On Tuesday, the Supreme Court will hear oral arguments in a case that places fcc enforcement authority under a hard constitutional spotlight. At issue is whether two telecommunications companies can force a wider rethink of how federal agencies decide violations, issue penalties, and move disputes into the court system.
What is the Supreme Court being asked to decide?
The case centers on whether Congress can let agencies internally determine legal and regulatory violations before a company ever sees a jury. AT&T and Verizon are challenging FCC findings that they violated consumer privacy rules and owed $57 million and $47 million, respectively. The companies say the process created by Congress in 1960 violates the constitutional right to a jury trial.
That challenge gives the justices a chance to review a system the FCC uses to issue determinations about possible violations of law and regulations. Under the current process, companies can contest those findings in a federal appeals court or wait for the Justice Department to file a lawsuit to collect the funds, which would allow a jury trial route.
Why does this fcc case matter beyond two telecom companies?
The stakes go beyond one enforcement dispute. The parties in the case and legal experts say a ruling for AT&T and Verizon could affect the processes dozens of agencies use to adjudicate legal violations. That would not only alter how penalties are handled, but also shift more disputes into federal courts.
Daniel Lyons, a nonresident fellow at the American Enterprise Institute and a law professor at Boston College, said the case could combine with other recent Supreme Court rulings restricting federal agencies to produce a broader institutional shift. He said the result could move decision-making away from internal agency judges and toward more time-consuming and costly litigation.
“In the short run, the policy impacts of this will be really significant. Agencies will wind up doing a lot less than we as a society expected them to do over the last 20-30 years, ” Lyons said.
How did the dispute between the FCC and the carriers develop?
In 2024, the FCC issued forfeiture notices for alleged violations of data privacy rules involving incidents where third parties could gain access to users’ location data from aggregator companies with contracts tied to the carriers. AT&T and Verizon then challenged the notices in federal appeals courts rather than waiting for a Justice Department lawsuit to collect the money.
The lower courts split. The U. S. Court of Appeals for the 5th Circuit threw out the FCC forfeiture against AT&T, finding the law violated the company’s 7th Amendment right to a jury trial. The U. S. Court of Appeals for the 2nd Circuit reached the opposite conclusion in Verizon’s case and upheld the proceedings.
What do the companies and the government say?
The companies argue that the Constitution does not permit Congress or federal agencies to create a process in which legal liability can be imposed without a jury trial first. They also say the FCC finding caused negative press coverage and reputational harm, and could be used against the companies in other agency proceedings.
In a combined brief at the Supreme Court, the companies said: “Congress empowered the earliest administrative agencies to investigate and make tentative recommendations when hearing private disputes, not to issue binding judgments with the force of federal law. ”
The Trump administration is defending the FCC process, arguing that the agency’s notice is not itself binding. In the administration’s view, the notice tells a company it may face legal liability in the future, while the finding of wrongdoing alone does not require payment.
The administration said in its brief: “Congress went beyond the constitutional minimum by directing the Commission to issue a notice of apparent liability and provide an opportunity to respond in writing. ”
As the justices take up fcc authority, the case is likely to be watched closely by agencies, carriers, and companies that rely on administrative review to resolve disputes. For now, the practical question remains stark: whether a process built to move faster and inside the agency can survive a constitutional challenge that reaches into the structure of federal enforcement itself.
