COLEY v. UNITED STATES POSTAL SERVICE

Filing 15

MEMORANDUM ORDER signed by JUDGE THOMAS D. SCHROEDER on 06/10/2013; that USPS's motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) (Doc. 9 ) is GRANTED, and the complaint will be DISMISSED WITHOUT PREJUDICE. (Garland, Leah)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

J.W. COLEY,

)
)
)
)
)
)
)
)
)

Plaintiff,
v.
UNITED STATES POSTAL SERVICE,
Defendant.

1:11cv00986

MEMORANDUM ORDER
Plaintiff J.W. Coley (“Coley”) seeks recovery for the loss
of

a

package

he

sent

to

China

via

the

Priority

Mail

International Service of Defendant United States Postal Service
(“USPS”).

Before the court is USPS’s motion to dismiss for lack

of subject matter jurisdiction and failure to state a claim upon
which

relief

can

summary judgment.
13.)

be

granted

(Doc. 9.)

and,

alternatively,

motion

Coley has filed a response.

for

(Doc.

For the reasons set forth below, the court finds that

Coley has failed to exhaust his administrative remedies, and the
complaint will be dismissed without prejudice.
I.

BACKGROUND
On

November

(containing
International

two

29,

2010,

Fluke

189

Service

from

Coley

mailed

Multimeters)

the

Manor

a
by

Station

small

package

Priority
Post

Mail

Office

in

Winston-Salem, North Carolina, to an individual at the Guizhou

University in Guizhou, China.
purchased

separate

postal

He paid $47.25 in postage and

insurance

in

the

insuring the value of the package at $640.

amount

of

$9.40,

Coley completed all

necessary paperwork to purchase the insurance.
The

package

was

picked

up

facility on November 29, 2010.

from

the

Winston-Salem

USPS

The parties disagree as to what

the evidence reveals as to whether the package was, in fact,
delivered.

USPS contends that on February 10, 2011, it sent

Coley a letter from its International Inquiry Center informing
him that the package was delivered on or about January 26, 2011.
Coley contends that the package was never delivered.
It
submitted

is
a

not

disputed

Domestic

or

that

on

February

International

16,

Claim,

contending that the package was not delivered.

PS

2011,

Coley

Form

1000,

USPS responded

on April 7, 2011, notifying Coley that its records indicated the
package was delivered as addressed and that he could appeal the
denial of his claim in writing within 60 days.
On or about May 3, 2011, Coley sent a letter appealing the
denial of his claim.

USPS responded by letter dated May 24,

2011, upholding the decision to deny the claim and notifying
Coley that he could appeal the decision in writing within 60
days

to

the

Vice

President

and

Consumer

Advocate

International Claims (whose address was provided).

of

USPS

USPS has no

record of any further appeal, and Coley does not contend that he
2

filed any.
General

Instead, Coley filed the present lawsuit in the

Court

of

Justice,

District

Court

Division

–

Small

Claims, in Forsyth County, North Carolina, on November 2, 2011,
alleging

that

insurance

USPS

claim

(Complaint).)

owed

for
USPS

November 15, 2011.

him

an

$640

for

undelivered

removed

the

non-payment

on

package.

action

to

his

(Doc.

this

4

court

on

(Doc. 1.)

USPS now moves to dismiss the complaint on several grounds.
First, it moves to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(1) on the ground the court lacks subject matter
jurisdiction.
failure

to

Second, it moves to dismiss the complaint for

state

a

claim

pursuant to Rule 12(b)(6).

upon

which

relief

can

be

granted

Finally, and alternatively, it moves

for summary judgment pursuant to Rule 56 on the ground there is
no

genuine

dispute

of

material

fact

and

it

is

entitled

to

judgment as a matter of law.
II.

ANALYSIS
USPS’s

initial

contention

is

that

this

court

lacks

authority to decide Coley’s complaint because Coley has failed
to exhaust his administrative remedies.

Once a defendant raises

a court’s potential lack of subject matter jurisdiction pursuant
to Federal Rule of Civil Procedure 12(b)(1), a plaintiff bears
the burden of proving that the court has authority to proceed.
Evans v. B.F. Perkins Co., a Div. of Standex Int'l Corp., 166
3

F.3d 642, 647 (4th Cir. 1999).
court’s

subject

matter

On a motion challenging the

jurisdiction,

the

court

may

look

at

evidence outside the pleadings, including affidavits, to resolve
any jurisdictional fact issue.

Kamen v. Am. Tel. & Tel. Co.,

791 F.2d 1006, 1011 (2d Cir. 1986).

The court must determine

whether it has subject matter jurisdiction over an action before
proceeding any further.

Constantine v. Rectors & Visitors of

George Mason Univ., 411 F.3d 474, 479–80 (4th Cir. 2005).
The legal framework for analyzing Coley’s claim has been
well set out in Gelbfish v. U.S. Postal Serv., 51 F. Supp. 2d
252, 254 (E.D.N.Y. 1999):
The USPS is liable only to the extent that it
agrees to be liable.
Frank Mastoloni & Sons,
Inc. v. United States Postal Service, 546 F.
Supp.,
415,
419
(S.D.N.Y.
1982)
(citation
omitted). The extent to which the USPS agrees to
be liable is identified in the postal laws and
regulations, in this case the Domestic Mail
Manual (“DMM”) which regulates registered mail.
The DMM is issued pursuant to the USPS's power to
adopt regulations, 39 U.S.C. § 401, and is
incorporated by reference into the Code of
Federal Regulations. 39 C.F.R. § 111.4. Because
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.
Mastoloni, 546 F.
Supp. at 419 n.4 (citing 44 U.S.C. § 1507). See
also Ridgway Hatcheries, Inc. v. United States,
13 Ohio Misc. 253, 278 F. Supp. 441, 443 (N.D.
Ohio 1968) (finding that parties who purchased
postal insurance were deemed to have notice of
postal insurance regulations published pursuant
to Federal Register Act).

4

In this case, the pertinent regulations are contained not
in the DMM but, since this is an international post, in the
International

Mail

Manual

reference

in

the

§ 20.1.

As

noted,

(“IMM”)

and

of

Federal

Regulations

these

postal

Code

are

incorporated

insurance

at

39

by

C.F.R.

regulations

are

promulgated pursuant to statutory authority and have the force
and effect of law.

Ridgway Hatcheries, 278 F. Supp. at 443.

Because

of

the

terms

postal

indemnity

are

published

as

regulations of the USPS, traditional doctrines of contract law
do not apply to postal insurance and indemnity coverage.
Various
claimant
indemnity.

provisions

must

pursue

of
to

the
make

IMM
an

describe

the

administrative

Id.

process
claim

a

for

It is not disputed that Coley followed the proper

procedures for the filing of his claim and for his appeal of
USPS’s April 7, 2011, ruling against him.

However, when that

appeal was denied, USPS informed him (Doc. 10, Ex. 9), as the
IMM requires (IMM § 931.32), that he appeal that decision to the
Vice President & Consumer Advocate (Doc. Ex. 9).
do that but instead filed the present action.

Coley did not

His failure to do

so means he did not exhaust his administrative remedies.
Coley argues that USPS is unnecessarily making a federal
case out of his simple small claims action and that any further
appeal would have been fruitless “when the details are being
ignored or possibly due to other reasons.”
5

(Doc. 13 at 3.)

However, Coley overlooks the fact that USPS is not generally
liable

for

loss

or

negligent

transmission

Hatcheries, 278 F. Supp. at 442.

of

mail.

Ridgway

He obtained insurance for his

package subject to the terms, conditions, and law by which USPS
agreed to be sued.

Part and parcel of that is the requirement

that a claimant exhaust his administrative remedies provided by
regulation before initiating legal action.

Simat USA, Inc. v.

U.S. Postal Serv., 218 F. Supp. 2d 365, 368 (S.D.N.Y. 2002);
Gelbfish,

51

F.

Supp.

2d

at

254;

Djordjevic

v.

Postmaster

General, 911 F. Supp. 72, 75-76 (E.D.N.Y. 1995).
Coley has no other basis for proceeding.

Because USPS is

part of the federal government, Coley’s action is in reality a
suit

against

the

United

States

and

is

barred

by

sovereign

immunity except to the extent the government has consented to be
sued

in

the

regulations.

Djordjevic,

911

F.

Supp.

at

74.

USPS’s motion to dismiss for lack of jurisdiction will therefore
be granted, but the dismissal will be without prejudice to the
re-filing

of

successfully

the

action

exhaust

his

in

the

event

administrative

Coley

remedies.

is

able
The

to

court

expresses no view as to whether Coley is able to do so at this
time.
Having determined that the court is without jurisdiction to
adjudicate Coley’s claim, the court need not consider USPS’s
remaining arguments.
6

III. CONCLUSION
For the reasons stated,
IT IS THEREFORE ORDERED that USPS’s motion to dismiss for
lack of subject matter jurisdiction pursuant to Federal Rule of
Civil Procedure 12(b)(1) (Doc. 9) is GRANTED, and the complaint
will be DISMISSED WITHOUT PREJUDICE.

/s/
Thomas D. Schroeder
United States District Judge
June 10, 2013

7