On June 4, 2026, the U.S. Supreme Court issued an opinion upholding the authority of the Federal Communications Commission (“FCC”) to issue administrative forfeiture orders for violations of the federal communications laws, which certain carriers had argued violated their right to a jury trial.
FCC v. AT&T, Inc., No. 25-406;
Verizon Communications, Inc. v. FCC, No. 25-567 (companion case). The 8-1 decision rejected the carriers’ challenge after concluding that the FCC’s process ensured that the carriers would have a right to a jury before any such forfeiture order could be enforced against them.
The FCC’s process for the imposition of penalties is somewhat unusual among federal agencies. Under 47 U.S.C. § 503(b)(4), upon concluding that a given entity has violated the federal communications laws, the FCC can issue a “notice of apparent liability,” preliminarily assessing a forfeiture penalty. By statute, an entity that receives such a notice is then provided the opportunity to respond in writing to show why a forfeiture penalty should not be imposed. And after reviewing the recipient’s response, the FCC will then issue an order that “determine[s]” whether the recipient is liable and, if so, “assesse[s]” a penalty. §§ 503(b)(1), (b)(2)(E). After the FCC issues an order assessing a forfeiture penalty, a recipient can seek review in a U.S. Court of Appeals (which will review the FCC’s decision under the Administrative Procedure Act). Or, as the Supreme Court observed, “[t]he recipient’s other option is to do nothing.” And critically for the Supreme Court’s subsequent analysis, the statute provides that if the recipient does nothing, the unpaid forfeiture penalty can only be recovered by the FCC “in a civil suit in the name of the United States,” which “shall be a trial de novo.” 47 U.S.C. § 504(a).
This case originated when, after a series of alleged security breaches, the FCC issued notices of apparent liability under 47 U.S.C. § 503(b)(4) and preliminarily assessed penalties of roughly $57 million against one carrier and $47 million against a second carrier, in each case alleging that the carriers had violated laws and regulations requiring them to take reasonable steps to keep location data confidential. The carriers responded to the notices, but the FCC then formally assessed the penalties.
The carriers paid the penalties and filed petitions for review in their respective Courts of Appeals, raising multiple challenges to the Commission’s orders. Of particular relevance, the carriers claimed that the forfeiture process violated their right to a jury trial under the Seventh Amendment, citing
SEC v. Jarkesy, 603 U.S. 109 (2024), in which the Supreme Court ruled that the U.S. Securities and Exchange Commission could not impose civil penalties using its in-house administrative process because it sidestepped any jury option.
In siding with the FCC, the Court held that because forfeiture orders issued under 47 U.S.C. § 503(b)(4) do not definitively settle the parties’ legal obligations and the FCC’s factual findings in its forfeiture proceedings are not conclusive, any forfeiture order issued by the FCC without the involvement of a jury does not violate the Seventh Amendment. The Court emphasized that the FCC’s forfeiture orders do not create any actual obligation to pay. The FCC cannot enforce a forfeiture on its own, recipients incur no penalties for nonpayment, and under § 504(c), the FCC cannot hold an outstanding order against a regulated party. The Court distinguished Jarkesy by pointing out that the SEC’s administrative penalties were immediately enforceable, whereas the statutory scheme at issue here made clear that the FCC’s penalties were not.
The decision may also have implications beyond the FCC. In amicus briefing filed in support of the FCC, the Citizens Utility Board of Illinois identified at least eleven federal statutes that provide for two-stage enforcement proceedings analogous to the FCC’s forfeiture scheme, including statutes governing the Federal Energy Regulatory Commission, the Department of Energy, the Fish and Wildlife Service, Customs and Border Protection, and the Department of Health and Human Services. While Seventh Amendment challenges to each individual statutory scheme would need to be considered on their own merits, the decision likely solidifies those agencies’ power to continue their enforcement programs without change.
While the opinion is a clear win for the FCC, time will tell how it is incorporated into practice. Historically, companies subject to FCC oversight have generally treated FCC forfeiture penalties as effectively binding and have typically either sought appellate review or simply accepted the outcome. However, with the Supreme Court’s emphatic reminder that FCC forfeiture penalties are not binding and that they cannot be enforced absent a de novo action brought by the Department of Justice, more companies may in the future be willing to take that path.
