Standing in Quicksand

Late June, when the Supreme Court ends its annual term, is the usual time for badly reasoned, hastily written decisions. Today's dissent in Sprint Communications v. APCC Services, joined by an embarrassingly substantial number of Justices, continues this fine tradition.

Today's case revisits one of my longstanding interests, the arcane doctrine of "standing to sue." The basic point is that you can't bring a lawsuit unless you're affected by the defendant's challenged behavior. You may be upset that the government is tapping phones without warrants and holding prisoners in Guantanamo Bay without judicial oversight (well, until recently), but you can't sue to claim that these actions are illegal unless you can show that your phone is being tapped or that you are being held at Guantanamo. Suits by well-meaning strangers are forbidden.

Today's case presents a curious variation on the usual fact patterns of environmentalists complaining about harm to areas they've never visited or parents complaining about racial discrimination at schools their children don't attend. In today's case, the plaintiff was suing for good old money -- it just wasn't exactly the plaintiff's money.

The case concerned the fees charged by payphone operators to long-distance carriers for calls made using access codes or 1-800 numbers. When the carriers don't pay, the operators have to sue to collect these fees, and because the fees are too small and numerous to be worth the trouble, the operators have taken to assigning their claims to "aggregators" for suit. The aggregator buys up many of these claims, sues on them, and then (by contractual agreement) remits the proceeds to the payphone operators. The aggregator gets paid a fee, but the fee is not based on success or failure in the lawsuit.

The law has long permitted assignment of monetary claims, and assignees have long been recognized as having standing to sue. Indeed, in 2000, the Supreme Court reaffirmed this rule, in a "qui tam" case, which involves the United States effectively assigning a portion of a claim of its own to a private party. The Court held that qui tam plaintiffs have standing.

But here's the question: does this standing exist if the assignee has contractually agreed to give back 100% of the money gained by suing to the assignor?

Fortunately, five Justices had the good sense to say yes. Surveying cases from over the centuries, the Court determined that this form of suit has in fact long been permitted and saw no good reason to change.

But four Justices dissented. Adhering firmly to formalism, they inisisted that if the plaintiff is obliged to give back 100% of the proceeds, it has no interest in the suit and therefore no standing.

Now, apart from the fact that I think justiciability doctrine is mostly a lot of purposeless nonsense anyway, this dissent seems even more absurd than usual.

The dissent admits that assignees normally have standing to sue. The dissent accepts the Supreme Court's 2000 reaffirmation of this principle. The only problem, the dissent says, is that in this case the assignee has agreed to give back 100% of the lawsuit proceeds and retains no interest in the outcome.

Well, as the Court points out, if one really believes that, then all the parties would need to do to arrange for a lawsuit that everyone would recognize as valid would be to agree that the assignee plaintiff is entitled to retain one dollar of the proceeds in the event the lawsuit succeeds.

Even the dissent admits this! (Page 8 -- "Perhaps it is true that 'a dollar or two' . . . would give respondents a sufficient stake in the litigation.")

I'm sorry, but once this is admitted, surely anyone could see that the dissent is utterly pointless? The dissent says that "the ease with which respondents can comply with the requirements of Article III is not a reason to abandon our precedents." Again, I'm sorry, but the law should not turn on meaningless distinctions. The whole trend of the law over centuries is to eliminate meaningless, formalistic requirements. We could require plaintiffs to say "pretty please" when filing their complaints, and if that were the tradition I'm sure some fusty old judges would say that the ease with which it could be done is no reason to abandon the rule, but it is precisely the reason.

The law should turn on real distinctions, not pointless ones. It's one thing (and usually, a pointless enough thing) to say that people can't sue if they aren't personally affected. But to say that potential plaintiffs are allowed to sell their claims, and the assignees are allowed to sue on them, and even that the assignees are allowed to give back most of the proceeds to the original potential plaintiffs, but only if the assignee gets to keep at least a dollar of the claim, would be pointless beyond description. And that's what the dissent says.

There will always be some people whose fondness for following rules leads them to act supremely foolishly when they can't perceive that the rules are causing an absurdly silly result. But one would hope there would be fewer than four at a time on the Supreme Court. Thank goodness that at least there were fewer than five.