SAN FRANCISCO (CBS SF) — A federal appeals court earlier this week upheld the right of the U.S. Postal Service to deliver mail to a single central point, such as a desk clerk, instead of individual mailboxes in single-room-occupancy hotels in San Francisco.

A three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco Wednesday unanimously rejected a bid by the city and three tenants’ groups to require deliveries to individual boxes, as is done in apartment buildings.

READ MORE: Stimulus Check Latest: Will You Get A Fourth Relief Payment?

The court said the postal service had a rational basis for treating SRO hotel tenants differently from apartment tenants, because they tend to be more transient.

“The USPS could rationally predict that if SROs were treated like apartment houses, the effect would be detrimental to the efficiency and economics of postal operations,” the court said.

SRO hotel units, which generally serve low-income tenants, are usually a single room of 350 square feet or less. Tenants share hallway kitchens and bathrooms. About two-thirds of the city’s approximately 500 SROs receive single-point deliveries, according to court filings.

The Postal Service argued that SRO occupants are generally more transient than lease-holding apartment dwellers, thus making mailbox rosters unstable and individual deliveries more complicated and expensive for the financially beleaguered agency.

READ MORE: Near Hurricane Force Winds Howl At Mt. St. Helena; Temperatures Soar; Red Flag Wildfire Warning

A government lawyer told the court during appeal arguments earlier this month that individual delivery in SRO hotels nationwide would impose an “onerous, unsustainable” cost of $300 million per year.

The appeals panel also rejected the tenants’ argument that centralized mail delivery impaired their free-speech right, ruling that the postal plan was not based on the mail’s content or viewpoint.

The city and tenant groups argued the policy “created a host of terrible consequences” for low-income SRO residents because it led to lost and stolen mail, including Social Security and welfare checks and medical appointment notices.

The groups that joined the city in filing the federal civil rights lawsuit in 2009 were the San Francisco Tenants Union, Central City SRO Collaborative and Housing Rights Committee of San Francisco.

The appeals court affirmed a similar ruling in which U.S. District Judge Richard Seeborg of San Francisco dismissed the case without a trial in 2011.

MORE NEWS: COVID: Out-Of-Work Bay Area Bartenders Turned To Delivering Mail During Pandemic Shutdown

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services may have contributed to this report.)