Key Takeaways
- The Federal Communications Commission (FCC) fined AT&T and Verizon over $100 million total for allegedly mishandling customer location data.
- The carriers argue that imposing these civil penalties without a jury trial violates their Seventh‑Amendment right to a jury trial.
- The Supreme Court will decide whether the FCC’s in‑house adjudication of fines is constitutional; the case follows a similar 2024 ruling that limited the SEC’s ability to do the same.
- A ruling against the FCC could affect at least five other federal agencies that levy civil penalties before any jury trial, including the Energy, Health and Human Services, and Interior departments.
- The Trump administration defends the FCC’s practice as a critical enforcement tool, warning that stripping agencies of this power would create gaps in oversight of privacy, national security, and other regulatory areas.
The Federal Communications Commission (FCC) relies heavily on civil fines to enforce rules that protect consumer privacy, curb robocalls, and regulate broadcasting. In recent years the agency has levied multimillion‑dollar penalties against the nation’s two largest wireless carriers, Verizon and AT&T, accusing them of failing to safeguard customers’ location information. The carriers contend that assessing those fines through an internal administrative process—without allowing them a jury trial—violates the Seventh Amendment. Their dispute is now before the U.S. Supreme Court, which will hear oral arguments on Tuesday.
The underlying conduct dates back to before 2019, when both AT&T and Verizon routinely tracked subscribers’ cellphone locations and sold that data to third‑party firms that provided services such as roadside assistance. The FCC determined that this practice exposed highly sensitive location details for tens of millions of consumers. A 2018 New York Times investigation illustrated the risk, showing that a Missouri sheriff had used the service to obtain unauthorized location data on hundreds of individuals, including a local judge. After the revelation, the FCC issued notices stating that the carriers had repeatedly and willfully breached rules requiring them to take reasonable steps to protect the confidentiality of location information.
In 2018 and 2019 the agency issued civil penalties: more than $57 million against AT&T and over $48 million against Verizon. The carriers paid the fines but simultaneously appealed, arguing that the FCC’s adjudication process deprived them of a constitutionally guaranteed jury trial. They maintain that FCC officials act as prosecutor, fact‑finder, and judge, issuing orders that declare the companies “shall be liable” and mandating payment within a set deadline. If a carrier refuses to comply, the Justice Department can sue, at which point a jury would hear the case—but the carriers say achieving that outcome requires them to first defy the FCC’s order, risking serious practical and reputational harm.
The FCC and the Trump administration defend the agency’s approach. Solicitor General D. John Sauer told the justices that eliminating the FCC’s ability to assess civil penalties would “risk opening a significant gap in federal oversight,” potentially leaving rules on privacy, national security, and other matters effectively unenforced. He characterized the fines as one of the agency’s “most important and frequently used enforcement tools.” The administration also distinguished the FCC’s scheme from the SEC’s in‑house tribunals that were struck down in the 2024 case Securities and Exchange Commission v. Jarkesy, noting that in the SEC scenario there was no avenue for a jury trial at all, whereas carriers could, in theory, obtain a jury trial by refusing to pay and inviting a Justice Department lawsuit.
Lower courts have split on the issue. AT&T appealed to the Fifth Circuit, which ruled that the Communications Act of 1934, as applied by the FCC, violated the company’s Seventh‑Amendment right to a jury trial because the agency had already “found the facts, adjudged guilt and levied punishment” before any trial could occur. Verizon’s appeal to the Second Circuit reached the opposite conclusion, holding that Verizon could have secured a jury trial simply by declining to pay the fine and thereby triggering a DOJ lawsuit.
The Supreme Court’s decision, expected in late June or early July, will have broader repercussions. At least five other federal agencies impose similar civil penalties before any jury trial: the Department of Energy (nuclear‑safety rules), the Department of Health and Human Services (employee health‑benefit plan requirements), the U.S. Fish and Wildlife Service (wildlife‑protection regulations), and others. A ruling that curtails the FCC’s authority could therefore ripple across multiple regulatory regimes, reshaping how the executive branch enforces compliance with federal law. Conversely, upholding the FCC’s practice would preserve a key mechanism for agencies to deter misconduct quickly and efficiently, avoiding the delays and costs associated with litigation in federal court. The case thus sits at the intersection of administrative law, constitutional rights, and the practical realities of modern regulatory enforcement.