Administrative Adjudication Appeal May Waive Seventh Amendment Right to Jury Trial

The Seventh Amendment right to a jury trial puts significant limits on administrative adjudications, but defendants may waive that right without realizing it.

There is now a circuit split on whether payment of a Federal Communications Commission (FCC)-imposed administrative penalty, paid in order to appeal, is a waiver of the right to a jury trial. The Supreme Court’s 2024 decision in Jarkesy v. United States held that there is a right to a jury trial when a company faces Securities and Exchange Commission (SEC) prosecution for fraud.

Three recent circuit decisions, however, analyzing a very similar issue under FCC proceedings, came to contrary results. Whereas all three agreed that there is a right to a jury trial in FCC administrative proceedings, two of the decisions found that right had been waived by paying the FCC-imposed penalty and then seeking an appeal.

Jarkesy v. United States Determines There Is a Right to a Jury Trial in Response to an SEC Fraud Claim

Jarkesy addresses whether an entity facing an SEC prosecution for fraud is entitled to a trial by jury. In that matter, the SEC chose to prosecute the fraud in an administrative proceeding and found the entity liable, issuing a civil penalty of $300,000. The Supreme Court overturned it.

In its decision, the Supreme Court determined first that the entity was entitled to a jury trial because the fraud claim was akin to a common law claim to which the Seventh Amendment right to a jury trial applies. Second, the Supreme Court determined that the “public rights” exception, under which Congress can assign specific matters to agencies for adjudication, did not apply. That was because Congress does not have discretion to remove jurisdiction that Article III courts traditionally hold, such as common law fraud claims. Accordingly, the judgment was invalid.

The Fifth Circuit Follows Jarkesy Regarding an FCC Proceeding

The third largest telecommunications company globally operated a location-based services program that shared customer location data with third-party aggregators and service providers. After media reports of misuse, the FCC investigated, issued a letter of inquiry, and later proposed a $57 million penalty for willful and repeated violations. The telecom company responded in writing, arguing, inter alia, that the enforcement regime violated Article III and the Seventh Amendment. The FCC rejected these arguments and issued a final forfeiture order in 2024. The company paid the penalty and petitioned the Fifth Circuit for review.

The Fifth Circuit granted AT&T’s petition and vacated the forfeiture order. . Relying on Jarkesy, the court held that the FCC’s in-house adjudication of civil penalties violated the Seventh Amendment and Article III. The court reasoned that the penalties were punitive, not remedial, and thus constituted a “suit at common law” requiring a jury trial. It also found that the public-rights exception did not apply because the enforcement action closely resembled a common law negligence claim.

It is also important to note that the court rejected the FCC’s argument that the possibility of a later trial satisfied the Seventh Amendment. An entity aggrieved by an FCC determination has two options for redress. One is to pay the penalty and take an immediate appeal to a federal court of appeals. The alternate is to wait for the FCC to seek to enforce the penalty through a suit in federal district court, at which point the entity would be entitled to de novo review and jury trial of the FCC’s determination. 47 U.S.C. § 504(a).

In this case, the Fifth Circuit determined that a jury trial in an enforcement proceeding did not fulfill the Seventh Amendment guarantee because such a trial would occur only after the agency had already acted as “prosecutor, jury, and judge” and because waiting for an enforcement action while the FCC’s determination of liability remained of record would have reputational consequences.

The D.C. and Second Circuits Find That Appealing from an FCC Administrative Adjudication Waives the Right to a Jury Trial

The FCC investigated two of the world’s largest telecommunications companies after reports claimed the companies were misusing customer location information, the same issue as in the matter described above. Following letters of inquiry and an investigation, the FCC issued preliminary determinations in 2020. The companies responded in writing, disputing liability and the proposed penalties. In 2024, the FCC affirmed the preliminary determinations and imposed penalties totaling $92 million. Sprint and T-Mobile paid the penalties and, concurrently, petitioned the D.C. Circuit for review, with the key argument being that the FCC enforcement process violated their Seventh Amendment right to a jury trial.

The D.C. Circuit affirmed. On the Seventh Amendment challenge, the court noted that the carriers had the statutory option to seek a jury trial in an enforcement action but waived that right by paying the penalties and seeking appellate review.

In a similar decision, on Sept. 10, the Second Circuit also found a waiver of any right to a jury trial. In Verizon Communications Inc. v. FCC, No. 24-1733 (Sept. 10, 2025), the FCC accused Verizon of failing to safeguard customer data and imposed a $46.9 million fine in an administrative proceeding. Verizon paid the fine and appealed. The Second Circuit “assume[d] for the sake of argument” that there is a right to a jury trial when facing the FCC penalty but ruled that Verizon waived that right when it sought appellate review rather than waiting for an enforcement action. The court distinguished the matter before it from Jarkesy because, unlike the SEC, the FCC would be unable to collect any of the penalty without proceeding to the district court, where a de novo jury trial would be available to Verizon.

Entities Must Weigh the Potential Harm of Nonpayment Against the Risk of a Waiver of the Right to a Jury Trial

The key question left open by the differing results in AT&T versus Sprint and Verizon appears to be whether taking an appeal waives the right to a jury trial. Two of the appellate courts agree (and the third assumed) that there is a right to a jury trial in these proceedings. The differing results come from the significance two of the courts found in the decision to pursue an appeal. Impacts from an entity’s decision on that point create several important considerations for clients facing administrative actions before the FCC.

First, pursuit of an appeal may be a waiver of the right to a jury trial. The D.C. Circuit’s decision is unequivocal that payment of the fine, in order to go directly to the court of appeals, is a waiver of the jury trial right. The Second Circuit focuses on the fact of the appeal, rather than the payment of the fine, but comes to the same conclusion. In making that determination, both courts dismissed claims that having to wait for a jury trial until after the FCC’s initial determinations rendered that procedure insufficient. Specifically, the D.C. Circuit did not accept that allowing the FCC to make a determination in the first instance violated separation of powers issues. Also, the D.C. Circuit and Second Circuit courts rejected the claim that an entity’s reputational harm due to having an adjudication against it was sufficient to require a jury trial (the Second Circuit stated that it “share[s] Verizon’s concern regarding these ‘real-world impacts,’” but did not find them to matter to the Seventh Amendment analysis). Accordingly, those who receive a penalty in an FCC administrative action should take pause before paying the penalty and proceeding to a court of appeals.

Second, it is unclear how this circuit split will resolve. Although it does not appear that the Fifth Circuit considered the waiver specifically, many of the issues that the D.C. and Second Circuit courts found important to the waiver analysis are the same issues that the Fifth Circuit found require a jury review in the first instance. To wit, the Fifth Circuit found that there was a separation of power harm in allowing the FCC to operate as “prosecutor, jury, and judge” and found tangible reputational harm in an entity having to allow an FCC determination to exist in the public record for years before achieving a jury trial in district court. Equally, Jarkesy does not provide helpful guidance on this issue because the jury trial right in the SEC proceeding at issue there was a review in the first instance, so that case is not on all fours with this issue.

Third, the arguments at issue in AT&T, Sprint and Verizon are potentially available in other forums. There are likely any number of other administrative proceedings where there is an option to go directly to a court of appeals for review. Doing so, however, may serve to waive any argument of a right to a jury trial. Conversely, because Jarkesy, AT&T and Sprint all recognize a jury-trial right in administrative proceedings involving claims rooted in common law, one can argue that such rights foreclose administrative prosecutions across a range of agencies. Until the Supreme Court resolves the split, companies facing agency penalties must carefully consider whether paying a fine to expedite appellate review is worth the potential forfeiture of their constitutional right to a jury trial. Savvy clients would do well to consult with attorneys who are familiar with these precedents before foreclosing the possibility of relying upon them.

This document is intended to provide you with general information regarding case law surrounding the right to jury trial in FCC proceedings. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.