A complaint filed in April by Gamefly that states that Netflix and Blockbuster are receiving preferential handling of DVDs is currently waiting on the US Postal Service to respond to discovery requests:

“The Postal Service seeks additional time to respond to the GameFly Motion because it has “been unable to turn its attention to the arguments presented by GameFly” due to constraints raised by “responding to the large number of discovery requests … filed by GameFly.”  Id. at 2.4 It contends the issues raised by the GameFly Motion may affect third parties and may set ground rules for non-public treatment of proprietary documents beyond those immediately at issue.  The Postal Service seeks an extension of an additional 17 days from the date its response to the GameFly Motion was due, until October 19, 2009.”

The original Gamefly complaint and the response by the US Postal Service resulted in a number of requests by Gamefly for information regarding the US Postal Service’s relationship with Netflix and Blockbuster. The prevailing theme of the filings is that Gamefly believes that Netflix and Blockbuster discs are manually processed to prevent breakage, that Gamefly discs are being stolen, and Gamefly wants the same treatment as Netflix and Blockbuster:

This relief should include, inter alia, an order prescribing the same prices and terms of service for GameFly, including the same degree of manual processing, that the Postal Service provides to Netflix and Blockbuster.   GameFly reserves the right to propose additional forms of relief as the evidentiary record justifies.

The US Postal Service responded that Gamefly could solve their problem by changing the mailer:

Count I accordingly fails because all DVD mailers are not equal.  Gamefly could get the inbound flats automation handling it wants by changing its mailpiece, and Gamefly in fact receives at least similar handling as other DVD mailers, after allowing for processing stream distinctions.

Gamefly filed a motion that requests information about “Netflix-only” mailbox slots, and discovered a directive that ordered post offices to take down the “Netflix-only” slots and signage:

Second, the Postal Service thought that the problem was widespread enough two years ago to issue a directive purportedly requiring the “immediate” elimination of Netflix-only mail drop slots:
In an effort to accommodate Netflix mail, some offices have created special mail drops and signage for Netflix returns.  This is not an authorized use of mail drop slots and it has legal ramifications for the Postal Service.
□ ALL Post Offices that have implemented Netflix return mail slots must remove the signage immediately.

This case is an interesting look at how DVDs are processed, and you can follow the filings on the Postal Regulatory Commission website.

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