FCC Challenges 5th Circuit’s Fine Restrictions for Enforcement Authority

On April 17, 2025, the U.S. Court of Appeals for the 5th Circuit vacated a $57 million FCC fine against AT&T for selling customer location data without consent, ruling that the agency violated the company’s Seventh Amendment right to a jury trial. In response, the Federal Communications Commission has filed briefs in the 2nd and D.C. Circuits urging those courts not to follow the 5th Circuit’s interpretation—an effort to create a circuit split that could prompt Supreme Court review and preserve the FCC’s power to impose monetary forfeitures on carriers and bad‐actor robocallers.

Background: 5th Circuit Verdict and Jarkesy Precedent

Last summer, the Supreme Court’s decision in Securities and Exchange Commission v. Jarkesy held that when the SEC seeks civil penalties, respondents are entitled to a jury trial under the Seventh Amendment. The 5th Circuit panel, composed of three Republican‐appointed judges, applied that ruling to the FCC’s enforcement regime under Section 222 of the Communications Act, which governs customer proprietary network information (CPNI). Because the FCC conducted its own in‐house adjudication—issuing a Notice of Apparent Liability (NAL), then an Order imposing the forfeiture—it was effectively acting as prosecutor, jury, and judge, the court said.

FCC’s Legal Strategy Across Circuits

In its brief to the 2nd Circuit (Docket No. 23-1987) and the D.C. Circuit (Docket No. 25-1052), the FCC argues that carriers can demand a de novo jury trial in federal district court under Section 504(a) of the Communications Act before any penalty is collected. By electing direct appellate review instead, Verizon and T-Mobile forwent that right. The agency cites an 1899 Supreme Court ruling allowing an initial administrative tribunal to enter judgment if a jury trial is available on appeal. The FCC also challenges the 5th Circuit’s reliance on non‐binding Eleventh Circuit precedent limiting de novo review.

Technical Mechanisms of FCC Enforcement

The FCC’s enforcement pipeline begins with automated compliance monitoring systems that ingest call detail records (CDRs), GPS metadata, and application logs under 47 C.F.R. Part 42. When anomalies—such as unauthorized CPNI disclosures or spoofed caller‐ID patterns—are detected, the Enforcement Bureau issues a NAL specifying the alleged violations. Carriers must respond with technical certifications, audit logs, and vendor reports within 30 days. If the bureau sustains its findings, it issues a Forfeiture Order, which the carrier can challenge either via jury trial in district court or directly at the appropriate circuit.

Implications for Network Operators and Robocall Mitigation Vendors

If the FCC loses its ability to impose fines administratively, telecom providers and third‐party call analytics firms may see a rollback of compliance requirements. The agency’s STIR/SHAKEN framework, for example, relies on a penalty threat to ensure call‐authentication certificates are properly managed and rotated. Robocall mitigation vendors—often hosted on AWS or Azure cloud platforms—use data sharing gateways approved by the FCC; without enforcement teeth, carriers may deprioritize integration, undermining caller‐ID authentication and consumer spam protection.

Potential Supreme Court Review and Broader Impact

A split between the 2nd, D.C., and 5th Circuits would heighten the likelihood that the Supreme Court grants certiorari under Rule 10. Legal experts note this case could reshape the “public rights” doctrine, affecting not only the FCC but agencies like the CFPB and FTC. If the Commission’s forfeiture process is deemed a public right properly handled administratively, agencies nationwide could retain broad fee and penalty powers without jury trials.

Expert Perspectives

• “The 5th Circuit’s narrow view of public rights undermines decades of regulatory enforcement practice,” says Prof. Mary Jane Seidenberg of Georgetown Law, who teaches administrative and telecommunications law.
• “Without clear rulemaking authority, the FCC’s fine process could grind to a halt, impacting consumer privacy safeguards,” notes telecom analyst Ravi Menon at IDC, pointing to a 25% year‐over‐year increase in CPNI complaints.
• “The technical burden on carriers to maintain call‐authentication logs is significant; losing enforcement leverage would slow industry‐wide STIR/SHAKEN adoption,” adds cybersecurity researcher Dr. Elena Kvirikashvili at MITRE.

Latest Developments

On May 8, 2025, the D.C. Circuit scheduled oral arguments for June 12 in the T-Mobile case, and the Supreme Court has invited the Solicitor General to file views on a cert petition by July. Meanwhile, the FCC’s 2025 Enforcement Bureau annual report shows a 30% rise in NALs for CPNI violations and a record $120 million in proposed fines against robocallers—figures likely at risk if the 5th Circuit stance prevails unchallenged.

Source: Ars Technica