AT&T v. FCC

United States Court of Appeals for the Fifth Circuit · 2025 · Administrative Law

Administrative LawArticle IIISeventh AmendmentAgency AdjudicationCivil PenaltiesFCCAT&Tsection 222

Facts

AT&T operated a location-based services program through location aggregators that collected customer location data and sold it to service providers. AT&T reviewed providers’ use cases and required providers to obtain and document customer consent, but it did not verify consent before giving access to location data and relied in part on aggregators and providers to enforce safeguards. After news reports revealed that some providers were misusing or inadequately protecting location data, AT&T terminated those providers and by March 2019 stopped providing location data to aggregators for location-based services. The FCC later found AT&T had willfully and repeatedly violated section 222 by unreasonably failing to protect customer data and imposed a $57 million forfeiture through its own internal adjudication process.

Issue

Whether the FCC may constitutionally adjudicate and impose civil forfeiture penalties against AT&T through its own in-house process, without first providing an Article III adjudicator and a jury trial. More specifically, the question was whether this enforcement action is a suit at common law outside the public-rights exception and whether the availability of a later section 504 collection action cures any constitutional defect.

Rule

When an agency seeks civil penalties that are punitive in nature and the statutory action bears a close relationship to a traditional common-law claim, the proceeding is a suit at common law for Seventh Amendment purposes. Such a matter presumptively involves private rights and must be adjudicated in an Article III court unless it falls within the narrow public-rights exception, which covers only matters historically determined exclusively by the political branches. A later section 504 collection action does not satisfy Article III or the Seventh Amendment where the agency has already found liability and imposed punishment, and where the later trial does not permit the defendant to challenge the order’s legal validity.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The Federal Transit Data Commission investigated HarborLine Mobility, a regional communications carrier based in Cleveland, for exposing riders’ location histories. After only written submissions, the commission imposed a $12 million monetary sanction, explaining that the amount reflected the gravity of the violation, HarborLine’s culpability, and the need to deter future misconduct; no customer would receive any of the money.

If HarborLine argues that the in-house proceeding triggered a jury-trial right, which is the strongest response under the governing doctrine?

Explanation. The court treated remedy as the more important factor in Seventh Amendment analysis. A civil penalty is legal in nature when it is punitive and designed to punish or deter, rather than restore the status quo or compensate victims. Here, the sanction is calibrated by gravity and culpability, paid to the government, and intended to deter, so it strongly indicates a suit at common law requiring a jury. (Derived from AT&T v. FCC (n.d.).)