An assignee of legal title who has no beneficial interest in a claim, and has not suffered any actual injury traceable to the defendant’s conduct has standing to bring that claim in federal court, ruled the United States Supreme Court on June 23, 2008. In the case of Sprint v. APCC, the court held that a collection agency can sue on behalf of its customers even though it has no financial interest in the case.
In the instant case, APCC Services, a billing and collection firm, is trying to collect from Sprint Communications Co. and AT &T, two long-distance communications carriers, for calls made over their networks. These costs typically arise when a payphone customer makes long-distance calls with access codes or a numbers beginning with 1-800. Under these circumstances, the customer pays only the carrier which completes the call but not the payphone operator which connects the call. Federal law requires the long-distance carrier to then compensate the payphone operator and payphone operators can sue the carriers for failure to compensate properly for these calls.
However, the evidentiary requirements of a single suit are often great, and the recovery is often small, so litigation is often prohibitively expensive for the operators. Therefore, many operators assign these claims to collection firms so that these firms can sue on their behalf. In the present litigation, the respondents are a group of collection firms who have taken assignments from about 1400 payphone operators. Each operator signed an Assignment and Power of Attorney Agreement in which the operator assigned and transferred its rights, title and interest in its claims, demands, or causes of action, so that the firm can litigate in the operator’s interest. The parties then separately agreed that the collection firm would remit all proceeds to the operator and would be paid a fee for its services from the operator.
After signing the agreements, the respondents filed suit in the federal court seeking compensation for the calls, but the petitioner long distance carriers moved to dismiss the claims on the ground that the respondents lacked standing to sue. The District Court initially agreed to dismiss but changed its mind upon reconsideration. A divided panel of the Court of Appeals affirmed that the respondents have standing. The U.S. Supreme Court then granted certiorari on the standing issue.
The Supreme Court held that the collection firms had standing, after reviewing the history and precedent which illustrate that the courts, for centuries, have found ways to allow assignees to bring suit. Specifically, suits by assignees have long been seen as amenable to resolution by the judicial process and the court found that the petitioners offered no convincing reason to depart from that historical tradition.
Source: Sprint v. APCC, 07-552.
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