The US supreme court backed the Federal Communications Commission’s system for levying fines, ruling on Thursday against wireless carriers AT&T and Verizon in their challenge to the agency and handing a win to Donald Trump’s administration.
The ruling was 8-1. At issue in the legal dispute was whether the agency’s in-house proceedings for imposing the penalties deprived the companies of their right to a jury trial under the US constitution. Trump’s administration defended the FCC’s system for assessing financial penalties, known as forfeiture orders.
The conservative chief justice, John Roberts, authored the ruling. Clarence Thomas, a conservative justice, was the court’s lone dissenter.
The court embraced the Trump administration’s argument that the FCC’s in-house system does not stop parties from bringing legal challenges to the agency’s assessments.
The legal dispute marked the latest case to test whether a federal agency’s internal enforcement arrangement violates the constitutional right to a jury trial after the supreme court in 2024 curbed the power of in-house proceedings at the Securities and Exchange Commission.
The FCC fined AT&T $57m and Verizon nearly $47m after the agency concluded that the companies had unlawfully sold access to customer location data to third parties without securing the consent of users.
In all, the FCC imposed nearly $200m in fines on carriers that it said failed to safeguard customer data. It fined T-Mobile $80m and Sprint, which T-Mobile acquired in 2020, $12m.
Verizon and AT&T paid the fines they were assessed, but also filed legal challenges that eventually led to a split among regional US appellate courts over the lawfulness of the FCC’s in-house procedure for imposing the penalties.
In the government’s defense of the FCC’s in-house system, justice department lawyers had argued that the agency’s assessments were not binding. If the government were to bring an enforcement action in court, it would allow the companies to make their case before a jury, the lawyers argued.
The companies, for their part, said that the FCC’s system impermissibly uses in-house proceedings for a process that belongs in court, depriving them of their right to a jury trial. The FCC’s initial assessments, they added, inflict reputational harm before the accused have had their day in court.
