APCC Services., Inc. v. Sprint Communications Co.

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 21, 2004 Decided June 28, 2005

No. 04-7034

APCC SERVICES, INC., ET AL.,
APPELLEES

v.

SPRINT COMMUNICATIONS CO.,
APPELLANT

Consolidated with
04-7035

Appeals from the United States District Court
for the District of Columbia
(No. 01cv00642)
(No. 99cv00696)

David P. Murray and Edward P. Lazarus argued the cause
for appellants. With them on the briefs were Randy J. Branitsky
and Jeffrey P. Kehne. Clifford J. Zatz entered an appearance.

Roy T. Englert, Jr. argued the cause for appellees. With
him on the brief were Donald J. Russell and Michael W. Ward.
Alyssa M. Campbell, Charles B. Montgomery, Jeffrey J. Ward,
Sean M. Hanifin, Adam Proujansky, Albert H. Kramer, Leon B.
Kellner and Leslie R. Cohen entered appearances.
 2

Joel Marcus, Counsel, Federal Communications
Commission, argued the cause as amicus curiae in support of
appellees. On the brief were John A. Rogovin, General Counsel,
Austin C. Schlick, Deputy General Counsel, John E. Ingle,
Deputy Associate General Counsel, and Laurence N. Bourne,
Counsel.

Before: GINSBURG, Chief Judge, and SENTELLE and
RANDOLPH, Circuit Judges.

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

*
Chief Judge GINSBURG wrote Sections I, II.A, II.B.1, II.B.3 and
Circuit Judge RANDOLPH wrote Section II.B.2 of the opinion for the
court. Circuit Judge SENTELLE dissents from Section II.A with respect
to the standing of the plaintiff aggregators but concurs in the
judgment. Chief Judge G I NSBURG dissents from Section II.B.2 and
from the judgment.
 3

them. We conclude the plaintiffs do have standing but the Act
does not provide them a right to sue in federal court.

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), clarified on
recons., 7 F.C.C.R. 4355 ¶ 50 (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.
 4

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 aggregators 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
 5

IXC had violated the Commission’s dial-around compensation
regulation. One PSP, Peoples Telephone 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 nov o. 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
 6

Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94–102
(1998).

A. The Aggregators’ Standing

Sprint and AT&T argue the aggregators lack standing to sue
because they do not have “a concrete personal stake in the
litigation.” As these IXCs see things, the aggregators’ “skeletal
and conditional” assignments from the PSPs are insufficient to
confer standing because they transfer only “bare legal title” to
the claims of the PSPs, that is, the right to sue “for purposes of
collection” but not the right to the recovery. Here the IXCs
point out that the aggregators have promised to return to the
PSPs all the proceeds from the litigation. * Further, they contend
the assignments, notwithstanding their terms, are in fact
“completely revocable” by the PSPs.

In terms of the “irreducible constitutional minimum”
requirements for standing — injury-in-fact, causation, and
redressability, see Lujan v. Defenders of Wildlife, 504 U.S. 555,
560 (1992) — the IXCs first argue the aggregators have not
suffered any injury of their own, and the assignments do not
confer upon the aggregators the right to assert the injury of the
PSPs. The IXCs also argue the relief the aggregators seek

*
Even if the IXCs are correct that the aggregators do not have
standing as assignees, we note that Peoples Telephone Company, a
PSP, and two aggregators, Jaroth, Inc. and NSC Telemanagement,
would still have standing. Jaroth contends it owned a 17% interest in
a PSP at the time the lawsuit was filed, and NSC contends it will
receive 10% of any compensation it collects on behalf of an affiliated
PSP. Part II.A, therefore, deals with the standing only of those
aggregators whose interest in the lawsuit stems solely from an
assignment.
 7

would not redress their purported injury because the aggregators
would not keep any portion of such damages as may be
awarded.

There are some circumstances in which a plaintiff has
standing to sue based upon an injury to someone else. Indeed,
in Vermont Agency of Natural Resources v. United States ex rel.
Stevens, 529 U.S. 765, 773 (2000), the Supreme Court stated in
no uncertain terms that “the assignee of a claim has standing to
assert the injury in fact suffered by the assignor.” At the same
time, however, the Court said that the assignee must have a
“concrete private interest in the outcome of the suit” that is
related to the injury asserted. Id. at 772.

Therefore, in order to determine whether the aggregators
have standing, we must first determine the effect of the
assignments, which purport to transfer to them “all rights, title
and interest” in the PSPs’ dial-around compensation claims. We
must then determine whether the aggregators have a stake in the
outcome of the suit, notwithstanding their contractual obligation
to account to the PSPs for any award of damages.

1. The assignments

Sprint and AT&T offer two reasons to believe the
assignments did not transfer the PSPs’ compensation claims to
the aggregators so as to give the aggregators standing to sue.
First, the transferred ownership interest was only “for purposes
of collection.” Second, the assignments were “completely
revocable” by the PSPs.

We need not dwell upon the IXCs’ first argument. The
quoted phrase appears in the following context: “[The PSP]
hereby assigns, transfers and sets over to [the aggregator] for
 8

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. The phrase “for purposes of collection,” which
the IXCs portray as a fatal limitation, we think a mere reflection
of the aggregator’s promise to pass back to the PSP whatever it
is able to collect. Whether that obligation affects the
aggregator’s standing is a distinct question, which we consider
in Part II.A.2 below, but it certainly does not affect the validity
of the assignment of the PSP’s dial-around compensation claim.
The IXCs, therefore, give us no reason to believe the assignment
is anything less than a complete transfer to the aggregator of the
PSP’s dial-around compensation claim.

Equally unavailing is the IXCs’ contention that the
assignments are “completely revocable.” By their terms, the
assignments “may not be revoked without the written consent of
[the aggregator ].” Sprint and AT&T suggest the court should
treat this provision as a mere “formality,” because APCCS sent
to each of its client PSPs a letter stating: “If at any point
APCCS is no longer representing you in the litigation, you will
be able to pursue your claims on your own, should you so
choose.” The possibility that APCCS would no longer represent
a PSP in litigation does nothing, however, to suggest the PSP
could revoke the assignment as long as APCCS continues to
represent the PSP in the litigation. Of course, APCCS itself
could repudiate the assignment and presumably would do so if
it no longer wanted to represent the PSP in the litigation. In any
event, the assignment itself is plain: the PSP may not revoke it
without the consent of the aggregator.

Having rejected both the IXCs’ arguments challenging the
effect of the assignments, we turn to the question whether the
aggregators’ promise to pass along the proceeds of litigation
affects their standing to sue.
 9

2. Pass back of the proceeds

Sprint and AT&T also argue the aggregators lack standing
because the assignments effectively give them only the right to
sue; the aggregators will reap no direct financial benefit from the
suit. In that respect, Sprint and AT&T argue, the interest of the
aggregators in this case is unlike that of a qui tam relator, whose
standing the Supreme Court upheld in Vermont Agency, 529
U.S. 765. Here, the IXCs argue, the aggregators retain “no
genuine economic interest” in the dial-around compensation
claims as a result of their promises to pay the proceeds to the
PSPs, whereas a qui tam relator benefits from the bounty he
receives if his claim is successful. Id. at 772.

According to the IXCs, this case is better compared to
Connecticut v. Physicians Health Services of Connecticut, Inc.,
287 F.3d 110 (2002), in which the Second Circuit held that the
State of Connecticut lacked standing to assert claims against an
insurance company offering managed care plans to Connecticut
residents. The State claimed standing on the ground that several
plan participants had assigned to the State their right to seek
“appropriate equitable relief with respect to any cause of action
they may have as plan participants or beneficiaries.” Id. at 112.
The Second Circuit concluded that Connecticut did not have a
“concrete private interest in the outcome of the suit” because
“[n]one of the remedies being sought would flow to the State as
assignee.” Id. at 118. The assignments at issue did not “confer
‘actual’ rights or benefits ... on the State. The right to recover
benefits or to seek money damages remain[ed] with the
assignor.” Id. at 115. Therefore, the court held that, “[e]ven if
the assignments are valid as a contractual matter, they ... merely
give the State the right to act as a nominal party.” Id. at 118.

The assignments at issue here, in contrast, transfer to the
assignees the entire interest of the PSPs in their dial-around
 10

compensation claims, and, as explained in Part II.A.1 above,
there is nothing to suggest the assignments were invalid. As for
the question that remains — whether the aggregators’ promise
to hand over any recovery to the PSPs means the aggregators
have no stake in the case — Physicians Health is not helpful; it
did not address the question whether an assignee that would
otherwise have standing to sue loses its standing when it
obligates itself to give the proceeds of the suit to another.

Still, we are not entirely without guidance. As the district
court observed, the identical issue has arisen under Federal Rule
of Civil Procedure 17(a): “Every action shall be prosecuted in
the name of the real party in interest.” Courts and commentators
agree that, if an assignment properly transfers ownership of a
claim, then the assignee’s interest “is not affected by the parties’
additional agreement that the transferee will be obligated to
account for the proceeds of a suit brought on the claim.”
Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d
11, 17 (2d Cir. 1997); see also Titus v. Wallick, 306 U.S. 282,
289 (1939) (legal effect of assignment “was not curtailed by the
recital that the assignment was for purposes of suit and that its
proceeds were to be turned over or accounted for to another”);
JAMES WM . MOORE, ET AL., M OORE ’S FEDERAL PRACTICE §
17.11[1][c] (3d ed. 1997) (“The assignee is real party in interest
even though assignee must account to the assignor”); 6A
CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FED . PRAC. &
PROC. § 1545 at 348 (1990) (“[F]ederal courts have held that an
assignee for purposes of collection who holds legal title to the
debt ... is a real party in interest even though the assignee must
account to the assignor for whatever is recovered in the action”).

Sprint and AT&T counter with the observation that Rule
17(a) and the requirement of standing “are governed by different
standards and serve distinct purposes.” That is true enough, as
 11

far as it goes: Standing depends in part upon elements “clearly
unrelated to the rather simple proposition set out in Rule 17(a),”
FED . PRAC. & PROC. § 1542 at 330. But standing also depends
in part, as does a plaintiff’s status as the real party in interest,
upon having “a personal interest in the controversy,” Whelan v.
Abell, 953 F.2d 663, 672 (D.C. Cir. 1992), and that is the only
requirement at issue in the IXCs’ challenge to the aggregators’
standing in this case.

We see no basis for distinguishing the personal stake
required under Rule 17(a) from the interest required for
standing. What the aggregators have promised to do with any
recovery is irrelevant to their standing — as it would be to their
status as real parties in interest. We need only be satisfied that
the aggregators received a valid assignment of the claims, so
that any damage award will be payable to them in the first
instance. Upon that score the IXCs have cast no doubt.*

B. Private Right of Action

Sprint and AT&T contend that nothing in chapter 5 of the
Communications Act authorizes a PSP to sue an IXC for failure
to pay the dial-around compensation required by the regulation
the Commission promulgated to implement § 276. In
determining whether the Act creates a private right of action, the
court’s task is straightforward: We must “interpret the statute
Congress has passed to determine whether it displays an intent
to create not just a private right but also a private remedy,” for

*
Because we conclude the aggregators have standing as
assignees, we need not consider their alternative claim, which is that
they have associational standing. See Hunt v. Wash. State Apple
Adver. Comm’n, 432 U.S. 333, 344 (1977); Fund Democracy, LLC v.
SEC, 278 F.3d 21, 25 (D.C. Cir. 2002).
 12

“private rights of action to enforce federal law must be created
by Congress.” Alexander v. Sandoval, 532 U.S. 275, 286
(2001).

1. Section 276

Section 276(b)(1) provides in relevant part:

In order to promote competition among payphone service
providers and promote the widespread deployment of
payphone services to the benefit of the general public ... the
Commission shall ... prescribe regulations that—

(A) establish a per call compensation plan to ensure that all
payphone service providers are fairly compensated for each
and every completed intrastate and interstate call using their
payphone.

As the plaintiffs acknowledge, § 276 itself does not create a
private right of action; nor does it hold a common carrier liable
for failing to comply with the requirements of the Act.
According to the plaintiffs, however, those gaps are filed by §§
206 and 207, respectively.

Section 206 provides in relevant part:

In case any common carrier shall do, or cause or permit to
be done, any act, matter, or thing in [chapter 5] prohibited
or declared to be unlawful, or shall omit to do any act,
matter, or thing in [chapter 5] required to be done, such
common carrier shall be liable to the person or persons
injured thereby for the full amount of damages sustained in
consequence of any such violation of the provisions of
[chapter 5].
 13

And § 207 provides in relevant part:

Any person claiming to be damaged by any common carrier
subject to the provisions of [chapter 5] ... may bring suit for
the recovery of the damages for which such common carrier
may be liable under the provisions of [chapter 5], in any
district court of the United States of competent jurisdiction.

The question, then, is this: According to the allegations of
the complaint, did Sprint and AT&T, which are common
carriers, do something made unlawful by, or fail to do something
required by, § 276? If so, then § 206 makes them liable to any
person injured as a result, and § 207 permits “any person
claiming to be damaged” to sue them in federal court.

The district court reasoned that § 276(b)(1)(A) “confers
upon PSPs a right to be ‘fairly compensated,’” while the
Commission’s regulation “provides the details necessary to
implement” that statutory right — namely, who must
compensate the PSPs, and by how much. 281 F. Supp. at 56.
According to the district court, the regulation “implements the
Congressional mandate ... by specifying what it means to be
‘fairly compensated’; as such, when a common carrier violates
the regulation, it is effectively doing something ‘declared to be
unlawful’ within the meaning of section 206 and is therefore
subject to suit under section 207.” Id.

In Greene v. Sprint Communications Co., 340 F.3d 1047
(2003), another case brought by aggregators against IXCs on
behalf of PSPs, the Ninth Circuit read the same statute quite
differently. That court first observed that § 276 “does not
establish a right to compensation, or to compensation by IXCs.
The statute does not say ‘PSPs shall be entitled to fair
compensation,’ or ‘IXCs shall pay PSPs.’” Viewing the “lack
 14

of rights-creating language in § 276 [as] crucial,” the court held
that, when an IXC fails to pay a PSP the compensation
prescribed by the Commission, “there is no violation of the Act
to be remedied through the private right of action afforded by §§
206 and 207.” Id. at 1050–52.

We join the Ninth Circuit in holding that § 276 does not
create a right of action for a PSP (or its assignee) to recover dial-
around compensation from an IXC. As our sister circuit
observed, the Supreme Court in Sandoval held that § 602 of
Title VI of the Civil Rights Act, 42 U.S.C. § 2000d-1, did not
reflect an intent on the part of the Congress to create a private
right of action specifically because there was no “rights-creating
language” in the statute. 532 U.S. at 288. The same is true of
§ 276 of the Communications Act. That section is by its terms
addressed neither to the rights of PSPs nor to the obligations of
IXCs. Rather, it is “yet a step further removed: It focuses ... on
the agenc[y] that will do the regulating.” Id. Section 276 is
addressed only to “the Commission,” which it directs to “take all
actions necessary ... to ensure that all [PSPs] are fairly
compensated” for the calls they originate.

Nothing in the statute requires the Commission to designate
the IXC as the party responsible for dial-around payment.
Indeed, as the IXCs note, the Commission identified the caller
and the recipient as possible payors, and in fact it considered a
“caller pays” scheme before eventually concluding that a
“carrier pays” scheme was more practical. See Notice of
Proposed Rulemaking, Implementation of the Pay Telephone
Reclassification and Compensation Provisions of the
Telecommunications Act of 1996, 11 F.C.C.R. 6716 ¶ 24 (1996);
see also Greene, 340 F.3d at 1051 n.3 (discussing alternative
schemes the Commission considered).
 15

Because the IXCs are not regulated by § 276, there is no
way in which they could have violated that provision. They may
have violated a regulation implementing § 276, but § 206 makes
a common carrier liable only for violating chapter 5 itself — not
for a violating a regulation issued by the Commission pursuant
to chapter 5. Because it is not a violation of § 276 for an IXC to
fail to pay dial-around compensation to a PSP, the plaintiffs do
not have a right of action, based upon that section, against the
IXCs.

2. Section 201(b)

Plaintiffs contend that even if they cannot rely on § 276, a
common carrier’s failure to comply with the Commission’s
regulations violates § 201(b) of the Act, which in turn triggers
the provisions (§§ 206 and 207) allowing suit in federal court.
Section 201(b) provides that any “charge, practice,
classification, or regulation that is unjust or unreasonable is
declared to be unlawful.” A common carrier’s failure to
compensate PSPs for dial-around calls, plaintiffs argue, is a
“practice” that is “unjust or unreasonable,” and therefore
“unlawful” under the Act.

At the heart of plaintiffs’ argument is the notion that it is
inherently an unreasonable practice, within the meaning of
§ 201(b), to violate a Commission regulation. That reading
would transform § 201(b) into a catchall provision, converting
any common carrier’s violation of a Commission order or
regulation into a violation of the Act actionable in federal court.
This result is not plainly evident from the text of the Act, and
nothing suggests that Congress intended its words to have such
a sweeping effect.

It is important to keep in mind that the question here is not
so much whether there is a private right of action, but where --
 16

directly in district court, or in the Commission. This is different
from Sandoval, in which the alternative to a right of action in
court was no action anywhere. Still Sandoval has something to
say about the issue facing us, if only in dicta: “[W]hen a statute
has provided a general authorization for private enforcement of
regulations, it may perhaps be correct that the intent displayed
in each regulation can determine whether or not it is privately
enforceable.” 532 U.S. at 291.

Here, the body of the FCC’s 1999 “Order” said not a word
about § 201(b). All we see is boilerplate in the ordering clause,
and in the clause identifying the authority for Part 64 of the
rules, citing a list of sections including “201.” (This is in
marked contrast to the treatment of § 276, which the
Commission mentioned throughout as the source of its
authority.) It cannot be that the mere citation of § 201 displays
-- in Sandoval’s words -- an intent that the regulation setting the
compensation level should be privately enforceable in court.
Still less can it be that the mere citation of § 201 is entitled to
Chevron deference as the agency’s authoritative interpretation
of § 201(b). The dissent’s quotation of the following statement
from Sandoval is therefore inapposite: a “Congress that intends
the statute to be enforced through a private cause of action
intends the authoritative interpretation of the statute to be so
enforced as well.” 532 U.S. at 284. There was no authoritative
interpretation of § 201(b) in this case. For all we know, the
Commission in 1999 never even thought about suits directly in
district court. Certainly the body of the Order itself gave no clue
that it did so. In fact, in some of the paragraphs talking about
the PSPs compensating the carriers for overpayments, the
assumption appears to be that collection actions will be before
the Commission (as indeed they must be in an any action by a
carrier against a PSP for not making a refund). See, e.g., In re
Implementation of the Pay Telephone Reclassification and
 17

Compensation Provisions of the Telecommunications Act of
1996, 14 F.C.C.R. 2545 ¶¶ 195-99 (1999).

A court should be reluctant to put words in the
Commission’s mouth -- here, the words “unjust and
unreasonable.” The Commission never, in its 1999 Order,
specified that a carrier’s failure to pay was of this magnitude.
Given the potential consequences to judicial dockets of the
Commission’s making that finding, we should require a clear
statement (and analysis) by the agency. What the Commission
meant by citing § 201 at the end of its Order is anyone’s guess.
If the Order itself indicated that the Commission expected
payphone providers to be able to collect in judicial actions that
would be another matter. But nothing in the Order so indicates
and as stated above, there is at least a suggestion that the
Commission expected collection actions to be administrative.
See, e.g., Ascom Communications, Inc. v. Sprint
Communications, Inc., 15 F.C.C.R. 3223, 3237 (2000)
(adjudicating a claim against Sprint for a violation of § 201(b)).

The dissent also invokes our decision in MCI
Telecommunications Corp. v. FCC, 59 F.3d 1407 (D.C. Cir.
1995), but the holding of that case is too narrow to be of any
help in this case. MCI, as well as the line of precedent on which
it relied, did not involve Commission prescriptions in general,
but rather referred specifically to ratemaking under § 205. Id. at
1414. The Commission’s ratemaking power is expressly
defined as the authority “to determine and prescribe what will be
the just and reasonable charge.” 47 U.S.C. § 205(a) (emphasis
added). It is one thing to hold that when Congress instructs the
Commission to set a “just and reasonable” rate for common
carriers, their noncompliance with the rate will be considered
“unjust and unreasonable”; it is quite another to extend that
reasoning to encompass all Commission regulations governing
 18

common carriers. In addition, MCI involved claims brought
before the Commission -- not in a federal district court. When
MCI is viewed in the new light of Sandoval, its value as a
precedent in this case is diminished still further.

We do not say that the Commission has no power to
interpret § 201(b) to encompass violations of its rules, and
thereby to create private rights of action in courts when
previously there were none. We do say the Commission did not
attempt to exercise any such power here. Plaintiffs therefore
cannot proceed under § 201(b).

3. Sections 407 and 416(c)

The plaintiffs next look to 28 U.S.C. §§ 407 and 416(c) to
supply the right to sue the IXCs in federal court. Section 407
authorizes a “complainant” to petition the district court for
damages based upon a carrier’s failure “to comply with an order
for the payment of money within the time limit in such order.”
The plaintiffs contend the regulation providing for dial-around
compensation is such an “order.”

In the alternative, the plaintiffs contend § 416(c), read in
conjunction with §§ 206 and 207, gives them a right of action.
That provision states, “It shall be the duty of every person ... to
observe and comply with [every order of the Commission] so
long as the same shall remain in effect.” According to the
plaintiffs, the compensation regulation is also an “order” within
the meaning of § 416(c), and §§ 206 and 207 make the failure to
comply therewith actionable in federal court.

The IXCs argue in response that the regulation at issue is
not an “order” within the meaning of either § 407 or § 416(c)
because that term, as used in those sections, includes only
 19

Commission decisions arising out of an adjudicatory, as opposed
to a rulemaking, proceeding. They argue that to interpret
“order” to include rulemaking decisions makes no sense in light
of § 416(a), which requires that every order be served upon the
carrier’s designated agent, and of § 416(b), which authorizes the
Commission “to suspend or modify its orders upon such notice
and in such manner as it shall deem proper.”

We agree with the IXCs that “order” in §§ 407 and 416(c)
refers only to adjudicatory and not to rulemaking decisions.
Although the Communications Act does not define the term
“order,” the Administrative Procedure Act does: “‘order’ means
the whole or part of a final disposition ... of an agency in a
matter other than a rule making.” 5 U.S.C. § 551(6). We
recognize that the circuits are divided over the question whether
“order” as used in § 401(b), a companion provision to those at
issue here, includes a decision promulgated through rulemaking.
The Ninth Circuit has held that it does, reasoning that “[w]hen
Congress intended the APA’s definition of a term to be
incorporated into the Communications Act, it said so.”
Hawaiian Tel. Co. v. Pub. Utilities Comm’n of Hawaii, 827 F.2d
1264, 1271 (9th Cir. 1987); see also Alltel Tennessee, Inc. v.
Tennessee Pub. Serv. Comm’n, 913 F.2d 305, 308 (6th Cir.
1990) (following Hawaiian Tel. Co. and citing cases from 4th,
5th, 7th, and 8th Circuits).

We are persuaded otherwise for the reasons laid out at
length by then-Judge Breyer in New England Telephone &
Telegraph Co. v. Public Utilities Commission of Maine, 742
F.2d 1, 4–9 (1st Cir. 1984) (relying in part upon APA definition
of “order” in concluding § 401(b) is limited to “adjudicatory
orders”). We are particularly convinced that, as the First Circuit
said of that provision, making §§ 407 and 416(c) applicable to
Commission regulations would “interfere seriously with the well
 20

established principle that the ‘enforcement’ of the
Communications Act is entrusted primarily to” the FCC, id. at
5, rather than to the district courts.

Further, the plaintiffs’ reading of §§ 407 and 416(c) would
render § 201(b) superfluous: any failure to comply with a
regulation, not only unjust and unreasonable practices, would be
a violation of the Act and therefore actionable under §§ 206 and
207. See Alaska Dep’t of Envtl. Conservation v. EPA, 540 U.S.
461, 489 n.13 (“It is ... a cardinal principle of statutory
construction that a statute ought, upon the whole, be so
construed that ... no clause, sentence, or word shall be
superfluous, void, or insignificant”). And, to those provisions
of § 416 that the IXCs correctly identify as inconsistent with the
plaintiffs’ broad interpretation of “order,” we add § 415(f), the
one year statute of limitations for filing a petition to enforce a
Commission order for the payment of money. If orders included
regulations, then a complainant would be able to seek
enforcement of a regulation only for the first year after it is
promulgated. That simply cannot be.

For these reasons, and because we agree entirely with the
First Circuit’s analysis in New England Telephone and
Telegraph, we reject the plaintiffs’ contention they can sue the
IXCs pursuant to §§ 407 and 416(c).

III. Conclusion

We hold that, as a result of the PSPs’ valid assignment of
their claims to the plaintiff aggregators, the aggregators have
standing to sue the defendant IXCs for failing to pay the PSPs
dial-around compensation as required by the regulation; that the
aggregators have promised to pass back to the PSPs any
recovery from the lawsuit is immaterial for the purpose of
 21

determining their standing. We also hold that none of the
provisions of the Act upon which the plaintiffs rely grants them
the right to sue in federal court to recover dial-around
compensation the IXCs are required by regulation to pay. The
orders of the district court denying the IXCs’ motion to dismiss
are therefore

Reversed.
 1

SENTELLE, Circuit Judge, concurring in part and dissenting
in part: In considering whether the plaintiff aggregators have
standing to sue, I, like the Court, begin with the same basic
question: “We must . . . determine whether the aggregators have
a stake in the outcome of the suit[.]” Maj. Op. at 7. Because I
conclude that most of the aggregators do not have a concrete
private interest in the outcome of this suit, I must respectfully
dissent from Part II.A of the Court’s opinion. *

The PSPs’ assignment of rights to APCC is materially
limited: “‘[The PSP] hereby 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.” What the Court sees as
“a mere reflection” of a technical detail not affecting the
substance of the relationship, I see as the first clue that the PSPs,
not the aggregators, would be the only plaintiffs with a real stake
in the outcome of this controversy.

The Supreme Court’s statements on the “irreducible
constitutional minimum” of standing, under Article III, are
straightforward: first and foremost, the plaintiff “must have
suffered an injury in fact – an invasion of a legally protected
interest which is (a) concrete and particularized, and (b) actual
or imminent, not conjectural or hypothetical[.]” Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992) (quotation
marks, footnote, and internal citation omitted). Of course, as
this Court recognizes, the party that actually suffered the injury
in the first instance need not be the party to bring suit; under
Vermont Agency of Natural Resources v. United States ex rel.

*
As noted by the Court, Maj. Op. at 6 n.*, this discussion only
applies to those plaintiff aggregators that do not own, wholly or in
part, PSPs.
 2

Stevens, an assignee of the injured party’s claim may have
standing to sue. 529 U.S. 765, 771-74 (2000).

The doctrine of assignee standing does not wholly erase the
basic requirements of standing, however. There are
“assignments,” and then there are assignments. Only an
assignment that gives the assignee an actual interest in the
recovery is sufficient for standing.

The assignee standing doctrine recognized by the Supreme
Court (and cited by this Court, Maj. Op. at 7) clearly refers to an
actual assignment of an interest that secures a portion of the
recovery. See Vermont Agency, 529 U.S. at 773 (“The FCA can
reasonably be regarded as effecting a partial assignment of the
Government’s damages claim.”). The cases cited in Vermont
Agency as exemplifying “assignee standing” reflect this fact.
See Poller v. Columbia Broadcasting System, Inc., 284 F.2d 599,
602 (D.C. Cir. 1960), rev’d, 368 U.S. 464, 465 (1962) (plaintiff
in antitrust suit was assignee of all of the assets of the dissolved
corporation (of which he was previously the sole shareholder));
Hazeltine Research, Inc. v. Automatic Radio Mfg. Co., 77 F.
Supp. 493, 495 (D. Mass. 1948) (plaintiff in patent license suit
was assignee of parent corporation’s right to grant licenses
under certain patents), aff’d, 176 F.2d 799 (1st Cir. 1949), aff’d,
339 U.S. 827 (1950); Manhattan Trust Co. v. Sioux City & N. R.
Co., 65 F. 559, 568 (N.D. Iowa 1895) (intervenor assignee in
suit at equity was entitled to redeem securities pledged by
assignor to third party, upon assignee’s payment of the loan
proceeds to that third party), aff’d sub nom. Hubbard v. Tod, 76
F. 905 (8th Cir. 1896), aff’d, 171 U.S. 474 (1898); Vimar
Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528,
531 (1995) (plaintiff in contract dispute was subrogated pro
tanto because, as injured party’s insurer, it had paid injured
party compensation that it would recover in contract parties’
 3

arbitration); Musick, Peeler & Garrett v. Employers Ins., 508
U.S. 286, 288 (1993) (plaintiff in stock fraud suit was
subrogated because, as injured party’s insurer, it had paid
injured party compensation that it would recover in civil suit).
See also Titus v. Wallick, 306 U.S. 282, 286 (1939), quoted in
Maj. Op. at 10 (plaintiff assignee did have to account for the
proceeds of the recovery and turn over the proceeds to the
assignor, but assignor was obligated, under the terms of the
assignment, “after paying the expenses of collection, to pay over
one-half of the net recovery to [assignee’s] wife, to discharge
certain indebtedness of [assignee], and to pay the balance to
[assignee].”).

The cases cited in Vermont Agency as exemplifying the
accepted doctrine of “assignee standing” share a common
characteristic noticeably absent from the case before us: in each
of those cases the “assignment” gave the putative plaintiff a
direct share in the recovery. This necessary characteristic
renders those cases consistent with Vermont Agency’s
requirement that the putative plaintiff have “a concrete private
interest in the outcome of the suit” in order to attain standing.
529 U.S. at 772 (quoting Lujan, 504 U.S. at 573) (quotation
marks & brackets omitted).

Under Vermont Agency (consistent with its foundation,
Lujan), an assignee plaintiff must both (1) seek to vindicate the
injury to the assignor, and (2) hold an interest “consist[ing] of
obtaining compensation for, or preventing, the violation of a
legally protected right.” Vermont Agency, 529 U.S. at 772-73.
An assignment suffices for such an interest when the assignee
actually receives the benefit of the compensation he receives.
Where the “assignment” relationship is in substance a mere
“agency” relationship such that the “assignee” enjoys no right to
 4

keep a part of the recovery, the irreducible constitutional
minimum of standing is left unsatisfied.

In this case, the putative plaintiffs themselves recognize that
the PSPs’ assignment of rights to aggregators such as APCC
gives them no share in the recovery. “The aggregators’
compensation for billing and collection services is based on the
number of payphones and telephone lines operated by their PSP
clients.” Br. for Plaintiffs-Appellees at 5-6. The aggregators are
a pass-through entity: “Aggregators are intermediaries between
PSPs and IXCs for billing and collection. An aggregator . . .
collects the IXCs’ payments, and distributes those payments to
its PSP clients.” Id. at 5.

The contract cited by the Court reflects the pass-through
nature of the “assignee-assignor” relationship. True, according
to one part of the Agreement, the PSPs “assign[] . . . for
purposes of collection” the interest in Company’s claims. But
we do not interpret the contract’s individual phrases apart from
the rest of the contract; rather, we interpret the agreement “as a
whole,” along with “all writings that are part of the same
transaction.” See RESTATEMENT (SECOND) OF CONTRACTS §
202(2) (1979). Doubts raised by the “for purposes of collection”
language of that portion of the contract are confirmed by the
Amendment to APCC Services Agency Compensation
Agreement, which notes that, far from taking on the rights and
responsibilities of the PSPs en toto, APCC merely acts as the
“PSP’s exclusive agent for billing and collection.” Amendment
at 1 (emphasis added). APCC does nothing more than “tak[e]
collective action on behalf of PSP and other[s] . . . with similar
claims.” Id. (emphasis added). APCC’s obligations to each PSP
in this additional agreement stretch far beyond mere
“obligat[ion] to account for the proceeds of a suit brought on the
claim.” Maj. Op. at 10.
 5

As noted above, APCC has no actual financial interest in
the recovery. The Amendment confirms this. APCC’s
compensation is determined by a schedule of variable fees
determined by current PSP call volume, not the historical PSP
call volume at issue in the case before us. APCC Services
Agency Compensation Agreement, Schedule A. See also
Sandusky Memo (“To fund the suits, all plaintiffs are being
required to agree to a quarterly assessment of their dial around
compensation on a per call basis.”). True, if APCC’s collection
efforts require APCC to provide “additional services . . . over
and above the services provided pursuant to the Agreement,”
APCC could deduct costs (again, based on current call volume)
from the PSPs’ recoveries, Amendment to APCC Services
Agency Compensation Agreement at 2. But APCC has not
alleged that such deductions are required in the present case, and
we therefore have no occasion to determine whether such
hypothetical deductions would be sufficient for standing.

The aggregators whose standing I find lacking advance an
alternative theory that they have “associational standing.”
Associational standing requires three elements: first, the
association’s members must otherwise have standing to sue in
their own right; second, the interest the association seeks to
protect must be germane to its purpose; third, neither the claim
asserted nor the relief requested must require the individual
members to participate in the suit. Hunt v. Washington State
Apple Advertising Comm’n, 432 U.S. 333, 343 (1977). The
aggregators assert that they meet each requirement and therefore
have associational standing. I disagree.

An aggregator cannot have “associational standing,”
because an aggregator is not an “association.” The assignors of
rights to the aggregators do not thereby become members of the
aggregators. Indeed, the aggregators have no members at all.
 6

“In determining whether an organization that has no members in
the traditional sense may nonetheless assert associational
standing, the question is whether the organization is the
functional equivalent of a traditional membership organization.”
Fund Democracy, LLC v. SEC, 278 F.3d 21, 25 (D.C. Cir.
2002). The aggregators are no such thing. APCC Services, Inc.,
Davel Communications Group, Inc., Data Net Systems, L.L.C.,
Intera Communications Corp., Jaroth, Inc., and NSC
Telemanagement Corp. are all for-profit companies with
contractual relationships with a number of other companies.
One corporation does not become a member of another
corporation by reason of entering into contracts with it. The
aggregators are in no sense “membership organizations.” They
are not even “organizations.” They are incorporated
entities–legal persons–and their clients are no more their
“members” than a law firm’s clients are the firm’s “members.”

In sum, I would respond to the District Court’s certified
question for interlocutory appeal with instructions to dismiss the
complaint with respect to the aggregators that do not own PSPs
either in whole or in part. I therefore dissent, respectfully, from
Part II.A of the opinion of the Court.
 1

GINSBURG, Chief Judge, dissenting with respect to Section
II.B.2 and to the judgment: Because I believe the plaintiffs have
a right to pursue their claims for dial-around compensation
under 47 U.S.C. § 201(b), I would affirm the order of the district
court on that ground.

Section 201(b) provides in relevant part:

All charges, practices, classifications, and regulations for
and in connection with [a] communication service, shall be
just and reasonable, and any such charge, practice,
classification, or regulation that is unjust or unreasonable is
declared to be unlawful .... The Commission may prescribe
such rules and regulations as may be necessary in the public
interest to carry out the provisions of this chapter.

Sections 206 and 207 afford a private right of action based upon
conduct made unlawful by chapter 5 of the Act. Section 201(b),
which is in chapter 5, makes unlawful any “unjust or
unreasonable” practice in connection with a communication
service. It is undisputed that both IXCs and PSPs provide a
“communication service,” and that the Commission is charged
with prescribing rules and regulations interpreting what is just
and reasonable. See 47 U.S.C. § 201(b); AT&T Corp. v. Iowa
Utilities Bd., 525 U.S. 366, 378-79, 397 (1999). I agree with the
plaintiffs that the IXCs’ failure to pay dial-around compensation
constitutes an “unjust and unreasonable practice” as the agency
has interpreted that phrase.

In rejecting the plaintiffs’ argument on that score, the court
frames the question not as whether there is a private right of
action under § 201(b), in conjunction with §§ 206 and 207, but
where such an action is to be heard — in district court or before
the Commission. According to the court, there is no indication
 2

“the Commission in 1999 ... even thought about suits directly in
district court” to recover for a violation of the regulation, slip
op. at 16, and had the Commission made its intention known,
“that would be another matter.” Id. at 16–17. I disagree. It is
not for the Commission to decide whether the plaintiffs may sue
in federal court for a violation of the statute; the Congress has
already made that determination. Section 207 provides that “any
person claiming to be damaged by a common carrier[’s]”
violation of Chapter 5 “may either make complaint to the
Commission ... or may bring suit ... in any district court of the
United States of competent jurisdiction.”

The PSPs allege the IXCs have violated § 201(b) by failing
to pay the sums required by the dial-around compensation
regulation. In promulgating that regulation the Commission
invoked, in addition to § 276(b)(1)(A), its authority under §§
201–205, see In re Implementation of the Pay Telephone
Reclassification and Compensation Provisions of the
Telecommunications Act of 1996, 14 F.C.C.R. 2545 ¶ 232
(1999). In its 2003 Report and Order on the regulation, the
agency made express what had previously been implied, namely,
that “failure to pay in accordance with the Commission’s
payphone rules, such as the rules expressly requiring such
payment that we adopt today, constitutes both a violation of
section 276 and an unjust and unreasonable practice in violation
of section 201(b) of the Act.” Pay Telephone Reclassification
and Compensation Provisions, Report & Order, 18 F.C.C.R.
19975 ¶ 32 (2003). That is clearly an authoritative interpretation
of § 201(b). The court can say “[t]here was no authoritative
interpretation of § 201(b) in this case” only because it makes no
mention of the 2003 Report and Order and fails to note that the
Commission filed an amicus brief in this case advancing the
same position. I disagree that the Commission has not exercised
 3

its interpretive authority in this case; the question, as I see it, I
whether its interpretation is correct.

The IXCs and the court claim that, if § 201(b) applies here,
then a common carrier’s violation of any regulation of the
Commission could be said to constitute an unjust and
unreasonable practice. I see no need to go so far, however, in
order to uphold the agency’s interpretation of § 201(b) with
respect to this regulation. Indeed, I would simply reiterate what
this court said a decade ago, namely, that when the Commission
reasonably deems the failure of a common carrier to act in a
specified way to be an unjust and unreasonable practice, a
carrier that fails to comply with the Commission’s prescription
violates the Act. See MCI Telecomms. Corp. v. FCC, 59 F.3d
1407, 1414 (1995) (“We have repeatedly held that a rate-of-
return prescription has the force of law and that the Commission
may therefore treat a violation of the prescription as a per se
violation of the requirement of the Communications Act that a
common carrier maintain ‘just and reasonable’ rates”). Contrary
to the suggestion of the IXCs, Sandoval does not instruct
otherwise. As the Court there explained, it is “meaningless to
talk about a separate cause of action to enforce” a regulation that
authoritatively construes a statute. 532 U.S. at 284. “A
Congress that intends the statute to be enforced through a private
cause of action intends the authoritative interpretation of the
statute to be so enforced as well.” Id.

I find the IXCs’ other arguments for rejecting the
Commission’s interpretation of § 201(b) equally unpersuasive.
The IXCs maintain that § 201(b) does not apply here because it
“relates [only] to the common carriers’ provision of
communication services to their customers,” but they do not
even purport to ground that limitation in the text. Nor is there
any precedent supporting such a limitation. On the contrary,
 4

both the Commission and this court have previously applied §
201(b) to one carrier’s provision of a communication service to
another carrier. See MCI, 59 F.3d at 1414 (§ 201(b) makes
unlawful carrier’s violation of agency regulation setting
maximum rate-of-return for interstate access); Ascom
Communications, Inc. v. Sprint Communications Co., 15
F.C.C.R. 3223 (2000) (§ 201(b) makes unlawful carrier’s
attempt to collect from PSP for unauthorized and fraudulent
calls placed from PSP’s phones over carrier’s network).

Sprint and AT&T next argue that § 201(b) applies only to
the violation of a regulation, like the one at issue in MCI,
promulgated exclusively pursuant to § 205 of the Act, which
authorizes the Commission to set just and reasonable rates for
services. I disagree — as does the Commission, which has
invoked § 201(b) in several contexts to which § 205 does not
pertain. See, e.g., Ascom, 15 F.C.C.R. at 3227 (“we conclude
that Sprint violated section 201(b) when it charged Ascom for
certain calls for which Ascom was not a customer”); In re
Telephone Number Portability, 18 F.C.C.R. 23697 n.76 (2003)
(“we note that a violation of our number portability rules would
constitute an unjust and unreasonable practice under § 201(b) of
the Act”); Core Communications, Inc. v. SBC Communications
Inc., 18 F.C.C.R. 7568 ¶ 25 (2003) (failure to comply with
merger conditions held an unjust an unreasonable practice). The
IXCs offer no reason to believe the Commission may determine
what constitutes an unjust or unreasonable practice only if, in
doing so, it relies exclusively upon its authority under § 205.
That limitation cannot be found in either § 201(b) or in § 205.

Having rejected each of the arguments raised by the IXCs,
I see no reason to deem unreasonable the Commission’s
determination that it is an unjust and unreasonable practice for
a common carrier to fail to pay PSPs as required by the
 5

regulation. See Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, Inc., 467 U.S. 837, 844 (1984). The Congress
delegated to the Commission the responsibility of prescribing
“such rules and regulations as may be necessary in the public
interest to carry out the provisions” of the Act, 47 U.S.C. §
201(b), and then specifically directed the Commission to
establish a compensation plan that “fairly compensates” PSPs
for dial-around calls. 47 U.S.C. § 276(b)(1)(A). The agency in
turn set a rate for dial-around compensation that it believed to be
“fair to both payphone owners and the beneficiaries of those
calls” and to serve the public interest by ensuring “the
widespread deployment of payphones.” 14 F.C.C.R. 2545 ¶ 59.
This court upheld the Commission’s reasoning, so the justness
and reasonableness of the rates is no longer open to challenge.
See APCC v. FCC, 215 F.3d at 52. One would therefore be
hard-pressed to say the Commission acted unreasonably when
it deemed a common carrier’s failure to pay just and reasonable
compensation an unjust and unreasonable practice. See Capital
Network Sys., Inc. v. FCC, 28 F.3d 201, 204 (D.C. Cir. 1994)
(“Congress entrusted the administration of the Communications
Act to the FCC .... Because ‘just,’ ‘unjust,’ ‘reasonable,’ and
‘unreasonable’ are ambiguous statutory terms, this court owes
substantial deference to the interpretation the Commission
accords them”).

Accordingly, I would hold the plaintiffs may sue the
defendant IXCs under § 201(b) for failure to comply with the
Commission’s regulation governing dial-around compensation,
and would affirm the district court’s order on that basis.