The Prepaid Press - March 15, 2008 - (Page 18)

CALLING CARDS March 15 · 2008 - 18 THE LEGAL LINE by Ed Maldonado U.S. Supreme Court. The issue, granted certiorari by the Supreme Court, concerns neither the constitutionality of the DAC Order by the FCC, nor a payphone provider’s entitlement for the federal courts to enforce their right to DAC. It is a constitutional challenge of the legal standing of APCC Services, Inc. in federal court to collect DAC on behalf of payphone providers who contract with them. It’s an interesting constitutional issue that Sprint’s appellate lawyers have raised and the U.S. Supreme Court has taken on, to decide whether someone can assign their Article III standing to access the federal courts. Legal standing is the right to initiate a lawsuit and to have one’s rights enforced through the courts. To have legal standing, a person (be they a corporation or an individual) must have been affected by the subject matter of the lawsuit and there must be a case or controversy (a.k.a. a lawsuit) that the courts can resolve. If you think standing is a simple and obvious issue to unravel, think again. A large body of federal case law exists on the topic that often meanders when it comes to how, when and whether a person can assign their rights of standing. Rules 17 (a), (b), and (c) under the Federal Rules of Civil Procedure set procedural requirements that affect legal standing, and the capacity to sue in the federal court. This is probably why the U.S. Supreme Court took notice of the case and granted certiorari. It’s a topic that affects access to the federal courts far beyond the issue of the collection of the DAC. Standing before a federal administrative agency, like the FCC, on an administrative question or issue is different than it is in the federal courts. The courts cannot exercise administrative or legislative power as Article III limits judicial power to “cases and controversies”. The Telecommunications Act of 1996 does maintain a carve-out exception giving the federal courts the ability to take jurisdiction and adjudicate patent violations of the Act where Parties of Interest bring a case or claim against a “common carrier”. This is found in Section 207 of the Act which vests exclusive jurisdiction over damage claims for statutory violations of the Act in the federal courts, or the FCC. The relevant part is: “Any person claiming to be damaged by any common carrier subject to the provisions of this chapter may either make complaint to the commission as hereinafter provided for, or may bring suit for the recovery of damages for which such common carrier may be liable under the provisions of this chapter, in any district court of the United States of competent jurisdiction; but such person shall not have the right to pursue both such remedies.” 47 USC § 207 et. al. The APCC has been a longtime advocate for the compensation of payphone service providers (PSPs), and in 1995 successfully lobbied Congress for inclusion under Section 276 of the 1996 Telecommunications Act. Under Section 276, Congress directed the FCC to compensate PSPs for every completed call made from a payphone. Between 1996 and 2001, the FCC wrestled with what constituted fair compensation and how that may be assessed against common carriers through FCC Orders and court appeals of the Dear Ed: I have been hearing that the Supreme Court is going to review the DAC dispute between APCC (American Public Communications Council) and Sprint. I run a prepaid calling card company, and while I have not yet heard from APCC, I expect I may at some time in the future. One of my carrier reps said that if the Supreme Court rules against APCC, the whole issue of DAC (Dial Around Compensation) may go away, or start over from the beginning. I cannot believe that it could be this easy. Is the rep right, or do I still have to worry about DAC? Anonymous in FL Dear Anonymous in FL (AFL): Put on your scuba gear. We’re going in deep. Your carrier Rep is about half right as to the grounds of Sprint Communications Co. v. APCC Services, Inc., Case No. 07-55, now before the 2,500 of your partners (and competitors) from the advanced payments industry will be meeting in Orlando in May. Constitutional Basis of Standing Article III of the United States Constitution limits a federal court’s jurisdiction to cases and controversies brought before it. This usually requires the plaintiff be “a Real Party of Interest” to bring the actual lawsuit in order to possess standing. As Article III has been interpreted to date, this mandates three basic requirement that any Plaintiff must prove to have standing in the federal courts: (1) that the Plaintiff have an injury in fact, which can be found in some violation or transgression of a legally protected interest that is identifiably by the courts in that it is (a) concrete and particularized, and is (b) actual or imminent, not hypothetical; (2) a causal (or connected) relationship between that injury that can be reasonably traced to a transgressing action or activity of the Defendant, and not some independent third party; and (3) the likelihood that the injury will be remedied by a favorable decision, and that the prospect of obtaining relief from the court for the injury is not too speculative. The leading Supreme Court case, most often cited to when analyzing these legal standing requirements for federal courts, is Lujan v. Defenders of Wildlife, 112 S. Ct. 2130, 2136 (1992), although there are others which articulate the same basic criteria. While a federal court’s constitutional review of standing is based upon the above analysis, the Federal Rules of Civil Procedure (“F.R.C.P.”) have addressed more practical concerns when it comes to standing under Rule 17 (a), (b) and (c); which govern distinctions between a “Real Party of Interest” under Rule 17 (a), versus the capacity to sue for another under Rule 17 (b) and (c). The ability of a person who is not the real party of interest to have the capacity to sue can be a necessary procedural tool, as many federal cases can involve the protected interests of those who may be of limited legal capacity to maintain a lawsuit for themselves. This is directly covered by F.R.C.P. Rule 17(c). Good examples of where such assignments of capacity are fundamental can be found in federal lawsuits brought on behalf of children not of legal age, persons lacking bona fide mental or cognitive capacities or whose former capacity has been diminished due to ailments such as alzheimers disease, the unborn, the comatose, persons who may have illegal immigration status and others similarly situated. F.R.C.P. Rule 17 (a), however, recognizes that certain legal representatives can have the capacity to bring an action on behalf of a Real Party of Interest. These include: an executor, a receiver, an administrator, a guardian, a bailee, a trustee of an expressed trust, a party with whom or in whose name a contract has been made fort he benefit of another – also called third-party beneficiary, or a party authorized by statute. (Remember these latter two categories as they are important to the current Supreme Court case regarding DAC.) The manner in which Standing and F.R.C.P. Rule 17 function triggers a series of shifts in the burden of proof between Plaintiffs and Defendants when it comes to proof of standing. The majority of Plaintiffs of Real Interest have the burden of demonstrating the above illustrated Lujan criteria under Rule 17(a). However, where a Plaintiff, who is not an minor or incompetent, has already assigned away all his interest in the case before the suit is brought, the burden shifts to reduced capacity requirements of Rule 17(b), F.R.C.P. Rule 9(a) requires the Defendant to object to the representative’s lack of capacity to sue as a Plaintiff. The capacity of that representative to sue is thereafter determined by the law of the state where the district court is held or where the person is domiciled. If this sounds convoluted to you, now inlay the issue of assignment of collection rights pursuant to federal statute, regulation and administrative orders by the FCC. Will You Be There? MAY 12-15, 2008 ORANGE COUNTY CONVENTION CENTER ORLANDO, FLORIDA SIX NEW TRACKS ON: � � � � � � Identiﬁcation and Policy Payments and Applications Mobile and NFC Security and Access Control Emerging Technology and Innovations Latin America To sponsor or exhibit contact Chris Frey at christopher.frey@sourcemedia.com or 212-803-6568. Download the agenda at www.ctst.com 6479_CTST_Prepaid_5x8.indd 1 2/6/08 9:28:22 AM http://www.ctst.com http://www.ctst.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - March 2008

The Prepaid Press - March 2008 tppEXPO’08 Slated for August 19-21 AT&T Strikes Back Contents The Retske Report: Net Neutrality 5 Minutes With Terry Maher, NBPCA Counsel Regulatory Rundown: FCC Enforcements Prepaid Wireless Roundup Prepaid Wireless in Brief tppEXPO’08 Spotlight BlackBerry Prepaid Option to be Offered Virgin Mobile USA Ringbacks Growing The Splitting of a Titan The State of Prepaid Technology: Part II – The Other Prepaid Calling Spot Rates Calling Cards in Brief IVR and Stratus to Offer SIP Platform PhoenixSoft Completes Integrated IP Transcoding The Legal Line Web Streamlines Bill Pay & Prepaid Distribution Travelex Debuts New Foreign Currency Packs TSYS and Telrock to Provide Mobile Solutions Payments in Brief NBPCA Offers Tips to Fight Money Laundering Hypercom Responds to Ingenico Inquiry Kiosks Change the Face of Prepaid Prepaid 101: Prepaid Wireless Coinstar to Expand Centers in Wal-Mart Locations Meta and MoneyGram Partner NRF Battles Retail Crime Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - March 2008

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