WASHINGTON, June 4 - The U.S. Supreme Court delivered a clear victory for the Federal Communications Commission on Thursday, casting aside legal challenges from wireless carriers AT&T and Verizon to the agency’s internal process for imposing financial penalties.
The court’s vote was 8-1. Central to the dispute was whether the FCC’s in-house proceedings for assessing forfeiture orders - the agency’s mechanism for levying fines - deprived the companies of their Sixth Amendment right to a jury trial. The carriers argued that the agency’s initial adjudicatory process amounted to a dispute resolution mechanism that should require a jury. The government contended otherwise.
Under scrutiny were forfeiture orders that the FCC issued after finding that several carriers sold access to customers’ location data to third parties without adequate user consent. The agency assessed $57 million against AT&T and nearly $47 million against Verizon. Across the industry actions at issue, the FCC said it imposed nearly $200 million in total penalties, including an $80 million fine for T-Mobile and $12 million for Sprint, which T-Mobile acquired in 2020.
Both Verizon and AT&T paid the fines they were assessed but pursued legal challenges. Those appeals produced conflicting outcomes in the federal appellate courts, setting the stage for Supreme Court review. In Verizon’s matter, the 2nd U.S. Circuit Court of Appeals in New York upheld the FCC’s approach, reasoning that the Constitution permits the agency to issue an initial assessment provided that the accused party retains the ability to challenge collection in court. That pathway, the 2nd Circuit concluded, preserved the opportunity for a jury trial if the government were to litigate collection of the penalty in court.
By contrast, the 5th U.S. Circuit Court of Appeals in New Orleans sided with AT&T, finding that the FCC’s initial assessment and fine deprived the company of its right to a jury. That split among circuits prompted the FCC to seek clarification from the Supreme Court.
In defending the agency’s process before the high court, Justice Department lawyers argued that the FCC’s initial assessments are not inherently binding. They said that if the government elects to bring an enforcement action in court to collect a forfeiture, the companies would be entitled to present their case to a judge and jury, preserving the constitutional guarantee. The carriers countered that allowing in-house agency proceedings to operate as the primary mechanism for determining liability and issuing fines effectively substitutes an administrative forum for one that the Constitution assigns to the courts. They also asserted that the agency’s initial findings and publicly announced fines inflict reputational harm before any judicial determination.
The legal fight unfolded against a backdrop of recent Supreme Court scrutiny of agency adjudication. The article’s reporting notes that the high court in 2024 curtailed the use of in-house proceedings at another federal regulator in a separate decision. It also refers to a 2025 Supreme Court ruling that affirmed the FCC’s funding arrangements for a multi-billion-dollar program to expand phone and broadband access to targeted beneficiaries.
The ruling issued Thursday resolves the contested question in this case by endorsing the FCC’s forfeiture framework as it relates to the preservation of later judicial remedies. The decision will have direct implications for how federal agencies structure enforcement processes and how regulated entities navigate administrative penalties tied to alleged misconduct, particularly in the telecommunications sector where consumer privacy and data handling practices are under scrutiny.
Case details:
- Supreme Court vote: 8-1.
- Fines at issue: AT&T $57 million; Verizon nearly $47 million; T-Mobile $80 million; Sprint $12 million; total near $200 million.
- Appellate split: 2nd U.S. Circuit upheld the FCC approach; 5th U.S. Circuit found a constitutional deprivation in AT&T’s case.