Argument Recap: Sprint & AT&T v. APCC

The following argument recap is by Tobias Zimmerman, an attorney at Akin Gump in Washington, DC. Tobias participated in the case in the lower courts, and Akin Gump also served as co-counsel to the Petitioners in this case.

The Court heard argument on Monday in Sprint Communications Co. LP v. APCC Services, Inc. Our summary of the issues in the case can be found here at SCOTUSwiki.

At oral argument, the Court grappled with standing and the unique procedural vehicle employed by respondents in asserting claims for payphone compensation on behalf of more than 1400 individual payphone owners. Carter Phillips, representing petitioners Sprint et al., faced lively questioning by Justice Ginsburg, who appeared unconvinced by petitioners’ claim that respondents’ agreement to account for all of the proceeds to the assigning payphone owners made the case materially different from one in which an assignee is entitled to retain a portion of any winnings. After Mr. Phillips sought to describe some of the practical problems created by having 1400 absent plaintiffs, Justice Ginsburg pointed out that “you would have the same problems” in a case in which an assignee indisputably has Article III standing because he is entitled to retain a portion of any recovery. Mr. Phillips agreed, but noted that the practical difficulties petitioners identify really only go to the question of prudential standing – not to the issue of constitutional standing under Article III.

Justice Scalia appeared most favorable to petitioners’ position that respondents lack Article III standing by virtue of their agreement to surrender the proceeds to the assignors. Noting that he had authored the opinion in Vermont Agency, on which respondents closely rely, Justice Scalia asked respondents’ counsel, Roy Englert, to name the “oldest” and “most recent” cases supporting the “long tradition” of standing by an assignee for collection. Mr. Englert identified Spiller v. Atchison Topeka & Santa Fe (1920) and Titus v. Wallick (1939) – dates which Justice Scalia dismissed when compared to the history examined in Vermont Agency, which stretched far back into the origins of qui tam actions in British common law. Justice Alito also noted that Spiller and Titus are distinguishable. Justice Scalia and the Chief Justice appeared most hostile to respondents’ claim to have standing as “assignees for collection,” while Justice Ginsburg appeared the most determined to identify the respondents as an appropriate plaintiff.

Justice Breyer (and, to a lesser extent, Justice Souter), pursued both sides on prudential standing, asking questions about the availability of discovery and the practical differences between the chosen form of action versus the already available class action device. Mr. Englert argued that the action could have been brought under Rule 23 as a class action, but that the chosen form is superior because it required affirmative claims by all of the individual payphone operators. Petitioners, however, argued that the action would not satisfy the typicality and commonality requirements of Rule 23, and therefore would not be eligible for class certification.

Finally, Justice Breyer posited a hypothetical to Mr. Englert in which the cost of defending each separate claim for compensation out of the billions of potentially relevant calls would exceed the compensation the payphone owners stand to gain. In such a case, Justice Breyer asked, doesn’t the inherent inefficiency of the federal forum dictate against accepting the case? Mr. Englert responded by noting that such situations are hardly uncommon, and defendants are used to making the appropriate cost-benefit analyses to determine when it is more economical to settle (rather than fight) such claims, and that settlement is an important part of federal litigation. Justice Breyer, however, suggested that the Federal Communications Commission might play a role in resolving this dispute more efficiently and fairly.