Sprint Communications Co., L.P. v. APCC Services, Inc.

PETITIONER: Sprint Communications Co., L.P.
RESPONDENT: APCC Services, Inc.
LOCATION: U.S. Naval Base at Guantanamo Bay

DOCKET NO.: 07-552
DECIDED BY: Roberts Court (2006-2009)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 554 US 269 (2008)
GRANTED: Jan 04, 2008
ARGUED: Apr 21, 2008
DECIDED: Jun 23, 2008

ADVOCATES:
Carter G. Phillips - argued the cause for the petitioner
Roy T. Englert, Jr. - argued the cause for the respondents

Facts of the case

In 1996, the Federal Communications Commission moved to require long-distance carriers to compensate pay-phone companies for so-called coinless phone calls. Last year, the Supreme Court ruled in Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc., that pay-phone operators could sue for greater compensation. This case arose when APCC Services brought such a suit against Sprint seeking compensation for coinless long-distance calls. Sprint argued that APCC had no stake in the outcome of the case because, under the terms of the assignment, any compensation from a favorable judgment or settlement would go directly to the pay-phone companies, not "intermediary" companies such as APCC.

The district court initially dismissed APCC's suit, but the court eventually reversed itself, concluding that it was sufficient that the assignment transferred legal title to the claim rather than merely transferring power of attorney. The U.S. Court of Appeals for the Eight Circuit affirmed, concluding that, as a matter of law, the assignment of a legal right to bring a claim gives the assignee a personal stake in the litigation sufficient to confer standing.

Question

Do third-party companies hired by pay-phone operators to collect compensation for coinless long-distance calls have standing to sue telecommunication companies over the amount of the fees?

Media for Sprint Communications Co., L.P. v. APCC Services, Inc.

Audio Transcription for Oral Argument - April 21, 2008 in Sprint Communications Co., L.P. v. APCC Services, Inc.

Audio Transcription for Opinion Announcement - June 23, 2008 in Sprint Communications Co., L.P. v. APCC Services, Inc.

John G. Roberts, Jr.:

Justice Breyer has our opinion this morning in case 0-552, Sprint Communications versus APCC Services.

Stephen G. Breyer:

This is a very complicated case involving standing in a communications law matter.

Now, the Federal Communications Law requires long distance communications carriers to reimburse payphone operators for connecting certain long distance calls made at their payphones, and the payphone operators may bring suit, if the long distance carriers don't pay them what they owe, so we had a lot of people suing the carriers.

In the litigation before us, about 1400 payphone operators who had claims against the carriers assigned their claims to firms, for billing and collection firms and they're called “aggregators.”

They aggregate a lot of claims and they file a lawsuit.

Now, these aggregators here agreed to accept the assignments of the claims from the payphone operators and they also agreed to remit the proceeds to the payphone operators if they won in the litigation and they're going to get a fee for their services.

The question is, do these aggregators, who are assignees of legal claims for money owed to the payphone operators and promise to pay the money they get back to the payphone operators, do they have standing to pursue the claims in a federal court?

The lower court said yes, they do have standing, and we agree, at least five of us do.

We've said that constitutional standing requires a plaintiff to have a personal stake in the outcome.

And we more or less have defined that to say that that person, the plaintiff has to have suffered an injury that the defendant caused in which the courts can redress.

Now, nobody doubts the assignee could bring this lawsuit if he had the right to keep even a small amount of the money he got as a recovery, because he is taking over the injury from the payphone operator and he is bringing the suit to get the redress, he'd get the redress.

If he kept it, everything will be fine.

But he doesn't keep any of it.

He turns it all over to the assigned one.

Does that make a difference in terms of standing?

To find the answer to that question, we examined legal history and the reason we did was because the case-or-controversy requirement in Article III, which is what leads to the standing requirement, is typically informed by history, the history of what kinds of matters traditionally have been appropriate for courts to hear.

And that history shows some of us that courts, really in order to help facilitate trade and commerce, that's where this came from in the 18th Century, that they have allowed assignees to bring lawsuits, including assignees who posses nothing but a pure legal title because those assignees have promised to give the proceeds of any recovery to others.

And they call the assignee in such a case -- they call them an assignee for collection.

There are a lot of cases saying the assignee for collection really exists and they have standing.

The long distance carriers offer no convincing reason to depart from this historic tradition, suits by assignees, including assignees for collection in commercial cases.

We found some cases went the other way, but the majority went the way we say.

And so, we think that the aggregators have satisfied the Article III standing requirements.

They have established an injury in fact, the long distance carriers caused the injury, the injuries will be redressed if they win.

And we find too that they satisfy the prudential standing requirements which were other things would go into in the opinion.

And we note that this is all a commercial matter, it's all in the context of business arrangements, business purposes and there is no claim that this is somehow a bad faith matter.

Now, all this is explained in excruciating length in our opinion.

The Chief Justice has filed a dissenting opinion which Justice Scalia, Thomas, and Alito have joined.