The Supreme Court has agreed to decide whether the Federal Communications Commission’s process for imposing multimillion-dollar penalties on Verizon and AT&T passes constitutional muster, a showdown that could reset how Washington agencies levy civil fines. The cases stem from FCC sanctions over mishandled customer location data—roughly $57 million for AT&T and $47 million for Verizon—and center on whether companies are entitled to a civil jury trial before the government can extract large penalties.
Both carriers paid the fines but then sought judicial review, arguing the FCC’s “pay-first, challenge-later” framework violates the Seventh Amendment. With federal appeals courts split—one siding with AT&T, another with the government in Verizon’s case—the nation’s highest court will now determine which architecture of administrative enforcement survives.
Why This Case Matters For Agency Power And Enforcement
At the heart of the fight is how far agencies can go in adjudicating and collecting civil penalties outside a jury trial. The carriers lean on the Supreme Court’s recent ruling in SEC v. Jarkesy, which curtailed the Securities and Exchange Commission’s use of in-house tribunals for fraud penalties. They argue the same principle applies to the FCC’s forfeiture regime, where companies often face significant financial exposure before any jury weighs in.
The FCC counters that its system is different. Under communications law, if a company refuses to pay, the government must sue in federal court to collect—giving the defendant the ability to demand a jury. The agency says that distinction preserves constitutional rights while allowing regulators to act swiftly when violations threaten consumers or the broader communications ecosystem.
How the Court draws that line could reverberate well beyond telecom. A ruling tightening access to jury trials for civil penalties may ripple through the enforcement playbooks of the FTC, CFPB, and EPA, potentially shifting power from agency adjudicators to Article III courts and altering the leverage regulators bring to settlement talks.
How The Fines Arose From Location Data Practices
The FCC penalties grew out of a yearslong probe into wireless carriers’ sale and sharing of real-time location data through third-party aggregators. Investigations by journalists and digital rights groups showed that sensitive location trails, intended for services like roadside assistance, leaked through a chain of intermediaries and were at times accessible to bail bondsmen and bounty hunters.
Following an Enforcement Bureau investigation, the FCC concluded major carriers failed to implement adequate safeguards and issued final forfeiture orders. Beyond the Verizon and AT&T fines, regulators also penalized other carriers, pushing total sanctions in this location-data sweep into the hundreds of millions of dollars. Privacy advocates hailed the action as overdue accountability for a market that had outpaced compliance. The carriers maintain they acted in good faith, terminated problematic arrangements, and dispute the legal pathway the FCC used to collect.
A Rare Circuit Split Sets The Stage For Review
Two appellate rulings teed up the Supreme Court review. The Fifth Circuit sided with AT&T, concluding the FCC’s fining scheme, as applied, infringed the right to a civil jury. In a separate track, the Second Circuit upheld the government’s position in the Verizon case, endorsing the agency’s argument that the opportunity for a jury arises at the collection stage and satisfies constitutional demands.
That conflict is exactly the kind of institutional disagreement the Supreme Court is designed to resolve. The Justice Department has urged the Court to take the cases to harmonize the rules, signaling the stakes for federal enforcement extend far beyond one set of telecom penalties.
What A Ruling Could Change For Civil Penalties
If the Court sides with the carriers, agencies may need to pivot more frequently to federal court before imposing large civil fines, building jury trials into the core of penalty actions rather than as an after-the-fact option. That could slow timelines, raise litigation costs, and constrain regulators’ ability to use administrative orders as a deterrent.
If the FCC prevails, expect enforcement agencies to view the decision as validation of existing penalty frameworks—especially where statutes already provide a path to a jury at the collection stage. Even then, the Court could announce guideposts that reshape how agencies structure notice, adjudication, and review to ensure due process.
What To Watch Next As The Supreme Court Weighs In
Key questions include how broadly the Court writes its opinion, whether it cabins the ruling to communications law or signals a standard for civil penalties across agencies, and what it says about remedies. A narrow ruling could tweak FCC procedures; a sweeping one might force Congress and regulators to revisit multiple enforcement statutes.
For consumers, the immediate issue remains privacy and accountability in the handling of location data. For companies and regulators, the larger question is who decides the facts—and when—before a multimillion-dollar fine becomes final. The answer will set the tone for digital-privacy enforcement and administrative power in the years ahead.
