Supreme Court Decision Syllabus (SCOTUS Podcast)
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Supreme Court Decision Syllabus (SCOTUS Podcast)
FCC v. AT&T (Seventh Amendment)
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The Supreme Court held that the FCC’s procedure for assessing monetary forfeitures against regulated entities does not violate the Seventh Amendment because the agency’s forfeiture orders do not themselves impose a legally enforceable obligation to pay and do not conclusively determine the facts underlying liability. Although the FCC may investigate alleged violations and issue forfeiture orders under 47 U.S.C. §503, payment can only be compelled through a separate enforcement action brought by the Department of Justice under §504, where the defendant is entitled to a de novo trial and a jury may make the ultimate factual determinations. Distinguishing its recent decision in SEC v. Jarkesy, where agency-imposed penalties were immediately enforceable without a jury determination, the Court emphasized that FCC forfeiture orders are merely preliminary steps that neither bind the recipient nor carry legal consequences absent a subsequent court proceeding. Because the statutory scheme preserves the opportunity for a jury trial before any enforceable obligation is imposed, the Court reversed the Fifth Circuit, which had found the scheme unconstitutional, and affirmed the Second Circuit, which upheld it.
Hello, this is Jeff Barnum reading the Supreme Court syllabus and Federal Communications Commission et al. v. ATT Incorporated. Search Rory to the United States Court of Appeals for the Fifth Circuit. Consolidated with the Verizon Communications Incorporated versus Federal Communications Commission et al. on search royal to the United States Court of Appeals for the Second Circuit. Argued April 21st, 2026, decided June 4th, 2026. The Communications Act of 1934, as amended, authorizes the Federal Communications Commission, or FCC, to investigate regulated parties for suspected violations of the communications laws and to seek monetary forfeitures for violations of those laws. In these cases, the Commission investigated cellular service providers ATT and Verizon, collectively the carriers, regarding their treatment of customer location data. Believing that the carriers had violated laws and regulations requiring them to take reasonable steps to keep location data confidential, the FCC sought forfeitures from the carriers. The Commission first issued the carrier's notice of apparent liability under Section 503B4, which specified the factual and legal bases for the forfeitures the Commission sought. After reviewing the carriers' responses, the Commission determined that the carriers were liable and assessed penalties of roughly $57 million against ATT and $47 million against Verizon. Once the Commission issues an order, the recipient has two options. First, it may seek review in the Court of Appeals under the Hobbes Act. The Court of Appeals, sitting without a jury, then reviews the order on the administrative record under the standards set forth in the Administrative Procedure Act. The recipient may also opt to do nothing. In the event of non-payment of a forfeiture penalty determined under Section 503B4, the penalty shall be recoverable in a civil suit in the name of the United States. The Commission may then refer the matter to the Department of Justice, which in turn may, but need not, bring a civil suit within five years of the issuance of the order. That suit shall be a trial de novo. The regulated party may, of course, pay the forfeiture voluntarily, but until it does, or the court in a Section 504 enforcement action orders payment, the Commission may not use the notice of apparent liability to the prejudice of the party in other commission proceedings. Here, the carriers paid their penalties and filed petitions for review in their respective courts of appeals. They argued that requiring forfeiture without the opportunity for a jury trial violates the Seventh Amendment. The Fifth Circuit granted ATT's petition for review and vacated the commission's order. The court held that the FCC's enforcement procedures violate the Seventh Amendment because by the time the Commission issues a forfeiture order, it has already found the facts, interpreted the law, adjudged guilt, and levied punishment, all without the involvement of a jury. The Second Circuit denied Verizon's petition for review on the ground that the FCC's forfeiture order did not itself compel payment. The Department of Justice needs to initiate a collection action under Section 504 before the carrier can be made to pay. The court thus held that the Commission does not violate the Seventh Amendment when it issues forfeiture orders without a jury. This court granted Sir Sherrari as to both decisions to resolve the conflict. Held, because forfeiture orders issued under Section 503B4 do not definitively resolve the party's legal obligations, and the FCC's factual findings in its forfeiture proceedings are not conclusive, it does not violate the Seventh Amendment for the Commission to issue forfeiture orders without the involvement of a jury. The FCC's forfeiture proceedings fit comfortably within the Court's Seventh Amendment precedence. The Seventh Amendment preserves the right to trial by jury in suits at common law and applies in all proceedings in which legal rights are to be settled. It does not, however, prescribe at what stage of a legal dispute a trial by jury must, if demanded, be had. The amendment requires only that before legal rights and obligations are conclusively ascertained and determined, the party has the chance to insist that a jury make the ultimate determination of issues of fact. Consistent with these principles, this court has upheld non-jury adjudications, making initial findings of fact that are subject to de novo review in a subsequent jury trial. Given the similar features of the Commission's enforcement scheme, the Commission may issue forfeiture orders without the involvement of a jury. The forfeiture orders at issue with these cases did not settle the carrier's legal obligations because they did not create an obligation to pay. The statute nowhere gives the commission the authority to execute on a forfeiture order. A recipient of a forfeiture order incurs no penalties for nonpayment. Interest does not accrue on the sum, and under Section 504C, the Commission cannot hold the existence of a notice of liability or an order of forfeiture against a regulated party unless the forfeiture has been paid or a court has ordered payment. The statute thus prevents the commission from penalizing a party for failing to act in response to the mere existence of a forfeiture order, which in turn suggests that the party need not comply in the first place. The orders also did not reflect the ultimate determination of any fact. The statute provides that forfeitures under Section 503B4 shall be recoverable exclusively in a trial de novo. Thus, for the purposes of a Section 504 trial, the only means by which the government can collect a penalty, it is as if the Commission never found any facts at all. Before a regulated party can be made to pay, the jury gets the last word. The carriers insist that they actually must pay because Section 503 uses words that sound mandatory. The Commission determines whether a forfeiture is appropriate, assesses the amount of such penalty, and imposes that penalty. But the proper understanding of such statutory terms depends on their place in the overall statutory scheme. And under the statute at issue here, the commission is powerless to visit any adverse consequences on a regulated party who receives a forfeiture order. SEC v. Yarcacy 603 U.S. 109, a Supreme Court case from 2024, proves the point. In Yarcacy, the court held that the Security and Exchange Commission, or SEC, could not impose civil penalties using its in-house administrative process. Those penalties were immediately enforceable. The SEC could garnish the recipient's wages or deduct a portion of the forfeiture from his tax return. And if the SEC were required to resort to judicial means of enforcement, no jury was available, at least as to the underlying legal violation. That means that, unlike here, the ultimate determination of the facts giving rise to the obligation to pay rested with the agency alone. The carriers argue that even if the Commission's orders do not require payment, the Seventh Amendment nonetheless applies because forfeiture orders have legal effect. Namely, they enable the Department of Justice to initiate a 504 suit. But the Seventh Amendment secures a right to the individual that attaches when legal rights are to be determined. A forfeiture order under Section 503B4 does not determine legal rights. It is simply a prerequisite to suit that must be met before the department may bring a collection action. The Seventh Amendment does not extend to such preliminary procedures. Finally, the carriers argue that FCC forfeiture orders cause reputational and practical harms entitling them to a jury even where no money is at stake. This argument is hard to square with the text of the Seventh Amendment, and in any event proves too much. Reputational harm may befall any party in the preliminary stage of a legal proceeding, yet this is never thought to pose a Seventh Amendment problem. The court's unconstitutional conditions doctrine, which vindicates the Constitution's enumerated rights by preventing the government from coercing people into giving them up, is a poor fit for this case. The Seventh Amendment applies only to suits, and the only suit in the statutory scheme is a Section 504 enforcement action. If the carriers elect not to pay and await unenforcement action, and the Department of Justice decides never to bring one, then the carrier's jury right does not attach. The carriers argue that if they insist upon their jury right and wait for an enforcement suit, the commission will use the existence of the order and the fact of nonpayment against them. But Section 504C prohibits the Commission from using unresolved forfeiture proceedings to a regulated party's prejudice in subsequent commission proceedings. While the commission may consider the facts underlying the unresolved forfeiture in a future proceeding, the regulated party will have a chance to contest those facts anew. And before any asserted fact can be used to support a binding order to pay, the government must prove it to a jury. Finally, the carriers contend that the risk of reputational harm unduly burdens their jury right, but the uncertain prospect of such harm does not improperly discourage the exercise of that right. The decision of the Fifth Circuit is reversed and remanded. The decision of the Second Circuit is affirmed. Chief Justice Roberts delivered the opinion of the court in which Justices Alito, Sotomayor, Kagan, Gorsuch, Kavanaugh, Barrett, and Jackson joined. Justice Thomas filed a dissenting opinion. Thank you for listening. 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