NISNICK v. UNITED STATES POSTAL SERVICE

Filing 11

OPINION. Signed by Chief Judge Jerome B. Simandle on 3/9/2017. (TH, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

JEFFREY NISNICK,

HONORABLE JEROME B. SIMANDLE

Plaintiff,
Civil Action No.
1:16-cv-04002 (JBS/AMD)

v.
UNITED STATES POSTAL SERVICE,
Defendant.

OPINION

APPEARANCES:
Mr. Jeffrey Nisnick
545 Norwood Road
Mount Laurel, NJ 08054
Plaintiff pro se
Elizabeth Ann Pascal, Assistant U.S. Attorney
Office of the U.S. Attorney
401 Market Street
P.O. Box 2098
Camden, NJ 08101
Attorney for Defendant United States Postal Service

SIMANDLE, Chief Judge:
When an insured package and its contents are damaged in the
mail, the sender or the addressee may make a claim for the loss.
The Postal Service processes that claim in accordance with
regulations contained in its Domestic Mail Manual, the
requirements of which are allegedly not displayed to the
claimant who initiates an online claims process. One requirement
in the D.M.M. is that the claimant bring the damaged packaging

and contents to a post office for inspection. In the present
case, Plaintiff, who was the insured sender, claims he supplied
accurate, detailed photos of the packaging damage, taken by the
addressee, but was uninformed of the Postal Service’s
requirement to obtain and present the actual packaging until
after the addressee had discarded it. Plaintiff alleges that the
Postal Service arbitrarily failed to consider the photographs as
the substantial equivalent and rejected his claim for failure to
present the original packaging. This case presents, among other
issues, whether the Postal Service’s denial was arbitrary,
capricious, or otherwise not in accordance with law.
This matter comes before the Court on Defendant United
States Postal Service’s motion for summary judgment. [Docket
Item 7.] Plaintiff filed a response [Docket Item 10] and the
motion is decided without oral argument pursuant to Rule 78,
Fed. R. Civ. P.
On June 7, 2016, Plaintiff Jeffrey Nisnick filed a civil
lawsuit in the small claims court of the New Jersey Superior
Court in Burlington County, demanding $750 in compensatory
damages, as well as punitive damages and costs. Defendant
subsequently removed the case to this Court and Plaintiff filed
an Amended Complaint on July 20. 2016. [Docket Items 1, 6.]
Plaintiff also now states that he seeks an injunction “that

forces the Defendant to immediately stop their misconduct as
well as revise their website to properly notify and instruct all
future claimants of what will be required during the claims
submission and review process. Said revision should not allow
online claimants to start an online claim without having agreed
to having understood the pertinent version of instructions, and
same instructions should be reiterated in the confirmation
emails.” [Docket Item 10-4 at 15 to 16.]
Defendant argues, first, that Plaintiff failed to exhaust
his administrative remedies by failing to comply with
Defendant’s regulations concerning indemnity claims for insured
mail. Defendant also argues that Plaintiff has not produced any
evidence that its denial of his claim for that failure to comply
with regulations was arbitrary and capricious. Plaintiff
contests these arguments, stating that Defendant presented
ambiguous and sometimes conflicting instructions for pursuing
his insurance claim and that this conduct was arbitrary and
capricious. He also contends that Defendants’ employees engaged
in actions which were arbitrary and capricious. For the reasons
discussed below, the Court finds that any failure to exhaust
administrative remedies shall be excused, and that the record
contains sufficient evidence and/or allegations to allow a
reasonable finder of fact to find in favor of Plaintiff.

Accordingly, Defendant’s Motion for Summary Judgment will be
denied.

I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff’s suit arises out of his purchase of insurance on
a package he shipped with Defendant on February 11, 2016.
[Docket Item 1-1 at 6.] Plaintiff filed a claim under that
insurance policy when the package was received by the addressee
in a damaged condition. Plaintiff contends that Defendant
wrongfully denied his insurance claim, thereby breaching its
contract with Plaintiff. [Id.]
All facts are taken from the complaints, motion papers,
responses, and exhibits thereto; they are construed in the light
most favorable to Plaintiff, the nonmoving party.
Plaintiff sold a microphone preamp on eBay to a buyer
located in Florida. [Docket Item 10-3 at 55; 10-4 at 10.]
Plaintiff bought optional insurance from Defendant for $7.00 in
addition to postage in the amount of $10.66 to send the item via
Priority Mail. [Docket Item 10-3 at 61.] Plaintiff shipped the
item with Defendant at the Mount Laurel Post Office on February
11, 2016. [Docket Item 10-3 at 78.] The tracking number of the
item was 9406209699938205425411. [Docket Item 10-3 at 74.] On or
around February 17, 2016, the buyer contacted Plaintiff to tell

him that the item had arrived damaged. The outer packaging was
damaged and the item inside was broken. [Docket Item 10-3 at
62.] The buyer included clear, color, and reasonably detailed
photographs of both the damaged packaging and the broken preamp.
[Docket Item 10-3 at 66-69.] 1 Plaintiff sent a return shipping
label to the buyer on or around February 18, 2016, and the buyer
shipped the broken preamp back to Plaintiff sometime after
February 18. [Docket Item 10-3 at 63-64.] Plaintiff then issued
a refund of $499.95 to the buyer. [Docket Item 10-3 at 70.]
Plaintiff submitted a claim under the insurance he
purchased from Defendant on the same date, February 18, 2016, by
going to Defendant’s website. [Docket Item 10-4 at 10.]
Plaintiff claims that when he submitted the claim, the website
had, at or near the top of the webpage, the “Start an Online
Claim” button, followed by a blank space equivalent to several
lines of text, followed by an abridged set of instructions for
filing an insurance claim. [Docket Items 10-4 at 8; 10-3 at 14.]
Those instructions included the following language,
approximately three paragraphs down:
Photos that clearly show the extent of damage will
help with your case. If you received something
1

While the copies of the photographs that are visible on CM/ECF
are of low quality, Plaintiff has provided the Court with
legible, clear color photographs in the courtesy copy he filed.
The Court sees no reason to believe Plaintiff has not provided
Defendant with copies of equivalent good quality.

damaged, please hang onto it until your claim is
settled. You may be asked to take them to the local
Post Office for inspection later. Please do not reship
the package.
[Docket Items 10-4 at 9; 10-3 at 17.] Plaintiff contends
that Defendant redesigned this webpage in April of 2016 to place
the abridged instructions above the “Start an Online Claim”
button. [Docket Item 10-4 at 8.] He also contends that the
language quoted above was changed sometime between April and
August of 2016 from “If you received something damaged, please
hang onto it” to “If you received something damaged, please hang
onto the original packaging and damaged item[.]” [Docket Item
10-4 at 14.] 2
Plaintiff states that the confirmation email from Defendant
he received on February 18, 2016, acknowledging the opening of
his claim, did not contain, reiterate, or otherwise refer
Plaintiff to the abridged instructions on the USPS website or to
the Domestic Mail Manual. [Docket Item 10-4 at 10.] He also
states his belief that he was not provided with and did not see
any instructions to the effect that he needed to retain the
original packaging and not reship the damaged item on the USPS

2

To the extent that such redesign and rewording constitutes
“subsequent remedial measures” aimed at preventing the type of
customer confusion Plaintiff contends he experienced, such a
change would be inadmissible to prove Defendant’s culpable
conduct or a need for warning or instruction under F. R. Evid.
407 for sound public policy reasons.

website once he clicked the “Start an Online Claim” button and
began the online claims process. Id.
Sometime between February 18 and February 22, 2016,
Defendant prepared and sent a letter to Plaintiff regarding his
claim, which stated:
In response to the insurance claim for missing
contents or damaged item(s) referenced above, please
present the item(s) and mailing container including
the wrapping, packaging, and any other contents
received, along with this letter, to a Post Office for
inspection within 20 days. If this evidence of damage
is not available for inspection, your claim may be
denied.

[Docket Items 7-3 at 2; 10-3 at 39.] Defendant also requested
that Plaintiff provide evidence of insurance and mailing in the
form of a receipt or mailing label. [Docket Item 10-3 at 40.]
Plaintiff contends that he received this letter on February 26,
2016. This was two days after he received the return-shipped
item from the eBay buyer, and accordingly, several days after
the buyer shipped the item back to Plaintiff without the damaged
original packaging. [Docket Item 10-5 at 2; 10-3 at 51.]
Plaintiff states that he mailed his appeal package with
supporting documentation to the USPS Claims Division in St.
Louis, MO, on March 2, 2016, from the Marlton, NJ Post Office.
[Docket Item 10-2 at 3.]

Defendant’s internal regulations, viewable at
http://about.usps.com/postalbulletin/2014/pb22383/html/info_001.htm, state that when
“customers bring their damaged item to the Post Office for
damage inspection,” Postal Service employees must complete PS
Form 3831, Receipt for Article(s) Damaged in Mails (which is
then provided to the customer), and, “[i]n the back office,”
complete PS Form 2856, Damage Report of Insured Parcel and
Contents (which is not to be provided to the customer before or
after the employee completes it). [Docket Item 7-1 at 4.] While
those regulations indicate only that those procedures should be
followed when a customer brings “their damaged item” for
inspection, this internal regulation also includes a “FAQ”
section that states, in response to a question about whether the
addressee or the sender should bring the package to a local Post
Office, “The addressee should retain the damaged package, all
contents, wrappings, packaging, etc., until he or she received a
letter from USPS instructing him or her to bring it to the Post
Office for inspection.” Id.
Plaintiff contends that “postal employees were unwilling to
inspect the Plaintiff’s materials and unwilling to even begin to
fill out PS Form 2856.” [Docket Item 10-5 at 3.] He states that
he “brought his ‘damaged item’ to two Post Offices for damage

inspection, and none of the above ‘actions required’ [by the
internal regulations cited above] by postal service employees
were willing to be performed by postal service employees at
either location.” [Docket Items 10-5 at 4, 9; 10-3 at 51.]
On March 22 or March 23 3, 2016, Defendant prepared and sent
a letter to Plaintiff telling him that his claim was denied
because Defendant did not receive “the information we requested
in our previous correspondence within 30 days.” Specifically,
Defendant stated that it “never received a damage report (PS
FORM 2856). This information was requested from the addressee on
2/18/16.” [Docket Items 7-3 at 3; 10-3 at 41.] Pursuant to that
letter, Plaintiff timely and appropriately appealed. [Docket
Item 7-3 at 4.] Plaintiff also notes that while he was impliedly
told to provide Defendant with PS Form 2856, in actuality, he
would not have been able to do so because PS Form 2856 was an
internal form that was not to be provided to customers. [Docket
Entry 10-5 at 4.]
On April 12 or 13, 2016, Defendant prepared and sent a
letter to Plaintiff telling him that it was not changing its
original decision to deny his claim. [Docket Items 7-3 at 4; 10-

3

Defendant and Plaintiff dispute the dates of certain letters
sent by Defendant to Plaintiff. Both dates have been noted;
Plaintiff cites the later date in each instance. [Docket Item
10-5 at 4 to 5.]

3 at 42.] The letter stated: “This office never received proof
of damage (PS Form 2856). This was requested from the addressee
and the mailer. Please provide this office with an official
damage report (PS Form 2856) along with a written appeal for the
item(s) and/or container of the claim referenced above so that
an accurate decision can be made on the claim.” [Id.] The letter
also stated that Plaintiff could file a final appeal with the
Office of the Consumer Advocate within 30 days of the date of
that letter. Plaintiff did so. [Docket Item 7-3 at 5.]
On April 21 or 22, 2016, Plaintiff received another letter,
this one from Debra C. Fuller, a Domestic Claim Appeal
Specialist with Defendant’s Office of the Consumer Advocate. In
this letter, Defendant stated that it “must uphold the decision
issued by the St. Louis Accounting Services officials for this
claim. Postal regulations provide that the damaged article,
container, packaging, and any other items received must be
presented by the addressee to the Postal Service for inspection
in support of claims for damage (Domestic Mail Manual, Section
609.2). The original mailing container and packaging were not
presented for inspection. Therefore, we were unable to determine
if the items were damaged by postal mishandling. . . . Under the
above circumstances, your claim cannot be approved for payment.

This office is the final level of postal authority concerning
claim appeals.” [Docket Item 10-3 at 43.]
Plaintiff subsequently filed his small claims case, and
Defendant removed to this Court.

II.

STANDARD OF REVIEW
At summary judgment, the moving party bears the initial

burden of demonstrating that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(a); accord Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). Once a properly supported
motion for summary judgment is made, the burden shifts to the
non-moving party, who must set forth specific facts showing that
there is a genuine issue for trial. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 250 (1986). In reviewing a motion for
summary judgment, the court is required to examine the evidence
in light most favorable to the non-moving party, and resolve all
reasonable inferences in that party's favor. Hunt v. Cromartie,
526 U.S. 541, 552 (1999); Wishkin v. Potter, 476 F.3d 180, 184
(3d Cir. 2007). Credibility determinations are not appropriate
for the court to make at the summary judgment stage. Davis v.
Portlines Transportes Maritime Internacional, 16 F.3d 532, 536
n.3 (3d Cir. 1994).

A factual dispute is material when it “might affect the
outcome of the suit under the governing law,” and genuine when
“the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Anderson, 477 U.S. at 248. The
non-moving party “‘need not match, item for item, each piece of
evidence proffered by the movant,’” but must simply present more
than a “mere scintilla” of evidence on which a jury could
reasonably find for the non-moving party. Boyle v. Cnty. of
Allegheny Pennsylvania, 139 F.3d 386, 393 (3d Cir. 1998)
(quoting Anderson, 477 U.S. at 252).
However, a claim of sovereign immunity is assessed as a
motion for dismissal for lack of subject matter jurisdiction
under Fed. R. Civ. P. 12(b)(1). See, e.g., Snow v. U.S. Postal
Serv., 778 F. Supp. 2d 102, 105-06 (D. Maine 2011) (Postal
Service claimed sovereign immunity; court considered motion as
motion to dismiss). A motion to dismiss under Rule 12(b)(1) must
be granted if the court lacks subject matter jurisdiction to
hear a claim. In re Schering Plough Corp. Intron/Temodar
Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012). When a
defendant files a motion under Rule 12(b)(1), the plaintiff
bears the burden of establishing subject matter jurisdiction for
the sake of remaining in federal court. Gould Elec., Inc. v.
United States, 220 F.3d 169, 178 (3d Cir. 2000).

Similarly, a claim that a plaintiff has failed to exhaust
administrative remedies is proper grounds for dismissal for lack
of subject matter jurisdiction, not summary judgment. See
Robinson v. Dalton, 107 F.3d 1018, 1022 (3d Cir. 1997); Blanc v.
U.S. Postal Serv., No. 14-CV-1404, 2014 WL 931220, at *3
(E.D.N.Y. Mar. 10, 2014) (complaint regarding broken vase
indemnity claim dismissed for lack of subject matter
jurisdiction where plaintiff failed to exhaust administrative
remedies as prescribed by Domestic Mail Manual [“D.M.M.”]).
III. ANALYSIS
A. Tort claims
Plaintiff argues that Defendant engaged in deceptive trade
practices, including “bait and switch.” To the extent that these
claims sound in tort, they must be dismissed.
It is well-settled that “the Postal Service enjoys federal
sovereign immunity absent a waiver.” Dolan v. U.S. Postal Serv.,
546 U.S. 481, 484 (2006). The Federal Tort Claims Act, 28 U.S.C.
§§ 1346(b)(1), 2674, applies to tort claims “arising out of
activities of the Postal Service,” under the Postal
Reorganization Act, 39 U.S.C. § 409(c). However, the “FTCA
qualifies its waiver of sovereign immunity for certain
categories of claims[;] . . . [i]f one of the exceptions
applies, the bar of sovereign immunity remains.” Dolan, 546

U.S., supra, at 485. Section 2680(b) of the FTCA is one such
exception. It provides that “the provisions of this chapter and
section 1346(b) of this title shall not apply to . . . [a]ny
claim arising out of the loss, miscarriage, or negligent
transmission of letters or postal matter.” In general, sovereign
immunity is construed narrowly and in favor of the Government:
“[T]he scope of Congress’s waiver [must] be clearly discernable
from the statutory text in light of traditional interpretive
tools. If it is not, then we take the interpretation most
favorable to the Government.” F.A.A. v. Cooper, 566 U.S. 284,
291 (2012).
To the extent that Plaintiff’s claims sound in tort,
Defendant has sovereign immunity under § 2680(b) of the FTCA and
those claims must be dismissed.
B. Contract claims
Because Plaintiff’s claims sound at least equally in
contract due to the insurance he purchased before shipping his
item, which contract thereof he claims Defendant breached,
§ 2680(b) does not preclude his suit entirely. “However,
traditional contract doctrine does not apply to claims for
breach of postal insurance contracts because the ‘postal
insurance regulations are promulgated pursuant to statutory
authority, and therefore have the force and effect of law.’”

Mansy v. Kemper, No. 2:11-cv-265, 2012 WL 2887220, *2 (E.D.
Tenn. July 13, 2012) (citing Ridgway Hatcheries v. U.S., 278 F.
Supp. 441, 443 (N.D. Ohio 1968)). The applicable regulations are
those contained in the D.M.M., which lay out the process of
filing (and, if necessary, contesting the determination of) an
indemnity claim for lost or damaged items insured by the Postal
Service. See Cascio v. U.S. Postal Serv., No. 05-CV-3033, 2005
WL 2862584, at *3 (E.D.Pa. Oct. 31, 2005).
While Plaintiff lays out evidence that he was not provided
with the regulations contained in the D.M.M., nor directed to
the D.M.M., and claims that he had no actual knowledge of its
contents (which were at times, he claims, even contradicted by
other instructions USPS provided), it is well settled law that
“the DMM is incorporated by reference into the Code of Federal
Regulations, it is deemed published in the Federal Register, 39
C.F.R. § 111.1, and a plaintiff is presumed to have notice of
the DMM’s contents.” Gelbfish v. U.S. Postal Serv., 51 F. Supp.
2d 252, 254 (E.D.N.Y 1999). See also Frank Mastoloni & Sons,
Inc. v. U.S. Postal Serv., 546 F.Supp. 415, 419 n.4 (S.D.N.Y.
1982); 44 U.S.C. § 1507; Ridgway Hatcheries, supra, 278 F. Supp.
at 443; Mansy, supra, at *2; Cascio, supra, at *3; Taylor v.
U.S. Post Office Dept., 293 F. Supp. 422, 422 (D.Mo. 1968);
Dosso v. U.S. Postal Serv., No. CCB-10-1703, 2010 WL 4900988, at

*4 (D.Md. Nov. 24, 2010); Jamil v. U.S. Postal Serv., No. C 055121 RS, 2006 WL 988825, at *2 (N.D. Cal. Apr. 14, 2006).
Section 609 of the D.M.M. provides as follows with regard
to insurance claims for lost or damaged packages:
1.3 Who May File: A claim may be filed by:
a. Either the mailer or addressee, for damaged
articles or articles with some or all of the
contents missing. . . .
1.5.1 Claims Filed Online: . . . Evidence of insurance
must be retained by the customer until the claim is
resolved. Upon written request by the USPS, the
customer must submit proof of damage (see 2.0) for
damaged items or missing contents, in person to a
local Post Office for inspection, retention, and
disposition in accordance with the claims decision.
1.5.2 Claims Filed by Mail: Customers may file a claim
by completing a Form 1000 and mailing the original
copy to address indicated on the form, accompanied by
proof of value. Obtain Form 1000 by calling 1-800-3320317, option 9. For pieces with multiple extra
services, the customer must provide original receipts
for all services purchased. Upon request by the USPS,
the customer must submit proof of damage under 2.0 for
damaged items or missing contents.
2.0 Providing Proof of Loss or Damage: If a claim is
filed because some or all of the contents are missing
or damaged, the addressee must retain the mailing
container, including any damaged articles, all
packaging, and any contents received. Upon written
request by the USPS, the addressee must make this
proof available to the local Post Office for
inspection, retention, and disposition in accordance
with the claims decision. Failure to do so will result
in denial of the claim.

[Docket Item 7-3 at 7 to 9.] If customers wish to contest an
initial determination of the Postal Service, they may appeal

within 30 days. [DMM § 609.6.2, Docket Item 7-3 at 15.] The DMM
also provides for one further level of appeal, to be filed
within 30 days of the intermediate decision, for “final review
and decision.” [DMM § 609.6.3, Docket Item 7-3 at 15.]
1. Exhaustion
Defendant claims that Plaintiff’s case must be dismissed
because Plaintiff failed to exhaust his administrative remedies
before filing his case. The Court disagrees.
“In order for the USPS to be liable under a contract
theory, a party seeking to recover for the loss of registered
mail must exhaust all ‘administrative remedies available under
the postal regulations’” before the party files a lawsuit.
McBride v. U.S. Postal Serv., No. 07-CV-0446, 2007 WL 1965337,
at *2 (E.D.N.Y. June 29, 2007) (quoting Djordjevic v. U.S.
Postal Serv., 911 F. Supp. 72, 75 (E.D.N.Y. 1995)).
It appears undisputed to the Court that Plaintiff
appropriately and timely filed his initial insurance claim as
well as all appeals. The basis for Defendant’s claim that
Plaintiff failed to exhaust his administrative remedies is that
Plaintiff did not bring the original damaged packaging for
inspection to his local post office. Because of this, no Postal
Service employee filled out PS Form 2856. Because it lacked this
completed form in hand, Defendant denied Plaintiff’s claim.

Plaintiff counters that he did not know of the requirement
to bring the original packaging for inspection at the Post
Office and did not learn of it in timely enough fashion to allow
for that to happen (i.e., by instructing the addressee/eBay
buyer not to discard the packaging, asking the eBay buyer to
mail the packaging back to Plaintiff intact, and/or asking the
eBay buyer to take the packaging and item to the Post Office
himself for inspection). Aside from the presumption of knowledge
of the D.M.M.’s provisions that is applicable to Plaintiff, it
does not appear that Plaintiff was substantively or actually
informed of this requirement until Defendant’s February letter –
or, at least, there is a genuine issue of material fact as to
this issue. As noted, Plaintiff obtained from the addressee and
provided to the Postal Service detailed color photographs of the
damaged packaging and contents. Plaintiff states that he behaved
reasonably by refunding the buyer and providing a return
shipping label.
It appears, furthermore, that when Plaintiff did learn of
the requirement, he brought the photos of the original packaging
(which a reasonable finder of fact could conclude accurately and
clearly represented the damage to that packaging) to two Post
Offices, but no Postal Service employee would fill out or file
PS Form 2856. Plaintiff argues in essence that, contrary to

Defendant’s letters to him and its current position, Defendant
itself frustrated his ability to provide Defendant with PS Form
2856, and his failure to do so should not constitute failure to
exhaust his administrative remedies when Defendant itself was
the cause of the omission.
Defendant claims that the case of Dosso v. U.S. Postal
Serv., No. 10-1703, 2010 WL 4900988 (D.Md. Nov. 24, 2014), is
analogous to this case. In Dosso, the plaintiff (who claimed
USPS lost a laptop he mailed overseas) was required by the
International Mail Manual (the D.M.M.’s international
counterpart) to provide certain evidence as proof of the item’s
value. Notably, the Postal Service and the I.M.M. did not
require Dosso to provide an original purchase receipt, but
accepted other forms of establishing value--namely, “a website
print out of the kind of computer[]”. Id. at *2. He did not do
so, and instead filed a lawsuit. The Court failed to excuse
Dosso’s non-exhaustion of the I.M.M.’s indemnity claims process
and dismissed his lawsuit. Id. at *4.
The Court does not find Dosso to be squarely on point with
the instant case, however. In Dosso, the Plaintiff inexplicably
failed to provide evidence of value which was reasonably within
his power to provide (and indeed, he ended up providing to the
Postal Service during motion practice); furthermore, the court,

when explaining why it would find unpersuasive Dosso’s claim not
to have adequate notice of the I.M.M.’s provisions, stated as
follows: “[T]he government has explained to Mr. Dosso that so
long as he provides some documentation of the value of an item
comparable to the lost laptop, the Postal Service will consider
his claim for indemnification.” Id. (emphasis added). Here, in
contrast, Plaintiff has at least raised a genuine dispute of
material fact about whether he has provided all the information
he reasonably could have to comply with the requirements of the
D.M.M., and indeed, whether he can be said to have substantially
complied with the administrative procedures of the Postal
Service under the D.M.M. This is not the unexplained and/or
untimely failure to provide requested information of Dosso.
Dosso is instructive, however, in its discussion of
exceptions to the administrative exhaustion requirement. While
the Court is aware of one district court decision holding that
administrative exhaustion may not be excused where a customer
sues the Postal Service over a damaged item, see Snow v. U.S.
Postal Serv., 778 F. Supp. 2d 102, 107-08 (D. Maine 2011), the
greater number of relevant cases either explicitly or implicitly
assume that exhaustion (i.e., strict compliance with the D.M.M.
or I.M.M.) may be excused under certain circumstances. See
Dosso; Simat USA, Inc. v. U.S. Postal Serv., 218 F. Supp. 2d

365, 368 (S.D.N.Y. 2002); Cascio, supra, at *3 (assessing
plaintiff’s claim that her untimely filing should be excused by
ambiguous form and/or Postal Service employee
misrepresentation); Elsass v. U.S. Postal Serv., No.
CV011103PCTJAT, 2003 WL 21537730, at *3 (D. Ariz. March 7,
2003)(discussing the availability of equitable estoppel to
overcome violation of D.M.M. provisions); Gelbfish, 51 F. Supp.
2d, supra, at 254 (assessing whether failure to exhaust should
be waived for lack of notice).
Both Dosso and Simat USA discuss when a court ought excuse
a litigant’s failure to exhaust administrative remedies. “A
plaintiff challenging an agency’s actions is excused from
exhausting such remedies only ‘if the litigant’s interests in
immediate judicial review outweigh the government’s interests in
the efficiency or administrative autonomy that the exhaustion
doctrine is designed to further.’” Dosso, supra, at *2 (citing
McCarthy v. Madigan, 503 U.S. 140, 146 (1992)). Simat USA states
that “there are four established exceptions to the general rule
requiring exhaustion. Exhaustion may not be required when ‘(1)
available remedies provide no “genuine opportunity for adequate
relief”; (2) irreparable injury may occur without immediate
judicial relief; (2) administrative appeal would be “futile”;
and (4) in certain instances a plaintiff has raised a

substantial constitutional question.’” Simat USA, 218 F. Supp.
2d, supra, at 368 (citing Guitard v. U.S. Sec’y of the Navy, 967
F.2d 737, 741 (2d Cir. 1992) (further internal citations
omitted)).
Dosso also states that “[c]ourts have excused plaintiffs
from exhausting administrative remedies where, for example, (1)
there are no facts in dispute; (2) the disputed issue [is]
outside the agency’s expertise; (3) the agency may not have the
authority to change its decision in a way that would satisfy the
challenger’s objections; (4) requiring resort to the
administrative process may prejudice the litigants’ court
action; or (5) the administrative process may be inadequate
because of agency bias.” Dosso, supra, at *2 (internal citations
omitted). The First Circuit, interpreting McCarthy, has
described these exceptions somewhat differently: (1) “when
unreasonable or indefinite delay threatens unduly to prejudice
the subsequent bringing of a judicial action”; (2) if “a
particular plaintiff may suffer irreparable harm if unable to
secure immediate judicial consideration of his claim”; (3) “if
substantial doubt exists about whether the agency is empowered
to grant meaningful redress”; and (4) when “there are clear,
objectively verifiable indicia of administrative taint.”

Portela-Gonzalez v. Sec’y of the Navy, 109 F.3d 74, 77 (1st Cir.
1997).
The Court is mindful of the importance of requiring
administrative exhaustion “because it serves the twin purposes
of protecting administrative agency authority and promoting
judicial efficiency.” McCarthy, 503 U.S. supra, at 145. The
Court is also mindful of the overall rationality of requiring
adherence to the provisions of the D.M.M.
However, on the facts of this case, and in this rare
instance, the Court is inclined to find that Plaintiff has
exhibited substantial compliance with the administrative process
provided for in the D.M.M. and has not failed to exhaust that
process. In the alternative, the Court finds that, on these
facts and in this rare instance, any such failure to exhaust
should be excused.
The vast majority of cases with which this Court is
familiar where claims against the Postal Service were dismissed
for failure to exhaust administrative remedies involved
plaintiffs like Mr. Dosso who inexplicably failed to timely and
appropriately pursue their indemnity claims under the D.M.M. or
I.M.M.’s administrative process: who failed to file a claim at
all, or who filed one or none of the prescribed appeals. These
claims were dismissed without prejudice. See, e.g., Edwards v.

U.S. Postal Serv., No. 15-CV-818, 2016 WL 5019192 (S.D. Ill.
Feb. 3, 2016) (plaintiff never filed claim with Postal Service);
Djordjevic, 911 F. Supp., supra, at 74 (plaintiff did not
respond, in course of claims process, to USPS request for
additional information and instead filed lawsuit); Gelbfish, 51
F. Supp. 2d, supra, at 254 (plaintiff did not appeal initial
Postal Service determination); Dosso, supra, at *3 (plaintiff
did not complete appeals process); Blanc, supra, at *3
(plaintiff filed initial claim but did not appeal); Mansy,
supra, at *1 (plaintiff filed first appeal but not second
appeal); Simat USA, 218 F. Supp. 2d, supra, at 368 (plaintiff
did not file second appeal).
This is not that case. Here, Plaintiff followed the
D.M.M.’s provisions to what he claims was the best of his
ability. It is undisputed that he timely filed his claims and
pursued the necessary levels of the D.M.M.’s appeals process.
Although Defendant states that it “provid[ed] Mr. Nisnick at
least three opportunities during the administrative process to
comply with the requirements of the Domestic Mail Manual”
[Docket Item 7-1 at 6], the Court believes that there is
sufficient evidence to allow a reasonable finder of fact to
conclude that such opportunities were illusory. While Defendant
contends that “neither Mr. Nisnick nor the recipient ever

brought the container, packaging or the damaged contents to a
local Post Office for inspection[,]” Plaintiff avers that he did
go to his local Post Office with clear photos of the packaging
(as well as the damaged item), showing the damage to it, because
the damaged packaging was no longer available. Given that, a
reasonable finder of fact could conclude that Plaintiff did not
fail to exhaust the D.M.M.’s administrative remedy scheme, or,
in the alternative, that he substantially complied with said
scheme.
To the extent that Plaintiff failed to comply strictly with
the provisions of the D.M.M. because he did not and/or could not
present the original packaging material, the Court finds
relevant to the instant set of facts the established exceptions
of futility; a lack of available remedies with genuine
opportunity for adequate relief; and lack of agency authority to
change its decision in a way that would meet Plaintiff’s
objections. See Simat USA, 218 F. Supp. 2d, supra, at 368 and
Dosso, supra, at *4.
Establishing futility “must be anchored in demonstrable
reality. A pessimistic prediction or a hunch that further
administrative proceedings will prove unproductive is not enough
to sidetrack the exhaustion rule. . . . [A]n essential element
of the claim of futility . . . is that all reasonable

possibilities of adequate administrative relief have been
effectively foreclosed.” Portela-Gonzalez, 109 F.3d, supra, at
78 (internal citations omitted).
On the facts in this case, the Court finds that the
futility exception applies because Plaintiff, were he again to
resort to Defendant’s administrative process, would have no
available avenues for relief. He has pursued his claim under the
D.M.M., appealed it as prescribed by the D.M.M., and obtained a
final, unfavorable, decision. The only thing he has not done-i.e., the failure that Defendant points to as Plaintiff’s
failure to exhaust, namely, to present the original packaging
for inspection at the Post Office--is something that is no more
in his power now than it was when he initially filed his
appeals. To instruct Plaintiff to return to that process,
especially when he has already received a final determination
from the Office of the Consumer Advocate, would be to instruct
Plaintiff to ask for something he will not receive. See, e.g.,
Houghton v. Shafer, 392 U.S. 639, 640; Gonzalez v. O’Connell,
355 F.3d 1010, 1018-19 (7th Cir. 2004). For similar reasons, the
Court finds that Plaintiff has no additional available remedies
for adequate relief. The Postal Service has adjudicated his
claim fully and finally and “there is nothing to indicate [it
will] change its position . . . [and plaintiff has] no

reasonable prospect of obtaining relief.” Gonzalez, 355 F.3d,
supra, at 1019 (internal citations omitted).
Further, to the extent that Defendant claims that the
D.M.M.’s provisions are absolute and final and “USPS personnel
are NOT authorized to change or waive these regulations,”
[Docket Item 7-1 at 13], the Court also finds that Defendant
lacks the authority to change its decision in a way that would
meet Plaintiff’s objections, which the Court understands to be
Plaintiff’s contention that it was arbitrary and capricious
under the circumstances for Defendant to ignore the evidence he
did have of the damaged packaging (i.e., the photographs) and
insist on the packaging itself, which was no longer available.
For these reasons, the Court finds that Plaintiff’s
purported failure to exhaust the administrative remedies
available to him under the D.M.M. is excused and declines to
dismiss his claims for lack of subject matter jurisdiction.
2. Arbitrary and Capricious, an Abuse of Discretion, or
Otherwise not in Accordance with the Law
Defendant argues that it is entitled to summary judgment
because “the record[] lacks any evidence that could meet the
‘arbitrary and capricious’ standard.” [Docket Item 7-1 at 17.]
As Defendant puts it: “The simple fact is that Mr. Nisnick never
complied with the Postal Service’s repeated requests to produce
the alleged damaged package for inspection.” Id. at 18. Drawing

all inferences in favor of Plaintiff, and keeping in mind the
fact that the discovery process does not appear to have been
completed when Defendant filed the instant motion, the Court
finds material facts in dispute.
Under the Administrative Procedure Act, the court “may not
overturn a USPS action unless it was arbitrary and capricious.”
Elsass, supra, at *2 (citing 5 U.S.C. § 706). The court “must
consider whether the decision was based on a consideration of
the relevant factors and whether there has been a clear error of
judgment.” Bowman Transp., Inc. v. Arkansas-Best Freight System,
Inc., 419 U.S. 281, 285 (1974) (internal citations omitted). The
reviewing court “must defer to any reasonable interpretation
given the statute by the agency charged with its
administration.” Arkansas Poultry Federation v. U.S.E.P.A., 852
F.2d 324 (8th Cir. 1988) (citing E.P.A. v. National Crushed
Stone Ass’n, 449 U.S. 64, 83 (1980)). If the agency’s decision
“articulate[s] a rational connection between the facts found and
the choice made,” that decision should be upheld. Bowman, supra,
419 U.S. at 285 (internal citations omitted).
Defendant cites Barton v. U.S. Postal Serv., 615 F. Sup. 2d
790 (N.D. Ind. 2009), in support of its argument that the record
lacks of evidence of an arbitrary or capricious decision made by
a postal service employee. However, a close reading of that case

persuades the Court that summary judgment is not the best
vehicle for assessing this question.
In Barton, the plaintiff claimed that the Postal Service
wrongfully denied his insurance claim for a laptop that
allegedly went missing from a package somewhere in transit, in
that a USPS employee tampered with the package, stole his
laptop, and replaced it with a cement block before returning the
package to Barton. The gist of the plaintiff’s evidence was that
he originally prepared the box for shipping with clear packing
tape, but when the box (with the cement block inside) was
returned to him, it had red, white, and blue USPS tape “all
around the box.” Id. at 793. In that case, the court did not
grant summary judgment, but rather held a bench trial, despite
the plaintiff “not submitt[ing] copies of the Postal Service
letters denying his claim at each step of the claim and appeal
process, and, thus, has not identified to the Court any specific
deficiencies in the Postal Service’s decision to deny his
insurance claim.” Id. at 795.
Furthermore, the magistrate judge who tried the case
actually examined the box and came to the conclusion that it was
more likely than not (because the original mailing label with
Barton’s handwriting was still on top of it, primarily) that the
red, white, and blue USPS tape was not on the package as a

result of a USPS employee tampering with the package. It was for
that reason that the court found “that Mr. Barton has failed to
provide evidence that the box was tampered with while in the
custody of the Postal Service sufficient for this Court to
overturn the Postal Service’s denial of his insurance claim. . .
. Considering all the evidence, the Court finds that Mr. Barton
has not met his burden of demonstrating that the Postal
Service’s actions in denying his insurance claim were
‘arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with the law.’” Id.
The posture of the case in Barton, as well as the language
used by the court in that case, presents persuasive authority to
this Court that Defendant’s request for summary judgment here
should not be granted. First, the court in Barton allowed the
case to proceed to a bench trial despite the plaintiff never
providing the letters of denial from the USPS or precisely
identifying which actions he alleged to have been arbitrary and
capricious. Second, the court is actually quite clear that,
implicitly, the plaintiff was claiming that it was the denial
itself that had been arbitrary and capricious.
The Court also finds instructive the recent opinion in
Karch v. United States, No. 16-C-405, slip op., 2016 WL 3676467
(E.D. Wis. July 7, 2016). In Karch, the court found that USPS’s

application of a DMM rule (there, requiring documentary evidence
from a third party to establish proof of value for a lost item)
was not arbitrary and capricious, and dismissed the case for
that reason. Id. at *2. The court in Karch stated: “Without
third-party affirmation of the value of the items, Plaintiff was
essentially requesting that USPS accept Plaintiff’s word that
the goods were worth the amount he requested. . . . USPS’s
refusal to accept Plaintiff’s offer of proof was in accord with
standard practices of insurance law and was not arbitrary and
capricious.” Id. There, the Court did not simply and reflexively
assess whether USPS employees, in denying the claim, followed
the letter of the D.M.M. regulations. Instead, it assessed the
underlying reasonableness of the plaintiff’s position (noting
that he was asking USPS to take his word for it when it came to
the value of the claim) and whether USPS’s position was “in
accord with standard practices of insurance law” in the process
of deciding whether the decision to deny the claim was arbitrary
and capricious.
Here, Plaintiff has provided the letters of denial, unlike
the plaintiff in Barton. He has pointed to specific actions by
USPS that he claims to have been arbitrary, capricious, or
otherwise not in accordance with the law. The Court understands
these to include, inter alia: the decision of the local postal

service employees not to accept or even view his photographs to
fill out or partially fill out PS Form 2856 [Docket Item 10-4 at
11 and 10-5 at 9 to 10]; the repeated requests to provide PS
Form 2856 when that was an internal form he did not have access
to and had been precluded from having filed on his behalf
[Docket Item 10-4 at 6]; the apparent decision to ignore or
decline to consider the photographs Plaintiff claims to have
included with his successive appeals during the administrative
claims review process [id.]; the regulation itself that, by its
terms, requires original packaging with no alternative for
mailers who are likely not to be in possession or have the
ability to control what happens to that original packaging, but
likely do have the ability and incentive to file the insurance
claim (especially when compared with the regulations for proof
of value, which are flexibly written to allow for reasonable
alternatives, and are implemented flexibly in practice 4); the
decision not to include on the consumer-facing website and
immediate claim confirmation e-mail the requirements of the

4

In Dosso, for example, the Assistant U.S. Attorney defending
the case sent the plaintiff a letter several months after the
case was filed telling him, “Mr. Dosso, if you provide me with a
website print out of the kind of computer showing its value and
a signed statement indicating the reason why you do not have the
original purchase receipt, I will send these items to USPS
directly and it is possible that your claim may still be
adjudicated.” Dosso, supra, at *4.

D.M.M. generally and the specific requirement of retaining and
presenting the original damaged packaging [Id. at 6-10]; and the
decision to characterize Plaintiff’s inability to provide the
original packaging and PS Form 2856 as his failure to do so
[Docket Item 10-4 at 11].
The Court does not find, at this stage of the litigation,
that any of the above decisions were, in fact, arbitrary,
capricious, or otherwise not in accordance with law. However, in
light of the factual record that has been developed and
Plaintiff’s allegations, the Court is not inclined to grant
summary judgment to Defendant on this issue because there is a
legitimate dispute whether Defendant’s insistence upon literal
compliance with its regulations, wherein Defendant itself may
have frustrated Plaintiff’s reasonable efforts of compliance,
was arbitrary and capricious. These disputes will require trial.

IV.

CONCLUSION

For the reasons discussed herein, Defendant United States
Postal Service’s motion for summary judgment will be denied. The
accompanying Order will be entered.

March 9, 2017
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge