8-1. The Supreme Court on June 4, 2026 upheld the Federal Communications Commission's power to issue forfeiture orders against major carriers without first providing a jury trial, resolving a constitutional challenge brought by AT&T and Verizon. The contested orders together exceeded $100 million, roughly $57 million and $47 million in the two cases, and the carriers paid the assessed penalties while litigating the agency's in-house process. This ruling keeps the FCC's administrative enforcement tool intact for data-privacy probes while leaving open a jury trial in any Justice Department collection suit.

8-1. That vote decided whether the FCC's internal forfeiture procedure runs afoul of the Seventh Amendment, and the Court sided with the agency on the key legal point: administrative forfeiture notices aren't final and enforceable until the Department of Justice brings a collection action in federal court.

Why the court said the FCC can still issue forfeiture notices

The majority opinion, written by Chief Justice John Roberts, stressed the nonfinality of the Commission's orders. Roberts wrote that the agency can't 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 practical consequence is procedural: the FCC may investigate, make findings, and issue notices of forfeiture, but it lacks unilateral power to compel payment. If a recipient declines to pay, the Commission must refer the matter to the Justice Department, which must file a civil suit to collect.

The Court distinguished the Communications Act framework from the administrative-enforcement model the justices rejected in SEC v. Jarkesy. In Jarkesy, the Court balked at certain agency procedures that deprived respondents of Article III protections. Here, the Supreme Court found the statutory structure preserves Article III oversight because the government must seek court enforcement to obtain the money. That step, the Court held, restores the possibility of a de novo judicial proceeding and access to a jury.

The litigation reached the high court after conflicting rulings from federal appeals courts had left the legal status of agency forfeiture procedures unsettled. One appeals court had vacated the FCC's process on Seventh Amendment grounds. Another had treated forfeiture orders as nonfinal, and therefore not subject to a jury trial at the administrative stage. The Supreme Court adopted the nonfinality view and resolved the split.

The dispute began with FCC enforcement actions in 2024, following investigations into whether third-party aggregators could obtain precise customer location data from wireless providers. The Commission concluded carriers had not adequately protected sensitive location information and assessed substantial penalties.

AT&T and Verizon challenged the agency's forfeiture notices rather than await a Justice Department suit, pushing the constitutional question up through the courts.

Mastheads

Both carriers paid the assessed penalties while pressing their constitutional claims. The two notices together exceeded $100 million, with the orders at roughly $57 million for one carrier and $47 million for the other. By paying, the carriers preserved their ability to litigate the lawfulness of the FCC procedure without risking an immediate collection action by the agency itself.

Under the Court's ruling, the FCC retains a ready administrative mechanism to identify violations and issue large forfeiture notices in data-privacy cases. But regulated parties also keep a clear path to a jury trial at the enforcement stage: when the Department of Justice brings a civil suit to collect a forfeiture, factual disputes can be tried de novo and submitted to a jury. That split in sequencing is the decision's central operational point.

Justice Clarence Thomas was the lone dissenter. He argued the carriers couldn't have known the Commission lacked power to impose monetary awards without judicial enforcement, and he warned that the government's approach risks allowing an agency to deprive parties of property without going through Article III courts. "When the Federal Government seeks to deprive a person of property, it must go through an Article III court," Justice Thomas wrote.

The majority and dissent frame the same constitutional concern differently. The majority focused on statutory structure and the existence of a later judicial remedy. Thomas emphasized an immediate risk to property rights, arguing that the Commission's procedure imposes pressure on regulated parties even if the agency can't directly collect without a court order.

For the FCC, the decision is a clear preservation of its enforcement toolbox in the agency's ongoing work on privacy and other rules. For carriers and other regulated companies, the ruling leaves in place an avenue to challenge administrative findings in federal court with the prospect of a jury trial if the Justice Department pursues collection. Corporations that received large notices will still be able to press constitutional and factual defenses, albeit after the Commission issues its administrative findings.

Legal observers noted the ruling's practical balance: it preserves the agency's ability to declare violations and set penalties on the record, while ensuring that final collection of money runs through Article III procedures when the government seeks enforcement. That sequencing is what the Court described as a safeguard of the Seventh Amendment jury-trial right in practice.

The decision is likely to shape how enforcement plays out in future FCC probes, especially those involving sensitive consumer information such as location data. Agencies can continue to investigate and issue notices that publicly record alleged violations and proposed penalties. At the same time, companies that choose to resist payment can expect the constitutional question to be litigated in federal court under the usual Article III and Seventh Amendment protections.

The litigation history also signals that parties facing large administrative forfeitures may weigh the tactical choice between paying and litigating versus waiting for a DOJ suit. In these cases AT&T and Verizon paid the assessed sums while keeping their constitutional claim alive in the courts. The Supreme Court's ruling preserves both options for future defendants.

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Expect the decision to shape future FCC privacy probes, especially location-data cases, and to factor into companies' tactical choices about whether to pay forfeitures up front or force DOJ collection suits.

This article was created with AI assistance.