Supreme Court Signals FCC Fines Are Nonbinding, AT&T and Verizon May Still Win Despite $104M Penalty

AT&T and Verizon face a combined $104 million fine from the Federal Communications Commission (FCC) for selling users' real-time location data without consent. The two carriers argue that the FCC's procedure for imposing these fines violates their Seventh Amendment right to a jury trial. Today's Supreme Court oral arguments focused on whether carriers could have secured a jury trial by declining to pay the fine and awaiting an FCC enforcement action in federal court.

Justices expressed skepticism regarding the carriers' specific claim of a jury trial deprivation. However, a significant shift in the legal landscape emerged during arguments. Justice Brett Kavanaugh noted that AT&T and Verizon have "won on the law going forward" regardless of the immediate case outcome. This observation followed a government lawyer's statement that the FCC could modify its forfeiture orders—the official notices imposing fines—to clarify that payment is not required until after a jury trial.

This development suggests a procedural victory for companies facing FCC penalties. Even if the Supreme Court rules against AT&T and Verizon on their specific Seventh Amendment argument, the FCC's approach to enforcing fines may fundamentally change. The agency would likely need to initiate a separate court action to collect unpaid fines, thereby providing companies with the jury trial opportunity they seek. This effectively means future FCC fines could serve as an initial claim, requiring judicial enforcement rather than immediate payment. This clarification could provide regulated entities with a clearer path to challenge penalties in court, altering the balance in FCC enforcement actions.

Future FCC forfeiture orders will likely include revised language. Companies will monitor how these changes affect enforcement actions and potential litigation strategies, particularly regarding the timing and necessity of court intervention.