The U.S. Supreme Court wrestled Tuesday with how much latitude federal regulators have when they seek penalties under an enforcement process at issue in a data-privacy dispute involving Verizon and AT&T. The Federal Communications Commission, according to the case presented to the justices, found the telecom companies sold customers’ location data without proper safeguards and levied penalties totaling more than $100 million.
Verizon and AT&T appealed, arguing the FCC’s process is unconstitutional because it gives them little opportunity to present their side in court. In the courtroom arguments, several justices appeared skeptical of limiting regulators’ power in the way the companies sought, with Chief Justice John Roberts framing the dispute in terms that suggested he saw the core issue as more than a straightforward constitutional question.
Roberts said, “I wonder if, at the end of the day, you’re really just talking about a PR problem,” during the arguments. The comment underscored concern among at least some members of the court about what the companies were trying to accomplish beyond resisting the FCC penalties.
The Trump administration defended the FCC’s process as an essential regulatory tool, while also arguing it does leave a path to court. Justice Brett Kavanaugh highlighted the timing and structure of that path when he told an attorney for AT&T and Verizon that the government had indicated companies do not have to pay the penalties right away.
“It seems like you’ve won on the law going forward one way or the other,” Kavanaugh told the attorney, drawing attention to the concession the government made about when companies must pay. In the administration’s framing, that meant the enforcement structure was not denying a meaningful opportunity for judicial review, even if the companies had challenged the process as unfair.
The court’s questions play out against a broader backdrop in which the conservative majority has previously limited the power of federal agencies, including decisions that narrowed regulators’ advantage in court and reduced another agency’s ability to pursue securities fraud cases. Advocates in Tuesday’s arguments warned that a ruling favoring Verizon and AT&T could have wider effects for other agencies that use similar enforcement mechanisms.
The companies, according to a veteran telecom attorney quoted in the arguments, face two options after receiving notices that they have violated FCC regulations. One option is to pay the penalty and then contest it in an appeals court, while the other is to refuse to pay and wait for a federal lawsuit that could eventually go before a jury, though Doug Orvis said neither option is viable for most companies, so they typically pay up.
A ruling is expected by late June, with the justices’ questioning Tuesday suggesting they are closely focused on whether the constitutional challenge would meaningfully constrain regulatory enforcement authority beyond the telecom case itself.