Opinion ID: 184918
Heading Depth: 2
Heading Rank: 1

Heading: The Standing of the Receiver

Text: 9 According to the Commission, Goodman lacks standing because the application mills of which he is Receiver were not themselves affected by the agency decisions at issue. Because Goodman sues solely in his capacity as Receiver, we first address the significance of that status. 10 Goodman suggests that a receiver has the power to sue on behalf of customers and creditors of the entity in receivership even when the entity itself would not have standing to do so. The sole case upon which he relies, however, does not support his position. The plaintiff in Scholes v. Lehmann, 56 F.3d 750 (7th Cir. 1995), was the receiver of a corporation (actually, more than one) that had made allegedly fraudulent conveyances at the direction of its controlling shareholder. When the receiver sued to set aside the transfers, the transferees challenged his standing. The corporation in receivership, they said, had no interest in reversing a series of fraudulent transactions in which it was complicit; hence, the receiver was really suing on behalf of the company's innocent creditors, which exceeded his authority to look out for the interests of the corporation itself. See id. at 753-54. 11 The Seventh Circuit disagreed. The conveyances, it reasoned, had injured the corporation by diverting its assets to an unauthorized use. To be sure, the company could not be heard to complain about the conveyances while it remained under the control of the shareholder responsible for them. Once he was out of the picture, however, the company regained its right to the property fraudulently conveyed for the benefit not of [the controlling shareholder] but of innocent investors. Id. at 754. Because the suit was therefore one the corporation itself could have brought, the receiver was authorized to sue on its behalf. See id. at 754-55. As this summary attests, nothing in Scholes supports Goodman's expansive view of a receiver's authority to sue on behalf of the customers and creditors of the company he represents; in fact, the decision is a straightforward application of the rule that a receiver has authority to bring a suit only if the entity in receivership could itself properly have brought the same action. See Caplin v. Marine Midland Grace Trust Co., 406 U.S. 416, 429 (1972); Jarrett v. Kassel, 972 F.2d 1415, 1426 (6th Cir. 1992); Fleming v. Lind-Waldock & Co., 922 F.2d 20, 25 (1st Cir. 1990). 12 Turning, therefore, to the critical question, we conclude the application mills would not have standing to bring this action on their own account. A plaintiff must, in the ordinary case, assert [its] own legal interests, rather than those of third parties. Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 100 (1979). As the Commission contends, Goodman's petition for review on behalf of the application mills runs afoul of this rule, for it is premised upon the Commission's alleged maltreatment not of the application mills but of the receivership licensees. 13 Goodman's response, in effect, is to claim that he has third party standing to assert the rights of the receivership licensees because their interests and those of the application mills are, for the purposes of this action, congruent. He has contracted with a telecommunications company that will buy a large number of the receivership licenses, contingent upon the Commission first granting the receivership licensees a four month extension of the loading deadline which, as noted above, the agency has refused to do. (The Commission has, however, agreed to waive its rule barring the sale of unconstructed licenses in order to make some of these transactions possible. See Implementation Order at p p 54-58). Any sales that occur will also benefit the application mills by reducing the damages for which they will be liable if the receivership licensees successfully sue them for fraud. 14 A mere congruence of interests between the receivership licensees and the application mills in whose place Goodman stands does not suffice to make Goodman a proper party to vindicate the interests of the receivership licensees. A plaintiff may assert the rights of a third party only when there is some hindrance to the third party's ability to protect his or her own interests, Powers v. Ohio, 499 U.S. 400, 411 (1991);see also United States House of Representatives v. United States Dept. of Commerce, 11 F. Supp. 2d 76, 88 (D.D.C. 1998), aff'd, 119 S. Ct. 765 (1999), but Goodman does not suggest any reason for thinking the receivership licensees are unable to sue the Commission themselves. It is true, as he suggests, that having all the receivership licensees' claims litigated in one suit would be considerably more convenient than hearing each one separately. We do not see, however, why a class action would be inadequate to that task. Cf. Fair Employment Council, Inc. v. BMC Marketing Corp., 28 F.3d 1268, 1280 (D.C. Cir. 1994) (civil rights organization did not have standing to raise claims of individual victims of discrimination; although not always aware that they had been discriminated against, those individuals did not face serious barrier to suit on their own behalf). 15 We conclude that Goodman lacks standing to sue the Commission. He does not represent the parties who sustained the injury of which he complains, nor is there anything preventing the parties who were injured from themselves protecting their rights.