(CN) - San Francisco's most vulnerable residents risk losing health care, housing and contact with family unless the U.S. Postal Service changes how it serves single-resident occupancy buildings, an attorney for the city told the 9th Circuit.
With a few exceptions, the USPS delivers mail to the roughly 320 buildings, known as SROs, and then building managers are left to sort it by resident. The agency considers SROs to be temporary lodging and treats them as hotels.
Since SRO residents stay three years on average, however, San Francisco argues that they should be served the same way as other apartment buildings where residents have their mail delivered to individual mail boxes.
"It costs no more to put mail in an individual slot in an SRO in the Tenderloin than to put mail in an individual slot in an apartment building on Nob Hill," attorney Steffen Johnson told the court. "And the consequences of dumping the mail at the front door can be severe when you're living check to check and the check disappears."
Johnson was before the three-judge panel trying to revive a lawsuit filed by the City and County of San Francisco and housing advocates in 2009. They want to make the USPS deliver mail to SROs using individual lock boxes for each residential unit.
The complaint charged that the USPS, the postmaster general, the USPS vice president and the San Francisco postmaster violated the constitutional rights of SRO residents. They say that the single-point mail delivery policy violates "the equal protection, free speech, privacy and freedom of association rights of disabled, elderly and low-income residents of San Francisco."
The USPS responded that the decision was not discriminatory because it came down to costs. Noting that the Postal Reorganization Act in 1971 required it to operate without losses, it calculated that a switch to individualized delivery would cost an additional $2 million per year.
San Francisco still claims, however, that the practice affects some of the city's "most vulnerable residents."
"At SROs, the Postal Service directs its mail carriers to leave a bag of the building's mail near the entryway or at the desk and just walk away, with no concern for the obvious danger that the mail will be stolen or misdelivered or otherwise 'disappear,'" its complaint stated. "For many sensitive pieces of mail containing monthly benefit checks, postal orders, critical health information, treasured personal letters and the like, this is exactly what happens - and the Postal Service knows and tolerates it."
The Central City SRO Collaborative, the San Francisco Tenants Union and the Housing Rights Committee of San Francisco joined San Francisco as plaintiffs.
Compounding the problem of theft is the fact that SRO managers use their positions as the last link in the mail-delivery chain to open their residents' mail, they claim. Building managers who learn about the residents' medical conditions or changes in their financial situations allegedly use the information to harass or evict tenants facing deteriorating health or finances.
"Knowing the importance of mail delivery to SRO residents, management at SROs and desk clerks often use their unchecked ability to withhold mail to retaliate against residents who report unsafe conditions to the city," the complaint states.
U.S. District Judge Richard Seeborg dismissed the suit before it went to trial, however, ruling that "Congress made clear that it was to run as a self-sufficient business, giving the highest priority to efficiency. Respecting that mandate, the USPS reasonably determined that it was most efficient to conserve valuable resources in a difficult economic period by continuing single-point delivery to SROs. The USPS's decision not to provide centralized delivery to SROs is reasonable and does not unconstitutionally infringe on plaintiffs' First Amendment rights."
In its appeal to the 9th Circuit, San Francisco argued that the Postal Service's "policy relies on an arbitrary classification to cut off centralized delivery service to only certain multi-unit residents-in violation of equal protection."
Johnson, the Winston & Strawn attorney representing San Francisco, told the three-judge panel Tuesday that they should look at whether the USPS was correct in its determination that SRO residents are any more transient than residents of other apartment buildings.
Judge Sandra Ikuta asked whether there was a more narrow issue before the court.
"Why under the rational-basis standard aren't we just looking at whether the Postal Service's understanding was rational," Ikuta said. "I mean we don't need to establish whether in fact it was true or not, it's just whether [they believed] that there was a rational basis to make that distinction."
Johnson responded that the 9th Circuit could also force a trial if it found that the USPS had used cost as a pretext to refuse to deliver to individual mail slots at SROs.
"The very classification of SROs as hotels ... is arbitrary and irrational," he said, adding that, as a class, SRO occupants are no more transient than occupants of other types of buildings that receive individualized delivery.
U.S. Department of Justice attorney Lowell Sturgill disagreed, saying that SRO residents are too mobile for the USPS to provide individual lock boxes. To have a stable cost-efficient delivery network, the Postal Service needs stable and predictable addresses, he said
"SRO hotel tenants do not sign long-term leases, do not pay security deposits," Sturgill said. "As a result, they are free to leave from one day to the next. Not only that, they are free to move from one SRO hotel room to another SRO hotel room."
San Francisco's lawyers took "a lot of gumption" to say SROs are apartment buildings, he added.
"Over 90 percent of these SRO hotels are taxed [by the city] as hotels," Sturgill said.
"That to believe the Postal Service has made an irrational judgment here would require you to completely close your eyes to the way the city itself treats these institutions," he added.
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.