CJ Roberts Agrees with AT&T and Verizon, But Rules For FCC

I often describe Chief Justice Roberts’s decisions as “blue plate specials.” If you read the bottom line, it seems like the liberal side win, but the mechanics of the decision helps the conservatives in the long run. In other words, the right might lose the battle, but they win the war. After more than two decades, the Chief Justice has made this balanced approach to jurisprudence into an art form.

Today’s decision in FCC v. AT&T is the latest example.

The FCC alleged that AT&T and Verizon violated federal law, and assessed a forfeiture order of $57 million and $47 million, respectively. The order stated in capitalized bold letters the forfeiture was mandatory:

“IT IS ORDERED that, pursuant to section 503(b) of the Act, 47 U.S.C. § 503(b), and section 1.80 of the Commission’s rules, 47 CFR §1.80, AT&T, Inc., IS LIABLE FOR A MONETARY FORFEITURE in the amount of [$57,265,625] for willfully and repeatedly violating section 222 of the Act and section 64.2010 of the Commission’s rules.” App. to Pet. for Cert. in No. 25–406, at 131a.

The carriers argued that the government could not impose that fine without first providing a de novo trial in an Article III court under Jarkesy. But, following longstanding precedent, the carriers paid under protest, and brought suit to get their money back. The Fifth Circuit held that this regime, which required the mandatory payment of a fine before an Article III proceeding, violated the Seventh Amendment and Jarkesy.

As the case was litigated below, the question presented was whether the requirement to pay the fine before the proceedings is an Article III problem. But then the government, as it often does, changed the case on appeal. It turns out all along that the forfeiture was voluntary. These sophisticated firms were just too stupid to read a statute, and they mistakenly paid $100 million under protest.

On appeal, the Chief Justice whipped together a blue plate special. He agreed with AT&T and Verizon on the law, but ruled for the FCC. The Court stated, “The orders at issue . . . did not create an obligation to pay.” Who knew? If only all lawyers were as smart as John Roberts.

This case split 8-1. Only Justice Thomas in dissent was willing to say the quiet part out loud:

The Court agrees with AT&T and Verizon that they were entitled to a jury trial de novo before an Article III court before they could be forced to pay. It agrees that they did not in fact receive such a jury trial de novo. But, it rules in favor of the Commission. The Court does so because the Commission, after AT&T and Verizon paid it over $100 million, took the position that its orders were not really binding after all. The Commission now agrees that AT&T and Verizon would have been entitled to a jury trial de novo in an Article III court had they declined to pay. Because its orders were not binding until after that jury trial, the Commission says, AT&T and Verizon in reality paid the Commission voluntarily. The Court accepts that account and does not grant the carriers any relief. Because I would give the parties an opportunity to proceed under a correct understanding of the law, I respectfully dissent.

Justice Thomas would have decided the case that was actually presented to the Court.

But as a court, we must resolve the cases before us. Regardless of what the Commission will do in the future, or what the Court believes it should have done all along, we granted certiorari in cases arising from two orders that theCommission addressed to AT&T and Verizon in 2024. At that time, neither the Commission nor the courts complied with the limits that the Court describes today.

Whenever you see statistics about how often the Fifth Circuit is reversed, ignore those statistics. It happens all the time that the government switches position on appeals from the Fifth Circuit. You cannot fault lower court judges who decide a case on one grounds, and the Supreme Court reverses on entirely new arguments. I made this same point in 2024 about the mifepristone case, which was radically altered on appeal.

The worst part of the majority opinion is Footnote 5. What happens to the $100 million that the carriers already paid. Do they get a refund? The Chief Justice refuses to answer the most obvious question that was necessitated by this “newfound account.”

The carriers also argue that the specific forfeiture orders in this case misled them into paying, and that a refund is therefore appropriate. See Reply Brief 17–19; Tr. of Oral Arg. 75 (Government acknowledging thatit “cannot mislead someone into waiving his jury trial rights”); see also post, at 3, 6–7 (opinion of THOMAS, J.). We express no view on the merits of this argument, what relief may be available to the carriers, or in what proceeding.

The emperor has no clothes.

Now the case goes back to the lower court to determine if a refund is appropriate.

Still, I don’t think Verizon and AT&T will be too upset. The Supreme Court agreed with the SG, and effectively neutered this statutory scheme:

And as explained above, the Commission is powerless to visit any adverse consequences on a regulated party who receives a forfeiture order.

If the FCC issues a forfeiture order, carriers will simply decline to pay and wait to be sued. The FCC does not have the resources to bring all of these cases in federal court. The government may have won the battle but lost this war. I’m sure the career people at the FCC were infuriated by SG’s position, but here we are.