AT&T and Verizon have lost their bid to wipe out FCC fines tied to the sale of customers’ real-time location data, after the Supreme Court ruled that the agency’s penalty process does not violate the Seventh Amendment right to a jury trial. In an 8-1 decision issued today, the court reversed a Fifth Circuit ruling that had favored AT&T and left intact the FCC’s authority to levy penalties that can later be tested in federal court.
Supreme Court sides with FCC process
The case centered on $104 million in fines imposed by the Federal Communications Commission in 2024 over violations first revealed in 2018. AT&T persuaded the US Court of Appeals for the 5th Circuit to overturn its penalty, while Verizon lost in the 2nd Circuit. The Supreme Court took the dispute to resolve the split, and Chief Justice John Roberts wrote the majority opinion.
Roberts said the FCC’s forfeiture process fits existing Supreme Court precedent because the orders at issue did not finally determine the carriers’ legal obligations. In the court’s view, the carriers had two paths: pay the fines and challenge them in appellate courts, or refuse to pay and force the government to seek collection through a separate judicial process that would include a jury trial.
“The FCC’s forfeiture proceedings fit comfortably within” the court’s Seventh Amendment precedents, Roberts wrote. He added that the orders “did not settle the carriers’ legal obligations because, stated simply, they did not create an obligation to pay,” and that before the companies could actually be made to pay, the government would have to prove its case to a jury.
Location data sales and consumer harm
The underlying FCC case involved the sale of users’ location data without consent. Advocacy group Public Knowledge said the companies sold access to customers’ location information and failed to stop “bounty hunters and even a rogue sheriff” from using it to track people who had no idea they were being followed.
John Bergmayer, the group’s legal director, said in a press release that the FCC investigated, found the carriers liable, and proposed penalties. He called the Supreme Court’s ruling the correct outcome and said AT&T and Verizon “tried to dodge all accountability” by arguing that the commission’s process denied them a jury trial.
Bergmayer also told Ars that the FCC can only enforce penalties through the courts, saying, “you can debate the framing, but that was already the law anyway.”
Why the carriers lost
AT&T and Verizon argued that FCC forfeiture orders create reputational and practical harm and therefore should trigger a jury trial even if no money changes hands immediately. The Supreme Court rejected that reasoning as inconsistent with the text of the Seventh Amendment, which applies to suits “where the value in controversy shall exceed twenty dollars.”
The court also said reputational harm does not create a special constitutional problem at the preliminary stage of a legal proceeding. Such harm, the majority noted, can arise before many types of cases are fully resolved, and that has never been treated as a Seventh Amendment violation.
During oral arguments, Justice Brett Kavanaugh appeared skeptical of the carriers’ position, telling their attorney that it seemed they had already “won on the law going forward” because the government acknowledged the orders were not directly enforceable without a jury-backed court proceeding.
Jarkesy and the limits of administrative fines
The carriers leaned heavily on the Supreme Court’s June 2024 decision in Securities and Exchange Commission v. Jarkesy, which held that the SEC could not impose certain civil penalties through its in-house administrative system without violating the jury-trial right. Today’s opinion said that case cut in the FCC’s favor, not against it.
The key distinction, the majority said, is that SEC penalties in Jarkesy were immediately enforceable. In contrast, FCC forfeiture orders do not themselves force payment. If the government wants to collect, it must bring a de novo trial in federal court, where the jury has the final say on the underlying legal violation.
“Thus, for the purpose of a §504 trial—the only means by which the Government can collect a penalty—it is as if the Commission never found any facts at all,” the court wrote. “Before a regulated party can be made to pay, the jury gets the last word.”
Thomas dissents
Justice Clarence Thomas was the lone dissenter. He argued that the FCC conducted its own adjudications rather than immediately going to court, and that the commission originally acted as if it could impose penalties without involving an Article III court.
Thomas said the government later changed its position during litigation, conceding that AT&T and Verizon would have been entitled to a trial de novo in federal court if they had refused to pay. In his view, the majority accepted a “newfound account” that the FCC’s orders were merely nonbinding notices.
Thomas wrote that the ruling should guide future enforcement but said it did not save the FCC’s handling of this case. He argued that the companies paid under protest, preserved their objections, and then litigated the matter effectively enough to prompt the government to revise its theory years later.
What happens next
The practical effect of the ruling is to preserve the FCC’s ability to investigate alleged misconduct, assess penalties, and then rely on federal courts if it needs to collect. Supporters of the agency said that flexibility is essential to consumer protection and telecom enforcement.
For AT&T and Verizon, the decision closes the door on one legal route to erasing the fines linked to location-data sales. The broader dispute over how carriers and regulators handle sensitive customer data, however, is likely to remain a live policy issue as enforcement continues.
Source: Original report
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Last Modified: July 7, 2026 at 9:36 pm
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