Standing—Suits By Assignees for Collection Purposes.
Sprint Communications Co., L.P. v. APCC Services, Inc., No.
07-552 (previously discussed in the
January 8, 2008 Docket Report).
Court held today that an assignee of a legal claim for money damages has
standing to sue on that claim in federal court, even if, as part of the
assignment, the assignee has agreed to pay all proceeds of the suit to the
assignor. The decision broadens the concepts of injury and redressability,
allowing individuals who suffered an actual injury but do not have the resources
to bring a claim on their own, or whose individual damages are too small to
justify litigation, to assign their claims by contract to third parties better
positioned to litigate in the aggregate. This development is particularly
significant to the business community, because it approves a means by which
plaintiffs may be able to apply leverage comparable to that available in a class
action, without otherwise satisfying the requirements for bringing a class
action in federal court.
involved so-called “dial-around” calls, in which payphone customers use a
toll-free number to place a call with a particular long-distance carrier, and
the carrier in turn compensates the payphone operator for placing the call.
Payphone operators frequently contract with “aggregators,” collection firms to
which the operators fully assign title to their relatively small individual
claims against long-distance carriers. The aggregators are paid a fee for their
services, and any recovery is paid to the operator. The long-distance carriers
challenged this practice, arguing that, because the aggregators have no direct
stake in the outcome of the litigation, and thus have no injury that can be
redressed by the suit, they lack standing under Article III to bring the
In an opinion
by Justice Breyer, the Court rejected the long-distance companies’ argument by a
five-to-four vote. After reviewing historical practice regarding assigned
claims, the Court held that the redressability element of Article III standing
is satisfied even when proceeds from a successful suit are remitted to the
assignor. The Court reasoned that the injury alleged is the failure of the
long-distance carriers to pay the dial-around compensation they owed; their
payment of damages would redress that injury, the Court explained, wherever the
money ultimately went. The Court also rejected the long-distance companies’
alternative argument that the aggregators should be denied standing for
prudential reasons, because, according to the companies, the practice of
aggregation amounts to an effort to circumvent federal class-action requirements
by constructing a suit that is functionally equivalent to a class action. The
Court explained that class actions under Rule 23 are permissive, rather than
mandatory; that a variety of methods exist under federal law for aggregating
claims; and that the aggregators’ choice of one method rather than another is
not a reason to deny standing.
Roberts filed a dissenting opinion, in which Justices Scalia, Thomas, and Alito
joined. The dissent argued that the majority misconstrued historical practice
and that the Court had never before concluded that a party lacking a direct,
personal stake in the litigation could meet the standing requirements of Article