In America: Verizon and AT&T Lose Supreme Court Case Against the FCC
Earlier this month, the US Supreme Court ruled in favor of the Federal Communications Commission (FCC) in a set of cases involving Verizon and AT&T. In an 8-1 decision with Justice Thomas dissenting, the Supreme Court ruled that the FCC’s issuance of a forfeiture order without a jury did not violate the 7th Amendment's right to trial by jury.
Cell service providers, such as AT&T and Verizon, require phones to connect to the nearest cell site on their networks regularly. This mechanism allows phones to seamlessly connect to the internet and provide information, such as location data, relative to these cell-site connections. Until 2019, cell service providers sold location data to location-finding providers. Infamously, the location-finding provider Securus was the subject of intense scrutiny after it was discovered that law enforcement officers could use its data to track a person’s location without a warrant.
Following these findings, the FCC launched an investigation into these practices, which culminated in fines issued in 2024 to both Verizon and AT&T. At this point, Verizon and AT&T could either ask a federal appeals court to review the FCC’s order or wait to see whether the Department of Justice (DOJ) enforces the fines. Ultimately, Verizon and AT&T chose to bring the case to a federal appeals court and argued that the FCC’s enforcement procedures violated their 7th Amendment right to trial by jury.
The 5th Circuit Court of Appeals ruled in favor of AT&T and threw out the FCC’s penalty order, while the 2nd Circuit Court of Appeals ruled against Verizon. These conflicting rulings led to the Supreme Court’s expedited uptake of the case and ultimate ruling in favor of the FCC.
Central to this case is the Communications Act of 1934, which governs how the FCC investigates potential violations of communications law and what fines or penalties it may impose. AT&T’s central argument is that the Communications Act allows the FCC to find facts, interpret the law, determine guilt, and impose punishments without a jury's involvement. In Chief Justice Roberts’ opinion, the FCC’s forfeiture orders against AT&T and Verizon do not violate the 7th Amendment because they are not conclusive and require the Department of Justice to compel payment for these penalties. If the Department of Justice pursues legal action to compel payment, it would also have to build its case from scratch to be heard before a jury.
“The orders at issue did not settle the carriers’ legal obligations because, stated simply, they did not create an obligation to pay. And the orders did not reflect the ultimate determination of any fact because, before the carriers could have been made to pay, the Government was required to prove its case to a jury.” – Chief Justice Roberts, US Supreme Court Majority Opinion.
In other words, the Supreme Court confirmed that FCC fines are nonbinding and can only be enforced by a court through legal action initiated by the Department of Justice.
Another point of contention for the legal teams representing AT&T and Verizon is that Section 503 of the Communications Act appears to make FCC fines mandatory. Reiterating the point that FCC fines are nonbinding without legal action, the Supreme Court argued that the compulsion to pay FCC fines would have to be heard in court before a jury.
“The carriers’ argument is thus something like a criminal defendant arguing that his right to trial by jury is infringed when the prosecutor decides to dismiss the indictment before trial.” – Chief Justice Roberts, US Supreme Court Majority Opinion.
The implication here is that AT&T and Verizon paid the FCC fines voluntarily and thus were under no obligation to receive a jury trial, but had they refused to pay such fines, they would have been entitled to a jury trial consistent with the 7th Amendment.
In his dissenting opinion, Justice Thomas agreed with the majority that FCC orders are nonbinding and can be enforced only through legal action by the Department of Justice. However, Justice Thomas questioned the aforementioned implication accepted by the Supreme Court's majority opinion.
“The Court does so because the Commission, after AT&T and Verizon paid it over $100 million, took the position that its orders were not really binding after all. The Commission now agrees that AT&T and Verizon would have been entitled to a jury trial de novo in an Article III court had they declined to pay. Because its orders were not binding until after that jury trial, the Commission says, AT&T and Verizon in reality paid the Commission voluntarily. The Court accepts that account and does not grant the carriers any relief.” – Justice Clarence Thomas, US Supreme Court Dissenting Opinion.
Continuing his dissent, Justice Thomas also questions whether AT&T and Verizon knew that FCC orders were nonbinding. In this case, AT&T and Verizon would have no way to ensure they would be granted a jury trial consistent with the 7th Amendment.
Overall, the Supreme Court's ruling in favor of the FCC is a major blow to the nation’s leading cellular service providers, AT&T and Verizon. While the case centered on the right to trial by jury and the scope of the FCC’s authority to issue and enforce fines, the decision demonstrates that consumer protection rights regarding location data remain a top priority for the United States' highest court.