Opinion ID: 186459
Heading Depth: 3
Heading Rank: 2

Heading: Pass back of the proceeds

Text: 22 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, 120 S.Ct. 1858, 146 L.Ed.2d 836. 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, 120 S.Ct. 1858. 23 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. 24 The assignments at issue here, in contrast, transfer to the assignees the entire interest of the PSPs in their dial-around 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. 25 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, 59 S.Ct. 557, 83 L.Ed. 653 (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., MOORE'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). 26 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 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. 27 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.