In the Matter of the Petition by
THE ARCHITECT AND ENGINEER, INC.,
68 Post Street,
San Francisco, California 94104

Denial of Application for Second-Class Mail
Privileges for "ARCHITECTS (Daily) REPORTS"

P.S. Docket No. 2/179

Rudolf Sobernheim Administrative Law Judge

APPEARANCES:
Mr. Edwin H. Wilder President
68 Post Street
San Francisco, California 94104 for Petitioner

Arthur S. Cahn, Esq.
Law Department U.S. Postal Service
Washington, D.C. 20260 for Respondent

INITIAL DECISION

This is a proceeding initiated by Petitioner pursuant to 39 C.F.R. 954 to contest the ruling of Respondent, represented by the Manager of the Mail Classification Division, Finance Department (hereinafter sometimes referred to as the "Manager"), issued on 27 August 1973, which denied, subject to the outcome of this proceeding, Petitioner's application of 11 November 1971 for second- class mail privileges for "ARCHITECTS REPORTS".

Petitioner's application was denied on the ground that its publication did not contain original articles on a variety of topics and was not, therefore, a periodical publication within the meaning of Houghton v. Payne , 194 U.S. 88 (1904), nor a newspaper but contained merely listings pertaining to the construction of buildings which would be more appropriately classified as miscellaneous printed matter charged postage as third class mail.

Upon receipt of this ruling Petitioner initiated the instant proceeding, addressing under date of 10 September 1973 an extended statement to the Postmaster in San Francisco, Cal., accompanied by appropriate exhibits. On 3 December 1973 the Manager replied to Petitioner's letter and advised him to file his petition for review with the Docket Clerk of the Office of Administrative Law Judges. In a further response, dated 11 December 1973, Petitioner expressed the opinion that the format of its publication might be its "problem" in obtaining second-class mail privileges, pointing out its convenience to subscribers who need not clip or cut out any item since each was on a separate sheet of paper printed on one side only. Petitioner added that only the uniqueness of its format enabled it to meet the competition of the McGraw-Hill Information Systems Company, its big-business rival, which published construction industry reports similar to Petitioner's.

On 10 January 1974 Petitioner's correspondence with the San Francisco Postmaster and the Manager was docketed in the Office of the Administrative Law Judges of the Postal Service. Contacts between Petitioner and the Mail Classification Division appear to have continued, however, for on 15 January 1974 Petitioner wrote to the mail classification specialist handling its application inter alia as follows (Resp. Ex. 1):

"In accordance with our conversation of yesterday, we are exploring the possibility of altering our production method to eliminate reproduction of the 'typewriter' material.

We have contacted a number of printing equipment suppliers and are checking into the feasibility of the Vari-Typer, as well as IBM equipment, but to get the information needed as going to take more time than we have under the present schedule.

Our present production process involves preparing the material on a standard typewriter and then running it on a Roneo 750 Press on a 14 in by 5 5/8 in sheet of paper. Five items are included on each sheet - these are then cut by a paper cutter into the individual 3" by 5 1/2" items for distribution to our subscribers. Once each week (Friday) we issue a cross-reference index of items out for bids and the full 14" sheet is used for that purpose (Copy of both sheets is enclosed)."

Shortly thereafter, on 23 January 1974 the Manager amended his ruling of 27 August 1973 by advising Petitioner that he also denied its application for second-class mail privileges for ARCHITECTS REPORTS on the following additional ground:

"Section 132.223, Postal Service Manual, provides that second-class publications must be formed of printed sheets. They may not be reproduced by stencil, mimeograph, or hectograph processes or reproduced in imitation of typewriting. Reproduction by stencil, mimeograph, or hectograph processes is reproduction in imitation of typewriting and is not permissible. Reproduction by any other printing process is permissible. Any style of type may be used. It is understood from information furnished by your that copies of the material 'Architects Reports' are prepared on a typewriter and reproduced on a Roneo 750 press. That process appears to be a mimeograph process. Therefore, in addition to the previously stated reason for denying the application filed for second-class mail privileges, the Postal Service proposes to deny the application because 'Architects Reports' is reproduced by a mimeograph process."

Respondent's answer, filed the same day, asserted all of the previously mentioned grounds for denial of Petitioner's application. A hearing was held in San Francisco, California, at which both sides presented testimonial and documentary evidence. At the request of the presiding Administrative Law Judge, Petitioner filed copies of items in its publication, intended to illustrate the testimony of its president, and Respondent filed copies of the DAILY PACIFIC BUILDER, published by Petitioner's competitor McGraw-Hill. Both parties have filed briefs setting forth their views in further detail.

Findings of Fact

1. ARCHITECTS REPORTS is published daily Monday through Friday.

2. Each issue of the publication consists of about 50 sheets approximately 3 x 5 inches in size which are mailed to subscribers in a brown manila envelope about 4 x 7 inches large.

3. All sheets are printed on one side only. The top sheet is somewhat larger than the rest and carries in red printing parallel to the left hand margin the name of the publication, other identifying data, and a notice to subscribers warning against copying material from the reports.

4. Except for the imprint on the left margin of the top sheet the material for publication is prepared on a standard typewriter and then run off, five items to a sheet about 14 x 5 inches, on a Roneo 750 press. After the sheets have been produced in this way, they are cut into the smaller sheets sent to subscribers. The text so printed has the appearance of being in imitation of typewriting.

5. Each sheet lists a construction project by name and location, its expected cost and information on the owner, developer, builder, contractor, architect or designer, as the case may be, physical data on the project and the current stage of the enterprise. At times a project may be the subject of several successive reports, presumably as Petitioner considers it in its subscribers' interest. See Pet'r Ex. 1; copies attached to Pet'r letter of 26 Feb. 1974; copies attached to Pet'r letter to PM, SF of 10 Sep. 1973.

6. Petitioner charges a substantial subscription price for its publication and maintains a legitimate list of subscribers.

7. Petitioner considers itself in competition with the DAILY PACIFIC BUILDER, published by the F. W. Dodge Division of the McGraw-Hill Information Systems Company.

8. The BUILDER is published daily except on week-ends in a 16-page edition in the format and on newsprint normally used by newspapers. Apart from some editorials and news stories and commercial advertising it consists of briefly descriptive listings or bid information on various construction projects as well as official notices with regard to public projects.

9. The descriptive listing of construction projects is essentially the area covered by Petitioner's publication and of presumed competition between it and McGraw-Hill. The text material of construction project listings in the two publications is very similar.

10. The DAILY PACIFIC BUILDER enjoys second-class mail privileges.

Conclusions of Law

1. Section 132.223 of the Postal Service Manual (PSM) with which Petitioner must comply to obtain second-class mail privileges for its publication provides as follows:

".223 Preparation

Publications must be formed of printed sheets. They may not be reproduced by stencil, mimeograph, or hectograph processes or reproduced in imitation of typewriting. Reproduction by stencil, mimeograph or hectograph processes is reproduction in imitation of typewriting and is not permissible. Reproduction by any other printing process is permissible. Any style of type may be used."

2. Petitioner's publication is printed in imitation of typewriting and, hence, not mailable at second-class postage rates.

3. Hence, it is unnecessary at this point to consider the further issue of whether ARCHITECTS REPORTS is a newspaper or other periodical publication within the meaning of Houghton v. Payne , supra , and other applicable regulations and administrative or court decisions.

4. It appears, however, that these questions are also raised by the content of the DAILY PACIFIC BUILDER, Petitioner's competitor. This publication complies with PSM 132.223 and its publisher presently enjoys second-class mail privileges for the BUILDER. If Respondent deems it necessary to test the issues raised in the original ruling denying Petitioner's application it has the opportunity to do so as regards the DAILY PACIFIC BUILDER. It need not wait until Petitioner resolves its printing problem and reapplies.

5. Accordingly, the Manager's decision is affirmed solely on the ground stated in his supplemental decision of 23 January 1974.