US Supreme Court justices on Monday expressed doubt about AT&T and Verizon's argument that the Federal Communications Commission's fine procedures violate their right to a jury trial. The carriers, fined $104 million for sharing users' location data without consent, paid the penalties before challenging them. Justices and FCC lawyers agreed the fines are nonbinding without court enforcement.
During oral arguments, several justices pointed out that AT&T and Verizon could have secured a jury trial by refusing to pay the fines and awaiting a government enforcement action in court. The carriers instead paid and appealed to circuit courts. AT&T prevailed in the 5th Circuit, while Verizon lost in the 2nd Circuit, leading to the Supreme Court cases consolidated before the bench. Jeffrey Wall, representing the carriers, argued that FCC forfeiture orders had long been viewed as compulsory, pressuring companies to pay to avoid reputational harm or regulatory issues. He contended this setup penalizes the exercise of Seventh Amendment rights, likening it to schemes struck down in the 2024 SEC v. Jarkesy decision. Justice Brett Kavanaugh acknowledged to Wall that the government appeared to be retreating, stating, “It seems like you’ve won on the law going forward, one way or the other.” Government attorney Vivek Suri countered that FCC orders function like indictments, authorizing lawsuits but imposing no final penalty until a de novo jury trial. He noted the FCC has described its orders as nonbinding since the 1970s and suggested clarifying language to avoid future disputes. Chief Justice John Roberts remarked that nonpayment posed mainly a “PR problem” for the carriers, while Justice Sonia Sotomayor emphasized that FCC findings do not create legal obligations absent a jury verdict. The Trump administration defended fines issued under Biden, highlighting the FCC's reliance on such penalties for privacy and security enforcement.
