D.C. Memo: Court Tosses FCC's $57 Million Fine Against AT&T, Vindicating Carr, Simington
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Fine: A panel of the U.S. Court of Appeals for the Fifth Circuit in New Orleans yesterday tossed out a $57 million fine against AT&T, saying the FCC violated the company’s Seventh Amendment right to a jury trial established by the Supreme Court in SEC v. Jarkesy in 2024. The FCC under Chairwoman Jessica Rosenworcel handed out the fine last year after concluding that AT&T failed to safeguard “customer proprietary network information” (“CPNI”) of mobile subscribers in sharing location geolocation data with data aggregators. AT&T had two options – pay the fine and appeal or not pay the fine and fight the Justice Department in court. Because neither involved a unrestricted jury trial mandated by the Seventh Amendment, the fine was unlawful, the court said. “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. Either way, AT&T’s Seventh Amendment rights have been denied,” the Fifth Circuit held in an opinion by Circuit Judge Stuart Kyle Duncan, who was joined by Catharina Hayes (judgment only) and Cory Wilson. In a key passage, the court explained, “The Commission cites no authority supporting the proposition that the constitutional guarantee of a jury trial is honored by a trial occurring after an agency has already found the facts, interpreted the law, adjudged guilt, and levied punishment.” FCC Chairman Brendan Carr dissented from the AT&T fine, saying among other things the issue was the purview of the FTC, as did FCC Commissioner Nathan Simington for his owns set of reasons. The FCC issued the AT&T fine a few months before Jarkesy wad decided; since then, Simington has refused to vote for any FCC-issued fine viewed as punishment, including the proposed $4.5 million fine pending against Telnyx for failure to take effective measures to block illegal calls. Free State Foundation President Randolph May yesterday called on the FCC to rescind the fine because Telnyx was not given fair notice – raising Fifth Amendment concerns different from the constitutional issues in Jarkesy. (PDF of Fifth Circuit ruling and more after paywall.)
