This guest post by BC Law Professor and Associate Dean of Academic Affairs Daniel Lyons first appeared in the AEIdeas Blog.

The Federal Communications Commission (FCC) has loomed large on the Supreme Court’s docket recently. Last term, the Justices addressed E-Rate fraud prevention efforts, the agency’s authority to bind courts, and the constitutionality of its Universal Service Program. Now the Commission is before the High Court. This new case, FCC v. AT&T, asks whether the FCC’s power to levy punitive fines violates the Seventh Amendment right to a trial by jury—a question whose resolution could reshape not just telecommunications regulation but the balance of power among agencies, courts, and juries.

AT&T builds on the Court’s 2024 decision in SEC v. Jarkesy. There, the court held that the Securities and Exchange Commission violated the Seventh Amendment by adjudicating an antifraud enforcement action in-house. The Seventh Amendment requires that “in suits at common law … the right of trial by jury shall be preserved,” which the Jarkesy Court extended to federal statutory claims that resemble traditional common law causes of action. Because the statutory antifraud provisions resembled common law fraud, and because the civil penalties were punitive rather than compensatory, the Court concluded the case had to be tried before a jury. Punitive fines of that kind were traditionally enforceable only in courts of law.

Jarkesy upended a long-standing consensus that such agency adjudications were constitutional, and lower courts have since struggled to define its scope. Last year, the Fifth Circuit relied on Jarkesy to strike down a $57 million FCC fine against AT&T for unlawfully sharing customer location data with business partners without adequate consent safeguards. The court characterized the enforcement action as analogous to a common law negligence claim and held that the punitive nature of the fine required a jury trial. That decision conflicted with rulings from two other circuits that had upheld FCC enforcement actions against similar Seventh Amendment challenges.

The Supreme Court granted review. Notably, the FCC does not dispute that its enforcement action resembles a common law claim under Jarkesy. Instead, it argues that the Seventh Amendment is satisfied because AT&T ultimately has access to judicial review before a jury. After an in-house adjudication, AT&T has two options. It could pay the fine and seek appellate review, without a jury. Alternatively, it could simply refuse to pay. In this instance, the FCC would refer the fine to the Justice Department, which has discretion to bring a collection action in federal court, where the case would be tried de novo before a jury. Because this latter path exists, the FCC contends that the Seventh Amendment’s jury-trial guarantee is met.

This argument is interesting but unconvincing. First, as AT&T notes, a jury trial is not available in this case because AT&T elected the pay-and-appeal option. The FCC may respond that the carrier had simply chosen not to avail itself of the jury trial option. More generally, the Seventh Amendment assures that a defendant facing liability will be judged fairly before a jury. It seems inconsistent to argue that the agency could instead judge the company itself, determine liability, and levy a fine, all in violation of Jarkesy, but could count on post-adjudicatory review to cure the agency’s unconstitutional behavior. Even if AT&T chose not to pay the fine, the Justice Department could choose simply not to collect the debt—in which case the government would effectively deny AT&T its day in court. The government would forego the fine but the liability ruling would stand. This is significant, as there are both legal and practical consequences for a carrier found to have violated federal law. Assuming the Justice Department does bring the case, AT&T must defend itself to a jury that knows the agency has found it guilty. While the trial is de novo, conceptually it can be hard to “unring the bell” by telling the jury to ignore this convenient fact.

Jarkesy is part of a series of Supreme Court decisions raising concerns about the separation of powers issues associated with the modern administrative state. The Constitution requires that the creation, enforcement, and adjudication of laws be vested in three independent branches of government. But the modern agency combines elements of all three powers in one institution. By separating the enforcement branch from adjudicatory officials, agencies can establish a separation of powers among agency personnel. But this is a pale imitation of the Constitution’s separation of powers among the branches of government. And the Seventh Amendment assures that a defendant’s guilt be determined by everyday citizens rather than professional bureaucrats.

AT&T thus presents the Court with a straightforward question: Whether the Seventh Amendment permits an agency to determine liability and impose punitive sanctions itself, so long as a jury trial may occur later—if the government chooses to pursue one. If Jarkesy means what it says, that conditional and discretionary path to a jury may not be enough.

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Daniel Lyons is a BC Law Professor and Associate Dean of Academic Affairs. He posts regularly at AEIdeas (Featured image via Adobe Stock).