 607,
609. Although the antitrust statutes were later amended to allow the
United States to bring antitrust suits, see 15 U. S. C. § 15a, Congress did
not thereby change the statutory definition of “person.” So, Cooper’s
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737 Cite as: 540 U. S. 736 (2004)
Syllabus
conclusion that the United States is not an antitrust “person,” in partic-
ular not a person who can be an antitrust defendant, was unaltered by
Congress’ action; indeed, the means Congress used to amend the anti-
trust law implicitly ratified Cooper’s conclusion that the United States
is not a proper antitrust defendant. Pp. 739–746.
(b) For purposes of the antitrust laws, the Postal Service is not a
separate person from the United States. The PRA’s designation of
the Postal Service as an “independent establishment of the executive
branch of the Government of the United States,” 39 U. S. C. § 201, is not
consistent with the idea that the Postal Service is an entity existing
outside the Government. Indeed, the designation indicates just the
contrary. The PRA gives the Postal Service a high degree of independ-
ence from other Government offices, but it remains part of the Govern-
ment. The Sherman Act defines “person” to include corporations, 15
U. S. C. § 7, and had Congress chosen to create the Postal Service as a
federal corporation, the Court would have to ask whether the Sherman
Act’s definition extends to the federal entity under this part of the defi-
nitional text. Congress, however, declined to create the Postal Service
as a Government corporation, opting instead for an independent estab-
lishment. The choice of words likely was more informed than unconsid-
ered, because Congress debated proposals to make the Postal Service
a Government corporation before it enacted the PRA. Although the
PRA refers explicitly to various federal statutes and specifies that the
Postal Service is exempt from some and subject to others, 39 U. S. C.
§§ 409–410, it makes no mention of the Sherman Act or the antitrust
laws. This silence leads to no helpful inference one way or the other
on the question at issue. However, the other considerations the Court
has discussed lead to the conclusion that, absent an express congres-
sional statement that the Postal Service can be sued for antitrust viola-
tions despite its status as an independent establishment of the Govern-
ment, the PRA does not subject the Postal Service to antitrust liability.
This conclusion is consistent with the nationwide, public responsibilities
of the Postal Service, which has different goals from private corpora-
tions, the most important being that it does not seek profits, § 3621. It
also has broader obligations, including the provision of universal mail
delivery and free mail delivery to certain classes of persons, §§ 3201–
3405, and, most recently, increased public responsibilities related to na-
tional security. Finally, the Postal Service has many powers more
characteristic of Government than of private enterprise, including its
state-conferred monopoly on mail delivery, § 601 et seq., and the powers
of eminent domain and to conclude international postal agreements,
§§ 401, 407. On the other hand, but in ways still relevant to the anti-
trust laws’ nonapplicability, the Postal Service’s powers are more
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738 POSTAL SERVICE v. FLAMINGO INDUSTRIES (USA) LTD.
Opinion of the Court
limited than those of private businesses, since it lacks the power unilat-
erally to set prices or to close a post office, § 404. Its public characteris-
tics and responsibilities indicate it should be treated under the antitrust
laws as part of the Government, not a market participant separate from
it. The fact that the Postal Service operates some nonpostal lines of
business beyond the scope of its mail monopoly and universal service
obligation does not alter this conclusion. Pp. 746–748.
302 F. 3d 985, reversed.
Kennedy, J., delivered the opinion for a unanimous Court.
Deputy Solicitor General Kneedler argued the cause for
petitioner. With him on the briefs were Solicitor General
Olson, Assistant Attorney General Keisler, Lisa S. Blatt,
and Mark B. Stern.
Harold J. Krent argued the cause for respondents. With
him on the brief were Angela Wah and George P. Eshoo.*
Justice Kennedy delivered the opinion of the Court.
This case requires us to consider whether the United
States Postal Service is subject to liability under the federal
antitrust laws.
Flamingo Industries (USA) Ltd., a private corporation,
and its owner and principal officer are the respondents here.
Flamingo had been making mail sacks for the Postal Service,
but then its contract was terminated. The respondents sued
in United States District Court alleging that the Postal
Service had sought to suppress competition and create a mo-
nopoly in mail sack production. (They also brought claims
against the Postal Service under federal procurement law
and state law, but those claims are not before us.) The Dis-
*Briefs of amici curiae urging affirmance were filed for the American
Trucking Associations, Inc., by Drew S. Days III, Beth S. Brinkmann,
Seth M. Galanter, Paul T. Friedman, and Robert Digges, Jr.; for Postal-
Watch, Inc., by William S. Stancil; and for the Washington Legal Founda-
tion et al. by Alan Charles Raul, Daniel J. Popeo, and Paul D. Kamenar.
Nicholas M. Fobe filed a brief for the Center for the Advancement of
Capitalism as amicus curiae.
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Opinion of the Court
trict Court dismissed the antitrust claims, concluding that
the Postal Service is not subject to liability under federal
antitrust law. The Court of Appeals reversed. It held that
the Postal Service can be liable but that it has a limited im-
munity from antitrust liability for conduct undertaken at the
command of Congress. 302 F. 3d 985, 993 (CA9 2002). We
granted certiorari to consider the question whether the
United States Postal Service is a “person” amenable to
suit under the controlling antitrust statute. 538 U. S. 1056
(2003). We hold it is not subject to antitrust liability, and
we reverse.
After the Revolution, both the Articles of Confederation
and the Constitution explicitly empowered the National Gov-
ernment to provide and regulate postal services. Article of
Confederation IX; U. S. Const., Art. I, § 8. The importance
of the enterprise was prefigured by the Continental Con-
gress’ appointment of Benjamin Franklin to be the first Post-
master General, on July 26, 1775. G. Cullinan, The United
States Postal Service 26 (1973) (hereinafter Cullinan).
From those beginnings, the Postal Service has become “the
nation’s oldest and largest public business.” J. Tierney,
Postal Reorganization: Managing the Public’s Business vii
(1981) (hereinafter Tierney).
During its history since Postmaster Franklin, the postal
organization has been reorganized or restructured at various
times. In the immediate period after ratification of the Con-
stitution, it was called the General Post Office and was sub-
ordinate to the Treasury Department. Cullinan 35–36. In
1825, its name changed from the General Post Office to the
Post Office Department, an alteration accomplished by some-
what informal means when Postmaster Joseph McLean sim-
ply changed the title on official letterhead. McLean also
began the practice of reporting directly to the President
rather than to the Secretary of the Treasury. Id., at 50–51.
(McLean was a popular Postmaster who served from 1823
until 1829, when the incoming President Andrew Jackson
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740 POSTAL SERVICE v. FLAMINGO INDUSTRIES (USA) LTD.
Opinion of the Court
solved his worries about McLean’s independence in matters
of postal governance, especially patronage, by appointing
him to this Court. Id., at 52.) In 1829, President Jackson
acknowledged the enhanced status of the Postmaster Gen-
eral by making him a member of the Cabinet, though it was
not until 1872 that Congress formally recognized the Post
Office Department as an executive department of the Fed-
eral Government. Id., at 36. A more complete account of
the origins and mission of the postal system is set forth in
Postal Service v. Council of Greenburgh Civic Assns., 453
U. S. 114, 120–126 (1981).
Major change came with the Postal Reorganization Act of
1970 (PRA), 39 U. S. C. § 101 et seq. It was adopted to in-
crease the efficiency of the Postal Service and reduce po-
litical influences on its operations. Tierney 1–26; Cullinan
5–10. The PRA renames the Post Office Department the
United States Postal Service and removes it from the Cabi-
net to make it “an independent establishment of the execu-
tive branch of the Government of the United States.” 39
U. S. C. § 201. Superintendence over the new Postal Service
is the responsibility of a Board of Governors, consisting of
11 members. § 202. Nine governors are appointed by the
President with the advice and consent of the Senate and are
removable only for cause. Ibid. The other two governors
are the Postmaster General, who also serves as the chief
executive officer of the Postal Service, and who is appointed
by the other nine, and the Deputy Postmaster General, who
is appointed by the other nine together with the Postmaster
General. Ibid.
The PRA creates a second independent establishment, the
Postal Rate Commission, to make recommendations on
postal rate changes. § 3601. The Commission advises the
Board of Governors on rates for all postal services, including
both letter carriage and parcel delivery. § 3621. Rates are
set by the Board of Governors based on the recommenda-
tions of the Commission, and those decisions are in certain
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Opinion of the Court
circumstances subject to judicial review. §§ 3625, 3628. In
making rate recommendations the Commission must con-
sider factors including making each class of mail bear the
costs attributable to it, and the effect of rate increases on the
mail-using public and on competitors in the parcel delivery
business. § 3622(b).
Under the PRA, the Postal Service retains its monopoly
over the carriage of letters, and the power to authorize
postal inspectors to search for, seize, and forfeit mail matter
transported in violation of the monopoly. See §§ 601–606.
It also retains the obligation to provide universal service to
all parts of the country. §§ 101, 403. The Postal Service
has the power of eminent domain, the power to make postal
regulations, and the power to enter international postal
agreements subject to the supervision of the Secretary of
State. §§ 401, 407. It has, in addition, powers to contract,
to acquire property, and to settle claims. § 401. As this
brief summary indicates, the Postal Service has significant
governmental powers, consistent with its status as an in-
dependent establishment of the Executive Branch. It was
exempted from many, though not all, statutes governing
federal agencies, and specifically subjected to some others.
§§ 409–410. With respect to antitrust liability, however, the
PRA neither exempts the Postal Service nor subjects it to
liability by express mention. It is silent on the point.
The PRA waives the immunity of the Postal Service from
suit by giving it the power “to sue and be sued in its official
name.” § 401. The first question we address is whether
that waiver suffices by its own terms to subject the Postal
Service to liability under the Sherman Act, ch. 647, 26 Stat.
209, as amended, 15 U. S. C. § 1 et seq. We begin with a dis-
cussion of our precedents bearing on the inquiry.
This Court has held that when Congress passes enabling
legislation allowing an agency or other entity of the Fed-
eral Government to be sued the waiver should be given a
liberal—that is to say, expansive—construction. Federal
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742 POSTAL SERVICE v. FLAMINGO INDUSTRIES (USA) LTD.
Opinion of the Court
Housing Administration v. Burr, 309 U. S. 242 (1940). In
support of its holding in Burr the Court, in a passage often
cited in later cases involving the waiver of sovereign immu-
nity, wrote as follows:
“[I]t must be presumed that when Congress launched
a governmental agency into the commercial world and
endowed it with authority to ‘sue or be sued,’ that
agency is not less amenable to judicial process than a
private enterprise under like circumstances would be.”
Id., at 245.
This general proposition was cited in the first two cases in
which the Court considered the extent of the waiver effected
by the sue-and-be-sued clause of the PRA. In Franchise
Tax Bd. of Cal. v. Postal Service, 467 U. S. 512 (1984), the
underlying dispute concerned the obligation of the Postal
Service to withhold unpaid state taxes from the wages of its
employees. A unanimous Court held that the Postal Service
was required to respond to an order to withhold the amounts,
even though the process was a state administrative tax levy,
not an order issued by a state court. Id., at 525. The sue-
and-be-sued clause, the Court held, must be given broad ef-
fect, and the Postal Service was required to respond to the
administrative order even though it had not been issued by
a judicial body. Id., at 519–521.
The second case in which the Court considered the scope
of the waiver effected by the PRA’s sue-and-be-sued clause
was Loeffler v. Frank, 486 U. S. 549 (1988). After the Postal
Service had been found liable for damages from employment
discrimination in an action brought under Title VII of the
Civil Rights Act of 1964, the question arose whether it was
subject as well to prejudgment interest. Id., at 551. The
Court allowed the interest, and in the course of its decision
asserted, or repeated, formulations which indicate that the
sue-and-be-sued clause effects a broad waiver of immunity.
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Opinion of the Court
Id., at 554–555. The Court also relied, however, upon the
provisions of Title VII itself which, by specific amendment,
extended the coverage under the Civil Rights Act to federal
employees. Id., at 558–561.
After Loeffler, this Court decided FDIC v. Meyer, 510
U. S. 471, 484 (1994). In Meyer, the question was whether
the Federal Savings and Loan Insurance Corporation
(FSLIC), an agency of the United States, could be held liable
in a so-called “Bivens action.” See Bivens v. Six Unknown
Fed. Narcotics Agents, 403 U. S. 388 (1971). A federal stat-
ute provided for a waiver of sovereign immunity in suits
against the FSLIC, but the Court explained that the in-
terpretation of the waiver statute was just the initial part
of a two-part inquiry. Even though sovereign immunity
had been waived, there was the further, separate question
whether the agency was subject to the substantive liability
recognized in Bivens. Meyer, supra, at 483. The Loeffler
Court had not set forth the two-step analysis in the explicit
terms Meyer used, but it did, as we have said, consult the
statute as the source of the liability upon which the obliga-
tion to pay prejudgment interest depended.
The two-step analysis in Meyer applies here. We ask first
whether there is a waiver of sovereign immunity for actions
against the Postal Service. If there is, we ask the second
question, which is whether the substantive prohibitions of
the Sherman Act apply to an independent establishment of
the Executive Branch of the United States.
When the Court of Appeals considered the instant case, it
cited Meyer and seemed at the outset to follow Meyer’s two-
step analysis. In our view, however, the ensuing discussion
in the Court of Appeals’ opinion was not consistent with the
Meyer framework; for, having found that the Postal Service’s
immunity from suit is waived to the extent provided by
the statutory sue-and-be-sued clause, the Court of Appeals
relied on the same waiver to conclude that the Sherman
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744 POSTAL SERVICE v. FLAMINGO INDUSTRIES (USA) LTD.
Opinion of the Court
Act applies to the Postal Service. This conflated the two
steps and resulted in an erroneous conclusion. See Meyer,
supra, at 484.
As to the first step, as an “independent establishment
of the executive branch of the Government of the United
States,” 39 U. S. C. § 201, the Postal Service is part of the
Government and that status indicates immunity unless there
is a waiver. The sue-and-be-sued clause waives immunity,
and makes the Postal Service amenable to suit, as well as to
the incidents of judicial process. § 401. See Meyer, supra,
at 482; Loeffler, supra, at 565; Franchise Tax Bd., supra,
at 525. While Congress waived the immunity of the Postal
Service, Congress did not strip it of its governmental status.
The distinction is important. An absence of immunity does
not result in liability if the substantive law in question is
not intended to reach the federal entity. So we proceed to
Meyer’s second step to determine if the substantive antitrust
liability defined by the statute extends to the Postal Service.
Under Meyer’s second step, we must look to the statute.
Some years before Meyer was decided, the Court of Ap-
peals for the District of Columbia Circuit recognized the two
distinct inquiries required when the question is whether the
Government, or an entity it owns, is named as a defendant
in a suit under the antitrust laws. Sea-Land Serv., Inc. v.
Alaska R. Co., 659 F. 2d 243, 245 (1981) (R. Ginsburg, J.).
That is the correct approach. Upon examining the Sherman
Act, our decisions interpreting it, and the statutes that cre-
ate and organize the Postal Service, we conclude that the
Postal Service is not subject to antitrust liability.
The Sherman Act imposes liability on any “person.” It
defines the word. It provides that “ ‘person’ . . . shall be
deemed to include corporations and associations existing
under or authorized by the laws of either the United States
[or of States or foreign governments].” 15 U. S. C. § 7. It
follows then, that corporate or governmental status in most
instances is not a bar to the imposition of liability on an en-
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745 Cite as: 540 U. S. 736 (2004)
Opinion of the Court
tity as a “person” under the Act. The federal prohibition,
for instance, binds state governmental bodies. See Georgia
v. Evans, 316 U. S. 159 (1942); see also Pfizer Inc. v. Govern-
ment of India, 434 U. S. 308 (1978).
It is otherwise, however, when liability is pursued against
the Federal Government. The Court made this proposition
clear in United States v. Cooper Corp., 312 U. S. 600, 614
(1941). The question in Cooper was whether, under the
Sherman Act, the United States was a person who could
bring a treble-damages claim for its own alleged antitrust
injury. The Court held the United States could not sue for
antitrust damages because it is not a person under the anti-
trust statute. Id., at 606–607. Important to the present
case is an explicit reason given by the Cooper Court for
reaching its decision. The Court observed that if the defi-
nition of “person” included the United States, then the Gov-
ernment would be exposed to liability as an antitrust defend-
ant, a result Congress could not have intended. Id., at
607, 609.
After Cooper, Congress amended the antitrust statutes to
allow the United States to bring antitrust suits. For our
purposes, the means by which it did so is instructive. Con-
gress did not change the definition of “person” in the statute,
but added a new section allowing the United States to sue.
See 15 U. S. C. § 15a. So, Cooper’s conclusion that the
United States is not an antitrust “person,” in particular not
a person who can be an antitrust defendant, was unaltered
by Congress’ action; indeed, the means Congress used to
amend the antitrust law implicitly ratified Cooper’s conclu-
sion that the United States is not a proper antitrust defend-
ant. See 312 U. S., at 609; Sea-Land, supra, at 245 (“Al-
though Congress was well aware of the view the Court
indicated in Cooper Corp., that Congress had not described
the United States as a ‘person’ for Sherman Act purposes,
Congress addressed only the direct holding in that case—the
ruling that the United States was not authorized to proceed
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746 POSTAL SERVICE v. FLAMINGO INDUSTRIES (USA) LTD.
Opinion of the Court
as a Sherman Act treble damage action plaintiff ” (footnote
omitted)).
The remaining question, then, is whether for purposes of
the antitrust laws the Postal Service is a person separate
from the United States itself. It is not. The statutory des-
ignation of the Postal Service as an “independent establish-
ment of the executive branch of the Government of the
United States” is not consistent with the idea that it is an
entity existing outside the Government. The statutory in-
struction that the Postal Service is an establishment “of the
executive branch of the Government of the United States”
indicates just the contrary. The PRA gives the Postal Serv-
ice a high degree of independence from other offices of the
Government, but it remains part of the Government. The
Sherman Act defines “person” to include corporations, and
had the Congress chosen to create the Postal Service as a
federal corporation, we would have to ask whether the Sher-
man Act’s definition extends to the federal entity under this
part of the definitional text. Congress, however, declined to
create the Postal Service as a Government corporation, opt-
ing instead for an independent establishment. The choice of
words likely was more informed than unconsidered, because
Congress debated proposals to make the Postal Service a
Government corporation before it enacted the PRA. See
H. R. Rep. No. 91–1104, p. 6 (1970).
As we have noted, the PRA refers in explicit terms to
various federal statutes and specifies that the Postal Service
is exempt from some and subject to others. 39 U. S. C.
§§ 409–410. It makes no mention of the Sherman Act or the
antitrust laws, however. The silence leads to no helpful in-
ference one way or the other on the issue before us; but the
other considerations we have discussed lead us to say that
absent an express statement from Congress that the Postal
Service can be sued for antitrust violations despite its status
as an independent establishment of the Government of the
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747 Cite as: 540 U. S. 736 (2004)
Opinion of the Court
United States, the PRA does not subject the Postal Service
to antitrust liability.
Our conclusion is consistent with the nationwide, public
responsibilities of the Postal Service. The Postal Service
has different goals, obligations, and powers from private cor-
porations. Its goals are not those of private enterprise.
The most important difference is that it does not seek profits,
but only to break even, 39 U. S. C. § 3621, which is consistent
with its public character. It also has broader obligations,
including the provision of universal mail delivery, the pro-
vision of free mail delivery to certain classes of persons,
§§ 3201–3405, and, most recently, increased public respon-
sibilities related to national security. Finally, the Postal
Service has many powers more characteristic of Government
than of private enterprise, including its state-conferred mo-
nopoly on mail delivery, the power of eminent domain, and
the power to conclude international postal agreements.
On the other hand, but in ways still relevant to the non-
applicability of the antitrust laws to the Postal Service,
its powers are more limited than those of private busi-
nesses. It lacks the prototypical means of engaging in anti-
competitive behavior: the power to set prices. This is true
both as a matter of mechanics, because pricing decisions are
made with the participation of the separate Postal Rate
Commission, and as a matter of substance, because price de-
cisions are governed by principles other than profitability.
See supra, at 740–741. Similarly, before it can close a post
office, it must provide written reasons, and its decision is
subject to reversal by the Commission for arbitrariness,
abuse of discretion, failure to follow procedures, or lack of
evidence. § 404. The Postal Service’s public characteristics
and responsibilities indicate it should be treated under the
antitrust laws as part of the Government of the United
States, not a market participant separate from it.
The Postal Service does operate nonpostal lines of busi-
ness, for which it is free to set prices independent of the
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748 POSTAL SERVICE v. FLAMINGO INDUSTRIES (USA) LTD.
Opinion of the Court
Commission, and in which it may seek profits to offset losses
in the postal business. § 403(a). The great majority of the
organization’s business, however, consists of postal services.
See Revenue, Pieces, and Weight by Classes of Mail and Spe-
cial Services for Government Fiscal Year 2003, available
at http://www.usps.com/financials/_pdf/GFY03.pdf (as visited
Jan. 23, 2004, and available in Clerk of Court’s case file).
Further, the Postal Service’s predecessor, the Post Office
Department, had nonpostal lines of business, such as money
orders and postal savings accounts. Cullinan 84–85, 107.
As a Cabinet agency, the old Post Office Department was not
subject to the antitrust laws. The new Postal Service’s lines
of business beyond the scope of its mail monopoly and univer-
sal service obligation do not show it is separate from the
Government under the antitrust laws.
* * *
The Postal Service, in both form and function, is not a
separate antitrust person from the United States. It is part
of the Government of the United States and so is not con-
trolled by the antitrust laws. The judgment of the Court of
Appeals is reversed.
It is so ordered.
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