When the FCC Fines You Without a Jury: Unpacking the Supreme Court’s AT&T Decision

Tony: Hello, I’m Tony Mangino from TC2, and this is Staying Connected—where we talk about what really matters to enterprise buyers navigating today’s technology and sourcing decisions. Today we’re diving into a major Supreme Court ruling decided on June 4, 2026—one that every company regulated by the FCC should be paying close attention to. I’m here again with Steve Rosen, a partner at LB3 who knows the ins and outs of regulatory compliance and enforcement. Steve, welcome back.

Steve: Thanks, Tony. This one is big. The case is FCC v. AT&T, Inc., and it addresses a question that’s been hanging over FCC enforcement for years: can the Commission fine you—order you to pay millions of dollars—without ever giving you a jury trial?

Tony: Let’s set the stage for folks who haven’t been following this. What exactly happened here?

Steve: So, AT&T and Verizon—two of the country’s biggest cellular carriers—were under investigation by the FCC for mishandling customer location data. Back in 2018, news reports revealed security breaches in the carriers’ location-based services programs. One high-profile incident involved a company called Securus, which provided location-finding services to law enforcement. A Missouri sheriff was reportedly able to access customer location data by uploading utterly irrelevant materials instead of a proper warrant.

Tony: And the penalties weren’t small, right?

Steve: Not at all. The FCC issued forfeiture orders assessing roughly $57 million against AT&T and about $47 million against Verizon—so over $100 million combined. The carriers paid those penalties, but they challenged the orders in court, arguing that requiring them to pay forfeitures without the opportunity for a jury trial violated the Seventh Amendment to the Constitution.

Tony: And this ended up at the Supreme Court because the lower courts couldn’t agree?

Steve: Exactly. You had a circuit split. The Fifth Circuit—hearing AT&T’s case—sided with the carrier and vacated the FCC’s order, holding that the Commission’s enforcement procedures violate the Seventh Amendment because by the time it issues a forfeiture order, the FCC has “already found the facts, interpreted the law, adjudged guilt, and levied punishment”—all without a jury. Meanwhile, the Second Circuit—hearing Verizon’s case—went the other way. That court said the FCC’s forfeiture order doesn’t, by itself, compel payment. The Department of Justice still needs to initiate a collection action before the carrier can be made to pay. So the Second Circuit held there was no Seventh Amendment violation. The Supreme Court took both cases to resolve the conflict.

Tony: All right, so let’s break down the legal questions for our audience. What exactly was the Court being asked to decide?

Steve: Does the FCC’s administrative enforcement process—where the agency investigates, determines legal liability, and orders the payment of a fine, all without a jury—violate the Seventh Amendment, which generally preserves the right to a jury trial in civil suits. The carriers said that when the FCC issues a forfeiture order for tens of millions of dollars, that’s effectively settling your legal rights and obligations.

Tony: And the FCC’s position?

Steve: The FCC argued that its forfeiture orders are not the final word. Under the statutory scheme, the FCC issues the order, but it can’t actually force you to pay. If you refuse to pay, the only way the government can collect is by having the Department of Justice bring a civil suit in federal court, including a trial by jury.

Tony: There was also an argument about unconstitutional conditions, right?

Steve: Right. The carriers raised a second challenge. They argued that the FCC’s scheme puts regulated companies in an impossible bind—a kind of constitutional catch-22. You can either pay the forfeiture voluntarily and get limited judicial review in a court of appeals without a jury, or you can refuse to pay and wait for an enforcement suit that may never come, all while the order hangs over your head. The carriers said those costs of exercising their jury right were so high that they were effectively coerced into waiving it.

Tony: So what did the Supreme Court ultimately decide?

Steve: The Court ruled 8-1 in favor of the FCC, holding that the Commission’s forfeiture proceedings do not violate the Seventh Amendment. First, the Court said forfeiture orders do not definitively resolve the parties’ legal obligations—in plain terms, they don’t create an actual obligation to pay. The FCC has no power to execute on a forfeiture order. It can’t seize your assets or garnish your wages, you don’t incur penalties for nonpayment, and interest doesn’t accrue on the amount. And, the Commission can’t even hold the existence of an unpaid forfeiture order against you in other administrative proceedings.

Tony: And the Court distinguished this from the SEC case—Jarkesy—right?

Steve: Yes. In SEC v. Jarkesy, which was decided in 2024, the Court held that the SEC couldn’t impose civil penalties through its own administrative process because those penalties were immediately enforceable—the SEC could garnish wages, deduct amounts from tax returns, and no jury was available even if it went to court. The FCC’s system is fundamentally different. The FCC can’t enforce its own orders, and if it goes to court, the defendant gets a full jury trial de novo. That distinction was decisive.

Tony: What about the unconstitutional conditions argument?

Steve: The Court rejected that, too. It noted that the Seventh Amendment applies only to “suits,” and the FCC’s administrative proceeding isn’t one. The only suit in the scheme is a Section 504 enforcement action, which the DOJ isn’t required to bring. So if the carriers simply refuse to pay and the government never sues, the jury right never attaches in the first place.

Tony: Okay, so let’s talk about what this actually means for companies that are regulated by the FCC. If you’re sitting in a compliance seat at a carrier, a broadcaster, or any FCC-regulated entity, what should you be thinking about right now?

Steve: First, the headline takeaway is that the FCC’s administrative enforcement authority has been upheld. The Commission can continue to investigate suspected violations, issue notices of apparent liability, and assess forfeiture penalties through its existing process—all without a jury. That means the FCC’s enforcement machinery keeps running exactly as it has been.

Tony: But the Court also said some things that could actually change the calculus for regulated companies, right?

Steve: Absolutely. This decision clarifies something important: FCC forfeiture orders are not self-executing. They don’t create a legal obligation to pay. That means, in theory, a company that receives a forfeiture order has a genuine choice—pay voluntarily or decline to pay and wait for the DOJ to bring an enforcement action including a full jury trial. And importantly, the Court affirmed that the FCC cannot hold the existence of an unpaid forfeiture order against you in other Commission proceedings.

Tony: So does this mean companies might start choosing not to pay?

Steve: That’s the practical question everyone should be wrestling with. Before this decision, most companies paid FCC forfeitures because the orders looked and felt mandatory. Now the Supreme Court has made clear that isn’t the case. Companies have real options. But there are tradeoffs. If you don’t pay, you’re waiting for the DOJ to decide whether to sue you—and having a public, unresolved forfeiture order on the books isn’t great for investor relations or public confidence.

Tony: What about the data privacy angle here? The underlying violations were about customer location data.

Steve: Right, and that shouldn’t be lost in the constitutional discussion. The FCC investigated these carriers for failing to take reasonable steps to protect customer location data—information that, as the Court noted, implicates serious privacy concerns because your phone is essentially tracking your movements at all times. The ruling doesn’t change any of those underlying obligations. Companies still need robust safeguards for customer data, and the FCC still has full authority to investigate and penalize violations.

Tony: Let’s wrap up with the key takeaways for our listeners—especially those of you in compliance and regulatory roles.

Steve: Sure. I’d boil it down to three points. First, the FCC’s enforcement process has survived constitutional scrutiny. The Commission can continue issuing forfeiture orders without a jury, so don’t expect any reduction in enforcement activity. Second, the Court has clarified that forfeiture orders are not self-executing. Companies now have a clearer understanding that they can decline to pay and insist on a jury trial if the DOJ brings an enforcement action. That’s a strategic option that didn’t feel available before. Third, Section 504(c) protections are real—the FCC cannot use an unpaid forfeiture order against you in other proceedings. The Court relied heavily on that provision, so expect it to have real teeth going forward.

Tony: Thanks for breaking that down, Steve. Always great to have you on the program! And to our listeners, if you’d like to learn more about how this ruling might affect your business, or if you’d like to discuss other regulatory compliance needs with Steve or me, or any of our LB3 and TC2 colleagues, please give us a call or shoot us an email. You can also stay current by subscribing to Staying Connected, by checking out our websites, and by following us on LinkedIn.