Sprint Commc'ns Co. v. APCC Servs., Inc.
| Decision Date | 23 June 2008 |
| Docket Number | No. 07–552.,07–552. |
| Citation | 2008 Daily Journal D.A.R. 9308,45 Communications Reg. (P&F) 577,554 U.S. 269,128 S.Ct. 2531,21 Fla. L. Weekly Fed. S 411,76 USLW 4542,171 L.Ed.2d 424,08 Cal. Daily Op. Serv. 7702 |
| Parties | SPRINT COMMUNICATIONS CO., L. P., et al., Petitioners, v. APCC SERVICES, INC., et al. |
| Court | U.S. Supreme Court |
OPINION TEXT STARTS HERE
A payphone customer making a long-distance call with an access code or 1–800 number issued by a long-distance carrier pays the carrier (which completes the call). The carrier then compensates the payphone operator (which connects the call to the carrier in the first place). The payphone operator can sue the long-distance carrier for any compensation that the carrier fails to pay for these “dial-around” calls. Many payphone operators assign their dial-around claims to billing and collection firms (aggregators) so that, in effect, these aggregators can bring suit on their behalf. A group of aggregators (respondents here) were assigned legal title to the claims of approximately 1,400 payphone operators. The aggregators separately agreed to remit all proceeds to those operators, who would then pay the aggregators for their services. After entering into these agreements, the aggregators filed federal-court lawsuits seeking compensation from petitioner long-distance carriers. The District Court refused to dismiss the claims, finding that the aggregators had standing, and the D.C. Circuit ultimately affirmed.
Held: An assignee of a legal claim for money owed has standing to pursue that claim in federal court, even when the assignee has promised to remit the proceeds of the litigation to the assignor. Pp. 2535 – 2546.
(a) History and precedent show that, for centuries, courts have found ways to allow assignees to bring suit; where assignment is at issue, courts—both before and after the founding—have always permitted the party with legal title alone to bring suit; and there is a strong tradition specifically of suits by assignees for collection. And while precedents of this Court, Waite v. Santa Cruz, 184 U.S. 302, 22 S.Ct. 327, 46 L.Ed. 552, Spiller v. Atchison, T. & S.F.R. Co., 253 U.S. 117, 40 S.Ct. 466, 64 L.Ed. 810, and Titus v. Wallick, 306 U.S. 282, 59 S.Ct. 557, 83 L.Ed. 653, do not conclusively resolve the standing question here, they offer powerful support for the proposition that suits by assignees for collection have long been seen as “amenable” to resolution by the judicial process, Steel Co. v. Citizens for Better Environment, 523 U.S. 83, 102, 118 S.Ct. 1003, 140 L.Ed.2d 210. Pp. 2535 – 2542.
(b) Petitioners offer no convincing reason to depart from the historical tradition of suits by assignees, including assignees for collection. In any event, the aggregators satisfy the Article III standing requirements articulated in this Court's more modern decisions. Petitioners argue that the aggregators have not themselves suffered an injury and that assignments for collection do not transfer the payphone operators' injuries. But the operators assigned their claims lock, stock, and barrel, and precedent makes clear that an assignee can sue based on his assignor's injuries. Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 146 L.Ed.2d 836. In arguing that the aggregators cannot satisfy the redressability requirement because they will remit their recovery to the payphone operators, petitioners misconstrue the nature of the redressability inquiry, which focuses on whether the injury that a plaintiff alleges is likely to be redressed through the litigation—not on what the plaintiff ultimately intends to do with the money recovered. See, e.g., id., at 771, 120 S.Ct. 1858. Petitioners' claim that the assignments constitute nothing more than a contract for legal services is overstated. There is an important distinction between simply hiring a lawyer and assigning a claim to a lawyer. The latter confers a property right (which creditors might attach); the former does not. Finally, as a practical matter, it would be particularly unwise to abandon history and precedent in resolving the question here, for any such ruling could be overcome by, e.g., rewriting the agreement to give the aggregator a tiny portion of the assigned claim itself, perhaps only a dollar or two. Pp. 2541 – 2544.
(c) Petitioners' reasons for denying prudential standing—that the aggregators are seeking redress for third parties; that the litigation represents an effort by the aggregators and payphone operators to circumvent Federal Rule of Civil Procedure 23's class-action requirements; and that practical problems could arise because the aggregators are suing, e.g., payphone operators may not comply with discovery requests or honor judgments—are unpersuasive. And because there are no allegations that the assignments were made in bad faith and because the assignments were made for ordinary business purposes, any other prudential questions need not be considered here. Pp. 2543 – 2546.
489 F.3d 1249, affirmed.
Carter G. Phillips, Washington, DC, for petitioners.
Roy T. Englert, Jr., Washington, DC, for respondents.
Thomas C. Goldstein, Patricia A. Millett, Akin Gump Strauss Hauer & Feld, LLP, Washington, D.C., David P. Murray, Randy J. Branitsky, Willkie Farr & Gallagher LLP, Washington, D.C., for Petitioner Sprint Carter G. Phillips, Counsel of Record, David W. Carpenter, Sidley Austin LLP, Washington, D.C., Wayne Watts, AT&T Inc., Senior Executive Vice President & General Counsel, San Antonio, TX, for Petitioner AT&T.Roy T. Englert, Jr., Counsel of Record, Donald J. Russell, Damon W. Taaffe, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, Washington, D.C., Michael W. Ward, Ward & Ward, P.C., Rolling Meadows, IL, for Respondents.Justice BREYER delivered the opinion of the Court.
The question before us is whether an assignee of a legal claim for money owed has standing to pursue that claim in federal court, even when the assignee has promised to remit the proceeds of the litigation to the assignor. Because history and precedent make clear that such an assignee has long been permitted to bring suit, we conclude that the assignee does have standing.
When a payphone customer makes a long-distance call with an access code or 1–800 number issued by a long-distance communications carrier, the customer pays the carrier (which completes that call), but not the payphone operator (which connects that call to the carrier in the first place). In these circumstances, the long-distance carrier is required to compensate the payphone operator for the customer's call. See 47 U.S.C. § 226; 47 CFR § 64.1300 (2007). The payphone operator can sue the long-distance carrier in court for any compensation that the carrier fails to pay for these “dial-around” calls. And many have done so. See Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc., 550 U.S. 45, 127 S.Ct. 1513, 167 L.Ed.2d 422 (2007) ().
Because litigation is expensive, because the evidentiary demands of a single suit are often great, and because the resulting monetary recovery is often small, many payphone operators assign their dial-around claims to billing and collection firms called “aggregators” so that, in effect, these aggregators can bring suit on their behalf. See Brief for Respondents 3. Typically, an individual aggregator collects claims from different payphone operators; the aggregator promises to remit to the relevant payphone operator ( i.e., the assignor of the claim) any dial-around compensation that is recovered; the aggregator then pursues the claims in court or through settlement negotiations; and the aggregator is paid a fee for this service.
The present litigation involves a group of aggregators who have taken claim assignments from approximately 1,400 payphone operators. Each payphone operator signed an Assignment and Power of Attorney Agreement (Agreement) in which the payphone operator “assigns, transfers and sets over to [the aggregator] for purposes of collection all rights, title and interest of the [payphone operator] in the [payphone operator's] claims, demands or causes of action for ‘Dial–Around Compensation’ ... due the [payphone operator] for periods since October 1, 1997.” App. to Pet. for Cert. 114. The Agreement also “appoints” the aggregator as the payphone operator's “true and lawful attorney-in-fact.” Ibid. The Agreement provides that the aggregator will litigate “in the [payphone operator's] interest.” Id., at 115. And the Agreement further stipulates that the assignment of the claims “may not be revoked without the written consent of the [aggregator].” Ibid. The aggregator and payphone operator then separately agreed that the aggregator would remit all proceeds to the payphone operator and that the payphone operator would pay the aggregator for its services (typically via a quarterly charge).
After signing the agreements, the aggregators (respondents here) filed lawsuits in federal court seeking dial-around compensation from Sprint, AT & T, and other long-distance carriers (petitioners here). AT & T moved to dismiss the claims, arguing that the aggregators lack standing to sue under Article III of the Constitution. The District Court initially agreed to dismiss, APCC Servs., Inc. v. AT & T Corp., 254 F.Supp.2d 135, 140–141 (DC 2003), but changed its mind in light of a “long line of cases and legal treatises that recognize a well-established principle that assignees for collection purposes are entitled to bring suit where [as here] the assignments transfer absolute title to the claims.” APCC Servs., Inc. v. AT & T Corp., 281...
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