USPS to Pay Pitney Bowes

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The U.S. Postal Service said it will pay $51.75 million to postage meter giant Pitney Bowes Inc., Stamford, CT, late last month to settle a dispute over a system that allows meter customers to purchase postage by telephone.

The lawsuit, filed by Pitney Bowes in late 1997, alleged that the USPS had taken the company's property by requiring that Pitney's customers maintain their postage accounts with the USPS, not Pitney.

The lawsuit arose out of a dispute over a 1978 statement of understanding that authorized Pitney Bowes to offer Postage by Phone, its proprietary version of the agency's Computerized Meter Resetting System. This system was first offered by Pitney Bowes in 1979, and enables business customers to reset their postage meters over telephone lines.

In 1995, as a part of a review of its cash management practices and postage meter policies, the postal service revised its regulations for CMRS and terminated the 1978 Statement of Understanding. Under the new rules, the agency declared it would hold the accounts -- in which customers were required to maintain a balance to cover future postage -- and earn the interest on the money that previously had gone to Pitney.

"We tried, for a couple of years, to get some compensation for this," said Pitney spokeswoman Sheryl Battles. " And when our efforts were not successful, we filed a lawsuit."

The Court upheld the revised regulations but ordered a trial on the merits of Pitney Bowes' claim for money damages.

The agency, however, said it had agreed to settle out of court and make the payment to Pitney for "a portion of the financial benefit that the postal service obtained as a result of the revised regulations."

"We are very pleased with the announcement that they have agreed to pay us in exchange for dropping the suit and have come to an agreement, " said Battles. "We have as long history of coming together with the postal service to provide value to postal customers."

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