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Federal Communications Commission v. AT&T, Inc.

Facts of the Case

Provided by Oyez

Between 2014 and 2019, AT&T operated a location-based services program in which it collected and shared its customers’ mobile location data with third-party service providers such as Life Alert and AAA. To provide this data, AT&T contracted with “location aggregators,” who in turn resold the data to service providers. AT&T required those providers to obtain customer consent for each location request and reviewed their procedures, but it did not directly verify customer consent before transferring data. In 2018, news reports began revealing that some service providers misused or failed to adequately protect customers’ location data. In response, AT&T halted access for those providers, and by March 2019, shuttered the entire location-data program.

Prompted by these reports, the Federal Communications Commission (FCC) initiated an investigation and in 2020 issued a Notice of Apparent Liability (NAL), proposing a $57 million fine for AT&T’s purported violations of Section 222 of the Communications Act of 1934 and corresponding FCC regulations. AT&T challenged the classification of location data as “customer proprietary network information” (CPNI), asserted it had acted reasonably, and raised constitutional objections. After reviewing AT&T’s written response, the FCC rejected its defenses and issued a forfeiture order. Significantly, the FCC imposed the fine without a hearing or trial; AT&T’s only opportunity to respond occurred through written submissions to the agency.

AT&T paid the fine and petitioned the U.S. Court of Appeals for the Fifth Circuit for review. The Fifth Circuit vacated the forfeiture order, holding that the FCC’s in-house enforcement process violated AT&T’s rights under Article III and the Seventh Amendment.

Questions

  1. Are provisions of the Communications Act of 1934 that govern the Federal Communications Commission’s assessment and enforcement of monetary forfeitures consistent with the Seventh Amendment and Article III?

Conclusions

  1. The Seventh Amendment's right to a jury trial does not require the FCC to involve a jury when issuing forfeiture orders—penalties for rule violations—because those orders do not create a legal obligation to pay and carry no binding factual findings, leaving the ultimate determination of liability to a jury in any subsequent enforcement action. Chief Justice John Roberts authored the 8-1 majority opinion.

    The Seventh Amendment guarantees the right to a jury in civil lawsuits, but only requires that a jury make the final determination of facts before legal rights are conclusively resolved. Two features of the FCC's enforcement scheme satisfy that requirement. First, an FCC forfeiture order creates no actual obligation to pay: the agency cannot seize assets, penalties do not accrue for nonpayment, and the statute expressly bars the FCC from using an unpaid order against a company in future proceedings. Second, the only way the government can actually collect a penalty is by filing a separate civil lawsuit—a full trial de novo, meaning the case starts from scratch as if the FCC had never made any findings at all. A jury therefore gets the final word on both the facts and the law before any money changes hands. This structure mirrors earlier precedents upholding agency fact-finding that serves merely as a starting point for a later jury trial.

    The carriers' counterarguments do not change this analysis. The mandatory-sounding statutory language—that the FCC "determines," "assesses," and "imposes" penalties—reads differently in context of a scheme where the agency has zero power to enforce its own orders. This distinguishes the case from SEC v. Jarkesy (2024), where SEC penalties were immediately enforceable and no jury was available in any subsequent court proceeding, meaning the agency alone made the final determination. A forfeiture order is simply a prerequisite to filing suit—analogous to a right-to-sue letter—not a determination of legal rights, so the Seventh Amendment does not attach to it. Claims of reputational harm from the order also fail because the Seventh Amendment's text addresses only monetary disputes, and reputational harm is a common feature of preliminary legal proceedings that has never triggered jury-trial rights.

    Justice Clarence Thomas dissented, arguing that because the FCC's orders commanded payment within 30 days, enforcement courts at the time routinely denied full de novo review, and the carriers reasonably believed the orders were binding, the majority's conclusion that the carriers voluntarily paid effectively punishes them for complying in good faith with what appeared to be mandatory government commands.