Term: 2007
Docket: 07-552
Sprint Communs. Co., L.p. v. Apcc Servs.
- Pro
07-552 SPRINT COMMUNICATIONS V. APCC SERVICES, INC. DECISION BELOW: 489 F3d 1249 EXPEDITED BRIEFING SCHEDULE CERT. GRANTED 1/4/2008 QUESTION PRESENTED: Federal regulations require petitioner telephone companies to make certain payments to the owners of payphones (“payphone service providers” or “PSPs”). This case arises from the PSPs’ assignments to other companies - respondents here - of the right to litigate their dispute with petitioners over the amount of compensation. After the PSPs assigned their claims to respondents “for purposes of collection” and agreed to finance the litigation, respondents sued petitioners “on behalf of” the PSPs. Under the assignments, respondents can gain or lose nothing from the outcome of the case because all the proceeds will go to the PSPs. A divided panel of the D.C. Circuit nonetheless held that respondents have standing to sue petitioners. The question presented is: Whether the assignment of a claim “for purposes of collection” confers standing on assignees which have no personal stake in the case and which avowedly litigate only “on behalf of” the assignors. LOWER COURT CASE NUMBER: 04-7034, 04-7035
In the case of Sprint Communications Co., L.P. v. APCC Services, 2007, the Supreme Court ruled in favor of payphone service providers represented by aggregators like APCC Services who sued long-distance carriers such as Sprint for unpaid dial-around compensation fees mandated by Federal Communications Commission (FCC) regulations. The court held that these aggregators had standing to sue on behalf of payphone operators even though any recovered damages would be passed directly to those operators and not retained by the aggregator itself. This decision was based on a legal doctrine known as "assignee for collection," which allows an entity to pursue litigation on behalf of another party if they have been assigned that right specifically for purposes of collecting a debt or other obligation.
In the dissenting opinion for Sprint Communications Co., L.P. v. APCC Services, Justice Roberts disagreed with the majority's view that assignees of legal claims have standing to sue in federal court even if they have promised to remit all proceeds of litigation to the assignor. He argued that such a situation does not present an actual controversy as required by Article III of the Constitution because there is no real party in interest - both parties are indifferent about winning or losing since neither will be affected by any judgment rendered. The justice also expressed concern over potential abuse and manipulation of this rule, which could lead to frivolous lawsuits and clog up courts unnecessarily.
