Recent political and legal developments call into question the future of the Federal Communications Commission’s in-house enforcement practices.
On May 14, 2025, FCC Commissioner Nathan Simington and his Chief of Staff Gavin Wax challenged existing FCC enforcement practices, stating “[t]he federal courts have spoken, and the message is clear: the days of unaccountable bureaucratic enforcement are numbered.” This followed the vacatur by the Fifth Circuit Court of Appeals of a $57 million FCC fine against AT&T on Seventh Amendment grounds. The Fifth Circuit followed last year’s Supreme Court SEC v. Jarkesy decision. There, the Court found a securities fraud fine imposed by the Securities and Exchange Commission violated the Seventh Amendment’s right to a jury trial. Two pending appeals, in the D.C. Circuit and the Second Circuit, raise the same Seventh Amendment issue addressed by the Fifth Circuit. The FCC has argued that those courts should not follow the Fifth Circuit decision. Decisions in these cases will shed light on the future of the FCC’s enforcement authority.
The Seventh Amendment. The Seventh Amendment requires that “[i]n Suits at common law ... the right of trial by jury shall be preserved.” In Jarkesy, to determine whether a jury is required, the Court looked to whether the suit was “legal in nature,” examining the cause of action and the remedy, with remedy being the more important component. The Court then found the remedy “all but dispositive,” identifying money damages as “the prototypical common law remedy,” particularly if intended to punish. The Court further found the limited “public rights” exception to the Seventh Amendment was inapplicable to the case. Thus, the Court found the Seventh Amendment required a jury trial in the SEC’s fraud case.
The FCC Enforcement Process. Almost all FCC enforcement actions are brought through internal agency processes that, if finding a violation, result in a monetary forfeiture. A party has two options to contest a forfeiture. The party can pay the fine and seek appellate court relief. Alternatively, if the party does not pay the fine, the FCC refers the matter to the Department of Justice, which then brings a civil suit for a trial de novo in federal district court.
FCC Customer Location Information Forfeiture Orders. In 2024, the FCC issued separate forfeiture orders against AT&T, T-Mobile, and Verizon. They each paid the fines and appealed the orders to the Fifth, District of Columbia, and Second Circuit Courts of Appeals, respectively, arguing the forfeiture orders violated the Seventh Amendment.
The Fifth Circuit Decision. In AT&T v. FCC, the Fifth Circuit found that the Seventh Amendment required a jury trial, and vacated the Forfeiture Order against AT&T. The court found that the FCC’s civil penalties represented a common law remedy, and that the violation, while technical in nature, was “analogous to common law negligence.” The court then rejected the FCC’s “public rights” argument, finding the matter distinct from the narrow category of cases to which this exception historically applies. Finally, and perhaps most importantly, the court rejected the FCC’s argument that section 504(a) preserves the right to a jury trial. Relying on Firth Circuit precedent that a section 504(a) trial de novo only examines the FCC’s factual, not legal, findings, the court found that section 504(a) does not properly preserve a jury trial.
Ongoing Litigation and a Potential Circuit Split. The Fifth Circuit may not have the final word on these issues. The same issues are currently pending before the D.C. and the Second Circuit Courts of Appeals. The FCC argues that these courts should not follow the Fifth Circuit’s decision. During both oral arguments, the judges focused on the scope of a trial de novo under section 504(a), expressing skepticism of the Fifth Circuit’s view that a section 504(a) trial de novo would be limited to examining the FCC’s factual findings only. Thus, there is the possibility for a circuit split on this issue.
The Meaning of Section 504(a). Such a circuit split, however, does not necessarily mean the FCC will prevail on its argument that section 504(a) satisfies the Seventh Amendment. Notably, the statute requires that the government bring suit to recover the fine. It does not directly contemplate a mechanism for the fined party to initiate the trial. In response, the FCC argues that existing court procedures allow a party to initiate court action, at least if government delay causes real harm. Time will tell how the D.C. and Second circuits resolve these issues, whether they result in a meaningful circuit split and, if so, whether (and when) that leads to Supreme Court action.
Additional Developments. Even if the FCC prevails on the Seventh Amendment question, the FCC’s processes are otherwise under challenge. In addition to Commissioner Simington’s calls for change, a coalition of five major communications trade associations has filed a rulemaking petition seeking changes to the FCC’s enforcement practices. The petition seeks significant process reforms and restrictions on how FCC staff conduct investigations, seeking to limit the scope of investigations and to implement procedural controls providing targets with opportunities to challenge potential overreach. This petition has not yet been put out for comment.
Conclusion. Technology, media, and telecommunications companies that are the subjects of FCC investigations should assess whether these court decisions – and others expected in the coming months – provide leverage for settlement of FCC inquiries and enforcement actions. Companies should also monitor proceedings at the FCC and consider supporting efforts to improve the FCC’s enforcement processes.
