Philadelphia
Target Says It’s Poised to Raise Second-Half Marketing Spending
CFO Says First-Half Savings Will Be Rolled Into Pre-Holiday Efforts
By Natalie Zmuda
Published: August 18, 2009
NEW YORK (AdAge.com) — Target plans to come out swinging in the second half.
Executives today said marketing spending, as a percent of sales, would be up compared with a year ago as the retailer looks ahead to the all-important holiday period. Executives are still feeling cautious about whether consumers will be spending in the second half, but as Target and other retailers begin lapping weaker sales results from last fall, same-store sales are likely to improve.
Douglas Scovanner, Target’s chief financial officer, said that the third quarter, leading into the holidays, is typically a seasonal peak in Target’s marketing and advertising efforts. This year, he said, the retailer has “elected to exaggerate that trend.”
Money to spend
“We expect to spend more as a percent of sales in Q3 and Q4 this year than we did last year,” Mr. Scovanner said during an earnings call. “For the year, our marketing plan is right on. But we have saved some money here in the front half for the expressed purpose of being able to invest it in the back half.”
In the second half of last year, Target spent $451 million on measured media, according to TNS Media Intelligence. In the first quarter of this year, the retailer’s ad spending was down 3% compared with the same period a year ago.
The move comes as execs say the retailer is finally gaining traction in its fight to convince consumers that it’s just as cheap as rival Walmart. Part of that strategy has included the introduction of a “low-price promise.” In March, Target began testing the program in Denver and Orlando, matching competitors’ prices on identical items in local markets. Target took the program nationwide July 12 and has promoted the effort in its circulars and in-store signage.
“We have been confident our prices are right, and we’re seeing our prices are right, because there are very few adjustments being made,” said Gregg Steinhafel, president-CEO, of the low-price program. “It might be one per store every couple of days. So it’s relatively modest. But we think this will be a terrific credibility builder and marketing umbrella to reinforce that we have strong values both every day and on sale.”
Same-store sales down
Same-store sales during the second period continued to lag, however, down 6%. Overall sales fell 3% to $14.6 billion.
When asked directly by an analyst why Target’s sales performance hasn’t been on par with fellow discounters such as Walmart and T.J. Maxx, Mr. Steinhafel said that it was due to consumer perception that Target’s value proposition is not as strong as those rivals. But, he added, the retailer’s research shows that its advertising and in-store signage is starting to “slightly” shift those perceptions.
“We’re starting to see slight basis points improvement in our price perception vis-a-vis where we were in prior periods,” he said. “So, we believe that we’re on the right track. We have made the right adjustments. [We] believe that over time we’ll continue to narrow that perception gap.”
In the second half, Target plans to focus on its pharmacy and grocery areas, both areas that have been outperforming the more discretionary home and apparel categories. A campaign to promote the pharmacy business, including Target’s first TV spot to highlight the category, is planned for the second half. The retailer also plans to sharpen its focus on Halloween, which falls on a Saturday this year. Plans to promote party favors and accessories under $3 are in the works.
Reader’s Digest Plans Bankruptcy Filing
From the New York Times
August 17, 2009, 2:00 pm
By Stephanie Clifford
UPDATE Aug. 17, 3:52 p.m. With comments from the Reader’s Digest Association chief financial officer, Tom Williams, and on the banks’ involvement.
The Reader’s Digest Association announced on Monday that it would file for Chapter 11 bankruptcy protection for its United States businesses within 30 days.
As part of the reorganization, Ripplewood Holdings, the private equity firm that owned Reader’s Digest and installed Mary Berner as its chief executive, will shed its shares and board seats, and existing debt holders will become the company’s owners. Ms. Berner will continue to run the company, and Tom Williams will remain as chief financial officer. The company does not expect to lay off any employees or close any of its publications, Mr. Williams said in an interview.
The value of the company will be much lower under the overhaul. Its debt of $2.2 billion will be reduced to $550 million, according to the agreement it has already struck with the majority of the banks. Ripplewood had bought Reader’s Digest for $2.8 billion in 2007 in a leveraged buyout.
“The bank lenders are taking a fairly significant haircut,†said John Puchalla, a senior analyst at Moody’s. While it was common for junior creditors to take a loss, for the senior creditors to take such a loss is “notable,†he said. “It’s certainly a lot less than the value the lenders viewed at the time of the L.B.O.,†he said.
Mr. Williams said a majority of its lenders had agreed to the terms of the restructuring, and the company expected to speed through bankruptcy, completing proceedings 45 to 90 days after it files, he said.
The filing does not cover its businesses outside the United States; it sells publications and products in 78 countries.
The company has lined up $150 million from lenders, through a debtor-in-possession loan, to help finance it through the restructuring, and will get $400 million more upon exiting bankruptcy, for the
total new debt of $550 million.
“Our banks are 100 percent aligned on the vendors that we choose and serve, so there’s no issue associated with paying any vendors,†Mr. Williams said.
That money comes from its new owners: J.P. Morgan, the company’s agent, G.E. Capital, Merrill Lynch, Eaton Vance, Regiment Capital Advisors, Ares Management, and Davidson Kempner. Although Ripplewood made an offer, “the offer from the lender group looks more compelling,†Mr. Williams said.
The company has an additional $100 million in cash on hand, Mr. Williams said.
The overhaul will save Reader’s Digest $65 million a year in cash-interest expense payments, reducing its annual payments from $145 million to $80 million, Mr. Williams said.
The company will continue to operate as usual once it comes out of bankruptcy, but with significantly less debt, Mr. Williams said. “No employees are going to be affected by this, there’s no-to-little
effect on our vendors, our operational performance remains very sound,†he said.
In the company’s most recent fiscal year, ended in June, its revenues, excluding the effects of foreign exchange, declined 1.4 percent, and gross margins and operating profit were flat with last year, Mr. Williams said. Additionally, ad revenue, which makes up about 9 percent of the company’s sales, were down only 3 percent from last year.
The magazine was founded in 1922, summarizing articles published elsewhere, and grew quickly. The company developed other titles, and, in 1990, went public.
The Reader’s Digest Association has been through a turbulent time in the last several years. In 2007, a consortium led by Ripplewood bought the company for $2.8 billion. Ms. Berner, a publishing executive, was installed as chief executive; her brother, Robert Berner, was then a managing director at Ripplewood.
But the company has lost money every year since 2005. The high debt load of the company had led analysts including Mr. Puchalla to downgrade its debt at the beginning of this year. In June, the company announced it was cutting the guaranteed circulation of the flagship magazine to 5.5 million, from 8 million, and decreasing the frequency to 10 times a year, from 12, along with focusing the magazine on socially conservative values.
Plunge in Credit-Card Mailings Slows
Could this be some good news for a change!From Brandweek
Aug 14, 2009
- Mark Dolliver
When the credit crunch took hold last year, it stanched the usual flood of direct-mail credit-card mailings to U.S. consumers. The subsequent meltdown of the financial system had its own restraining effect on such offerings. But now, a report from Synovate says the research firm’s Mail Monitor operation has detected a bottoming out in the volume of such solicitations.
In the second quarter of this year, says the report, households received 349.1 million credit-car offers in the mail. That’s 67 percent lower than the level of mailings in the same quarter of 2008. But it’s down just 6 percent from the level of first-quarter 2009. Some of the big mailers even increased their volume during the second quarter. Bank of America’s mailings were up 77 percent from the first-quarter-2009 level, and Citibank’s were up 65 percent. Noting that credit-card issuers have been growing less risk-averse than they were earlier in the recession, Synovate goes so far as to predict an “uptick” in card offers next year.
An earlier report from Mintel Comperemedia noted a stabilization (after two years of declines) in the number of mailings sent to households promoting mortgages and home-equity loans. But the nature of the offers has shifted, given lessons consumers have learned the hard way in the past year. Notably, direct-mail offers of adjustable-rate mortgages have “fallen out of favor,” according to Mintel’s analysis.
Of course, the fact that companies are making offers of credit cards and loans doesn’t necessarily mean people are taking them up on it. Polls during the past year have consistently found consumers professing their aversion to taking on more debt of any sort. Typical of the genre was a Gallup poll released last month (based on fieldwork in June) in which 46 percent of respondents said it’s “a bad time to borrow money,” vs. 17 percent saying it’s a “good time” to do so.
Postal Service health is still a concern
By Juliana Gruenwald CongressDaily July 30, 2009 While there is little disagreement that the U.S. Postal Service is facing a severe financial crisis, lawmakers voiced concerns on Thursday over the proposed solutions, which include closing some branches and possibly reducing deliveries to five days a week.
GAO this week said it was adding the Postal Service to its list of “high-risk areas” needing attention by Congress.
It said the USPS is facing a “deteriorating financial situation” and is on track to end the year with a net loss of $7 billion. Its financial woes are due to the ailing economy and declining mail volumes as more people and businesses bypass snail mail for e-mail, text messaging and other forms of electronic communications.
At a House Oversight and Government Reform Federal Workforce and Postal Service Subcommittee hearing, lawmakers pressed the USPS for details on what criteria would be used in determining which of the proposed 3,200 suburban and urban branches under consideration would be closed.
USPS acting Vice President Jordan Small said fewer than 1,000 post offices out of the list of 3,200 are likely to be closed. The criteria USPS will use in determining whether to close a facility is a branch’s proximity to other branches and the consuming habits of postal customers in that area.
He declined to give an estimate of how much would be saved by the closures and by eliminating Saturday deliveries. Small said USPS would have a better sense of the estimated cost savings in October when a study on such moves is complete.
But some lawmakers voiced concern about the potential impacts on their communities. “While I admit, the finances here are very grave … there is a need to conduct ourselves with, I think, a thoughtful approach … and do it in a way that causes the least amount of disruption,” Federal Workforce and Postal Service Subcommittee Chairman Stephen Lynch, D-Mass., said. Rep. Gerry Connolly, D-Va., said many of his constituents who have long commutes to work would be unable to visit a post office if they are not open in the evening.
Del. Eleanor Holmes Norton, D-D.C., chastised the postal service for taking too long to implement the necessary reforms but then quizzed Small on whether any post offices in Washington are on the list of possible closures. For the most part, business groups dependent on the postal service said they support the proposed changes if they will help ensure USPS’s viability.
But they voiced strong opposition to raising postal rates. Noting that the bad economy has hurt their industry as well, “mailers cannot shoulder another rate increase,” the Direct Marketing Association’s Jerry Cerasale said. Federal Workforce and Postal Service Subcommittee ranking member Jason Chaffetz, R-Utah, said lawmakers should consider providing USPS with economic stimulus funds and urged USPS to do more to make itself more relevant, perhaps through assisting in conducting the 2010 census.
Few Bright Spots In Media Sales Forecast: Magna
From DIRECT: Jul 14, 2009 1:23 AM
Media supplier advertising revenue will sink to $161.4 billion in 2009, according to media services firm Magna. That figure represents a 14.5% drop from 2008’s level. And there isn’t much hope for recovery during the next few years: Magna anticipates the compounded annual ad revenue growth rate between 2009 and 2014 to be only 0.9%.
At least that represents growth. Radio ad revenue has dropped of late, dipping to $14 billion in 2009. And the next five year’s won’t be fun, either, with radio ad revenue slipping by 0.8% a year.
And at $15.7 billion, magazine spending has plummeted, and there isn’t much hope for turnaround. Its declines will continue through 2014, on a compounded annual basis of 3.3% every year.
Move from slick paper to pulp, and the future looks bleaker. Total ad sales for newspapers – including online revenue – will amount to $28.5 billion, and that number is going to drop by 3.7% annually through 2014.
What good news there is, is tepid. For instance, total television consumption is set to rise, as population increases and viewing will outstrip embracement of digital video recorders. Total television spending, which stands at an estimated $47.7 billion for 2009, will rise by 3.2% during the next five years.
And while the rate of broadband computer penetration is slowing, it is still rising and should it 70% by 2014. At that time, most computer access will be broadband-based, Magna predicted.
Where is growth? No surprise there: Direct online media expenditures will amount to $13.9 billion in 2009, and will increase between this year and 2014 by 10.2% on a compounded annual basis.
Similarly, total online spend, which stands at $23 billion for 2009, will jump by 8.4% compounded annually through 2014.
The biggest surprise may be in Magna’s direct mail predictions. At $19.2 billion, supplier revenue is down 11.2% for the year. But – whether due to postage and printing increases, or a swing back of the pendulum as marketers re-embrace the mail – between now and 2014 it is seen as growing at 2% annually.
Mail Truck full of undelivered mail towed from McDonalds parking lot!
You’ve gotta check this out!!!
Mail Delivery Van full of mail towed
Did You Know that the Postal Service…
Some fun facts about the postal service:Â
- Contrary to popular belief, the United States Post Office has no official motto. However, a number of postal buildings contain inscriptions, the most familiar of which appear on postal buildings in New York City and Washington D.C.
General Post Office, New York City, 8th Avenue and 33rd. Street.
“Neither snow nor rain nor gloom of night stays these couriers from the swift completion of their appointed rounds.”
This inscription was supplied by William Mitchell Kendall of the firm of McKim, Mead & White, The Architects who designed the New York General Post Office. Kendall said the sentence appears in the works of Herodotus and describes the expeditions of the Greeks against the Persians under Cyrus, about 500 B.C. The Persians operated a system of mounted postal couriers, and the sentence decribes the fidelity with which their work was done. - Handles more than 43% of the world’s mail. It’s nearest competitor is Japan with only 6%.
- Depends exclusively on postage and fees rather than tax payer revenue for it’s operations.
- Serves customers with nearly 40,000 post offices and retail units throughout the country.
- Operates a $5.5 billion transportation network that includes more than 200,000 vehicles and contract space on approximately 15,000 commercial flights daily.
- Serves more than 8 million small business customers.
- Operates the nations largest alternate fuel delivery fleet with more than 7,000 vehicles powered by natural gas, electridity, and ethanol in 1996.
- The postal service is listed by Fortune Magazine as 29th on a list of the world’s largest companies. Working with an annual budget of nearly 1% of the United States economy.
- Recycles more than one million tons of materials annually.
- Handles more than 41 million change-of-address cards each year as a free service to the 17% of the nation’s population that moves each year.
- Serves as the largest credit/debit card acceptor in the nation with nearly 50,000 terminals at 33,000 postal locations throughout the country.
- Experiences an increase of one million dollars in costs when the price of gasoline increases by one cent nationwide.
- Delivers more in one day than FedEx does in a year, and more in three days than UPS does in a year.
The United States Postal Service & Power Company?
Switching to electric delivery vehicles would enable the U.S. Postal Service to make millions by selling electricity and to reduce delivery costs by millions as well, a postal expert says.
Batteries for the electric vehicles could be charged during off-peak hours and kept connected to the grid, writes Michael Ravnitzky, Special Assistant to Commissioner Ruth Goldway of the Postal Regulatory Commission, in a paper published today on the PRC’s Web site. When not being used in delivery vehicles, stored power in the batteries could be sold back into the grid at times of peak or unexpected surges in demand.
(A presentation Ravnitzky did recently on the concept can be found here. The paper grew out of an op-ed piece Ms. Goldway wrote for The New York Times.)
USPS’s fleet of 142,000 right-hand drive delivery trucks is nearing the end of its useful life. The vast majority could be replaced by electric vehicles using today’s battery technology, Ravnitzky writes.
“Most daily mail delivery routes are short, repetitive and well-defined, and include many stops, making the postal delivery fleet a prime application for electric drive vehicles. The electrification of the postal fleet could significantly reduce gasoline and maintenance expenses while reducing the fleet’s carbon footprint,†he says.
“Historical experience with electric drive vehicles suggests maintenance cost reductions of at least 30 percent to 50 percent,†he writes. That, and an electricity cost that is equivalent to 80-cents-per-gallon gasoline, suggests annual savings for the Postal Service could be in the hundreds of millions of dollars.
On the revenue side, Ravnitzky sees more opportunity from storing electricity and having it available to the grid on a contingency reserve basis than from actually selling electricity. As such unreliable sources as wind and solar power became more of a factor in the grid, he notes, the needs to store electricity and have it available on a rapid-response basis will grow, he says. He estimates $2000 to $2500 annually in revenue per vehicle from various “V2G†(vehicle to grid) services – which would mean several hundred million dollars if most of the fleet went electric.
“The operators of the electrical grid are essentially running a massive just-in-time delivery system and it can be tricky to keep this system balanced.”
Electric vehicles cost more upfront than gasoline-powered ones, and some investment in battery-charging operations would also be needed, according to Ravnitzky. Mass production of the expensive batteries would reduce the cost and presumably give a leg up to manufacturers developing similar products for the consumer market. Further study is needed to provide detailed information on capital costs, operational savings, revenue potential, and environmental impact, Ravnitzky says.
Perhaps his vision could be employed to provide a simultaneous bailout for three needy recipients – American car companies, the U.S. Postal Service, and the environment.
Summer Postage Sale – well, sort of a sale, no, more like a small rebate
summer sale
To those that are excited about the impending summer postage sale, there are a few details you need to know, first, did you receive a letter from the USPS recently?
Here is what it looks like: summer-sale-electronic-letter
Here are the details:
The USPS has made it official (almost) that they are going forward with the proposed ‘Summer Sale’ event. The PRC must still weigh in with their decision, which is expected in late May, to make this program official. This program would provide a 30% postage credit on mailings submitted between July 1, 2009 and September 30, 2009. This incentive program is designed to increase mailing activity during the usually dormant summer months, when the USPS has their most excess capacity available.
Unlike most sales however, there are a multitude of qualifiers that apply to the Summer Sale.
Who and what qualifies?
For the most part, the USPS has already determined what mailers qualify. Letters were sent out on 5/7/09 to approximately 3,200 mailers whom they determined will be eligible for this program by utilizing the mail volume data that exists within their internal system.
1. This program only applies to Presorted Standard letters and flats.
2. The next qualifier is that you must have mailed a minimum of 1,000,000 pieces during the time period of October 1, 2007 and March 31, 2008. Total volume is calculated by mailer, so even if you utilize multiple permits, your total volume will be calculated across all permits that are associated to your organization. This also applies to “Ghost Numbersâ€, which are created if your mail is sent through a Mail Service Provider. If you feel you are eligible, but have not received a letter, then you can request a contact by emailing your information to summersale@usps.gov.
If you have met the criteria above, you are ready to begin to calculate the ‘Sale’ portion of the program. The 30% postage credit will be given only on the number of mail pieces that exceed your mailing threshold for the time period of July 1, 2009 to September 30, 2009. The caveat to this all is that your mail volume in October must not fall below your mailing threshold for that month. If this occurs; the total credit accrued from mailings between 7/1/09 to 9/30/09 will be deducted by the amount of pieces that fell below the threshold in October and that will be the final credit. The credit will be issued at some point in December of 2009 once the USPS has completed the above calculations.
How to calculate your potential savings:
Below is an example of how to calculate the savings that you as a mailer may receive through this program. Listed in this example is the all important Threshold, which will be the key to planning your mailings to take advantage of this program.
1. Base volume (7/1/08 – 9/30/08): 500,000 pieces
2. Trend:
a. Volume 10/1/08 – 3/31/09 = 1,800,000 pieces
b. Volume 10/1/07 – 3/31/08 = 2,000,000 pieces
c. a/b = (1,800,000 / 2,000,000) = .90 or 90%
3. Base x trend = Threshold:
500,000 x .90 = 450,000
4. Rebate = (Actual volume – threshold) x (actual postage cost / actual volume) x 30%
a. Actual volume for 7/1/09 – 9/30/09 – threshold =
475,000 – 450,000 = 25,000 pieces
b. Actual postage cost / actual volume =
$103,075 / 475,000 = $0.217
c. Rebate =
25,000 x $0.217 x .3 = $1627.50
The October Effect:
It is important to keep your mailing volume for October in mind when factoring the potential savings. If your volume falls below the calculated threshold, then your overall credit will be impacted. Below is an example of how to calculate this effect.
a. October 2008 volume x trend (in #2 above) = October threshold:
300,000 x .90 = 270,000 pieces
b. If October 2009 (260,000 pieces) < October threshold:
Threshold – actual = adjustment
270,000 – 260,000 = 10,000
Rebate adjustment
a. Actual volume – summer sale threshold – rebate adjustment:
475,000 – 450,000 – 10,000 = 15,000
b. New rebate:
15,000 x $.217 x .3 = $976.50
For those of you that have received a letter; be sure to certify the volume that the USPS has provided to you since this will be a binding once you have agreed to enroll in the program. Also be sure to have your response in by August 1st, 2009.
This program is a great way to potentially reach more customers at a lower cost and therefore enhance your business’ ROI. The system is not perfect, but it is a step in the right direction for the USPS to utilize their new found pricing freedom to help mailers.
From the Federal Register today:
Federal Register Notices
DATE: Pending publication in the Federal Register.
Standard Mail Volume Incentive Program (aka Summer Sale)
AGENCY: Postal Serviceâ„¢.
ACTION: Final rule.
SUMMARY:
The Postal Service is revising Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM®), to add section 709.2 which introduces new standards for a special volume incentive program for mailers of Standard Mail® letters and flats with mail volume exceeding their individual USPS™-determined threshold levels. The program period will be from July 1, 2009 through September 30, 2009.
EFFECTIVE DATE: July 1, 2009.
FOR FURTHER INFORMATION CONTACT: Kevin Gunther at 202-268-7208.
SUPPLEMENTARY INFORMATION:
The Postal Service is implementing a volume incentive program for qualified high-volume mailers of commercial or Nonprofit Standard Mail letters and flats, for volume mailed between July 1, 2009 and September 30, 2009, above their USPS-determined threshold level. This program encourages mailers to provide new volume and to take advantage of our current excess capacity to process and deliver additional volume.
3rd Circuit: When Serving Post Office, Don’t Rely on Mailbox Rule
OK, so how ironic is this!!!!
Shannon P. Duffy
The Legal Intelligencer
May 12, 2009
If you’re filing a claim against the postal service, don’t just drop it in the mail because the courts won’t apply the ordinary presumption that a letter mailed is a letter received.
In a holding fraught with irony, the 3rd U.S. Circuit Court of Appeals has declared in Lightfoot v. United States (pdf) that the so-called “mailbox rule” cannot be invoked against the U.S. Postal Service to save an otherwise time-barred claim.
Instead, the court said, a plaintiff pursuing a claim under the Federal Tort Claims Act has the burden of proving that the federal agency was “presented” with a timely administrative claim, and that proof of mailing is not enough.
“The term ‘presented’ in the filing of an administrative claim means more than merely mailing the claim,” visiting Judge Richard G. Stearns of the District of Massachusetts wrote for a unanimous 3rd Circuit panel.
In the suit, plaintiff Cedric Lightfoot claims he was sideswiped by a postal van while driving on Broad Street in Philadelphia in October 2004.
Everyone agreed that Lightfoot’s lawyer, Frank S. Pollock of Brownstein Vitale & Weiss, filed a timely initial claim with the USPS by certified mail just before the second anniversary of the accident.
The dispute erupted over whether Pollock had filed a timely request for reconsideration within six months after the USPS denied his initial claim.
Pollock filed an affidavit in which he swore that he had signed a final copy of the request for reconsideration before giving it to his secretary to be mailed first class.
But Assistant U.S. Attorney Paul W. Kaufman offered an affidavit from an in-house lawyer at USPS that said he never received it.
Senior U.S. District Judge Jan E. DuBois sided with the government, finding that while the government has waived its sovereign immunity to allow suits under the FTCA, the waiver is a limited one and that the burden remains on the plaintiff to demonstrate strict compliance with the law’s administrative provisions.
“Where a plaintiff fails to comply with the presentment requirement or limitations periods in the statute, a district court lacks subject matter jurisdiction over the FTCA claim,” DuBois wrote in a March 2008 opinion.
On appeal, Pollock argued that DuBois erred in refusing to apply the “mailbox rule” to his claim for reconsideration.
But Stearns, in an opinion joined by 3rd Circuit Judges Theodore A. McKee and D. Brooks Smith, found that the federal courts have been nearly unanimous for more than a quarter century in rejecting such arguments.
In 1981, Stearns noted, the 9th Circuit in Bailey v. United States refused to “accept appellants’ invitation to rewrite the [FTCA] and in effect repeal the regulation by holding that mailing alone is sufficient to meet the requirement that a claim be ‘presented.’”
Just three years ago, Stearns said, the 9th Circuit noted that, since Bailey, “virtually every circuit to have ruled on the issue has held that the mailbox rule does not apply to [FTCA] claims, regardless of whether it might apply to other federal common law claims.”
That strong weight of authority was enough for Stearns, who wrote, “We now join these sister courts in rejecting the mailbox rule and holding that a plaintiff must demonstrate that the federal agency was in actual receipt of the claim, whether on initial presentment or on a request for reconsideration.”
In a footnote, Stearns rejected Pollock’s reliance on Glover v. United States, a 2000 decision from the Eastern District of New York that drew a distinction between the requirements for an initial presentation and a request for reconsideration.
” Glover is not persuasive,” Stearns wrote, noting that the 10th Circuit has already explicitly rejected Glover ‘s rationale and held that “nowhere is there any indication that what constitutes presentment of a request for reconsideration is different from presentment of the claim itself.”
Pollock, in an interview, said he was disappointed that the 3rd Circuit never addressed his most compelling arguments, but instead had relegated the discussion to a footnote with no real analysis.
The importance of Glover , he said, was that the trial judge in that case recognized that while the mailbox rule cannot apply to an initial claim, it made sense to do so for reconsideration.
The initial claim is designed to give notice to the federal agency and is mandatory, Pollock said, but the Glover court recognized that requests for reconsideration are governed by non-mandatory procedures that are designed to give the agencies an opportunity to take a second look at a rejected claim to facilitate settlements.
The issue in Lightfoot’s case was identical to Glover, Pollock said, because everyone agreed that the initial claim was timely filed.
The lesson to be drawn from the 3rd Circuit’s ruling, Pollock said, is that lawyers should always use certified mail when filing FTCA claims and that it is sometimes better to simply file suit than to ask an agency to reconsider denial of a claim.
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