Fifth Circuit Rules FCC Enforcement Action Unconstitutional

Key Takeaways

• The U.S. Court of Appeals for the Fifth Circuit vacated a $57 million fine levied by the Federal Communications Commission (FCC) against AT&T.
• The court ruled the FCC's in-house enforcement proceedings violate the Seventh Amendment.
• The AT&T decision applies to all FCC enforcement actions (and seemingly any other federal agency enforcement action) seeking to impose fines through in-house agency adjudications.
• This decision may require the FCC and other federal agencies to seek legislative changes to their existing enforcement procedures and authority.

The Fifth Circuit has rendered its long-awaited decision in AT&T v. Federal Communications Commission, vacating a $57 million forfeiture order levied by the FCC against AT&T for allegedly failing to safeguard customers' location data. In reaching its decision, the Fifth Circuit primarily relied on the U.S. Supreme Court decision in Securities and Exchange Commission v. Jarkesy, finding that