The U.S. Supreme Court on Thursday delivered a significant victory to the Trump administration by upholding the Federal Communications Commission's (FCC) system for imposing fines, ruling 8-1 against wireless carriers AT&T and Verizon in their constitutional challenge.
Background of the Legal Dispute
At the heart of the case was whether the FCC's in-house penalty proceedings, known as forfeiture orders, violated the companies' right to a jury trial under the U.S. Constitution. The Trump administration defended the FCC's process, arguing it was lawful and necessary for efficient enforcement.
The FCC had fined AT&T $57 million and Verizon nearly $47 million after determining that the companies unlawfully sold access to customer location data to third parties without obtaining user consent. In total, the agency imposed nearly $200 million in fines on carriers for failing to safeguard customer data, including $80 million on T-Mobile and $12 million on Sprint, which T-Mobile acquired in 2020.
Conflicting Appellate Rulings
Verizon and AT&T paid the fines but filed legal challenges that led to a split among federal appellate courts. In Verizon's case, the New York-based 2nd U.S. Circuit Court of Appeals upheld the fine, ruling that the Constitution permits the FCC to make an initial penalty assessment as long as the accused can challenge collection efforts in court. Verizon then appealed to the Supreme Court.
In AT&T's case, the New Orleans-based 5th U.S. Circuit Court of Appeals ruled that the FCC's initial assessment of wrongdoing and fine deprived the company of its constitutional right to a jury trial. That prompted the FCC to appeal to the Supreme Court.
Supreme Court Decision and Implications
The legal dispute was the latest to test whether a federal agency's internal enforcement arrangement violates the jury trial right, following a 2024 Supreme Court ruling that curbed in-house proceedings at the Securities and Exchange Commission. In defending the FCC's system, Justice Department lawyers argued that the agency's assessments are not binding and that companies can make their case before a jury if the government brings an enforcement action in court.
The companies countered that the FCC's system impermissibly uses in-house proceedings for a process that belongs in court, depriving them of a jury trial, and that initial assessments cause reputational harm before they have their day in court.
The Supreme Court in 2025 also issued an important ruling endorsing how the FCC funds its multi-billion-dollar program to expand phone and broadband internet access to low-income and rural Americans.
