Supreme Court Decision Elevates DOJ’s Role in Future FCC Enforcement Actions

In a recent decision, the US Supreme Court upheld the Federal Communications Commission’s authority to issue forfeiture penalties but required the option for a jury trial to enforce their collection, which now elevates the US Department of Justice’s role in such enforcement actions.

The US Supreme Court’s recent decision in FCC v. AT&T marks a significant but qualified victory for the Federal Communications Commission’s (FCC or Commission) enforcement authority.[1] In an 8-1 ruling, the Court upheld the FCC’s longstanding forfeiture process against constitutional challenge, concluding that the agency may investigate violations, issue notices of apparent liability, and assess monetary forfeitures without first providing a jury trial.[2]

Crucially, however, the Court’s reasoning rested on a feature of the Communications Act of 1934, as amended (Communications Act), that simultaneously elevates the role of the US Department of Justice (DOJ) in FCC enforcement actions. The distinction matters in the post-SEC v. Jarkesy[3] environment because it is now clear that an FCC forfeiture order is not a self-executing money judgment—with all of the consequences that flow from such an action—but instead serves as an initial, non-binding finding that will have to be resolved in federal district court should a party choose not to do so at the administrative level.

While the decision preserves the FCC’s ability to pursue enforcement administratively, it confirms that the FCC cannot unilaterally collect or compel payment of a forfeiture. Instead, the Commission must rely on DOJ to convert a forfeiture order into an enforceable judgment in federal court in a trial de novo setting (i.e., without deference to the FCC’s administrative factual or legal findings),[4] which underscores DOJ’s position as the indispensable gatekeeper for collection and judicial enforcement.

Accordingly, a target of an FCC investigation or enforcement action should evaluate the strength of the FCC’s case through the litigation lens that DOJ will apply to assess its options in responding to, challenging, or settling an enforcement action. For the FCC, the ruling increases the practical pressures it faces to bring enforcement actions, especially for high-profile matters, within the Communications Act’s one-year applicable statute of limitations period (with limited exceptions for violations involving spoofed communications) that DOJ can then subsequently enforce in a trial de novo collection action.

Key Takeaways

• The Court’s decision keeps the FCC’s administrative forfeiture process intact, but only because an unpaid forfeiture order does not impose a lien or create an executable judgment on its own transfer money.
• For contested matters, DOJ’s decision on whether to bring a Section 504(a) collection action is the practical gateway to enforcement; DOJ will need to establish a record and legal theory that can survive de novo review in federal district court.
• Regulated entities should evaluate their enforcement response strategy and the quality of the FCC’s investigative record against the backdrop of potential DOJ-related litigation down the road by focusing on the preservation of factual defenses, legal objections, and penalty arguments during the administrative phase.

THE COURT’S DECISION

The consolidated cases arose from FCC investigations into how multiple telecommunications service providers handled customer location data. After determining that the providers had violated statutory and regulatory privacy obligations governing location data specifically, and customer proprietary network information (CPNI) generally, the FCC assessed forfeitures totaling almost $200 million. The providers challenged the FCC’s enforcement process, arguing that the assessment of monetary penalties without a jury trial violated the Seventh Amendment.

The Supreme Court rejected that argument. Chief Justice John Roberts, writing for the majority, emphasized that FCC forfeiture orders are not self-executing.[5] The Court found that the Communications Act does not authorize the FCC to collect penalties on its own, impose liens, garnish assets, or otherwise compel payment. Rather, if a target refused to pay, the FCC had to refer the matter to DOJ, which may then bring a civil collection action in federal district court.[6] Any such action would proceed on a trial de novo basis, allowing a jury to determine liability and damages independent of the FCC’s prior findings.[7]

The Court concluded that the Communications Act’s statutory scheme satisfied the Seventh Amendment because compulsory payment could occur only after the United States prevailed in federal court.[8] The opinion thus treated the Communications Act’s collection mechanism as materially different from regulatory regimes in which an agency both adjudicated liability and entered an enforceable penalty judgment.

DOJ AS THE ULTIMATE ENFORCEMENT ACTOR

Although the decision preserves the FCC’s enforcement authority, its practical effect is to highlight, and potentially expand, the practical importance of DOJ’s participation in enforcement matters involving the communications sector. The ruling does not transfer the FCC’s administrative enforcement authority to DOJ; however, it elevates DOJ’s collection enforcement judgment, especially when it comes to contested, high-value matters.

The Court repeatedly emphasized that an FCC forfeiture order alone creates no enforceable obligation to pay. Enforcement and collection depend on a separate decision by DOJ to file suit.[9] If DOJ declines to pursue collection, the forfeiture remains effectively unenforceable. This aspect of the Court’s ruling reinforces DOJ’s role as an independent enforcement checkpoint between FCC adjudication and judicial proceedings that involve forfeiture collection.

INCREASED STRATEGIC IMPORTANCE OF DOJ REVIEW AND LITIGATION RISK ASSESSMENTS

Historically, many FCC forfeiture matters have been resolved before reaching the collection stage. For many regulated entities who appear before the Commission on a consistent basis for issues involving FCC-issued licenses, authorizations, and compliance-related obligations, resolving an enforcement matter on favorable terms may outweigh the uncertainty and expenses associated with the prospect of a protracted litigation posture.

That said, the Supreme Court’s decision reinforces that DOJ review is not merely a procedural formality but a substantive enforcement determination that could result in increased coordination between the FCC’s Enforcement Bureau and DOJ litigators much earlier in the enforcement process to analyze evidentiary sufficiency and litigation risk.

For instance, the FCC’s Enforcement Bureau, in coordination with the Office of General Counsel, might seek DOJ’s input on its evidence, legal theory, or penalty rationale before presenting a Notice of Apparent Liability for the Commission’s consideration. DOJ’s assessment might determine that the investigation lacks key evidence that could cause the FCC to reconsider whether to bring an enforcement action, narrow the alleged violations, or adjust the proposed penalty—or, DOJ might not find the FCC’s legal theory or penalty calculation to be one that can withstand de novo scrutiny by a judge or jury in federal district court.

Separate from evaluating the evidentiary record and quality of the FCC’s investigations and enforcement actions, DOJ must also decide whether pursuing a collection action serves broader federal enforcement interests. Resource constraints, litigation priorities, potential evidentiary concerns, and unrelated policy considerations may influence whether DOJ elects to proceed.

Those decisions could also involve multiple layers of decision making within DOJ that requires coordination between DOJ’s Civil Division and the specific US Attorney’s Office that would represent the United States in a trial de novo in court. Even then, it could matter which US Attorney’s Office will be handling the collection of the forfeiture order given the differences in perceived capability and approach between US Attorney’s Offices.

For the FCC’s highest profile enforcement matters or those that result in its largest forfeiture penalties DOJ’s views will carry significantly more weight than in the past. Consequently, regulated entities may increasingly view anticipated engagement with DOJ as a critical component of enforcement strategy.

POTENTIAL IMPACT RESULTING FROM GREATER LITIGATION EXPOSURE IN FEDERAL COURT

Because Section 504(a) collection actions proceed de novo, defendants have an opportunity to challenge factual disputes, legal defenses, and penalty issues before a federal district court and, where applicable, a jury.[10] The FCC’s administrative findings are not binding on the court or jury.

DOJ attorneys (not the FCC enforcement personnel that conducted the underlying investigation) will be the principal litigators in high-stakes forfeiture disputes. Currently, the FCC’s litigators consist primarily of appellate advocates who defend challenges to FCC final orders and rules filed in appellate courts under the Hobbs Act.[11] The FCC will need to consider bolstering its trial court litigation expertise now that the effectiveness of its enforcement actions may depend as much on DOJ’s litigation strategy as on the Commission’s underlying investigation.

Further complicating matters are the Supreme Court’s recent decisions eroding any deference the FCC previously enjoyed in its interpretation of federal statutes.[12] Therefore, the FCC’s policy and rulemaking bureaus and offices will need to ensure that they employ appropriate precision when promulgating regulations for which violations can result in monetary penalties. The lack of deference, coupled with any ambiguity associated with the relevant regulations, could result in arguments invoking the equivalent of a civil rule of lenity concern[13] or fair-notice defense.

The decision should not be interpreted to mean that every FCC forfeiture matter is likely to proceed to result in litigation. We anticipate that many matters will continue to be resolved through consent decrees and settlements or the payment of forfeitures. The principal change is that high-dollar, novel, or heavily contested matters may warrant an earlier assessment of the case that DOJ would need to prove.

IMPLICATIONS FOR REGULATED ENTITIES

The Court’s decision and the enhanced role DOJ may play will likely be relevant to areas where the FCC has demonstrated a heightened interest in enforcement, including the following:

• National security and supply chain risk concerns revolving around access to US communications networks, the operation of submarine cable systems, and issuance of FCC equipment authorizations
• Cybersecurity, network security, and incident-reporting obligations
• Consumer protection issues involving illegal robocalls, robotexts, spoofing, and telecommunications fraud mitigation
• Fraud, waste, and abuse involving multibillion-dollar programs the FCC administers, such as the Universal Service Fund and the Supply Chain Reimbursement Program
• Radio frequency and spectrum regulation involving harmful interference, exposure limits, unauthorized/unlicensed operations, and the importation, marketing, or sale of non-compliant devices
• Emergency communications, network outage reporting, and resiliency requirements
• Artificial intelligence and other emerging technology initiatives that implicate FCC jurisdiction

For telecommunications providers, submarine cable operators, broadcasters, satellite operators, equipment manufacturers, and other FCC-regulated entities, the ruling clarifies that constitutional challenges to the FCC’s forfeiture framework face a steeper path following the ruling.[14] The Court has now affirmed the agency’s administrative enforcement structure.

Companies facing significant forfeitures or involved in high-profile or novel enforcement matters should recognize that the ultimate enforcement battleground may be federal district court rather than the FCC itself. Because forfeiture collection requires DOJ involvement and judicial proceedings, enforcement targets may have additional opportunities to contest liability, challenge legal interpretations, and develop factual defenses. Those opportunities may be most meaningful after the FCC issues a forfeiture order and the government, through DOJ, must decide whether to seek collection in court.

The decision may also affect settlement dynamics at both the FCC and DOJ levels. Both the FCC and regulated parties now have clearer guidance regarding the procedural path that follows a contested forfeiture order. That clarity could influence negotiations over whether disputes are resolved administratively or litigated (and potentially later settled) through DOJ-led collection actions.

LOOKING AHEAD

The Supreme Court’s ruling preserves one of the FCC’s most important enforcement mechanisms at a time when federal agencies face increasing judicial scrutiny. However, the opinion achieves that result by emphasizing the constitutional significance of federal judges and juries serving as the final backstop in the Communications Act’s enforcement process.

Far from diminishing DOJ’s involvement, the Court’s reasoning makes clear that it serves as the essential bridge between administrative findings and enforceable monetary penalties.[15] Going forward, contested collections of FCC forfeitures will depend not only on the Commission’s investigative authority, but also on DOJ’s willingness, resources, strategy, and ability to carry those cases into federal court.

Moreover, even if DOJ were to initiate a forfeiture collection suit, nothing would preclude it from settling that matter in a manner consistent with its assessment of the strength of the case and the litigation risk involved if the case were to proceed before a judge or jury.

For regulated entities, the message is equally clear: while the FCC may initiate the enforcement process, DOJ now firmly occupies a more visible and consequential position in determining whether, and how, FCC penalties are ultimately enforced.

HOW WE CAN HELP

Our lawyers stand ready to assist with any questions on the topics discussed in this LawFlash. Members of our team have deep backgrounds in this space, including Loyaan A. Egal, who served as chief of the FCC Enforcement Bureau, led the FCC’s Privacy and Data Protection Task Force, and established what is now the FCC Enforcement Bureau’s Fraud Division. He also previously served as a deputy chief in the Foreign Investment Review Section of DOJ’s National Security Division and as an Assistant US Attorney in the Southern District of New York and the District of Columbia.