FCC Urges Judges Not to Follow Fifth Circuit in Striking Down Fines

WASHINGTON, April 28, 2025 – After the Fifth Circuit invalidated a $57 million penalty against AT&T, the Federal Communications Commission is urging other courts not to toss nearly $140 million in fines against Verizon and T-Mobile.

“A Fifth Circuit panel concluded that the FCC’s enforcement proceeding leading to a monetary forfeiture order violated another carrier’s Seventh Amendment rights,” the agency wrote in Friday letters to the courts handling the cases. “This Court should not follow that decision.”

In April 2024 the agency fined the three major 5G carriers more than $200 million collectively for failing to vet third parties before selling location data in 2018. Each company fought the fines in court. 

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The Fifth Circuit held on April 17 that the FCC’s forfeiture process violated companies’ Seventh Amendment right to a jury trial, writing that it was “guided” by a recent Supreme Court decision, SEC v. Jarkesy, which found the same was true of the Securities and Exchange Commission.

The D.C. Circuit heard oral arguments in T-Mobile’s challenge last month, and the Second Circuit will hear arguments in Verizon’s case Tuesday. In the wake of the AT&T decision, both companies told judges the Fifth Circuit got it right in vacating the fine.

Companies subject to an FCC fine can get a jury trial by not paying and waiting for the Justice Department to start a collection action. The Fifth Circuit said the potentially long wait time ran afoul of Jarkesy. Judge Stuart Kyle Duncan also wrote that Fifth Circuit precedent holds companies subject to those DOJ actions are only allowed to challenge the facts at issue, rather than the legal determinations the agency made based on those facts.

In its letters, signed by agency attorneys John Grimm and Scott Noveck, the FCC was quick to note the second prong doesn’t apply in the Second and D.C. Circuits.

“This court, however, has never adopted such a limitation, and the Fifth Circuit’s premise is in doubt,” the agency wrote to the Second Circuit. “Regardless, the proper approach would be to challenge any such limitation in the trial court and seek to strike the limitation – not to vacate the forfeiture order.”

The agency has maintained that the DOJ collection actions satisfy companies’ right to have a jury trial before any money is required to be paid – the carriers all paid their fines in order to appeal them. It also argued the Seventh Amendment doesn’t apply because the regulation of common carriers like telecom providers fell under the “public rights” exemption, matters Congress decides agencies can adjudicate outside of court.

FCC Chairman Brendan Carr, a commissioner at the time, dissented from the fines when they came down and has called for reforming the agency’s enforcement procedures in the wake of Jarkesy, but he said at an agency press conference that he disagreed with the Fifth Circuit decision.

“Our position continues to be that the FCC can impose fines, impose license revocations, our full suite of potential remedies,” he said. “We respect the Fifth Circuit’s decision but we disagree ultimately with the conclusion there, particularly as it applies to other circuits.”

Blair Levin, former FCC chief of staff and policy advisor at New Street Research, wrote in an investor note that the Fifth Circuit decision would weaken the agency’s ability to collect fines, which could complicate Carr’s agenda if it stands.

Carr has initiated or reinstated investigations into a range of companies since becoming chair, including probes into Verizon and Comcast over diversity initiatives, a complaint against 60 Minutes alleging the show’s editing of an interview with then-Vice President Kamala Harris violated news distortion rules, and probes of NPR and PBS. 

Both Verizon and Paramount, the owner of 60 Minutes broadcaster CBS, have multibillion dollar mergers waiting on FCC approval, which Levin noted still gives Carr “significant leverage.”

Carr reiterated Monday that “all options remain on the table” in the 60 Minutes case. The show’s executive producer resigned last week, writing he did not think management would allow him editorial independence, and the show’s anchor said on air Sunday that Paramount “began to supervise our content in new ways.”

Levin noted the D.C. Circuit appeared to lean against the carriers. He wrote that in the event of a Circuit Split, a Supreme Court decision would not come down until at least the second quarter of 2026.