The US Supreme Court has agreed to hear a case that could limit the Federal Communications Commission's power to impose fines on telecom companies. The dispute stems from 2024 penalties totaling $196 million against AT&T, Verizon, and T-Mobile for selling customer location data without consent. Carriers argue the process violates their right to a jury trial, citing a recent securities ruling.
In a move that could reshape regulatory enforcement in telecommunications, the Supreme Court on Friday granted petitions from Verizon and the federal government, consolidating challenges related to FCC fines. The cases arise from actions taken in 2024, when the FCC imposed $196 million in penalties on the major carriers for sharing customer location information without consent, a practice first exposed in 2018. The commission stated the companies failed to protect against unauthorized disclosure.
AT&T successfully overturned its fine in the 5th Circuit Court of Appeals, which ruled that the FCC had acted as "prosecutor, jury, and judge," breaching the Seventh Amendment. In contrast, Verizon's appeal failed in the 2nd Circuit, and T-Mobile's in the District of Columbia Circuit. Those courts held that carriers could secure a jury trial by refusing payment, prompting the Justice Department to sue for collection.
The carriers draw on the Supreme Court's June 2024 decision in Securities and Exchange Commission v. Jarkesy, which struck down a similar SEC penalty system for lacking jury trial protections. Verizon's petition questions whether the Communications Act violates the Seventh Amendment and Article III by allowing FCC monetary penalties without guaranteed jury trials. It argues that paying the fine leads to deferential appellate review under the Administrative Procedure Act, while refusal risks reputational harm and an uncertain DOJ lawsuit.
The Trump administration supports the FCC's process, citing precedents like a 1899 Supreme Court ruling that permits jury trials on appeal and a 1915 case upholding agency liability decisions subject to judicial review. FCC Chairman Brendan Carr, who opposed the fines on authority grounds, now defends the agency's legal mechanisms. A ruling could impact T-Mobile's ongoing rehearing bid, potentially altering how the FCC enforces communications law.
