During oral arguments on Tuesday, the Supreme Court appeared receptive to preserving the Federal Communications Commission's authority to levy substantial fines against telecommunications corporations, following critical concessions from the Biden administration regarding the limits of that power. The justices are scrutinizing a combined $100 million in penalties imposed on Verizon and AT&T for allegedly selling access to customers' real-time location data without proper consent.
The Constitutional Question
The telecom giants argue the FCC's administrative penalty process violates their Seventh Amendment right to a jury trial. They contend that being labeled a lawbreaker by their primary regulator inflicts severe reputational and financial harm, forcing them to settle even before the government files a formal lawsuit to collect. "Let's remake it where it is not even a paper tiger, it's truly just a piece of paper," argued Jeffrey Wall, the lead attorney for the companies, who also serves as one of former President Donald Trump's personal lawyers handling his New York conviction appeal.
However, the FCC and Justice Department maintain their system is constitutionally sound. They stress that a forfeiture order is not final; if a company refuses to pay, the agency must file a collection lawsuit in federal court, where a jury trial is available. "For the FCC, however, the only way it can get to the penalties is to file this collection suit where you do get a jury trial," stated Justice Department lawyer Vivek Suri, distinguishing it from other agencies like the SEC, which can garnish wages or tax refunds without a jury.
Judicial Skepticism and Analogy
The court's conservative justices, who recently curtailed the Securities and Exchange Commission's in-house enforcement powers, seemed to find the FCC's framework more palatable. Justice Clarence Thomas noted the government had "walked away" from its broader arguments, weakening the companies' position. Chief Justice John Roberts questioned whether the core complaint was merely a public relations problem rather than a legal injury, asking if the substantive issue was moot since "you are not obligated to pay until you get a jury."
Justice Amy Coney Barrett offered a pointed analogy, comparing the FCC's process to a criminal plea deal. "You have a choice. You can roll the dice and go and have a jury trial; otherwise, I'll give you a sweetheart deal and you can forget all that," she said, suggesting the carriers face a similar, permissible calculation. This line of questioning indicates the Court may rule that the pressure to settle an FCC fine, while significant, does not equate to a constitutional violation.
Broader Legal and Political Context
The case arrives as the Supreme Court continues to redefine the boundaries of federal agency power and procedural rights. It follows the landmark 2022 decision in SEC v. Jarkesy, which invalidated the SEC's use of in-house judges for certain fraud penalties. A ruling for the FCC would signal a limit to that precedent, preserving a key enforcement tool for telecommunications regulators. This legal battle over administrative power mirrors other contentious issues before the Court, including a major Colorado case examining the scope of religious liberty protections.
The underlying violations stem from a 2019 investigation, prompted by reports that a Missouri sheriff obtained location data through a third-party vendor. The FCC alleges the carriers broke rules requiring them to protect such sensitive information and obtain customer approval before sharing it. The case highlights ongoing tensions between privacy rights, corporate data practices, and regulatory oversight in the digital age—a conflict also evident in disputes over school policies on gender identity and student data.
While the justices seemed inclined to allow the FCC's current system to stand, they pressed the government on whether the process could be abused to coerce settlements. The companies urged the Court to issue an opinion ensuring FCC orders cannot "hang over their heads" as a threat. A final decision, expected by late June, will clarify the enforcement reach of a major federal regulator and set a precedent for how agencies balance administrative efficiency with constitutional guarantees.
