standing - assignees for collection of debt
Sprint Communications v. APCC Services - June 23, 2008
Here is the first paragraph of the majority decision in the Court's 5-4 decision.
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.
Excepts from the Court's own summary of the case appear below.
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 pay-phone operator (which connects the call to the carrier in the firstplace).
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.
(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. Supreme Court precedent offers "powerful support for the proposition that suits by assignees for collection have long been seen as "amenable" to resolution by the judicial process.
(b) No convincing reason is offered 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 the 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 pay-phone 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.
Petitioners’ claim that the assignments constitute nothing more than acontract for legal services is overstated. There is an important distinction between simply hiring a lawyer and assigning a claim to alawyer. The latter confers a property right (which creditors might attach); the former does not.
Dissent - Robert, CJ
"The majority concludes that a private litigant may sue in federal court despite having to "pass back . . . all proceeds of the litigation"...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-orcontroversy 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.assignees