Sprint Communications--Summary of June 23, 2008 Decision

In this 5-4 decision (Opinion by Breyer; dissent by the Four Conservatives, led by CJ Roberts), the Court held that the "Aggregators" (such as APCC), who had contracts with the pay phone companies to sue the interexchange carriers like Sprint, had standing to sue in federal court, even though they had nothing specific to gain through the litigation. They had separate contracts with the payphone service providers to pay them for bringing suit. That is the entirety of the decision, which will occupy more than 50 pages of text in the Supreme Court Reporter when it is published. That it was a 5-4 decision indicates the closeness of the question and the disagreement over interpreting the "case or controversy" requirement in Article III of the US Constitution. Indeed, the dissenting opinion states its disagreement with the majority in one significant paragraph:

"The majority concludes that a private litigant may sue in federal court despite having to “pass back ... all proceeds of the litigation,” Brief for Respondents 9, thus depriving that party of any stake in the outcome of the litigation. The majority reaches this conclusion, in flat contravention of our cases interpreting the case-or-controversy requirement of Article III, by reference to a historical tradition that is, at best, equivocal. That history does not contradict what common sense should tell us: There is a legal difference between something and nothing. Respondents have nothing to gain from their lawsuit. Under settled principles of standing, that fact requires dismissal of their complaint."

The Majority Opinion--Facts and Law

The majority, obviously, disagreed. It is funny sometimes, isn't it, how so many stubborn people can just interpret things in "flat contravention of our cases"? In the remainder of this essay I will recite a few facts of the case, as well as the majority's major point, derived from the Syllabus of the decision.

"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."

Here is how the Court argued:

"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."

As you can tell, this kind of reasoning probably drove the Four Conservatives bonkers. They want specific history, express textual authorization, etc. etc. But the majority went on:

"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."

At issue was the "redressability" requirement in the Court's precendents in order to find standing. Assignment of a claim, the Court held, allows the redressability requirement to be fulfilled, even if APCC has nothing specifically to gain through the litigation itself (its gain comes through a separate contract with the payphone providers).

So, now that Article III standing is established, are there reasons for denying standing according to the Court's doctrine of "prudential" standing? No.

"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."

So we have it. The majority is slightly "stretching" the standing doctrine, which the conservatives would want to constrict. Assignees, in certain circumstances, now have standing to sue, regardless of whether they have the possibility of gaining an award through the litigation. There you have it.

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