Both Sides Urge SCOTUS to Resolve Circuit Split on FCC Data Fines
The U.S. government, CTIA and the U.S. Chamber of Commerce agreed in filings at the U.S. Supreme Court that justices should resolve a circuit split over whether the FCC properly handed down fines against AT&T, Verizon and T-Mobile for violating the agency's data privacy rules. AT&T, which won its case in the U.S. Court of Appeals for the 5th Circuit, had also urged SCOTUS to resolve the split (see 2512050055). Briefs were filed last week in docket 25-567.
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DOJ and the FCC said the 2nd Circuit, which upheld the fine against Verizon (see 2511170035), “correctly determined that the forfeiture order at issue here complies with the Seventh Amendment.” But they agreed with Verizon “that the question presented warrants this Court’s review and that the petition should be granted.” The government previously challenged the 5th Circuit decision.
SCOTUS should “realign the parties” in the case, so “carriers are on one side and the FCC is on the other,” but need not do so prior to granting certiorari, the government added. “Instead, the Court should enter an appropriate order after it grants review and the parties negotiate a briefing schedule.”
The 2nd Circuit decision “deepened” the circuit split after the D.C. Circuit upheld a fine against T-Mobile for data violations in August (see 2508150044), CTIA told SCOTUS. The group's members are broadly affected by the 2nd Circuit decision, it said, because if that court's analysis stands, they “risk being denied their right to a jury trial whenever they are accused of violating the Communications Act or the FCC’s rules.”
CTIA also said the 2nd Circuit’s decision is contrary to SEC v. Jarkesy, a 2024 case in which justices found that when the SEC seeks civil penalties against a defendant for securities fraud, the Seventh Amendment entitles the defendant to a jury trial, and the agency must bring the action in federal court. In the 2nd Circuit’s view, “an agency can hold a party liable for violations of federal law and demand financially ruinous penalties … without ever presenting its case before a jury,” CTIA said. That would mean vesting agencies with “jury-free, adjudicatory power … as long as those agencies then hold targets in years-long purgatory with what ultimately has turned out to be an illusory opportunity for a jury trial at the end of the tunnel.”
The case presents “a circuit split in its starkest form,” CTIA added. Three different courts of appeals, “within the span of a single month, considered the same constitutional question applied to the same statutory scheme arising out of the same agency investigation involving essentially the same facts.” The disagreements among the courts “turn on pure questions of law,” with two of the circuits “expressly acknowledging the split.”
The FCC “exceeded its authority by violating [Verizon’s] Seventh Amendment jury trial right,” the U.S. Chamber said. “To make matters worse, the FCC imposed a staggering penalty based upon a novel interpretation of the Communications Act and for conduct that was not at the time a violation of any agency rule or law.”