FOREFEITURE PHONY?: Supreme Court Upholds FCC’s Forfeiture Power– But Only Because It Doesn’t Really Mean Anything

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So the headlines around this new Supreme Court ruling in FCC v. AT&T will tell you the Supreme Court has upheld the FCC’s power to issue forfeiture orders– and that’s true.

But missed in all this is the much bigger issue– the reason SCOTUS upheld the power is because it isn’t really much of a power at all. Instead its more of a protection for regulated entities.

I’ll explain. But first, the background.

AT&T, Verizon and T-Mobile allegedly misused consumer data.

You have the background.

The FCC didn’t like it and issued forfeiture orders totaling over $100MM.

AT&T paid its penalty–about $57MM– but then challenged the order because no jury was involved in the determination and the Seventh Amendment assures no American (or company) is compelled to pay a civil penalty without a jury determining the facts.

The Supreme Court agreed with this assessment but ultimately found it didn’t matter because the FCC’s forfeiture order didn’t actually determine anything or require any payment.

See the FCC’s forefeiture order is just the first step in a lengthy process that must be followed before liability can be finally determined. Well, actually its the second step.

Here’s how it goes:

  1. FCC sends a letter.
  2. Party responds
  3. FCC issues order.
  4. Party can challenge or appeal (or pay).
  5. If party wins, case over.
  6. If party loses, DoJ can–but might not– sue to collect.
  7. To win the DOJ proceeding the government must prove everything all over again in front of a jury.

That last piece is critical.

Before At&T would ever have been compelled to turn over the $57mm the FCC ordered the DOJ would have to bring a case against it and prove everything the FCC found to the jury. So the FCC’s ruling isn’t very valuable at all– its sort of like a legal placeholder.

At&T complained that the ruling still made it look bad– but the Supreme Court shrugged. The constitution does not protect parties from being shamed by the government without a jury– it just protects people from having their legal rights determined without a jury.

So there you go– FCC maintains its “power” to issue forfeiture orders but SCOTUS has clarified that’s really not much of a power at all.

Then again, probably best to avoid one of these if possible!

Troutman Amin, LLP is one of the best telecom law shops in the nation. If you have questions on what the Commission’s rules require– give us a shout and avoid the chaos!

Chat soon.

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Published by Eric "Czar" Troutman

The Czar of TCPAWorld Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems. Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience. While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail. Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure. Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense. In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues.

1 Comment

  1. I think the Court’s order said it perfectly (quoting from FCC v. AT&T, INC (607 U. S. 1120–1121 (2026).)

    The Seventh Amendment “preserve[s]” the right to trial by jury in “Suits at common law.” It applies in all proceed ings, whatever their “peculiar form,” in which “legal rights” are to be “settle[d].” (Parsons v. Bedford, 3 Pet. 433, 447 (1830).)

    The Amendment requires only that, before legal rights and obligations are conclusively “ascertained and determined,” Parsons, 3 Pet., at 447, a party has the chance to insist that a jury make the “ultimate determination of issues of fact,” Ex parte Peterson, 253 U. S. 300, 310 (1920)

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