418 F.3d 1238 (D.C. Cir. 2005), 04-7034, APCC Services, Inc. v. Sprint Communications Co.

Docket Nº:04-7034, 04-7035.
Citation:418 F.3d 1238
Party Name:APCC SERVICES, Inc., et al., Appellees v. SPRINT COMMUNICATIONS CO., Appellant.
Case Date:June 28, 2005
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

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418 F.3d 1238 (D.C. Cir. 2005)

APCC SERVICES, Inc., et al., Appellees

v.

SPRINT COMMUNICATIONS CO., Appellant.

Nos. 04-7034, 04-7035.

United States Court of Appeals, District of Columbia Circuit

June 28, 2005

Argued Oct. 21, 2004.

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[Copyrighted Material Omitted]

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Appeals from the United States District Court for the District of Columbia, No. 01cv00642, No. 99cv00696

David P. Murray and Edward P. Lazarus argued the cause for appellants. With them on the briefs were Randy J. Branitsky and Jeffrey P. Kehne. Clifford J. Zatz entered an appearance.

Roy T. Englert, Jr. argued the cause for appellees. With him on the brief were Donald J. Russell and Michael W. Ward. Alyssa M. Campbell, Charles B. Montgomery, Jeffrey J. Ward, Sean M. Hanifin, Adam Proujansky, Albert H. Kramer, Leon B. Kellner and Leslie R. Cohen entered appearances.

Joel Marcus, Counsel, Federal Communications Commission, argued the cause as amicus curiae in support of appellees. On the brief were John A. Rogovin, General Counsel, Austin C. Schlick, Deputy General Counsel, John E. Ingle, Deputy Associate General Counsel, and Laurence N. Bourne, Counsel.

Before: Ginsburg, Chief Judge, and Sentelle and Randolph, Circuit Judges.

Opinion dissenting in part filed by Circuit Judge Sentelle.

Dissenting opinion filed by Chief Judge Ginsburg.

OPINION

Per Curiam.*

In these consolidated appeals, we consider whether chapter 5 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151—615b, creates a private right of action for an owner or operator of a payphone (hereinafter a payphone service provider, or a PSP) to recover from an interexchange carrier (IXC) the compensation for coinless payphone calls required by a regulation of the Federal Communications Commission. Before answering that question, however, we must first decide whether the plaintiffs, as the assignees of PSPs' claims against the IXCs, have standing to sue them. We conclude the plaintiffs do have standing but the Act does not provide them a right to sue in federal court.

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I. Background

In 1990 the Congress enacted the Telephone Operator Consumer Services Improvement Act, Pub. L. No. 101-435, 104 Stat. 986 (codified at 47 U.S.C. § 226), which requires PSPs to allow consumers to use an access code (e.g., "10-10-220") or a subscriber 800 number to make a call from a payphone. See 47 U.S.C. § 226(c)(1)(B). Before then, many PSPs had blocked the use of access codes and 800 numbers because they enabled customers to "dial around" the PSP's preselected IXC, with the result that neither the IXC nor the PSP received any payment for the call.

In its initial implementation of the Act, the Commission required IXCs to compensate PSPs only for access code calls, not for calls to subscriber 800 numbers, see Policies and Rules Concerning Operator Services Access and Pay Telephone Compensation, 6 F.C.C.R. 4736 ¶¶ 34, 36 (1991), clarified on recons., 7 F.C.C.R. 4355 ¶ 50 (1992), but we held that compensation scheme was not fully consistent with the 1934 Act, 47 U.S.C. § 226(e)(2), and had to be reconsidered. Fla. Pub. Telecomms. Ass 'n, Inc. v. FCC, 54 F.3d 857, 859 (D.C. Cir. 1995). Then, in the Telecommunications Act of 1996, the Congress instructed the Commission to devise a new plan that would "ensure that all payphone service providers are fairly compensated for each and every completed intrastate and interstate call using their payphone[s]." 47 U.S.C. § 276(b)(1)(A). After several failed attempts, see Ill. Pub. Telecomms Ass'n v. FCC, 117 F.3d 555, 558 (D.C. Cir. 1997) and MCI Telecomms. Corp. v. FCC, 143 F.3d 606, 607 (D.C. Cir. 1998), the Commission finally crafted such a plan. See Am. Pub. Communications Council v. FCC, 215 F.3d 51, 52 (D.C. Cir. 2000) (upholding the plan). Getting the Commission to enact a regulation requiring IXCs to compensate them for dial-around calls was only half the battle for the PSPs, however; their challenge now is to collect.

Most PSPs rely upon "aggregators" to act as intermediaries between themselves and the several IXCs; an aggregator acting on behalf of a PSP submits billing information to the IXCs and pays over to the PSP the monies it receives from the IXCs. The aggregator charges the PSP a fee based upon the number of telephone lines that PSP operates. Plaintiff American Public Communications Council Services (APCCS) is the largest aggregator, representing more than 1400 PSPs, which in turn own and operate more than 400,000 payphones nationwide.

APCCS and several other plaintiff aggregators represent that certain IXCs "have failed to pay the required [dial-around] compensation for millions of calls placed over several years." They sought authorization from their client PSPs to sue IXCs on the PSPs' behalf, and agreed to pass back to the PSPs any amounts they recovered thereby. Each PSP then signed an "Assignment and Power of Attorney" providing, in relevant part, that the PSP

assigns, transfers, and sets over to [the aggregator] for purposes of collection all rights, title and interest of the [PSP] in the [PSP's] claims, demands or causes of action for "Dial-Around Compensation" ("DAC") due the [PSP] for periods since October 1, 1997, pursuant to Federal Communications Commission rules, regulations and orders.

The aggregators, purporting to act "as assignee[s] of the claims of and attorney[s]-in-fact" for the PSPs, then jointly filed lawsuits against Sprint, AT&T, and other IXCs, claiming each IXC had violated the Commission's dial-around compensation regulation. One PSP, Peoples Telephone

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Company, also participated in the lawsuits as a co-plaintiff.

AT&T moved to dismiss the cases on the ground the aggregators lacked standing to sue. The district court initially agreed and dismissed all the claims of the aggregators, APCCS v. AT&T Corp., 254 F.Supp.2d 135, 137 (D.D.C. 2003), but upon the aggregators' motion for reconsideration, vacated its earlier ruling and denied AT&T's motion. 281 F.Supp.2d 41, 45 (D.D.C. 2003).

Another IXC, Cable & Wireless, moved to dismiss the single complaint against it on the grounds that the aggregators lacked not only standing but also a right of action for dial-around compensation under § 276 of the Act and the implementing regulation promulgated by the Commission. The district court denied that motion and permitted the plaintiffs to amend their complaints to assert that §§ 201(b), 407, and 416(c) of Title 47 provide alternative grounds for relief. APCCS v. Cable & Wireless, Inc., 281 F.Supp.2d 52, 57 (D.D.C. 2003). (Cable & Wireless thereafter filed for bankruptcy and the case against it was stayed.) At the instance of Sprint and AT&T, the district court then certified its orders for interlocutory appeal, APCCS v. Sprint Communications Co., 297 F.Supp.2d 90, 101 (D.D.C. 2003); APCCS v. AT&T Corp., 297 F.Supp.2d 101, 110 (D.D.C. 2003), and we consolidated their appeals.

II. Analysis

Our review is de novo. We assume the factual allegations in the complaints are true. See Greene v. Dalton, 164 F.3d 671, 674 (D.C. Cir. 1999). Because Article III standing is a jurisdictional requirement, we begin our analysis there. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-102 (1998).

A. The Aggregators' Standing

Sprint and AT&T argue the aggregators lack standing to sue because they do not have "a concrete personal stake in the litigation." As these IXCs see things, the aggregators' "skeletal and conditional" assignments from the PSPs are insufficient to confer standing because they transfer only "bare legal title" to the claims of the PSPs, that is, the right to sue "for purposes of collection" but not the right to the recovery. Here the IXCs point out that the aggregators have promised to return to the PSPs all the proceeds from the litigation.** Further, they contend the assignments, notwithstanding their terms, are in fact "completely revocable" by the PSPs.

In terms of the "irreducible constitutional minimum" requirements for standing — injury-in-fact, causation, and redressability, see Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) — the IXCs first argue the aggregators have not suffered any injury of their own, and the assignments do not confer upon the aggregators the right to assert the injury of the PSPs. The IXCs also argue the relief the aggregators seek would not redress their purported injury because the aggregators would not keep

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any portion of such damages as may be awarded.

There are some circumstances in which a plaintiff has standing to sue based upon an injury to someone else. Indeed, in Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 773 (2000), the Supreme Court stated in no uncertain terms that "the assignee of a claim has standing to assert the injury in fact suffered by the assignor." At the same time, however, the Court said that the assignee must have a "concrete private interest in the outcome of the suit" that is related to the injury asserted. Id. at 772.

Therefore, in order to determine whether the aggregators have standing, we must first determine the effect of the assignments, which purport to transfer to them "all rights, title and interest" in the PSPs' dial-around compensation claims. We must then determine whether the aggregators have a stake in the outcome of the suit, notwithstanding their contractual obligation to account to the PSPs for any award of damages.

1. The assignments

Sprint and AT&T offer two reasons to believe the assignments did not transfer the PSPs' compensation claims to the aggregators so as to give the aggregators standing to sue. First, the transferred ownership interest was only "for purposes of collection." Second, the assignments were "completely revocable" by the PSPs.

We need not dwell upon the IXCs' first argument. The quoted phrase appears in the following context: "[The...

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