Megan Barbero spoke with MLex about the U.S. Supreme Court's decision in FCC v. AT&T. Her comments appeared in the article, “FCC's Authority to Fine Survives, but Its Ability to Collect May Be Tested.” An excerpt is below.
"What we saw the Supreme Court grappling within the FCC case was really the scope of the Jarkesy decision," said Megan Barbero, a partner at Venable LLC. She noted that during oral argument, questions were aimed at whether the FCC's orders were similar to the SEC's binding civil penalties that were struck down.
She said what matters is the kind of remedy being imposed in the end. If the agency is issuing what is "essentially a suggestion of payment, not legally binding, not self-enforceable," the agency's process survives so long as the DOJ must go to court, where the company can demand a jury trial, before the penalty can be enforced.
Barbero said this shifts the burden to the DOJ to determine what orders to enforce, which "has opened a whole new realm of enforcement that the agency may be required to engage in."
Recognizing that bringing a lawsuit is no small lift for the government, this could embolden some companies to test the waters by refusing to pay.
"It's a significant resource commitment for the DOJ to enforce those types of forfeiture orders in court. Defendants can demand a jury trial, and I expect what we will see going forward is there will be more testing of that," Barbero said.
That puts the DOJ in the tricky position where it may have to come out swinging to prevent such a strategy from gaining a foothold.
"I imagine there will be a strong interest at DOJ in bringing enforcement suits at least initially if they have regulated entities that are not paying. Otherwise, you can imagine a regime where entities opt out of paying the forfeiture and if DOJ doesn't follow up with an enforcement action you create a regime where you have a toothless process," Barbero said. "And if there's also broad noncompliance with these nonenforceable orders, it takes away the negative press and reputational harms that have been motivating companies to comply. DOJ will want to guard against that outcome, so we'll see enforcement actions, at least initially."
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