The U.S. Supreme Court is grappling with a challenge presented by telecommunications giants AT&T and Verizon, which questions the constitutionality of fines imposed by the Federal Communications Commission (FCC). AT&T and Verizon argue that these penalties, exceeding $100 million collectively, breach their Seventh Amendment right to a jury trial. The crux of the matter centers on whether FCC fines, issued through administrative proceedings, deprive companies of the opportunity to opt for a jury trial—a right preserved for “suits at common law” as per the constitutional amendment.
This dispute looks back at a similar case, SEC v. Jarkesy, where the Securities and Exchange Commission’s penalties were ruled to violate the Seventh Amendment. The case currently before the court, FCC v. AT&T, derives from administrative actions whereby the agency concluded that both AT&T and Verizon violated a portion of the Telecommunications Act of 1996, by not adequately protecting confidential customer data.
In advocating for the telecommunication carriers, Jeffrey Wall criticized the process, emphasizing the absence of an option for obtaining a jury trial prior to the imposition of penalties. According to Wall, labeling the FCC’s actions as “invitations to pay” undermines the binding nature exhibited by the orders. On the other hand, Vivek Suri of the DOJ, defending the FCC, contended that these orders only become binding when subject to enforcement action by the DOJ, which would then allow for a jury trial to take place.
The Justices appeared to be partially convinced by the notion that these orders are nonbinding until reviewed by a federal court. Chief Justice John Roberts and Justices Amy Coney Barrett and Ketanji Brown Jackson questioned whether the perceived non-binding nature of the orders indeed necessitated a jury, considering the available judicial review.
In questions of lasting consequence, Justices expressed concern over the penalties’ reputational impacts on the telecommunications entities, yet Suri reassured them, indicating that the orders carry no legal weight in future DOJ proceedings.
A ruling in this case is expected later in the year, potentially influencing future interpretations of the Seventh Amendment’s application to administrative proceedings. More details can be found on SCOTUSblog.