SCOTUS Rules Against AT&T, Verizon Over Fines For Selling Location Data

The Supreme Court ruled Tuesday against AT&T and Verizon in a closely watched dispute over federal penalties tied to the sale of consumers’ real-time location data. The decision preserves the FCC’s authority to impose financial penalties through its administrative enforcement system. It is a major victory for federal regulators seeking to police privacy violations in the telecommunications industry.

Last year, AT&T persuaded the 5th U. S. Circuit Court of Appeals to throw out an FCC fine, arguing that the agency’s process improperly bypassed a jury. Verizon, however, lost a similar challenge before the 2nd Circuit, creating conflicting rulings that prompted Supreme Court review. In an 8-1 decision, the justices sided with the FCC and overturned the 5th Circuit’s ruling. Justice Clarence Thomas was the lone dissenter, ARSTechnica reported.

Strengthening Regulatory Powers

The ruling strengthens the federal government’s power to impose administrative penalties on companies accused of breaking telecommunications and privacy laws, while reducing a constitutional challenge that could have greatly restricted the enforcement powers of regulatory agencies. After paying the penalties, both companies challenged the FCC’s enforcement process in federal court, arguing that the agency’s system violated their Seventh Amendment right to a jury trial. Under the FCC framework, companies can pay a fine and seek review through the federal appeals courts rather than having the case initially decided by a jury.

Writing for the Court’s majority, Chief Justice John Roberts rejected that argument, concluding that the companies were not denied access to a jury trial because an alternative path remained available to them. According to the Court, the carriers could have refused to pay the fines and forced the government to pursue collection efforts, a process that ultimately could have resulted in a jury trial.