WASHINGTON—The Supreme Court of the United States (SCOTUS) has issued a 8-1 decision upholding the Federal Communications Commission’s authority to levy fines as part of its enforcement efforts.
The ruling involves massive penalties totaling nearly $200 million that the FCC imposed on Verizon ($47 million), AT&T ($57 million), T-Mobile ($80 million) and other wireless carriers for failing to protect their customers’ location data.
Both Verizon and AT&T appealed the decision, arguing that the FCC’s fines violated their seventh amendment rights to a jury trial.
In a June 4 ruling written by Chief Justice John Roberts, the court found that “the FCC’s forfeiture proceedings fit comfortably within the Court’s Seventh Amendment precedents. The Seventh Amendment `preserve[s]’ the right to trial by jury in `Suits at common law,’ and applies in all proceedings in which `legal rights’ are to be `settle[d],’”
“It does not, however, `prescribe at what stage’ of a legal dispute “a trial by jury must, if demanded, be had," Roberts wrote. "The Amendment requires only that, before legal rights and obligations are conclusively `ascertained and determined,’...a party has the chance to insist that a jury make the `ultimate determination of issues of fact,’...Consistent with these principles, this Court has upheld nonjury adjudications making initial findings of fact that are subject to de novo review in a subsequent jury trial…Given the similar features of the Commission’s en-forcement scheme, the Commission may issue forfeiture orders with-out the involvement of a jury.”
The Court’s decision earlier this year to address the Verizon and AT&T appeals had raised concerns about the FCC’s ongoing ability to impose fines.
In the last two decades, SCOTUS has been steadily chipping away at the legal authority of government regulators, most notably in its 2024 ruling rejecting the doctrine of “Chevron deference,” under which courts were to defer to a regulatory agency’s expertise in interpreting federal laws where Congress’ intent was unclear, and in a second 2024 ruling in Securities & Exchange Commission v. Jarkesy. In the SEC case, the Court ruled 6-3 that the securities regulator must bring fraud cases seeking civil penalties to federal court instead of relying on its internal tribunals.
Based on the SEC case, both Verizon and AT&T appealed the fines, arguing the FCC was denying the defendants their right to a jury trial by issuing them.
The 2nd U.S. Circuit Court of Appeals in New York denied that argument in the Verizon case and upheld the fine but the 5th U.S. Circuit Court of Appeals in New Orleans overturned the fines against AT&T.
Following that, Verizon appealed the 2nd Circuit ruling to SCOTUS and the FCC appealed the AT&T case. The June 4 SCOTUS decision resolved the conflict between the Circuit Court judgments.
In the June 4 SCOTUS ruling the court ordered that “the judgment of the United States Court of Appeals for the Fifth Circuit in No. 25–406 is reversed, and the case is remanded for further proceedings consistent with this opin-ion. The judgment of the United States Court of Appeals for the Second Circuit in No. 25–567 is affirmed.”
Justice Clarence Thomas issued a dissenting opinion arguing that the Court was wrong in ruling that the FCC fines were “non-binding” and therefore did not violate the companies right to a jury trial.
“When the Federal Government seeks to deprive a person of property, it must go through an Article III court,” Thomas wrote, citing the SEC v. Jarkesy decision. “That means the regular course of trial proceedings with their usual protections, not the use of ad hoc adjudication procedures before the same agency responsible for prosecuting the law, subject only to hands-off judicial review. Thus, as this Court held in Jarkesy and reaffirms today, agencies can collect penalties only after adjudication in court through a trial de novo.”
TV Tech will add reactions to the ruling as they come in.
The full opinion is available here.
