Justice Ketanji Brown Jackson told the carriers’ attorney, “Your argument is that you don’t have the right to initiate a jury trial unless the government comes after you in terms of enforcement proceedings, and I’m really struggling with why you’re not happy that the government is not coming after you. If the government is giving up its claim by not seeking to enforce it, then I don’t know why you would need the right to a jury trial, and that’s good for you.” Why doesn’t it matter?”
Wall argued that when a company’s primary regulator “tells us we owe $100 million… you can’t sit back and do nothing.” He said the FCC’s unpaid fine could harm the company in future FCC proceedings.
“The FCC can use the fact that we didn’t pay and we’re breaking the law when it considers character or persistent disregard of the law as statutory circumstances that the Commission can consider under various provisions dealing with things like licenses and spectrum,” Wall said.
SEC penalty system abolished
One question is whether the FCC violated the Supreme Court’s June 2024 decision Securities and Exchange Commission v. Jarkesywhich held that “when the SEC seeks civil penalties against a defendant for securities fraud, the Seventh Amendment gives the defendant the right to a jury trial.”
Wall argued that the FCC’s strategy would “leave a huge hole Jarkesy” agencies with schemes like were illegal Jarkesy He said even if regulated companies were to “effectively comply”, their seizure orders could be described as non-binding.
Suri countered that the enforcement powers of the two agencies were different, because the SEC could deduct fines from tax refunds or garnish wages. If the SEC goes after the non-payer in court, a lawsuit “will be limited to the issue of whether you paid the penalty,” without any “review of whether the underlying order was correct,” he said.
SEC fine decisions result in interest accruing immediately, he said, whereas interest on FCC fines accrues only after the jury makes a decision. “For the FCC, the only way to get a penalty is to file a collection lawsuit where you get a jury trial,” Suri said.
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