Fifth Circuit Tosses $57 Million Fine Against AT&T
Judges said the agency's forfeiture process was invald under Jarkesy.
Jake Neenan
WASHINGTON, April 18, 2025 – Three Fifth Circuit judges tossed the Federal Communications Commission’s $57 million fine against AT&T Thursday, finding the agency’s enforcement procedures violate the carrier’s right to a jury trial.
“No one denies the Commission’s authority to enforce laws requiring telecommunications companies like AT&T to protect sensitive customer data,” Circuit Judge Stuart Kyle Duncan wrote. “But the Commission must do so consistent with our Constitution’s guarantees of an Article III decisionmaker and a jury trial.”
Duncan wrote that the June 2024 Supreme Court decision in Securities and Exchange Commission v. Jarkesy “guided” the opinion. Justices ruled in that case that the SEC could not levy civil penalties without providing a jury trial, and Duncan wrote that the FCC’s adjudication process was invalid in the same way. He wrote for judges Corey Wilson and Catharina Haynes, with Haynes concurring only in the judgment.
The agency had argued that fined companies could get a jury trial by simply not paying the fine, in which case the Department of Justice could pursue a collection action that involves a trial. Judges were not convinced, Duncan wrote, largely because in the Fifth Circuit the companies then would be limited to challenging the facts at issue during the trial, rather than the agency’s legal conclusions based on those facts.
“If AT&T wants an Article III court to review the forfeiture order’s legality, it has to give up a jury trial. If it wants a jury trial, it has to defy a multi-million dollar penalty, wait for DOJ to sue, and, even then, relinquish its ability to challenge the order’s legality,” he wrote. “Either way, AT&T’s Seventh Amendment rights have been denied.”
In April, the FCC fined the three major mobile carriers more than $200 million for not vetting third parties before selling them customer location data in 2018. All the companies challenged the penalties in court, arguing as AT&T did that Jarkesy invalidated them and that the location data at issue wasn’t covered by FCC privacy rules.
The D.C. Circuit heard arguments in T-Mobile’s challenge in March but hasn't issued a decision. The Second Circuit is set to hear the Verizon case on April 29.
CTIA, the major wireless industry group that represents the three companies, was pleased with the AT&T ruling.
“The court rightfully ruled that the FCC’s current enforcement processes do not ensure the Constitutional guarantees of due process and a jury trial,” the group said in a statement. “The decision highlights that the FCC and Congress should swiftly re-examine and modernize its enforcement processes.”
Current FCC Chairman Brendan Carr dissented from the fines when they were handed down, similarly arguing location data wasn’t covered.
“After Jarkesy, the FCC is on thinning ice when it decides the legality of its own enforcement actions involving forfeitures,” he said in a dissent from a separate fine against broadcasters that came down after the case. “It is time for the FCC to start the process of fundamentally reforming our enforcement practices – lest the courts step in, including in cases where bad actors deserve accountability.”
Nathan Simington, the other Republican commissioner at the agency, has since Jarkesy came down refused to vote in favor of any forfeitures until the FCC reviewed its procedures.
“The Fifth Circuit’s decision vacating the FCC’s forfeiture order is yet another signal that the agency’s enforcement framework is due for a serious update,” Simington said in a statement. “The agency should move swiftly to ensure our procedures align with the right to a jury trial and other due process guarantees.”
Carr’s office did not immediately respond to a request for comment.
This story was updated to add comment from CTIA.
