On June 4, 2026, the Supreme Court of the United States issued its ruling in FCC v. AT&T, Inc. and Verizon Communications, Inc. v. FCC, a case that challenged the Federal Communications Commission's (FCC's) ability to hold telecommunications companies accountable for violating federal law. The ruling addresses a fundamental question: Can the FCC investigate a carrier, find it violated the law, and assess a penalty—all without first convening a jury trial? The answer, the Court holds eight-to-one, is Yes—but with a significant qualification that substantially shapes what FCC enforcement orders may mean going forward.

The case arose from a concrete harm: after investigating AT&T and Verizon's handling of customer location data, the FCC concluded that both carriers had sold that data to third parties—including law enforcement—without adequate safeguards, in violation of federal privacy rules. The FCC assessed penalties of roughly $57 million against AT&T and $47 million against Verizon. The carriers paid—then challenged the process as unconstitutional. But the Supreme Court rejected that challenge. In doing so, the Court accepted the government's recharacterization of FCC forfeiture orders (monetary penalties for violations of the Communications Act or FCC rules) as essentially non-binding—a reading that Justice Clarence Thomas argues in his dissent could, in practice, hamstring FCC enforcement going forward.

Location Data, Privacy, and the FCC's Investigation

Cellular carriers maintain detailed records of customer location because cell phones must periodically connect to the nearest tower in the carrier's network. AT&T and Verizon operated programs through which they sold customers' location data—through intermediaries—to companies providing location-based services such as roadside assistance.

The privacy stakes in this matter were higher than a typical commercial data dispute. One high-profile incident involved Securus, a company that provided location-finding services to law enforcement. Officers using Securus were required to upload legal authorization—such as a warrant—before obtaining location data. According to press reports cited in the court record, however, a Missouri sheriff was able to access customer location data despite uploading what the U.S. Court of Appeals for the Second Circuit described as "utterly irrelevant materials" instead of valid legal authorization. The incident illustrated a risk that went beyond commercial misuse: carriers' location-data programs, the FCC concluded, lacked safeguards sufficient to prevent law enforcement from obtaining sensitive location information outside lawful channels. Critics argued this amounted to a backdoor around Fourth Amendment warrant requirements. The FCC's investigation was, in part, a response to that concern.

The FCC's Enforcement Bureau investigated and concluded that the carriers had violated Section 222 of the Communications Act—the federal statute governing confidentiality of customer proprietary network information—as well as FCC rules implementing that provision. Following its informal enforcement process, the FCC issued "notices of apparent liability" (NALs) and, after reviewing the carriers' written responses, issued orders assessing the penalties described above.

Two Paths, Two Courts, One Conflict

The Communications Act of 1934 gives the FCC two enforcement paths to seek monetary forfeitures. One is a formal adjudication before an administrative law judge, with limited appellate review—a process the Supreme Court notes the FCC "does not use" in practice. The other, used here, is an informal proceeding under Section 503(b)(4) of the Communications Act: the FCC issues a notice of apparent liability, gives the recipient a chance to respond in writing, and then issues an order determining liability and assessing a penalty.

Once the FCC issues a forfeiture order, the statute gives the recipient two options. First, the recipient may seek review in a federal court of appeals under the Hobbs Act (a federal statute that channels challenges to certain agency orders directly into the courts of appeals), which reviews the order on the administrative record under standards from the Administrative Procedure Act. Second, the recipient may do nothing because the FCC cannot collect the penalty itself. If the carrier doesn't pay, the FCC may refer the matter to the Department of Justice (DOJ), which may—but is not required to—bring a civil collection suit within five years. Crucially, that suit "shall be a trial de novo." (47 U.S.C. § 504(a).) A "trial de novo" means the whole case is retried as if the agency had never made any findings.

Both AT&T and Verizon paid the assessed penalties and simultaneously filed petitions for review in federal court, arguing the FCC's process violated the Seventh Amendment to the U.S. Constitution, which preserves the right to trial by jury in civil suits at common law. The United States Court of Appeals for the Fifth Circuit agreed with AT&T and vacated the FCC's order; the Second Circuit disagreed and upheld Verizon's penalty. The Supreme Court granted certiorari (agreed to hear and review a lower court's decisions) to resolve the conflict.

The Decision

The Supreme Court reversed the Fifth Circuit and affirmed the Second Circuit, ruling eight-to-one that the FCC's informal enforcement process does not violate the Seventh Amendment. The Court's core reasoning rests on two connected findings:

First, FCC forfeiture orders under Section 503(b)(4) do not create an obligation to pay. The statute gives the FCC no authority to execute on an order—the Commission cannot seize assets or impose liens. No penalty accrues for nonpayment; interest does not accrue on the sum. And Section 504(c) of the Communications Act expressly prohibits the FCC from using "the existence of a notice of liability or an order of forfeiture" against a regulated party in other FCC proceedings unless the forfeiture has been paid or a court has ordered payment.

Second, the FCC's factual findings are not conclusive. Because any collection suit must proceed as a trial de novo—meaning the jury decides the facts fresh, with no deference to the FCC's findings—"for the purpose of a §504 trial . . . it is as if the Commission never found any facts at all." The Supreme Court found this structure consistent with prior precedents upholding non-jury administrative findings that are subject to de novo jury review in subsequent proceedings.

The Supreme Court distinguished its 2024 ruling in SEC v. Jarkesy, which held the Securities and Exchange Commission (SEC) could not use its in-house administrative process to impose civil penalties without a jury. The key difference: SEC penalties were immediately enforceable through wage garnishment and tax refund offsets, and if judicial enforcement was required, no jury was available to hear the underlying merits. Under the FCC's scheme, the jury always gets the last word before the government can actually collect.

On the carriers' unconstitutional conditions argument—that they were coerced into paying (and thereby waiving their jury right) because the alternative was the uncertainty of waiting for an enforcement suit that might never come—the Supreme Court also ruled against the carriers. An FCC forfeiture order is simply a statutory prerequisite to a DOJ collection suit, analogous to a right-to-sue letter from the Equal Employment Opportunity Commission (EEOC) or a prison litigation exhaustion requirement. The Seventh Amendment attaches to suits; if the DOJ never brings one, the jury right never ripens. The Supreme Court also rejected the argument that reputational harm from a public forfeiture order is itself a cognizable Seventh Amendment injury, noting the Amendment applies only "where the value in controversy shall exceed twenty dollars."

The Dissent

Justice Thomas agreed with the majority's constitutional analysis—that carriers are entitled to a trial de novo before being forced to pay—but dissented on the practical question of relief for AT&T and Verizon. His objection is pointed: AT&T and Verizon paid under orders that explicitly told them payment was mandatory within 30 calendar days, that the FCC's authority to impose penalties was "beyond the ambit of the Seventh Amendment," and that no Article III court—that is, a federal court established under the Constitution, with an independent judge and jury—involvement was needed. The FCC's own regulations stated that its orders "requir[e]" penalties to "be paid in full." When the carriers paid and sought review, no carrier had ever actually received a jury trial in a Section 504 enforcement action, and courts around the country had routinely limited the scope of de novo review, declining to allow challenges to the FCC's legal conclusions.

In Justice Thomas's view, the majority penalizes the carriers for doing exactly what courts encourage: paying under protest, preserving their objection, and litigating it. The Supreme Court holds they paid "voluntarily"—and thus received no coerced waiver of their jury right—only because the government, as Justice Thomas notes, changed its litigation position years after the payments were made. Justice Thomas says he would have remanded to give the parties an opportunity to proceed under the Court's newly clarified understanding of the law.

What This Ruling Does and Does Not Resolve

This ruling has an immediate impact on AT&T and Verizon, but stakeholders might focus on its implications for FCC enforcement authority going forward. 

What the ruling resolves

FCC informal forfeiture proceedings under Section 503(b)(4) survive the Seventh Amendment challenge. The FCC can investigate, find violations, and assess penalties administratively, without a jury, so long as any actual collection requires a new trial de novo with full jury participation.

What it leaves open or conspicuously unsettled

• Whether carriers must pay before seeking court of appeals review. The Supreme Court noted the parties litigated this case on the premise that payment is a precondition to Hobbs Act review, but explicitly declined to endorse that premise. This is a significant unresolved question with direct implications for how future carriers respond to FCC orders.
• The practical enforceability of FCC orders. The majority's reasoning—that FCC orders are non-binding notices that carriers may decline to pay with no immediate adverse consequences—could, as Justice Thomas warns, undermine the deterrent effect of FCC enforcement. If carriers understand that non-payment triggers no penalty and DOJ may never bring a collection suit, the incentive to comply voluntarily is reduced. The Court did not address this practical concern.
• Whether the FCC's pre-2026 enforcement posture was lawful. The majority's opinion is premised on a reading of the statute under which FCC orders have always been non-binding. But as Justice Thomas documents, the FCC, regulated parties, and lower courts did not operate that way. The majority does not acknowledge the gap between its statutory reading and longstanding administrative practice.
• The refund question. The Court left entirely open whether AT&T and Verizon—or other carriers who paid FCC forfeitures under the pre-2026 understanding—have a cognizable claim for refund.

The Bottom Line

The FCC retains authority to use its informal enforcement process, and that process survives constitutional challenge. But the decision could simultaneously narrow what FCC forfeiture orders mean: they are, under the Supreme Court's new reading, essentially notices that the government believes a violation occurred and that DOJ may file suit—not binding commands. The deterrent value of FCC enforcement going forward may depend less on the orders themselves than on DOJ's willingness to follow through with collection suits, which the statute does not require and which involve an entirely fresh jury trial.

The substantive privacy violation at the heart of this case—carriers selling customer location data without adequate safeguards—was never relitigated on the merits. The Supreme Court resolved only the procedural constitutional question. The $57 million and $47 million penalties assessed against AT&T and Verizon, respectively, were paid, and this litigation resolved the challenge to the process that produced them. Whether the underlying conduct was adequately deterred and whether the FCC's enforcement tools are adequate to protect consumers going forward remain open policy questions this decision does not answer.

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