FCC Loses the Ability to Levy Fines

On April 17, the U.S. Court of Appeals for the Fifth Circuit ruled that the Federal Communications Commission doesn’t have the authority to levy fines. The case under appeal came from an AT&T fine issued by the FCC in 2024 for violating customer privacy by selling customer location data. AT&T appealed the FCC ruling and said that the FCC had violated the Seventh Amendment of the Constitution by not allowing AT&T to have a jury trial. The Fifth Circuit sided with the AT&T appeal and said that the FCC had acted as prosecutor, judge, and jury in deciding that AT&T had broken the rules and in setting the fine. The Court’s opinion relies in the 2023 Supreme Court Decision in Securities and Exchange Commission v. Jarkesy that ruled that the SEC had no authority to levy civil fines. Since then, many lawyers have assumed that the ruling would apply broadly to all federal agencies, and this ruling affirms that opinion. The two cases together seem to affirm the inability of federal agencies to fine the companies they regulate.