Government Seeks SCOTUS Review of Decision Rejecting AT&T Data Fine
DOJ and the FCC asked the U.S. Supreme Court to overturn a decision by the 5th U.S. Circuit Court of Appeals that rejected a $57 million FCC fine against AT&T for violating the agency's data protection rules. The 5th Circuit ruled in April that the fine was unconstitutional because it denied AT&T's Seventh Amendment right to a jury trial. The 2nd Circuit later upheld a similar fine against Verizon, while the D.C. Circuit upheld one against T-Mobile (see 2509100056).
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The 5th Circuit denied the government's earlier request to review the decision en banc. The government has defended the fines -- which were imposed because the carriers allegedly failed to safeguard data on customers' real-time locations (see 2502030050) -- even though FCC Republicans Brendan Carr and Nathan Simington, who were commissioners at the time, opposed them last year. But the government now sees larger implications for the FCC’s authority to impose fines that go beyond the narrower issues in question in the case (see 2507180032).
“The Fifth Circuit’s decision is wrong,” the government told the high court in a petition filed last week. “This Court has twice held that Congress may commit the initial adjudication of a civil case to a non-Article III tribunal acting without a jury, so long as the parties may obtain de novo review in an Article III court with a jury.” The 5th Circuit ruling “has serious practical consequences, since it deprives the Commission of one of its most important regulatory remedies and severely impairs the agency’s ability to enforce federal communications law.”
A conflict between the judicial circuits has historically been one of the surest paths to SCOTUS review, and the brief noted that the decision in question “conflicts with recent decisions of two other courts of appeals that have rejected similar Seventh Amendment challenges to the FCC penalty scheme.” In addition, SCOTUS “usually grants review when, as here, a court of appeals has held a federal statute unconstitutional.”
The brief argued that the facts here are different from SEC v. Jarkesy. In that case, SCOTUS found that when the SEC levies civil penalties on defendants for securities fraud, the Seventh Amendment requires it to bring the action in court, where the defendant is entitled to a trial by jury (see 2406270063).
The statute in Jarkesy authorized the SEC “to seek civil penalties either by commencing an administrative proceeding within the agency or by filing suit in federal court,” the brief said. “The Communications Act, by contrast, does not authorize either the FCC or [DOJ] to seek monetary penalties in court without an antecedent administrative proceeding in which the Commission formally determines that a regulated party has violated the law.”