APCC Services, Inc. v. Sprint Communications Co.

418 F.3d 1238
Court of Appeals for the D.C. Circuit·Decided June 28, 2005·No. Nos. 04-7034, 04-7035·Published·Cited by 10 cases

Opinions

Opinion for the Court filed PER CURIAM.*

Opinion dissenting in part filed by Circuit Judge SENTELLE.

Dissenting opinion filed by Chief Judge GINSBURG.

PER CURIAM.

In these consolidated appeals, we consider whether chapter 5 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-615b, creates a private right of action for an owner or operator of a payphone (hereinafter a payphone service provider, or a PSP) to recover from an interexchange carrier (IXC) the compensation for coinless payphone calls required by a regulation of the Federal Communications Commission. Before answering that question, however, we must first decide whether the plaintiffs, as the assignees of PSPs’ claims against the IXCs, have standing to sue them. We conclude the plaintiffs do have standing but the Act does not provide them a right to sue in federal court.

[1241] I. Background

In 1990 the Congress enacted the Telephone Operator Consumer Services Improvement Act, Pub.L. No. 101-435, 104 Stat. 986 (codified at 47 U.S.C. § 226), which requires PSPs to allow consumers to use an access code (e.g., “10-10-220”) or a subscriber 800 number to make a call from a payphone. See 47 U.S.C. § 226(c)(1)(B). Before then, many PSPs had blocked the use of access codes and 800 numbers because they enabled customers to “dial around” the PSP’s preselected IXC, with the result that neither the IXC nor the PSP received any payment for the call.

In its initial implementation of the Act, the Commission required IXCs to compensate PSPs only for access code calls, not for calls to subscriber 800 numbers, see Policies and Rules Concerning Operator Services Access and Pay Telephone Compensation, 6 F.C.C.R. 4736 ¶¶ 34, 36, 1991 WL 638196 (1991), clarified on recons., 7 F.C.C.R. 4355 ¶50, 1992 WL 690067 (1992), but we held that compensation scheme was not fully consistent with the 1934 Act, 47 U.S.C. § 226(e)(2), and had to be reconsidered. Fla. Pub. Telecomms. Ass’n, Inc. v. FCC, 54 F.3d 857, 859 (D.C.Cir.1995). Then, in the Telecommunications Act of 1996, the Congress instructed the Commission to devise a new plan that would “ensure that all payphone service providers are fairly compensated for each and every completed intrastate and interstate call using their payphone[s].” 47 U.S.C. § 276(b)(1)(A). After several failed attempts, see Ill. Pub. Telecomms. Ass’n v. FCC, 117 F.3d 555, 558 (D.C.Cir.1997) and MCI Telecomms. Corp. v. FCC, 143 F.3d 606, 607 (D.C.Cir. 1998), the Commission finally crafted such a plan. See Am. Pub. Communications Council v. FCC, 215 F.3d 51, 52 (D.C.Cir. 2000) (upholding the plan). Getting the Commission to enact a regulation requiring IXCs to compensate them for dial-around calls was only half the battle for the PSPs, however; their challenge now is to collect.

Most PSPs rely upon “aggregators” to act as intermediaries between themselves and the several IXCs; an aggregator acting on behalf of a PSP submits billing information to the IXCs and pays over to the PSP the monies it receives from the IXCs. The aggregator charges the PSP a fee based upon the number of telephone lines that PSP operates. Plaintiff American Public Communications Council Services (APCCS) is the largest aggregator, representing more than 1400 PSPs, which in turn own and operate more than 400,000 payphones nationwide.

APCCS and several other plaintiff ag-gregators represent that certain IXCs “have failed to pay the required [dial-around] compensation for millions of calls placed over several years.” They sought authorization from their client PSPs to sue IXCs on the PSPs’ behalf, and agreed to pass back to the PSPs any amounts they recovered thereby. Each PSP then signed an “Assignment and Power of Attorney” providing, in relevant part, that the PSP

assigns, transfers, and sets over to [the aggregator] for purposes of collection all rights, title and interest of the [PSP] in the [PSP’s] claims, demands or causes of action for “Dial-Around Compensation” (“DAC”) due the [PSP] for periods since October 1, 1997, pursuant to Federal Communications Commission rules, regulations and orders.

The aggregators, purporting to act “as assignee[s] of the claims of and attorney[s]-in-fact” for the PSPs, then jointly filed lawsuits against Sprint, AT & T, and other IXCs, claiming each IXC had violated the Commission’s dial-around compensation regulation. One PSP, Peoples Tele[1242] phone Company, also participated in the lawsuits as a co-plaintiff.

AT & T moved to dismiss the cases on the ground the aggregators lacked standing to sue. The district court initially agreed and dismissed all the claims of the aggregators, APCCS v. AT & T Corp., 254 F.Supp.2d 135, 137 (D.D.C.2003), but upon the aggregators’ motion for reconsideration, vacated its earlier ruling and denied AT & T’s motion. 281 F.Supp.2d 41, 45 (D.D.C.2003).

Another IXC, Cable & Wireless, moved to dismiss the single complaint against it on the grounds that the aggregators lacked not only standing but also a right of action for dial-around compensation under § 276 of the Act and the implementing regulation promulgated by the Commission. The district court denied that motion and permitted the plaintiffs to amend their complaints to assert that §§ 201(b), 407, and 416(c) of Title 47 provide alternative grounds for relief. APCCS v. Cable & Wireless, Inc., 281 F.Supp.2d 52, 57 (D.D.C.2003). (Cable & Wireless thereafter filed for bankruptcy and the case against it was stayed.) At the instance of Sprint and AT & T, the district court then certified its orders for interlocutory appeal, APCCS v. Sprint Communications Co., 297 F.Supp.2d 90, 101 (D.D.C.2003); APCCS v. AT & T Corp., 297 F.Supp.2d 101, 110 (D.D.C.2003), and we consolidated their appeals.

II. Analysis

Our review is de novo. We assume the factual allegations in the complaints are true. See Greene v. Dalton, 164 F.3d 671, 674 (D.C.Cir.1999). Because Article III standing is a jurisdictional requirement, we begin our analysis there. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94-102, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998).

A. The Aggregators’ Standing

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APCC Services, Inc. v. Sprint Communications Co., 418 F.3d 1238 (D.C. Cir. 2005).

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