The Supreme Court has agreed to resolve a circuit split on whether the Seventh Amendment's jury-trial guarantee and Article III permit a statutory scheme that allows the Federal Communications Commission (FCC) to impose monetary penalties in an administrative proceeding without a jury. The government's principal defense is that the fined party can get a jury if it refuses to pay because the government cannot collect those penalties without filing an enforcement action in federal district court. The consolidated cases, FCC v. AT&T and Verizon Communications Inc. v. FCC, will provide the Court with an opportunity to further define the scope of its landmark decision SEC v. Jarkesy from two terms ago.
In Jarkesy, the Court held that the statutory scheme authorizing the SEC to impose civil money penalties in a securities fraud case in its in-house administrative proceedings violated the Seventh Amendment. And the Court stressed that the civil penalty remedy was "all but dispositive" of the Seventh Amendment claim. Post-Jarkesy, a defendant has a right to a jury trial if the SEC seeks to impose civil money penalties—a remedy that is intended to punish or deter wrongdoing—for a violation that is rooted in the common law, like fraud or negligence.
In the pending cases, the FCC imposed "forfeiture penalties" under the Communications Act in its administrative proceedings. But the government claims that the carriers could have chosen a jury trial and opted not to. How so? The government argues that the carriers effectively waived a jury trial by electing to pay the forfeiture penalties. Had the carriers instead refused to pay the penalties, the Department of Justice could have initiated a collection action in federal district court, which would have provided the right to a de novo jury trial. By paying the penalties, the carriers limited themselves to a petition for review in the courts of appeals, where no jury is available. One challenge with this theory is the burdens it imposes on the Seventh Amendment jury-trial right: a jury is available, but only after the FCC issues an enforceable order and the carrier refuses to pay—taking on the reputational and business harms of failing to abide by a final decision of the FCC. That is no small ask to get to a jury.
Over the decades, Congress has increasingly given administrative agencies the power to determine liability and impose penalties for statutory violations through in-house, administrative proceedings. The Supreme Court held in Jarkesy that respondents in these proceedings have a right to a jury trial where the agency seeks civil penalties and the statutory cause of action has a common-law analogue. The government now asks the Court to hold that the Seventh Amendment is satisfied where a respondent could have a right to a jury trial, if it refuses to comply and the government seeks to enforce the penalty. A Supreme Court decision in favor of the carriers, finding that the FCC proceedings violated their right to a jury trial, could highlight the breadth of Jarkesy's reach and the limited sphere left for Congress to authorize agencies to impose money penalties.
The consolidated cases are Verizon Communications Inc. v. Federal Communications Commission, No. 25-567, and Federal Communications Commission v. AT&T, No. 25-406.