PSBCA No. 6490


September 18, 2015

JANET RODRIGUEZ-RIVERA v. UNITED STATES POSTAL SERVICE

PSBCA No. 6490 

APPEARANCE FOR APPELLANT:
Luis Rafael Rivera, Esq. 

APPEARANCE FOR RESPONDENT:
Jessica J. Stringer, Esq.
United States Postal Service Law Department  

OPINION OF THE BOARD

Appellant, Janet Rodriguez-Rivera, delivered mail under a contract with Respondent, United States Postal Service.  The Postal Service terminated the contract for default based upon Ms. Rodriguez-Rivera’s alleged involvement in a drug trafficking scheme, failing to account for packages, and taking packages for her own use.  We rule in favor of Ms. Rodriguez-Rivera.  The termination for default is converted to a termination for convenience.

FINDINGS OF FACT

      Background

  1. Appellant was awarded a contract (Contract HCR 0760 – “Contract”) with Respondent, United States Postal Service, to deliver mail along a rural route that originated at the Yabucoa, Puerto Rico, Post Office.  The term of the Contract was from April 1, 2010 to March 31, 2014.  (Appeal File (AF) 9 at 23).
  2. The Contract provided that Appellant would deliver mail to 678 mail boxes along Highway Contract Route 3 (HC 03) in Yabucoa (AF 9 at 36-37, 49).[1]  For delivery along this rural route, mail was addressed with the recipient’s name, “HC 03” (not a street name), the box number, and Yabucoa, PR 00767 (Tr. 1 at 19-20; see, e.g., AF 10 at 109, 115, and 117).[2]
  3. The Yabucoa Post Office is a small post office.  Thirteen people work there including clerks, Postal Service letter carriers, contractors, and the Postmaster.  This post office serves approximately 39,000 people in Yabucoa and 6,000 people in the surrounding area.  (Tr. 1 at 30-32).
  4. The Yabucoa Post Office was managed by the Postmaster, who also served as the contract Administrative Official (AF 9 at 38; Tr. 1 at 17-18).
  5. Six of the 13 people who worked out of the Yabucoa Post Office were contractors who delivered mail on six different rural routes called HC 01 through HC 06 (Tr. 1 at 31-32). 
  6. As part of his duties, the Postmaster observed daily the six contract carriers scan packages within the post office in preparation for delivery (Tr. 1 at 36-38). 
  7. Appellant delivered mail as a contractor for seventeen years starting in 1995 (Tr. 1 at 39; Tr. 2 at 64; AF 8 at 18).
  8. The record contains no deficiency reports addressing Appellant’s performance (Tr. 1 at 45-46).
  9. The Contract provided:  “Sanctity of the Mail[:]  The supplier shall carry all mail tendered for transportation under this contract . . . with certainty, celerity, and security . . . .”  (AF 9 at 39).
  10. Appellant was required by the Contract to “[d]eposit all mail matter received . . . into the appropriate customer mail boxes . . . placed along the line of the route.  In the event that (i) mail cannot be contained in customer boxes . . . [Appellant] shall deliver the affected mail as provided in the applicable Postal Service Regulations. . . .” (AF 9 at 42).
  11. Most of the mail boxes along HC 03 were located in groups called cluster box units (CBUs).  Mail was inserted in either a small slot at the front of the box or, after the carrier opened an access panel, the opened front of the CBU.  (Tr. 1 at 19-20).  Individual mailboxes in the CBUs were about 4 inches by 4 inches by 18 inches and often were not big enough to hold a package (Tr. 1 at 20).
  12. If a package was too large for the box, the carrier either would attempt to deliver the package to the addressee who would often be there to meet the carrier or leave a slip in the box stating that the package could be picked up at the Yabucoa Post Office (Tr. 1 at 20-22, 119; Tr. 2 at 116). 


    13. The Investigation

  13. In 2011 and 2012, law enforcement officials investigated reports of drug trafficking at the Yabucoa Post Office.  The investigation primarily involved the Postal Service Office of the Inspector General (OIG), the U.S. Drug Enforcement Administration (DEA), the U.S. Bureau of Alcohol, Tobacco, and Firearms (ATF), and the Puerto Rico Police Department (PRPD).  (Tr. 1 at 58-60, 97; AF 10 at 94-144; AF 11 at 147-51; AF 13 at 156-70).
  14. The OIG and DEA focused on three of the six routes performed by contractors:  HC 02, HC 03 performed by Appellant, and HC 05 performed by Appellant’s nephew (Tr. 1 at 99-100; AF 10 at 99). 
  15. In April 2011, law enforcement officials identified two suspicious packages addressed for delivery on two routes (HC 02 and HC 05, but not Appellant’s HC 03) originating from the Yabucoa Post Office.  One of the packages was addressed to [redacted] Alamo (Alamo package) on HC 02.  The other package was addressed to [redacted] Fernandez (Fernandez package) on HC 05.  (AF 16; AF 17; AF 19; AF 20; AF 21; Tr. 2 at 11-14).
  16. On May 5, 2011, Appellant’s brother, was pulled over by the PRPD.  In his vehicle was an unregistered pistol and 12 lbs. of marijuana in the Alamo package (Tr. 2 at 11-12; AF 10 at 99; AF 15 at 192-93).  During questioning, Appellant’s brother explained that he had received the Alamo package after paying a dealer $4,000.  Appellant’s brother pleaded guilty to possession with intent to distribute marijuana in violation of 21 U.S.C. § 841(a)(1) (AF 15 at 199-207).  During an interview with the OIG, Appellant’s brother indicated that the HC 02 contractor had knowledge of the contents of the package and had made arrangements for its delivery to Appellant’s brother (AF 10 at 99).  The Postal Service terminated the HC 02 contractor’s contract to deliver mail (Tr. 2 at 29).  Nothing in the record directly connects this incident with Appellant other than she is the sister of the convicted drug dealer (Tr. 2 at 96; AF 10 at 99).[3]
  17. On December 15, 2011, the OIG intercepted four suspicious packages addressed for delivery on Appellant’s route.  After obtaining a search warrant, the OIG determined that the packages contained marijuana.  (AF 10 at 99-101; AF 11; Tr. 1 at 100-01).  The four packages were kept by the OIG and never provided to Appellant for delivery (Tr. 1 at 102-03).  Nothing in the record shows that Appellant ever had any contact with these packages, knew about their contents prior to this litigation, or worked with the senders to coordinate the delivery of these packages.
  18. On December 16, 2011, the OIG intercepted another package addressed for delivery along Appellant’s route.  The package was addressed to [redacted] Contreras, HC 03, Box 12572, Yabucoa, PR 00767 (Contreras package).  (AF 10 at 98-100, 116-17; Tr. 1 at 103-05).  The Postal Service’s records did not show a [redacted] Contreras living along HC 03, which made the package seem suspicious.  Notwithstanding their suspicions, the OIG and DEA did not secure a search warrant for the package and never learned the contents of the package.  (Tr. 1 at 104-05).  Nothing in the record shows that the Contreras package contained illegal drugs.
  19. The OIG returned the Contreras package to the mail stream for delivery and began surveillance (AF 10 at 101; Tr. 1 at 104-05).  Appellant scanned the package as delivered at 9:38 a.m. on December 22, 2011, even though she had not yet left the post office and had not delivered the package (AF 10 at 101, 127; Tr. 1 at 24-25, 105).  Appellant placed the package in the car she used to deliver mail along with the other mail for delivery on HC 03.  An OIG agent and a DEA agent continued their surveillance of Appellant delivering the mail.  (AF 10 at 101; Tr. 1 at 67, 105-09).
  20. The OIG agent and DEA agent did not see Appellant deliver the Contreras package.  Appellant returned to the Yabucoa Post Office at the end of the day.  She did not return the package to the Post Office.  (AF 10 at 101; Tr. 1 at 109). 
  21. The OIG and DEA agents discontinued their surveillance without knowing what happened to the package (Tr. 1 at 68; 105-09; Tr. 2 at 37-41).  The OIG and DEA agents did not look in the window of her car at the end of the day to see if the package was still there.  The OIG and DEA agents did not confront or interview Appellant at the end of the workday on December 22, 2011.  (AF 10 at 101-02; Tr. 1 at 67-68, 109-10; Tr. 2 at 39).  The OIG and DEA did not get a search warrant to search Appellant’s home for the package and no search was conducted (Tr. 1 at 139).  The OIG and DEA do not know what happened to the package (Tr. 2 at 39).
  22. Along rural routes in Puerto Rico many extended families share a mailbox.  Additionally, transient friends or relatives may also use the mailbox.  (Tr. 1 at 68.)  The record does not include a complaint from either the sender or intended recipient about nondelivery of the Contreras package.
  23. On February 3, 2012, Appellant’s nephew, the contractor delivering mail on route HC 05, was pulled over for a traffic offense and arrested by the PRPD.  His vehicle contained a large amount (approximately 5,000 pieces) of undelivered mail, including two packages containing approximately 25 lbs. of marijuana.  The PRPD contacted the OIG.  (AF 13 at 158-60; Tr. 1 at 110).  Appellant’s nephew was charged with possession with an intent to distribute marijuana in violation of 21 U.S.C. § 841(a)(1), delay or destruction of the mail in violation of 18 U.S.C. § 1703(a), and theft of mail in violation of 18 U.S.C. § 1709 (AF 13 at 161; AF 14 at 17).  He pleaded guilty to the destruction of the mail count (AF 14 at 178).  Nothing in the record connects Appellant with this incident other than being the aunt of the convicted contractor (AF 10 at 130).
  24. The Yabucoa Postmaster never found illegal drugs in the possession of Appellant (Tr. 1 at 48-49).
  25. On July 31, 2012, the OIG seized another package addressed to [redacted] Diaz, HC 03, Box 11977, Yabucoa, PR 00767 (Diaz package) (AF 10 at 103).  The OIG then returned the package to the mail stream.  Appellant, as part of her normal duties, scanned the Diaz package as out for delivery.  But before she could bring the package to her car for delivery, the OIG intercepted the package.  After obtaining a search warrant, the OIG determined that the Diaz package contained 5 lbs. of marijuana.  (Tr. 2 at 25-27; AF 10 at 103).  Nothing in the record shows that Appellant knew the contents of the Diaz package.
  26. Also, on July 31, 2012, more than seven months after the OIG and DEA conducted the December 22, 2011 surveillance; the OIG interviewed Appellant.  The OIG concluded that because she did not provide details about delivering the Contreras package, and because she said that she never scanned a package as delivered before it actually was delivered, she provided false statements.  (AF 10 at 98; AF 11).
  27. The contracting officer suspended Appellant from further contract performance on July 31, 2012 (AF 5 at 14).

    28. Termination for Default

  28. The Contract includes a Termination for Default clause which provides:  “The Postal Service may terminate this contract . . . for default by [Appellant] . . . .  In the event of termination for default . . . [Appellant] will be liable to the Postal Service for any and all rights and remedies provided by law. . . .”  In addition, “If it is determined that the Postal Service improperly terminated this contract for default, such termination will be deemed a termination for convenience.”  (AF 9 at 72-73).  The Contract also included an Events of Default clause which provides: 
    29. [Appellant’s] right to perform this contract is subject to termination under the clause entitled Termination for Default.  The following constitute events of default, and this contract may be terminated pursuant to that Clause.
    a.  The supplier’s failure to perform service according to the terms of the contract;
    b.  If the supplier has been administratively determined to have violated Postal Laws and regulations and other laws related to the      performance of service; . . . 
    f.  The supplier’s failure properly to account, deliver and pay over moneys, mail and other property pursuant to this contract;
    g.  If the supplier . . . associates with known criminals, or . . . otherwise is not reliable, trustworthy, or of good character.
    o.  If the supplier materially breaches any other requirement or clause of this contract.
    (AF 9 at 78-79).
  29. The contracting officer issued a show cause notice on November 29, 2012, stating that Appellant violated the terms of her contract.  The show cause notice referenced an OIG report, but did not provide a copy of it.  (AF 5 at 14-15). 
  30. When Appellant, through counsel, asked for a copy of the OIG report that formed the basis of the contracting officer’s show cause letter, the contracting officer responded that Appellant would need to file a Freedom of Information Act request to get a copy of the OIG report “due to the confidentiality of the OIG” (AF 3 at 9).
  31. On January 29, 2013, the contracting officer terminated the Contract for default, effective July 31, 2012, based on failure to perform service in accordance with the terms of the contract including (1) Section B.1.4.d, which provides that “[t]he supplier will be required to exchange mail through locked lobbies, vestibules, collection boxes, or lockers . . . .”; (2) Section B.5, which requires a supplier to identify contractor employees for background checks, (3) Section B.6a, which requires drivers to be licensed and either over the age of 18 or 21 depending on the type of vehicle used, (4) Section B.7, which requires the supplier to have insurance on her vehicle, (5) “other violations relating to drug trafficking violations,” and (6) unspecified violations of the Events of Default clause (AF 2 at 3; AF 9 at 38, 44, 45, 47-48, 78-79). 
  32. In the termination for default letter, the contracting officer did not explain how the contract terms were violated, just that the OIG agents investigating Appellant concluded that the terms of the contract were violated.  Nor did the contracting officer specify how Appellant was implicated in the alleged drug trafficking scheme.  (AF 2 at 3).  The contracting officer also stated that the termination was justified because she did not receive a response to the Show Cause Letter (notwithstanding the contracting officer’s refusal to provide a copy of the OIG report) (AF 2 at 3).
  33. Appellant filed a timely appeal of the contracting officer’s final decision (AF 1 at 1-2).

    34. DECISION

    The Postal Service bears the burden of proving that the termination for default was justified.  See Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765 (Fed. Cir. 1987).  Termination for default is a drastic sanction.  See Wayne L. Orr, PSBCA No. 6268, 10-2 BCA ¶ 34,560.  As such, it should be sustained only for good grounds on solid evidence.  See J.D. Hedin Constr. Co. v. United States, 408 F.2d 424, 431 (Ct. Cl. 1969); Lee Aron VanDyke, PSBCA No. 6150, 09-2 BCA ¶ 34,291.  In order to prevail, the Postal Service must prove that deficiencies in Appellant’s performance constituted a material breach of the contract, not a minor violation.  See Gordon T. Smart, PSBCA No. 6123, 11-1 BCA ¶ 23,695.

    The Postal Service’s Post Hearing Brief explains that it terminated the contract for default for two reasons: drug trafficking and violation of the sanctity of the mail.  While the Show Cause Notice and Termination for Default Decision identify additional reasons, we deem those abandoned by the Postal Service and do not address them.

    Drug Trafficking

    The Postal Service alleges that Appellant was actively involved in illegal drug trafficking on her mail route.  Based on this involvement, the Postal Service argues that it was justified in terminating the contract for default.  A review of the ten packages relied upon by the Postal Service to support this argument is necessary. 

    The DEA and OIG identified two suspicious packages (the Alamo and Fernandez packages) which were addressed for delivery on routes (HC 02 and HC 05) other than Appellant’s route.  The packages were intercepted before they were delivered.  While Appellant lives on route HC 05, nothing in the record directly connects her to these packages (Finding 15). 

    The OIG then intercepted four packages containing illegal drugs addressed for delivery along HC 03, Appellant’s route.  The four packages were intercepted before they were given to Appellant for delivery.  (Finding 17).  The OIG failed to tie the illegal contents of these packages to Appellant.

    The OIG and DEA then intercepted another suspicious package (the Contreras package).  However, nothing in the record shows that this package actually contained drugs (Findings 18-22).  If the OIG and DEA believed that it contained drugs and conducted surveillance based on this belief, they let the package slip away.  The Contreras package does not show that Appellant illegally trafficked drugs. 

    The Postal Service then relies on two packages containing 25 lbs. of marijuana seized during the arrest of Appellant’s nephew.  Nothing in the record connects Appellant to these two packages or the arrest other than being the aunt of the HC 05 contractor.[4]  (Finding 23). 

    The Postal Service finally relies on the Diaz package to show that Appellant trafficked in illegal drugs.  The Diaz package contained 5 lbs. of marijuana and was addressed for delivery on HC 03.  After Appellant scanned the package out for delivery, the OIG intercepted the package at the Post Office before Appellant placed it into her vehicle.  Nothing in the record shows that Appellant knew the contents of the package or did anything other than try to deliver a package addressed for delivery along her route.  This tenuous connection does not show that Appellant knowingly trafficked drugs.

    In summary, on the allegation of illegally trafficking drugs on her mail route, the facts as presented by the Postal Service do not support the termination for default.

    Sanctity of the Mail 

    The Postal Service next argues that Appellant stole the Contreras package and improperly handled the mail.  At 9:38 a.m. on December 22, 2011, Appellant prematurely scanned the Contreras package as having been delivered.  While under OIG and DEA surveillance, Appellant then placed the Contreras package in her car for delivery along with the other mail.  The OIG and DEA then followed Appellant as she delivered mail.  The OIG and DEA concluded that Appellant stole the package, but did not search Appellant’s car at the end of the day.  The OIG and DEA do not know what happened to the Contreras package.  Additionally, the record does not include complaints from either the package’s sender or the intended recipient, and Appellant testified that she delivered the package.  (Findings 19-21).  On this record, we are not willing to conclude that Appellant stole the Contreras package.  To the extent that the Postal Service argues that Appellant improperly removed this package or other packages from the mail stream, the record does not support the argument. 

    The Postal Service also argues that the sanctity of the mail was violated because of a package scanning error which Appellant tried to cover up.  When asked by the OIG agent about an incorrect scan of one specific package seven months after it occurred on a route with 678 mail boxes, Appellant told the OIG she properly scanned the package.  Even if incorrect, inaccurately explaining a single scanning error which occurred seven months before the interview is not sufficient to terminate the contract for default.

    In short, the Postal Service alleges that Appellant violated the sanctity of the mail by theft and mishandling, but provides no evidence to support it other than she scanned a package as delivered before actually delivering it.  While a scanning error is a mistake, it is not sufficient under the facts in this case to uphold the termination for default.

    CONCLUSION AND ORDER 

    The Postal Service has not proved that it properly terminated its contract with Janet Rodriguez-Rivera; accordingly, we rule in favor of Appellant.  The appeal is granted.  The termination for default is converted to a termination for convenience.

     Peter F. Pontzer
    Administrative Judge
    Board Member 

    I concur:
    William A. Campbell
    Administrative Judge
    Chairman 

    I concur:
    Gary E. Shapiro
    Administrative Judge
    Vice Chairman

     

    [1] The “HC” generally refers to a highway contract delivery route where delivery is performed by a contractor.

    [2] The Board conducted three days of hearing.  The transcript references the three days as Tr. 1, Tr. 2, and Tr. 3.

    [3] The record does not show what happened to the Fernandez package.

    [4] While Appellant’s brother and nephew pleaded guilty to criminal acts, nothing in the record connects her to those acts.