The Supreme Court on Thursday handed regulators a decisive victory, ruling that the Federal Communications Commission can levy penalties against wireless carriers without subjecting the process to a jury trial. The 8-1 decision rejected arguments from AT&T and Verizon that the agency's enforcement system violated constitutional protections.
Chief Justice John Roberts wrote the majority opinion, with Justice Clarence Thomas as the sole dissenter. The case centered on whether the FCC's internal penalty system, known as forfeiture orders, unlawfully deprived the carriers of their right to a jury trial.
At stake were fines totaling nearly $200 million imposed across the wireless industry. The FCC had determined that AT&T, Verizon, T-Mobile, and Sprint improperly sold customer location data to third parties without user consent. AT&T faced a $57 million penalty and Verizon nearly $47 million. T-Mobile was fined $80 million, while Sprint, now part of T-Mobile, received a $12 million assessment.
Both companies paid their fines but challenged the legality of how they were assessed. The dispute created a split among federal appeals courts before reaching the nation's highest bench.
The Trump administration defended the FCC's approach in court filings, arguing that the agency's initial assessments do not represent final judgments. Justice Department lawyers contended that companies retain the right to contest penalties in federal court, where a jury would have the opportunity to hear their case. Under this interpretation, the agency's in-house proceedings do not extinguish constitutional protections.
Verizon and AT&T countered that the FCC's system impermissibly shifted enforcement matters that belong in courtrooms into administrative proceedings. The companies argued that reputational damage occurs once the agency makes public its initial findings, leaving defendants vulnerable before having their moment in front of a jury.
The ruling represents the latest chapter in an ongoing debate over federal agency power. In 2024, the Supreme Court moved to curtail the enforcement authority of the Securities and Exchange Commission's in-house proceedings, creating uncertainty about whether similar restrictions would apply across the regulatory landscape. Thursday's decision clarifies that the FCC's process survives constitutional scrutiny.
Author James Rodriguez: "This is a watershed moment for the FCC and a sobering reminder that agencies have more structural flexibility in enforcement than the recent SEC decision suggested."
Comments