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Capital One files response to USPS NSA dismissal request

On July 28, Capital One responded to US Postal Service request to dismiss a complaint it made with the Postal Regulatory Commission on June 19 alleging that the USPS “unduly discriminated” against the company. The company claims it was denied a Negotiated Service Agreement under the same terms as one approved to Bank of America Corp.

The USPS in response filed a motion to dismiss the complaint on July 21.

Capital One is asking the PRC to deny the motion to dismiss and allow the complaint to be argued in a hearing before the PRC.The agency is expected to rule shortly whether to uphold a motion to dismiss a complaint made by Capital One Services Inc. against the US Postal Service.

Ann Fisher, acting director, public affairs and government relations for the PRC, said the agency is expected to make a decision “in the near future” on whether or not the complaint will be dismissed.

The USPS claims that Capital One’s proposed NSA was not identical to the one approved with Bank of America, and that Capital One had not exhausted all good-faith negotiations for an NSA before filing the complaint.

Capital One’s rebuttal states that, to ensure transparency as mandated in the Postal Accountability and Enhancement Act of 2006 (PAEA), the PRC should not dismiss the complaint.

“Dismissing a substantial complain at the earliest stage — and thereby depriving the mailer of its opportunity to prove its case — would frustrate Congress’ intent in establishing the PAEA regulatory structure,” the filing reads.

In its motion to dismiss, the USPS claims that Capital One did not complete the proper steps to negotiate a functionally equivalent NSA before filing its complaint. It further alleges that Capital One filed the complaint as a way to skip the negotiating process “and simply sign a new NSA that is identical to the Bank of America NSA.”

Capital One, however, in its filing said that it had met with USPS officials on 13 occasions between February 27, 2007 and June 9, 2008 regarding discussions about an NSA similar to Bank of America’s.

Capital One’s complaint also claimed that the NSA between Bank of America and the USPS used thresholds for mailing discounts based on industry average rates from 1998, and not current NSA baselines.

The USPS has approved nine NSAs in total, with one extension since 2003.

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