The U.S. Supreme Court has upheld the Federal Communications Commission’s authority to impose fines through its administrative enforcement process, rejecting a challenge from wireless carriers AT&T and Verizon that argued the system violated their constitutional right to a jury trial.
In an 8-1 decision issued Thursday, the court ruled that the FCC’s process for assessing civil penalties does not infringe on protections guaranteed by the Seventh Amendment. The case centered on millions of dollars in fines imposed on the companies for allegedly failing to adequately protect customers’ location data.
Chief Justice John G. Roberts Jr., writing for the majority, said the FCC’s forfeiture orders do not automatically require companies to pay penalties and therefore do not deny them access to a jury trial.
The companies could have challenged the penalties by refusing to pay and pursuing the matter in federal court, where a jury could ultimately decide the case, the court said.
The FCC orders “did not create an obligation to pay,” Roberts wrote. He added that the companies were not “impermissibly coerced” into surrendering their trial rights because before a party “can be made to pay, the jury gets the last word.”
Justice Clarence Thomas was the lone dissenter.
The ruling represents a victory for the FCC and for the Trump administration, which defended the agency’s forfeiture process as one of its most frequently used enforcement tools.
The case stemmed from FCC penalties approved in 2020 after the agency determined that wireless carriers had improperly sold access to customers’ location information without obtaining user consent. The FCC fined AT&T more than $57 million and Verizon more than $48 million. The agency also imposed fines on T-Mobile and Sprint, bringing the total penalties to nearly $200 million.
According to the FCC, the carriers tracked cellphone users’ locations and sold the information to third parties, which used it to provide services such as roadside assistance. Regulators concluded that the practice compromised sensitive location information belonging to tens of millions of consumers.
AT&T paid its fine but appealed. The U.S. Court of Appeals for the Fifth Circuit ruled in the company’s favor, finding that the Communications Act of 1934 violated its right to a jury trial. Verizon also paid its penalty and challenged the FCC’s actions, but the U.S. Court of Appeals for the Second Circuit rejected the company’s argument, concluding that Verizon could have obtained a jury trial by declining to pay.
The conflicting appellate rulings helped send the dispute to the Supreme Court.
The companies argued that the FCC’s administrative process improperly allows agency officials to serve as prosecutor, fact-finder and adjudicator before imposing penalties. They also contended that the agency’s actions could damage a company’s reputation before it has an opportunity to defend itself before a jury.
Roberts dismissed those concerns in the majority opinion.
“Reputational harm may befall any party in the preliminary stage of a legal proceeding. The filing of a complaint may trigger negative press. So too may the filing of an indictment against a criminal defendant,” he wrote. “Yet this has never been thought to pose a Seventh Amendment problem.”
The case was closely watched because it tested the authority of federal agencies to enforce regulations through internal proceedings. Administrative agencies have increasingly faced legal challenges from critics who argue that certain enforcement actions should be handled in court rather than through agency processes.
The Supreme Court previously limited the Securities and Exchange Commission’s use of in-house tribunals in a 2024 ruling involving securities fraud penalties. In Thursday’s decision, however, the court found that the FCC’s process differs because its orders are not immediately enforceable and can ultimately be challenged before a jury.
FCC Chairman Brendan Carr welcomed the ruling, saying the agency would “continue to hold companies accountable,” The New York Times reported.
Supporters of the decision said it preserves enforcement powers used by multiple federal agencies. Caroline Flynn, an attorney with Earthjustice, said the ruling protects the government’s ability to carry out regulations affecting consumers, communities and the environment.
“By rejecting this unsupported attack on agency authority, the court’s decision safeguards the government’s ability to enforce laws that protect people, communities and the environment — and makes clear this case was never about the Constitution, but an effort to dismantle how agencies enforce the law,” Flynn said in a statement, per The Times.
The decision leaves intact a regulatory framework used not only by the FCC but also by other federal agencies that rely on civil penalties as part of their enforcement efforts.
