postalnews blog

From the New York Law Journal:

With the nature of the shipping business changing, and competition from private long-distance carriers becoming fiercer, the U.S. Postal Service should not be insulated from equitable estoppel for falsely promising to insure jewelry in a package a customer sent from Cobleskill, N.Y., to Paris, a federal judge has ruled.

The decision stemmed from an incident in which a window clerk assured a customer that the jewelry he was sending via Global Express Mail could be insured. When the package was returned empty, the customer filed a claim, but was told that jewelry was not allowed to be shipped by Global Express Mail, and the claim was denied. The District Court originally sided with the USPS, noting that the reverse side of the Express Mail label specifically excludes liability for jewelry, regardless of any statements by postal employees.

In the past, courts have held that government entities must be shown to be guilty of “affirmative misconduct”, rather than “inadvertent misrepresentation” in order to pursue an ‘estoppel’ claim against the government. After the Appeals Court threw out the original decision, the trial judge reversed himself, citing changes in the way the USPS is regulated, including the recent Postal Reform Act.

Because Congress has granted the USPS increased autonomy in order to compete with other services, it no longer should be treated as an arm of the government in cases like this, the judge wrote:

USPS’s responsibilities have grown as it has gained autonomy; its practical immunity from equitable estoppel is no longer appropriate… allowing for estoppel against USPS in a situation like that before the Court, where Plaintiff relied upon the assurances of USPS employees when deciding to purchase USPS services, will allow USPS to regain the public’s trust and to meet service, fairness, and accountability standards that consumers rightly expect of any competitive business.