Megan Barbero, Courtney Dixon, and Katelyn Ghasemi authored the Law360 article “Justices' FCC Fine Ruling May Weaken Agency Leverage,” examining the implications of the U.S. Supreme Court's recent decision on the Federal Communications Commission's enforcement authority. The following is an excerpt:
On June 4, in Federal Communications Commission v. AT&T Inc., the U.S. Supreme Court held that the FCC's administrative forfeiture orders do not violate the Seventh Amendment.
In an 8-1 decision, the court concluded that the FCC framework is constitutional because forfeiture orders may be enforced only through a subsequent judicial proceeding where the respondent may demand a de novo jury trial.
The decision largely preserves the FCC's existing enforcement framework. But by clarifying that administrative forfeiture orders do not, by themselves, create a legally enforceable obligation to pay, the court has reduced the incentives for regulated entities to pay voluntarily and shifted the burden to the U.S. Department of Justice to bring resource-intensive collection actions in federal court.
Background of the Dispute
After the FCC assessed forfeiture penalties of approximately $57 million against AT&T and $47 million against Verizon for allegedly violating a statutory duty to safeguard customer data, AT&T and Verizon paid the penalties and filed petitions for review in the U.S. Courts of Appeals for the Second and Fifth Circuits.
They argued that "the after-the-fact possibility of a jury trial in a separate debt-collection action" does not satisfy the Seventh Amendment, relying on the Supreme Court's 2024 decision in U.S. Securities and Exchange Commission v. Jarkesy.
For the full article, click here.