Judges Probe FCC’s $92 Million Fine Against T-Mobile

WASHINGTON, March 24, 2025 – Judges questioned lawyers for both T-Mobile and the Federal Communications Commission Monday on whether the agency’s penalty process was upended by a recent Supreme Court decision that found a separate agency couldn’t collect fines without a jury trial. 

The carrier is appealing a $92 million fine the FCC handed down in April 2024 for allegedly failing to protect customer location data the company sold to third parties. The agency fined the major wireless carriers $200 million collectively for the practice. FCC Chairman Brendan Carr, then a commissioner, dissented from the order, but the agency is still defending it.

Three judges from the U.S. Court of Appeals for the D.C. Circuit heard arguments: Karen LeCraft Henderson, Florence Pan, and Bradley Garcia. Henderson was appointed by President George H.W. Bush, while Pan and Garcia were appointed by President Joe Biden.

T-Mobile argued the Supreme Court decision, Securities and Exchange Commission v. Jarkesy, should also render the FCC’s penalty system invalid. The agency under democratic Chairwoman Jessica Rosenworcel has argued, among other things, that the ruling doesn’t apply to the FCC because companies have the option of not immediately paying a fine, at which point the Justice Department can pursue the fines in court.

“Why isn’t it true that, even if there is a jury trial right in this context, it was provided and waived?” Judge Pan asked. “It was up to your clients to decide whether they wanted to just get a trial de novo by not paying the forfeiture.” De novo refers to new proceedings where an issue would be tried from scratch.

Helgi Walker, a partnerr at Gibson Dunn representing T-Mobile, pointed out that there’s no guarantee the DOJ will bring a case as the agency isn’t obligated to under the law. In the intervening time between nonpayment and a DOJ collection action, she argued the FCC would be able to hold its finding that T-Mobile violated the law against the company in other proceedings. 

AT&T, fined $57 million for the same alleged conduct, made a similar argument in the Fifth Circuit last month. The three major carriers opted to pay their respective fines, which allowed them to appeal the agency’s decision. 

“Under the Communications Act,” T-Mobile was “not required to pay any monetary penalty, which is the focus of Jarkesy, unless they first had a de novo trial in district court,”  John Grimm, counsel for the FCC, said. “While they chose to challenge the commission’s decision directly in this court, that was their choice. It was not mandated by the statute they claim is unconstitutional.”

Judge Garcia pressed the FCC on whether companies had a meaningful option to get a jury trial, since in some jurisdictions defendants in collection actions can only make factual arguments, as opposed to legal ones. 

“It’s not exactly a free choice to go to a jury if you have to waive all your objections to the legal determinations,” he said.

The companies did not dispute the underlying facts in this case, but T-Mobile said in a brief they “vigorously dispute the legal relevance of those facts and the FCC’s findings of liability based on them.”

Other issues

Judge Pan questioned why the agency fined the carriers for each third party data broker it sold to, even if it found the companies’ due diligence was lax, when only one was alleged not to have safeguarded customers’ data properly.

“I think they raise a strong argument that their reliance on the honor system was not crazy, given that in the vast majority of cases it worked,” she said. “This seems like a pretty harsh penalty.”

Grimm said the companies should have done more after it became public in 2018 that Securus provided location data to a sheriff’s office without court orders. 

“The commission found that the carriers didn’t take adequate steps to investigate the extent of the problem,” he said.

T-Mobile and the other carriers have also argued data at issue isn’t protected by the Communications Act. They say the law only governs data the companies have as a result of providing common carrier voice services, and not data they have as a result of providing data services.

Judge Pan appeared receptive to the agency’s argument that providers still have to safeguard information they acquire outside of the common carrier service, so long as they’re still in a common carrier relationship with a given customer.

“It seems to me,” she said, “just because the carrier is offering both telecommunications and data services doesn’t mean this is no longer a carrier-customer relationship.”