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Sprint Communications Co. v. APCC Services, Inc.

Supreme Court of the United States · Civil Procedure

Civil ProcedureArticle III standingAssignmentsArticle IIIstandinginjury in factcausationredressability

Facts

Federal law required long-distance carriers to compensate payphone operators for certain dial-around calls. Many payphone operators assigned their dial-around compensation claims to billing and collection firms called aggregators, with agreements transferring all rights, title, and interest in the claims for purposes of collection, appointing the aggregators as attorney-in-fact, and making the assignments irrevocable without the aggregators' consent. Separate agreements required the aggregators to remit all litigation proceeds to the payphone operators, while the operators paid the aggregators for their services. The aggregators then sued Sprint, AT&T, and other carriers in federal court to recover unpaid compensation.

Issue

Does an assignee of a legal claim for money owed have Article III standing to sue in federal court when the assignee has promised to remit the proceeds of the litigation to the assignor? More specifically, does an assignee for collection possess the requisite injury, redressability, and stake in the litigation?

Rule

An assignee of a claim, including an assignee for collection only, has Article III standing to assert the assignor's injury when the claim has been assigned to the assignee. Redressability turns on whether the requested relief will remedy the injury asserted in the suit, not on what the assignee plans to do with any recovered funds afterward.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Denver, Peak Ledger Recovery, LLC received written assignments from several independent vending-machine owners of unpaid contract claims against FrontRange Snack Supply. Each assignment transferred to Peak Ledger all rights, title, and interest in the claims for collection, and a separate agreement required Peak Ledger to remit any recovery to the owners after deducting its service fee charged separately.

If Peak Ledger sues FrontRange in federal court, FrontRange argues Peak Ledger lacks Article III standing because it will keep none of the damages recovered. How should the court rule?

Explanation. The majority held that an assignee of a legal claim for money owed, including an assignee for collection only, has Article III standing. The assignment transfers the claim, allowing the assignee to assert the assignor's injury. Redressability is satisfied because a favorable judgment would require the defendant to pay the amount owed to the assignee; what the assignee later does with the money does not defeat standing. (Derived from Sprint Communications Co. v. APCC Services, Inc. (n.d.).)