WASHINGTON (CN) – The U.S. Supreme Court cleared the way for collection agencies to pursue claims against long-distance telephone carriers, even after the billing firms agreed to remit any money they won to payphone operators.
The justices voted 5-4 that collection companies have standing to sue Sprint and other carriers on behalf of payphone operators seeking to recoup money from carriers. Carriers are required to pay operators for the customer’s call.
But because litigation of so many small claims can be expensive and time-consuming, many operators assign their “dial-around” claims to bill collectors.
The collectors then file claims against the carriers in court.
However, the collectors in this case signed agreements to remit any money they recovered in court to the operators, who would pay them for their services. Carriers argued that the case should be dismissed, because the collectors lack standing to sue.
“History and precedent show that, for centuries, courts have found ways to allow assignees to bring suit,” Justice Breyer wrote. Because the operators assigned all rights and interest in their claims to the collectors, the collectors have a stake in all litigation that involves “legal rights of their own,” Breyer concluded.
Justices Roberts, Scalia, Thomas and Alito dissented.