Supreme Court ruling could hurt FCC case

Both AT&T and Verizon cite the Supreme Court’s June 2024 ruling in Securities and Exchange Commission v. Jarkesy, which held that “when the SEC seeks civil penalties against a defendant for securities fraud, the Seventh Amendment entitles the defendant to a jury trial.”

The Supreme Court ruling, which affirmed a 5th Circuit order, had not been issued yet when the FCC finalized its fines. The FCC disputed the 5th Circuit ruling, saying among other things that Supreme Court precedent made clear that “Congress can assign matters involving public rights to adjudication by an administrative agency ‘even if the Seventh Amendment would have required a jury where the adjudication of those rights is assigned to a federal court of law instead.'”

Of course, the FCC will have a tougher time disputing the Jarkesy ruling now that the Supreme Court affirmed the 5th Circuit. Verizon pointed out that in the high court’s Jarkesy decision, “Justice Sotomayor, in dissent, recognized that Jarkesy was not limited to the SEC, identifying many agencies, including the FCC, whose practice of ‘impos[ing] civil penalties in administrative proceedings’ would be ‘upend[ed].'”

Verizon further argued: “As in Jarkesy, the fact that the FCC seeks ‘civil penalties… designed to punish’ is ‘all but dispositive’ of Verizon’s entitlement to an Article III court and a jury, rather than an agency prosecutor and adjudicator.”

Carriers: We didn’t get fair notice

Both carriers said the FCC did not provide “fair notice” that its section 222 authority over customer proprietary network information (CPNI) would apply to the data in question.

When it issued the fines, the FCC said carriers had fair notice. “CPNI is defined by statute, in relevant part, to include ‘information that relates to… the location… of a telecommunications service,'” the FCC said.