Third parties can sue for pay phone fees

June 23, 2008 at 2:25 PM
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WASHINGTON, June 23 (UPI) -- Collection companies can recover long-distance telephone fees for pay phone companies disputing charges owed, the U.S. Supreme Court ruled Monday.

The court, in a 5-4 ruling, determined federal law allowed six third-parties organizations -- or aggregators who perform billing and collection functions -- to sue in federal court to recoup fees owed to pay phone owners when a customer uses a toll-free number to place a long-distance call. AT&T and Sprint Nextel argued that third-party companies weren't allowed to sue in federal court to recover fees on someone else's behalf.

"Because litigation is expensive, because the evidentiary demands of a single suit are often great, and because the resulting monetary recovery is often small, many pay phone operators assign their dial-around claims to billing and collection firms called 'aggregators' so that, in effect, these aggregators can bring suit on their behalf," Justice Stephen Breyer wrote in the majority ruling.

In a dissent, Chief Justice John Roberts said third parties suing to collect proceeds then passing them back to the companies making the claim shouldn't be permitted in the U.S. federal court system.

"(Until) today, it has always been clear that a party lacking a direct, personal stake in the litigation could not invoke the power of the federal courts," Roberts said.

Breyer was joined in the majority opinion by Justices John Paul Stevens, Anthony Kennedy, David Souter and Ruth Bader Ginsburg. Joining Roberts were Justices Antonin Scalia, Clarence Thomas and Samuel Alito.

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