The U.S. Supreme Court today handed the Federal Communications Commission a significant enforcement victory, ruling 8-1 that the agency has the constitutional authority to impose financial penalties on telecommunications companies through its in-house adjudication process — without first providing a jury trial.
The decision, issued in the consolidated cases FCC v. AT&T and Verizon Communications v. FCC, resolves a years-long legal dispute over nearly $200 million in fines the FCC levied against the nation’s largest wireless carriers for selling customer location data to third parties without securing user consent. Chief Justice John Roberts wrote the majority opinion. Justice Clarence Thomas was the sole dissenter.
The ruling hands a win to the Trump administration, which defended the FCC’s system for assessing financial penalties, known as forfeiture orders.
How the Case Got Here
The fines at the center of the dispute were imposed in 2024 following an FCC investigation that found the four largest wireless carriers had sold access to customer location data to aggregators who resold it to third-party service providers — including, notably, a Missouri sheriff who used a commercial location-finding service to track individuals without a court order.
The FCC assessed penalties totaling nearly $200 million: $57 million against AT&T, nearly $47 million against Verizon, $80 million against T-Mobile, and $12 million against Sprint, which T-Mobile acquired in 2020.
Verizon and AT&T paid the fines but simultaneously filed legal challenges, arguing that the FCC’s in-house adjudication process — under which the agency both investigates and imposes penalties without a jury trial — violated their Seventh Amendment right to a jury trial. Those challenges produced a split between federal appellate courts. The New York-based 2nd U.S. Circuit Court of Appeals upheld the FCC’s fine against Verizon, while the New Orleans-based 5th U.S. Circuit Court of Appeals reached a different conclusion in AT&T’s case — setting up the Supreme Court review.
What the Court Decided
Chief Justice John Roberts wrote for the majority, concluding that the FCC’s administrative process fits within longstanding Seventh Amendment precedent because a jury trial remains available before legal rights and obligations are finally determined.
The decision also distinguishes the FCC’s forfeiture process from the Securities and Exchange Commission enforcement system, the Supreme Court struck down in SEC v. Jarkesy in 2024, in which the SEC’s administrative penalties were found to violate the Seventh Amendment because they were immediately enforceable and left factual determinations with the agency. The FCC’s forfeiture orders do not create a binding obligation to pay — the Commission has no power to seize assets, impose interest on unpaid fines, or penalize a regulated party simply for ignoring a forfeiture order.
An Important Nuance
While the ruling is broadly characterized as a win for the FCC, a careful reading of the majority opinion reveals a more qualified picture of what the agency’s enforcement authority actually means in practice.
The FCC’s forfeiture orders are constitutional — but they are not self-executing. A company that receives a forfeiture order and refuses to pay forces the government’s hand: the Department of Justice must file a civil enforcement suit, and that suit proceeds as a trial de novo, with a jury having the final word on the facts. The DOJ retains discretion over whether to bring that enforcement action at all, and has a five-year window in which to do so.
What this means is that the FCC’s enforcement mechanism is real and now constitutionally settled — but a determined company has a path to contest any fine in open court before it becomes a legally binding obligation. The FCC wins the right to issue the penalty and build the record. A company that wants to fight it must do so before a judge and jury at the collection stage.
Justice Thomas, in his lone dissent, noted a practical inequity in the outcome. At the time AT&T and Verizon paid the fines, the FCC’s own orders commanded payment within 30 days and explicitly asserted that the penalties were not subject to Seventh Amendment protections. Both companies paid in good faith reliance on those orders. The majority’s recharacterization of those orders as nonbinding, Thomas argued, offered the companies nothing in return for having complied.
The Court left open whether the carriers might be entitled to a refund, declining to address that question.
What It Means for the Telecom Industry
For the industry broadly, today’s ruling settles a constitutional question that has been in litigation since 2024. The FCC’s authority to issue forfeiture orders is now established law. Carriers and communications companies can no longer argue that the agency’s in-house enforcement mechanism is unconstitutional — that argument has been closed.
The practical consequence is that any company facing FCC enforcement action must now engage with the process rather than challenge its legitimacy. If it disagrees with the penalty, its recourse is to contest the facts in court — not to argue the agency lacked the authority to fine it in the first place.
For FCC Chairman Brendan Carr, the ruling preserves and confirms the enforcement toolbox he inherited. The agency’s ability to investigate, document violations, and issue forfeiture orders is constitutionally sound. Whether and how aggressively the FCC uses that authority across a range of pending regulatory matters is now a policy question, not a legal one. The question is no longer whether the FCC can act. It is whether it will.
