Judges Appear Skeptical of Fifth Circuit Decision Tossing AT&T Fine

WASHINGTON, April 29, 2025 – Second Circuit Judges appeared skeptical Tuesday of parts of another court’s rationale for tossing a $57 million fine against AT&T.

The Federal Communications Commission fined the three major wireless carriers more than $200 million collectively for failing to properly vet third parties to whom it was selling location data in 2018. All three fought the fines in court, and the Second Circuit heard oral arguments in Verizon’s challenge to its $48 million penalty Tuesday.

In the first decision to come down on the issue, the Fifth Circuit sided with AT&T earlier this month, writing the FCC’s forfeiture process was invalid under SEC v Jarkesy.

That case, from June 2024, held the Securities and Exchange Commission had to afford entities a jury trial before levying fines.

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 arrangement ran afoul of Jarkesy in part because precedent in the jurisdiction would bar companies from challenging anything other than the facts at issue in that situation, rather than the legal determinations the FCC made based on those facts.

“Yeah, but that doesn’t bind us,” Second Circuit Judge Alison Nathan said when the issue was brought up. “And it’s not our law.”

Judge Gerard Lynch was also not persuaded.

“I can’t imagine what kind of a world it would be where a de novo jury trial does not ultimately get you the ability to challenge the legal rulings as well as the factual rulings of the FCC,” he said.

Experts have said the Fifth Circuit decision, if it stands, could significantly weaken the FCC’s ability to impose fines going forward. If judges in the Verizon or T-Mobile cases rule the opposite way, the issue would likely end up before the Supreme Court.

FCC Chairman Brendan Carr, a commissioner at the time, dissented from the fines and has argued for reviewing the agency’s enforcement procedures in light of Jarkesy, but said Monday he disagreed with the Fifth Circuit ruling.

Judges in that case also found the penalties didn’t fall under a Seventh Amendment exemption allowing agencies to adjudicate certain matters outside of court, something the Second Circuit panel didn’t ask questions about.

Verizon and the other carriers have made additional arguments for tossing the fines that would not implicate the FCC’s entire forfeiture process, including that the data at issue isn’t protected by the Communications Act. They say the law only governs data the companies have solely as a result of providing common carrier voice services, and not data they could also have as a result of providing data services.