While reform legislation has a very low probability of happening, the decision by the U.S. Court of Appeals about the exigent rate case definitely will be issued in the near future. It is now 57 days since the September 6 oral arguments and a decision could come any time, but almost certainly before Christmas.

We have written extensively about what is at stake, and it really comes down to when the 4.3% exigent rate surcharge will be removed from postal prices, if at all. The Postal Service went for a big payday, arguing the increase should be permanent, costing mailers a present value of approximately $60 billion, while the Postal Regulatory Commission (PRC) ruled that the USPS could recover up to $3.2 billion in excess revenue to compensate for recession-driven losses. The PRC cap that is in place unless the court forces a change will end the surcharge around the late summer or early fall of 2015. The Alliance and its allies who are major customers of the Postal Service argued for a temporary surcharge that should have been smaller than the PRC compromise, but in no case larger or permanent.

The most likely two outcomes: either the court defers to the expert regulator, or it returns the case back to the PRC to revise its methodologies for limiting the surcharge amount. The latter decision is a risk to mailers that the surcharge period will increase. The oral arguments did not hint at the judges ruling in favor of the USPS permanent proposal, but it still is a possibility, albeit small and very damaging.