In the Matter of the Petition by

NATIONAL AUTO RESEARCH PUBLICATIONS, INC.,
Box 758, Gainesville, Georgia 30501

Proposed Revocation of Second-Class Mail Privileges for
"OFFICIAL USED CAR MARKET GUIDE BLACK BOOK"

P.S. Docket No. 2/131

February 4, 1975

Rudolf Sobernheim Administrative Law Judge

APPEARANCES:
Marion Edwyn Harrison, Esq.
Harrison, Lucey, Sagle & Solter Suite 500
1701 Pennsylvania Avenue,
N.W. Washington, D.C. 20006 for Petitioner

Grayson M. Poats, 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. Part 954 to contest the ruling of Respondent, represented by the Manager of the Mail Classification Division, Finance Department, U.S. Postal Service (sometimes hereinafter referred to as the "Manager") which on 25 June 1973 annulled, subject to the outcome of this proceeding, the second-class mail privileges theretofore granted to Petitioner's publication "Official Used Car Market Guide Black Book" (hereinafter sometimes referred to as "Black Book").

The reasons for this ruling were stated by the Manager as follows:

Section 132.211, Postal Service Manual (Title 39, United States Code, section 4351) states that only newspapers and other periodical publications which meet the mailability criteria established in Part 124 may be mailed at the second-class rates. Section 132.224, Postal Service Manual (Title 39, United States Code, section 4354(a)(4) states that publications must be originated and published for the purpose of disseminating information of a public character, or they must be devoted to literature, the sciences, art, or some special industry. A periodical, as ordinarily understood, is a publication appearing at stated intervals, each number of which contains a variety of original articles by different authors devoted either to general literature of some special branch of learning or to a special class of subjects. Ordinarily, each number is incomplete in itself, and indicates a relation with prior or subsequent numbers of the same series. It implies a continuity of literary character, a connection between the different numbers of the series in the nature of articles appearing in them, whether they be successive chapters of the same story or novel or essays upon subjects pertaining to general literature. (See Houghton v. Payne , 194 U.S. 88 (1904)).

The subject publication is simply a listing of the loan value, and four categories for the retail value of used cars. Each issue is primarily an update service with each subsequent issue updating the previous issue. The "Official Used Car Market Guide Black Book" does not contain any original articles and is, in fact, a reference book. Accordingly, this publication is not a periodical publication for postal purposes. The provisions of Title 39, United States Code, which are cited above have been carried forward by section 3 of the Postal Reorganization Act, Public Law 91-375, as implemented by Postal Service Orders 71-9 and 71-10, June 21, 1971.

A hearing was held thereafter at which both parties presented evidence. After they had submitted briefs and reply briefs, the Acting Judicial Officer of the U.S. Postal Service on 17 September 1974 issued the Amended Postal Service Decision in Florists' Transworld Delivery Association , P.S. Docket No. 1/167. In consequence, the parties were invited to comment on the effect of that decision on the instant matter. Both parties availed themselves of this opportunity and filed supplemental briefs.

FINDINGS OF FACT

1. National Auto Research Publications, Inc. with offices at Gainesville, Georgia, since 1955 has published, and is presently publishing, Black Book.

2. Each issue of Black Book consists of about 80 strips of paper, 8 inches long and 2 1/2 inches wide with a black flexible cardboard cover strip of the same size. The cover and paper strips are held together by a single staple at the half-way mark of the long dimension and are folded over into a booklet of 4 by 2 1/2 inches, covered front and back by a black flexible cardboard cover and containing (in the copies of record, Resp. Ex. 2) 158 numbered pages, an unnumbered page for the table of contents, and the cover. The booklet thus fits easily into a man's shirt or jacket pocket or a woman's purse for ready use.

3. a. The outside front cover lists the publisher, the name of the publication with the notation "weekly", the date of the particular issue, and the applicable state or regional edition. The outside back cover of the regional edition is blank and that of the state edition lists the automobile auctions in the state with sale day and time, as well as the name, address and telephone number of the Black Book representative in the state.

b. The inside front cover has a standard text of business suggestions, an explanation of the classification of cars (Extra Clean; Clean; Average; Rough), and a rule of thumb for figuring the loan value of a car; 90% of wholesale price for a "clean" car. The inside back cover contains an order form for Black Book with a $40 subscription price for a single order and discounts for multiple orders.

4. a. Each issue of Black Book has a table of contents which shows all domestic passenger cars in alphabetical order, followed by listings for imported cars and for trucks.

b. On the reverse is a statement of Petitioner's office address, single subscription price and the like. Beneath Petitioner furnishes an explanation of the data used in preparing each weekly issue of Black Book. It reads as follows:

"The BLACK BOOK is Guaranteed For Accuracy Because:
1-- No Formulas, Dealer's Reports, Arts, Sciences or
      Guess Work Involved.
2-- Personal Coverage of 56 Leading Wholesale Auto
      Auctions Each Week by 44 Company Employees.
3-- Eighteen to Twenty Thousand Units Available for
      Inspection Each Week.
4-- All Sold Units Inspected by Company Employees Who
      Are Experienced Used Car Men.
5-- Each Unit Inspected by Company Employees and
      Classified According to Condition Into One of
      Four Categories, i.e., Extra Clean, Clean,
      Average, Rough.
6-- All No Sales Eliminated.
7-- Actual Sale Price Recorded.
8-- Not Confined to Region Such as North, South,
      East, West.
9-- The Actual Current Market in YOUR STATE Each
      Week.

"The BLACK BOOK is Published Each Week as a Service Providing Confidential Information to Dealers, Banks, Insurance Adjusters, Financial Institution and Leasing Companies.

Title to the Information Shall Remain in the National Auto Research Publications, Inc. The use of the BLACK BOOK and the Confidential Information Contained Therein by Any Person or Firm Other Than a Subscriber to this Information is prohibited.

THERE IS ONLY ONE BLACK BOOK]

Every effort has been made to insure accuracy. However, we assume no responsibility for errors or omissions."

5. Between the table of contents page (FF 4, supra ) and the back cover (FF 3, supra ) there follows the bulk of Black Book's contents, to wit: the report of the auction prices for the types of cars sold during the eleven to sixteen days preceding the publication date of each issue, as classified by Petitioner's reporters (see also Pet'r Ex. 1, 2).

a. The name and year of the car are shown in heavy print with a box to the right showing special features included in the price, such as automatic transmission or power steering. Beneath are shown price adjustments for special features or lack thereof, such as plus $60.00 for vinyl top or $275 less if the car has a manual transmission (Resp. Ex. 2, N.Y. ed., p. 1).

b. Underneath Black Book lists the sub-types of the particular car ( e . g 4D sedan, 2D hardtop), sold at any of the reported auctions, classified by Petitioner's reporters in accordance with Petitioner's scheme, and under each classification to the right of the car type the auction price and to the left thereof the loan value at 90% of the clean car price.

c. At the end of the price listings the editors of Black book have appended a brief statement of their views on the limited role of mileage as a factor in classifying used cars (Resp. Ex. 2, p. 158).

6. a. Black Book omits from its report sales of cars over 6 years old or where the price is below $200 (T 64).

b. Black book contains three exceptions to the rule that all prices reported are prices paid at an auction within the area of the particular edition during the 11 to 16 day period preceding the publication date of a particular issue.

(i) Where a particular type of car is not sold during the reporting period the last previous price continues to be listed (T 81).

(ii) Where several cars of a particular type and of the same classification are sold the price, if no more than perhaps $50.00 apart, may be averaged and the reported price would be that average rather than a single actual figure (T 85).

(iii) The prices reported in a particular state edition may not be the prices paid at auctions in that state because there was not, for instance, adequate selling activity in a state during the reporting period. In that event the prices reported in the state edition may come from another state in the same regional market area (T 88) if the Black Book editors consider such prices as representative of second hand car sales within the state (T 88). The subscriber is not, however, informed of this substitution ( ibid .).

7. In order to insure delivery to subscribers every Monday (T 70) Petitioner maintains an editorial staff of five persons, including an editor-in-chief (T 75, 82) who sift the incoming reports beginning with the Monday morning before delivery of the issue (T 74). The reports, coming from 37 field reporters (T 66), are sorted for publication by states or regions and according to the make and classification of the cars sold (T 72-74), based on the reports alone (T 76), although inquiries are occasionally made to obtain missing information or clarify an obscure feature of the report (T 76). The volume of reports, as exhibited at the hearing is substantial and 100 to 125 transactions per week may well be reported in respect of a popular car (T 84). The price figures in each issue are from 85 to 95% new (T 79); as to continued reporting of older figures see FF 6a.(i), supra .

8. Black Book has 27,000 subscribers in the United States and a separate Canadian edition has 6,000 (T 89). The bulk of the subscribers are second hand car dealers (T 90) but car leasing companies and financial institutions (T 77) as well as individual lawyers and accountants (T 90) are among the subscribers. Members of the public can subscribe if they so desire ( ibid. .

9. In the annulment letter (Resp. Ex. 1) Respondent stated that Black Book was "simply a listing of the loan value, and four categories for the retail value of used cars." It described Black Book as "primarily an update service with each subsequent issue updating the previous issue" and as, "in fact, a reference book."

10. a. Petitioner contended, on the other hand, through the testimony of an automobile dealer who is active in the affairs of the independent car dealers' trade associations (T 32) and has subscribed to and used Black Book for over 15 years (T 35) that he and other car dealers who use Black Book (T 46) use it to gauge car price trends from week to week (T 39) and, hence, use not only the current but also back issues of Black Book for at least 4 to 6 weeks back (T 38). He himself kept old copies of Black Book for reference for as long as one year or 18 months (T 38).

b. Petitioner's witness emphasized that for this use in gauging market trends based on reported prices paid by dealers for cars rather than on dealer prices to the public (T 47), frequency and regularity of publication as well as continuity of arrangement (T 43, 46) were most important and that Black Book thus provided a meaningful tool for this purpose (T 48).

11. On the basis of these contentions (FF 9 and 10, supra )

I find that Black Book is used by its subscribers to a substantial extent to determine price trends and to guide their purchasing activities, if they are dealers, or their selling activities, if they are car owners engaged in leasing their cars to renters. The fact, however, that Black Book both states a formula for computing loan value and lists the loan values computed in accordance therewith opposite the reported auction prices is indicative of the importance which Petitioner attaches to conveying this information to those of its subscribers who engage in financing used car sales.

13. It follows that the weekly issues of Black book have usefulness to subscribers both as providing a series of data covering a longer period of time and spot data on the basis of either of which the subscriber can make business decisions. In this sense each issue of Black Book is incomplete in itself and is related to prior and subsequent numbers of the series.

14. Black Book is not a permanent catalogue or a directory, updated from week to week, of used car sales prices. It is, on the contrary, a running weekly report of the sales activities which take place throughout the country at used car auction sales, assembled and edited by Petitioner so as to be useful to subscribers in their local dealings.

15. Black Book disseminates information of a public character and is also devoted to a special industry, i . e . the sale of used cars.

CONCLUSIONS OF LAW

1. Only newspapers and other periodical publications, meeting the mailability criteria of Part 124 of the Postal Service Manual (PSM), and meeting the qualifications imposed by PSM section 132.2 as well as other criteria imposed by decisional law are entitled to second-class mail privileges. Cf . PSM sec. 132.211

2. Neither the contentions of the parties not the record of this proceeding raise any question as to Petitioner's compliance with the technical provisions of Parts 124 and 132 of the Postal Service Manual.

3. It is, however, well established and at this late date hardly needs supporting citation that compliance with the terms of PSM section 132.2 is not sufficient to qualify any periodically issued publication as a newspaper or a periodical publication other than a newspaper, entitled to second-class mail privileges. Houghton v. Payne , 194 U.S. 88 (1904).

4. For it has been held since Houghton v. Payne , supra , that a periodical publication other than a newspaper (PSM 132.211) means either a magazine containing a variety of original articles by different authors devoted either to some special branch of learning or to a special class of subjects or a so-called "non-descript" publication. Petitioner's publication "Black Book" does not contain articles of any kind. The brief and unchanging instructional material found on the inside front cover, in back of the table of contents and on page 158 hardly qualifies as articles but in any event constitutes less than 2% of each issue of Black Book. What gives Black Book its usefulness and purpose are the other 98% consisting of auction price reports and a statement of the loan value of each type of car sold. See Florists' Transworld Delivery Association , P.S. Docket No. 1/167, Amended Postal Service Decision, p. 23. Such a publication as Black Book is not, therefore, a magazine within the meaning of Houghton v. Payne , supra . National Automobile Dealers Used Car Guide Company, P.S. Docket No. 2/183 (1974), decided this day. This matter has been fully considered most recently in the Amended Postal Service Decision in Florists' Transworld Delivery Association , supra , and the Initial Decision in Shepard's Citations, Inc. , P.S. Docket No. 1/88(1974), upheld on appeal by the Acting Judicial Officer in his Postal Service Decision (1974). See also the Postal Service Decision in Teleflora Delivery Service, Inc. , P.S. Docket No. 1/206 and Florafax Delivery, Inc. , P.S. Docket No. 1/207 (1974) to like effect.

5. Petitioner argues strongly that Houghton v. Payne , supra , should be read as limited to the type of publication to which the Supreme Court's decision finally denied second-class mail privileges, to wit: cheap editions of entire books, published serially for subscribers. In this view, the description of publications entitled to second-class mail privileges is mere dictum intended to delimit serial reprints of complete books from those publications which truly are characterized by their periodicity. If the argument were viewed in isolation it might have persuasive force. But history has by-passed such arguments and it is neither my duty nor in this instance a sensible task to attempt to reverse the long course of court and administrative decisions which have interpreted Houghton v. Payne , supra , contrary to Petitioner's argument.

6. In the first place, a reading of the decisive passage (194 U.S. at pp. 96-97) shows that the Court was not merely distinguishing books, published seriatim in their entirety, from periodicals. It considered that the provisions of law, now embodied in PSM section 132.2, did not fully define the term "periodical" and had resort to dictionary definitions and ordinary meaning to find a definition for this term. The quest of the Court is on its face too far-reaching to allow the radical narrowing of its scope which Petitioner proposes.

7. In addition, when the Supreme Court next addressed the topic in Smith v. Hitchcock , 226 U.S. 53 (1912) it did not merely say that books were not periodicals and dispose of the case before it on that ground. Instead, the Court stated broadly that it had to be "taken as established that not every series of printed papers published at definite intervals is a periodical publication within the meaning of the law, even if it satisfies the conditions" otherwise set forth by law and cited " Houghton v. Payne , 194 U.S. 88, 96" in support of its assertion. Hitchcock v. Smith 226 U.S., at p. 58. Hence, the Supreme Court itself as early as 1912 rejected the narrow reading of its precedent-making decision of eight years earlier. As Florists' Transworld Delivery Association and Shepard's Citations, Inc. both supra , and the earlier court and administrative-judicial decisions there cited show, the broad view of Houghton v. Payne has been the law ever since.

8. Houghton v. Payne , supra , also noted that "[a] few other nondescript publications, such as railway guides, appearing at stated intervals, have been treated as periodicals and entitled to the privileges of second class mail matter" (194 U.S. at 96-97). Postal Service administrative decisions have extended this privilege to other types of transportation guides. National Publishing Company, Inc. , P.O.D. Docket No. 3/5 (1969). No decisions have, however, been found which have extended the second-class mail privilege to publications other than transportation guides. For the reasons stated by the acting Judicial Officer in the Amended Postal Service Decision in Florists' Transworld Delivery Association , supra , pp. 34-35, it would be an inappropriate innovation to treat Black Book as a non-descript publication. To the extent that a non-descript publication should provide information of a public character "most useful" not only to an industry but to the public ( Payne v. Railway Publishing CO ., 20 App. D.C. 581, 598-9 (1903)), Black Book also fails to qualify. See also comment in Shepard's Citations, Inc. , supra , Initial Decision, p. 27.

9. In addition to periodicals newspapers are included within the class of periodical publications, although they are not so regarded in common speech. Houghton v. Payne , 194 U.S. at p. 96. Newspapers are defined as a publication regularly printed and distributed, usually at a short interval, daily or weekly, containing news or other matters regarded as of current interest. WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY OF THE ENGLISH LANGUAGE (1961), s . v . newspaper.

10. No specific form is required of newspapers other than the general conditions laid down in PSM Section 132.2 which Black Book meets. While Black Book does not have the appearance or format of the usual newspaper, it is such in fact. For its sole purpose and function is to convey current business news relevant to the business of buying and selling used cars as well as making such information available to the organizations representing and members of the public generally.

11. To accord second-class mail privileges to Petitioner for Black Book is in accord with the decision in Surveys for Business, Inc. , P.O.D. Docket No. 3/37 (1970) which allowed second-class mail privileges for a publication reporting notices regarding changes in location and management of food and non-food enterprises at an annual subscription price of $1,440 for a few hundred subscribers. While that decision, which neither party has discussed, was addressed to the question of whether the limitations on advertising publications were applicable in that case, it supports the result reached here. See also the discussion in The Architect and Engineer, Inc. , P.S. Docket No. 2/179(1974).

12. It was argued in the two last-cited cases that similar business news services such as the Dodge Bulletin or the Pacific Builder enjoyed second-class mail privileges. In Surveys for Business, Inc. , supra , Respondent argues that the Dodge Bulletin had erroneously been granted such privileges. However, more than four years later there is no record of any action by Respondent against such publications. In these circumstances Surveys for Business, Inc. should be followed here. To so hold does not require any reevaluation of Florists' Transworld Delivery Association or Shepard's Citations, Inc. , both supra , neither of which was published with sufficient frequency to be considered purveyors of current news. See also National Automobile Dealers Used Car Guide Company , supra . Moreover, the publication in the Florists ' case was not available to the public, which would seem to be a condition sine qua non for a newspaper.

13. Accordingly, Petitioner is entitled to second-class mail privileges for Black Book and the proposed action to revoke its second-class mail privileges should be withdrawn.