The case stems from enforcement actions against AT&T and Verizon for violating customer data protection requirements under the Telecommunications Act of 1996. The FCC concluded both companies failed to protect confidential customer location information and issued forfeiture orders requiring AT&T to pay $57 million and Verizon to pay $46.9 million within 30 days. Neither company received a hearing or trial before the agency issued the penalties.

The dispute centers on the FCC's two-track enforcement system. Carriers can either pay the fine immediately and seek appellate review under a deferential standard, or refuse payment and potentially face a Department of Justice lawsuit in federal district court within five years, where they would be entitled to a jury trial.

The U.S. Court of Appeals for the 5th Circuit sided with AT&T, striking down the fine. Judge Stuart Kyle Duncan wrote that "in this process, which was completely in-house, the Commission acted as prosecutor, jury, and judge."

The U.S. Court of Appeals for the 2nd Circuit reached the opposite conclusion for Verizon. Judge Alison Nathan wrote that "[n]othing about the Commission's proceedings … transgressed the Seventh Amendment's jury trial guarantee."

Solicitor General D. John Sauer defends the current system, arguing the in-house proceeding "is not a lawsuit, much less a lawsuit seeking money damages." He stresses that "the FCC cannot require a carrier to pay a single dime" without a subsequent DOJ enforcement action, maintaining that the Seventh Amendment is satisfied because carriers can obtain jury trials in any DOJ collection lawsuit.

AT&T and Verizon argue that "the after-the-fact possibility of a jury trial in a separate debt-collection action does not satisfy the Seventh Amendment." They emphasize the Supreme Court "has never approved a penalty-now-trial-later approach to the Seventh Amendment" and contend the forfeiture orders themselves create immediate legal obligations by determining carriers "shall be liable to the United States."

The companies also invoke the unconstitutional conditions doctrine, arguing the FCC system forces them to surrender either their right to jury trial or their right to judicial review. They note that carriers "have always opted to pay the forfeiture order rather than wait" for potential DOJ enforcement because waiting subjects them to "serious practical and reputational harms from the final FCC order."

The FCC warns that a ruling against its enforcement scheme would "seriously disrupt the Commission's administration of" federal communications laws. The agency argues that "[f]orfeitures are among the FCC's most important enforcement tools" and without them, "many vital rules—such as those protecting privacy, combating robocalls, and regulating broadcasting" would "go effectively unenforced."

The case will be argued on April 21, 2026.