Amicus Curiae Brief — Federal Communications Commission, et al., Petitioners v. AT&T, Inc.

No. 25-406, No. 25-567

In the Supreme Court of the United States

____________

F EDERAL C OMMUNICATIONS C OMMISSION , ET AL .,

Petitioners,

v.

AT&T, I NC.,

Respondent.

____________

VERIZON C OMMUNICATIONS I NC.,

Petitioner,

v.

F EDERAL C OMMUNICATIONS C OMMISSION , ET AL .,

Respondents.

____________

On Writs Of Certiorari To The United States

Courts Of Appeals For The Fifth and Second Circuits

____________

BRIEF OF PACIFIC LEGAL

FOUNDATION AS AMICUS CURIAE

IN SUPPORT OF AT&T, INC. AND

VERIZON COMMUNICATIONS INC.

____________

O LIVER J. D UNFORD

Pacific Legal Foundation

4400 PGA Blvd.

Suite 307

Palm Beach Gardens, FL

33410

ALLISON D. D ANIEL

Counsel of Record

J OSHUA M. R OBBINS

Pacific Legal Foundation

3100 Clarendon Blvd.

Suite 1000

Arlington, VA 22201

Telephone: (202) 888-6881

ADaniel@pacificlegal.org

Counsel for Amicus Curiae Pacific Legal Foundation

TABLE OF CONTENTS

Interest of Amicus Curiae .......................................... 1

Introduction and Summary of the Argument ............ 2

Argument .................................................................... 3

I.

The FCC’s punitive monetary penalties

implicate private rights and therefore require

Article III adjudication and a civil jury........... 3

A. The Commission’s forfeiture orders

adjudicate legal liability and impose punitive

monetary penalties. ....................................... 4

B. The claims and remedies here are closely

analogous to common-law actions ................ 5

C. Atlas Roofing cannot justify administrative

adjudication of punitive monetary liability

for common-law-analogous claims ................ 7

II. The Communications Act’s back-end collection

suit does not satisfy Article III or the Seventh

Amendment and it renders the jury-trial right

illusory in practice ........................................... 9

A. A later collection suit cannot cure a

constitutional violation that occurs when the

agency adjudicates liability and imposes

punishment .................................................... 9

B. The pay-or-refuse choice makes the jury

right contingent and often irrational to

exercise. ....................................................... 10

C. For many parties, especially smaller

businesses and individuals, Article III

adjudication and the jury right are illusory

in practice .................................................... 13

Conclusion ................................................................. 18

ii

TABLE OF AUTHORITIES

Page(s)

Cases

AT&T, Inc. v. FCC,

149 F.4th 491 (5th Cir. 2025) .......... 2, 5, 6, 10, 14

Atlas Roofing Co., Inc. v. Occupational

Safety & Health Rev. Comm’n,

430 U.S. 442 (1977) ......................................... 7, 8

Axon Enterprise, Inc. v. FTC,

598 U.S. 175 (2023) ..................................... 12, 13

Curtis v. Loether,

415 U.S. 189 (1974) ............................................. 6

Ellingburg v. United States,

No. 24-482, 607 U.S. ___

(U.S. Jan. 20, 2026) ............................................. 4

FCC v. Fox Television Stations, Inc.,

567 U.S. 239 (2012) ........................................... 14

Free Enterprise Fund v. Public Company

Accounting Oversight Board,

561 U.S. 477 (2010) ........................................... 10

FTC v. Standard Oil Co. of Cal.,

449 U.S. 232 (1980) ........................................... 12

Granfinanciera S.A. v. Nordberg,

492 U.S. 33 (1989) ................................... 3, 5, 7, 8

Jake’s Fireworks, Inc. v. Consumer Product

Safety Commission,

105 F.4th 627 (4th Cir. 2024), cert.

denied, 145 S. Ct. 2700 (2025) .......................... 14

iii

Koontz v. St. Johns River Water

Management District,

570 U.S. 595 (2013) ..................................... 11, 12

Leachco, Inc. v. Consumer Product Safety

Commission,

103 F.4th 748 (10th Cir. 2024), cert.

denied, 145 S. Ct. 1047 (2025) .................... 15, 16

Sackett v. EPA,

566 U.S. 120 (2012) ..................................... 11, 12

SEC v. Cochran,

20 F.4th 194 (5th Cir. 2021) ............................. 13

SEC v. Jarkesy,

603 U.S. 109 (2024) ......................... 3, 5, 6, 7, 8, 9

Stern v. Marshall,

564 U.S. 462 (2011) ......................................... 5, 8

Tilton v. SEC,

824 F.3d 276 (2d Cir. 2016) ............................... 13

Tull v. United States,

481 U.S. 412 (1987) ................................. 3, 4, 6, 7

U.S. Army Corps of Engineers v. Hawkes

Co., 578 U.S. 590 (2016) .............................. 11, 12

Verizon Commc’ns Inc. v. FCC,

156 F.4th 86 (2d Cir. 2025) ............................. 2, 9

Statutes

47 U.S.C. § 222 .......................................................... 4

47 U.S.C. § 401(a) ..................................................... 5

47 U.S.C. § 503(b) ............................................. 4, 5, 6

47 U.S.C. § 503(b)(2)(B) ............................................ 4

47 U.S.C. § 503(b)(2)(E) .................................. 4, 7, 13

iv

47 U.S.C. § 503(b)(4) ............................................. 2, 5

47 U.S.C. § 504(a) ................................................... 10

Other Authorities

47 C.F.R. § 64.2010(a)............................................... 6

Breger, Marshall, Short Circuiting the

Administrative Judiciary: A Response to

Linda Jellum, 101 Tex. L. Rev. Online

173 (2023) .......................................................... 13

INTEREST OF AMICUS CURIAE 1

Founded in 1973, Pacific Legal Foundation (PLF)

is a nonprofit, tax-exempt California corporation that

litigates nationwide to vindicate individual liberty,

private property, and separation-of-powers principles.

PLF has extensive experience challenging administrative enforcement regimes that combine investigation,

prosecution, adjudication, and punishment within the

Executive Branch.

PLF files this brief to provide the Court with constitutional and practical context about why punitive

monetary penalties that resemble traditional actions

at common law must be adjudicated by Article III

courts with juries. PLF is currently litigating related

issues in multiple matters challenging agency adjudication of private-rights disputes and punitive penalties, including American Tripoli v. U.S. Department of

Labor and the Federal Mine Safety and Health Review

Commission, No. 25-1349 (8th Cir.); Serpe v. Federal

Trade Commission, No. 0:24-cv-61939 (S.D. Fla.); and

Joe Manis v. U.S. Department of Agriculture, No. 252001 (4th Cir.). These cases reflect a recurring problem: when the government can impose binding liability and punishment administratively, constitutional

guarantees become contingent and, for many ordinary

Americans, practically out of reach.

No party’s counsel authored any part of this brief. No person

or entity, other than Amicus Curiae and its counsel, paid for the

brief ’s preparation or submission.

1

2

INTRODUCTION AND

SUMMARY OF THE ARGUMENT

These consolidated cases present a straightforward

question after this Court’s decision in SEC v. Jarkesy:

may a federal agency adjudicate legal liability and impose massive punitive monetary penalties in house,

without an Article III judge or a civil jury, on the theory that the target could refuse to pay and await a

later collection suit?

The Communications Act’s forfeiture scheme allows the Federal Communications Commission to investigate regulated parties, issue a charging document, consider only written objections, and then enter

a final forfeiture order that adjudges a violation and

fixes a multi-million-dollar penalty. See 47 U.S.C.

§ 503(b)(4). In these cases, the Commission imposed

$57 million in fines on AT&T and $47 million on Verizon based on alleged failures to safeguard customers’

location information. AT&T, Inc. v. FCC, 149 F.4th

491, 496-97 (5th Cir. 2025); Verizon Commc’ns Inc. v.

FCC, 156 F.4th 86, 91-92 (2d Cir. 2025).

The Fifth Circuit held that this scheme violates

both Article III and the Seventh Amendment. AT&T,

149 F.4th at 501-03. The Second Circuit disagreed,

reasoning that Verizon could have refused to pay and

preserved the opportunity for a trial de novo in a later

collection action. Verizon, 156 F.4th at 106-08.

PLF’s brief focuses on two principal points. First,

the Commission’s pursuit of punitive monetary penalties for common-law-analogous wrongdoing implicates

private rights and seeks a legal remedy. Under the

Court’s jurisprudence, these features trigger the civiljury right and require adjudication by an Article III

3

court. See SEC v. Jarkesy, 603 U.S. 109 (2024), Granfinanciera S.A. v. Nordberg, 492 U.S. 33 (1989), and

Tull v. United States, 481 U.S. 412 (1987). Second, the

possibility of a later collection suit does not satisfy the

Constitution. Article III and the Seventh Amendment

are violated when the agency itself adjudicates guilt

and imposes punishment. A later suit cannot retroactively supply an independent judge and jury for the

determination that matters.

Under the Second Circuit’s reasoning, the jury

right becomes contingent on nonpayment and the government’s decision to sue. A constitutional protection

that depends on a defendant’s willingness to incur additional financial and strategic exposure is illusory in

practice. Article III and the Seventh Amendment require that the determination of liability for punitive

monetary sanctions occur in court before a jury—not

after the Executive has acted.

I.

ARGUMENT

The FCC’s punitive monetary penalties implicate private rights and therefore require

Article III adjudication and a civil jury

Jarkesy reaffirmed a settled principle: when the

government seeks to impose a punitive monetary penalty through a claim that is legal in nature, the Seventh Amendment preserves the right to a jury trial,

which requires adjudication in Article III courts. 603

U.S. 109, 121-35 (2024). Whether these constitutional

guarantees apply turns on “the substance of the suit,”

not the label Congress or an agency attaches to it. Id.

at 135.

4

A. The Commission’s forfeiture orders adjudicate legal liability and impose punitive

monetary penalties

Congress authorized the FCC to enforce 47 U.S.C.

§ 222, which imposes a duty on telecommunications

carriers to protect customer information held on their

proprietary networks, through monetary “forfeiture

penalties.” 47 U.S.C. § 503(b). These sanctions impose substantial monetary liability for past violations

of federal law and function as punitive penalties. See

Tull, 481 U.S. at 422.

Whether a monetary sanction constitutes punishment turns on how the statute operates in practice.

This Court recently reaffirmed that principle in Ellingburg v. United States, No. 24-482, 607 U.S. ___

(U.S. Jan. 20, 2026). There, the Court held that restitution under the Mandatory Victims Restitution Act

is “plainly criminal punishment” for purposes of the

Ex Post Facto Clause, even though restitution also

serves compensatory purposes. Ibid. The Court emphasized that restitution is imposed at sentencing,

codified in Title 18’s criminal provisions, predicated

on conviction, and enforced by the Government rather

than by private parties. Ibid. The statutory text and

structure controlled the analysis.

The same structural features are present here. The

FCC’s forfeiture regime authorizes the sovereign to

impose substantial monetary sanctions for alleged

statutory violations, adjudicated and enforced by the

Government itself. 47 U.S.C. § 503(b)(2)(B). Such

sanctions impose binding monetary liability on private parties and serve traditional punitive aims of deterrence and retribution. Id. § 503(b)(2)(E).

5

The Communications Act provides for judicial enforcement of Commission orders in federal district

court. See 47 U.S.C. § 401(a). But for forfeitures under § 503(b), the Commission first adjudicates liability

internally. Under the route the Commission used

against both AT&T and Verizon, the agency issues a

Notice of Apparent Liability, receives written objections, and then issues a forfeiture order if it disagrees.

Id. § 503(b)(4). A forfeiture order is not an advisory

opinion. It represents the Commission’s final determination that the target violated federal law and owes

the United States a specified sum. See AT&T, 149

F.4th at 503-04 (describing how the Commission “adjudged a carrier guilty” and “levied fines” in-house).

The Commission is not merely setting prospective

rules for future conduct; it is imposing retrospective

liability and punishment. That is the traditional work

of courts. Stern v. Marshall, 564 U.S. 462, 484 (2011)

(Article III protects liberty by preventing the political

branches from aggrandizing power to themselves at

the judiciary’s expense).

B. The claims and remedies here are closely

analogous to common-law actions

Because the Commission seeks punitive monetary

liability, both Article III and the Seventh Amendment

require application of the historical test set out in

Jarkesy to determine whether the claim and remedy

are analogous to suits at common law. Jarkesy instructs courts to ask (1) whether the cause of action

resembles a claim historically tried at law and

(2) whether the remedy is legal or equitable. 603 U.S.

at 122-26 (citing Granfinanciera, 492 U.S. at 42).

Both factors point decisively in the same direction

here.

6

First, the Commission’s theory of liability closely

resembles traditional legal claims for breach of duty.

The agency alleges that the carriers failed to take

“reasonable measures” to protect sensitive customer

information from unauthorized access. 47 C.F.R.

§ 64.2010(a); AT&T, 149 F.4th at 499-501 (describing

the Commission’s “unreasonable safeguards” theory).

That formulation tracks classic negligence principles:

a duty imposed by law, breach of that duty by unreasonable conduct, and resulting harm or risk. See

Jarkesy, 603 U.S. at 139 (explaining that the Seventh

Amendment applies to modern statutory claims that

are “akin to common law claims”). At common law,

actions sounding in negligence, breach of duty, or

other tort-based misconduct were paradigmatic suits

at law tried before juries. See Curtis v. Loether, 415

U.S. 189, 195 (1974).

The Commission’s claim also bears resemblance to

common-law actions in debt. When the Government

seeks to recover a fixed monetary sum for violation of

legal obligations, the action historically lay in debt—a

form of action long understood to require a jury. Tull,

481 U.S. at 418-20. The forfeiture orders here do precisely that: they adjudicate liability and demand payment of a specified monetary sum to the United

States. That is not prospective rulemaking or equitable supervision. It is the imposition of legal liability

for past conduct.

Second, the remedy is quintessentially legal. As

discussed above, a monetary penalty designed to punish and deter is “a form of relief that only courts of law

could provide.” Tull, 481 U.S. at 422; Jarkesy, 603

U.S. at 134. The forfeitures authorized under 47

U.S.C. § 503(b) are not compensatory. They are pay-

7

able to the sovereign, calibrated to deter future violations, and imposed only after a finding of wrongdoing.

Id. § 503(b)(2)(E). As in Jarkesy, such penalties “are

designed to punish or deter” the wrongdoer, making

them legal in nature. 603 U.S. at 123-25.

Nor does the absence of a perfect historical twin defeat the jury right. The Seventh Amendment extends

to statutory claims that are “analogous to commonlaw causes of action ordinarily decided in English law

courts in the late 18th century.” Granfinanciera, 492

U.S. at 42. It does not require an “abstruse historical

search” for a precise match, particularly when the

remedy is “more important.” Tull, 481 U.S. at 421

(cleaned up). Where, as here, the Government seeks

punitive monetary relief for alleged legal violations

closely resembling traditional duty-based claims, the

action falls on the law side of the historical divide.

Because the Commission seeks punitive monetary

penalties for common-law-analogous wrongdoing, the

action implicates private rights. Jarkesy, 603 U.S. at

128-35. The public-rights exception cannot be used to

convert an ordinary claim for legal liability into an administrative matter simply because it arises under a

federal statute. Id. at 133-35.

C. Atlas Roofing cannot justify administrative adjudication of punitive monetary liability for common-law-analogous claims

The government may rely on Atlas Roofing Co., Inc.

v. Occupational Safety & Health Rev. Comm’n, 430

U.S. 442 (1977), which upheld administrative imposition of civil penalties under the Occupational Safety

and Health Act. But Atlas Roofing cannot bear the

weight the government’s theory would place upon it.

8

Atlas Roofing reasoned that Congress may assign

“public rights” disputes to administrative tribunals

without a jury, particularly where Congress creates

“new statutory ‘public rights’” unknown to the common law. Id. at 455-56. Yet this Court’s modern Seventh Amendment jurisprudence makes clear that the

inquiry does not turn simply on whether Congress has

labeled a claim “statutory.” As Granfinanciera explained, the relevant question is whether the cause of

action and remedy are analogous to suits that would

have been tried at law in 1791. 492 U.S. at 42-46. And

Jarkesy reaffirmed that the public-rights exception

does not permit Congress to withdraw from Article III

and the Seventh Amendment actions seeking legal

remedies that resemble traditional common-law

claims. 603 U.S. at 133-35. Whether a claim is statutory is “not legally relevant.” Id. at 122.

To the extent Atlas Roofing suggested that the

mere creation of a statutory cause of action is sufficient to place a dispute within the public-rights exception, that suggestion is in tension with Granfinanciera, Stern v. Marshall, 564 U.S. 462 (2011), and most

recently Jarkesy. The Court has since emphasized

that Congress may not evade Article III and the Seventh Amendment by recharacterizing traditional legal

claims as matters of “public rights.” See Granfinanciera, 492 U.S. at 60-61 (rejecting the argument that

statutory labeling alone removes a claim from the

jury-trial guarantee).

Whatever continuing force Atlas Roofing retains, it

cannot be extended to authorize administrative adjudication of punitive monetary liability for commonlaw-analogous claims. Where Congress regulates

matters that would not have been adjudicated in

9

courts of law at the Founding, such as the administration of public benefits or the resolution of certain regulatory privileges, administrative adjudication may

very well be permissible. But where, as here, the government seeks punitive monetary penalties for conduct closely analogous to traditional duty-based

claims, the action falls within the core of the judicial

power and must be adjudicated in Article III courts

before juries.

II. The Communications Act’s back-end collection suit does not satisfy Article III or the

Seventh Amendment and it renders the

jury-trial right illusory in practice

The Second Circuit assumed for argument’s sake

that the Seventh Amendment could apply, but held

there was “no Seventh Amendment problem” because

Verizon “could have” declined to pay and preserved a

trial de novo if the government later sued. Verizon,

156 F.4th at 106-08. That reasoning fails both doctrinally and practically.

A. A later collection suit cannot cure a constitutional violation that occurs when the

agency adjudicates liability and imposes

punishment

The Seventh Amendment protects the right to have

a jury decide liability for legal claims. That right is

violated when the government assigns the determination of liability and the imposition of punitive penalties to an administrative tribunal. Jarkesy, 603 U.S.

at 121-26. A subsequent lawsuit does not retroactively supply the jury for the proceeding that determined liability.

10

The Fifth Circuit made this point plainly: by the

time DOJ sues (if it does), the Commission has “already found the facts, interpreted the law, adjudged

guilt, and levied punishment.” AT&T, 149 F.4th at

503. Nothing in Article III or the Seventh Amendment suggests that an agency may exercise judicial

power first and then offer a jury only after the government has secured a public judgment of wrongdoing.

Nor is it enough that § 504(a) describes the collection action as a “trial de novo.” 47 U.S.C. § 504(a).

The constitutional question is not whether the later

court can reconsider the case; it is whether the government may impose binding punishment without

first going to an Article III court and jury.

B. The pay-or-refuse choice makes the jury

right contingent and often irrational to exercise

The Second Circuit’s approach conditions the jury

right on a regulated party’s willingness to refuse payment, accept the immediate consequences of an adverse forfeiture order, and gamble that the government will bring a collection action. That is not how

constitutional rights work.

This Court has repeatedly rejected enforcement designs that force regulated parties to “bet the farm” to

obtain meaningful judicial process. Free Enterprise

Fund v. Public Company Accounting Oversight Board,

561 U.S. 477, 490 (2010). In Free Enterprise Fund, the

Court refused to require accounting firms to incur

sanctions in order to challenge the constitutionality of

the PCAOB’s structure, explaining that regulated

parties need not “bet the farm by taking the violative

action” to secure judicial review. Ibid. (quotation

omitted).

11

The same concern animated Sackett v. EPA, 566

U.S. 120 (2012). There, the Environmental Protection

Agency issued a compliance order alleging that the

Sacketts had filled wetlands in violation of the Clean

Water Act and directing them to restore the property.

The order exposed them to potential civil penalties of

up to $37,500 per day for noncompliance, plus additional penalties for ongoing violations. Id. at 122-23.

The Government argued that the Sacketts could obtain review only by waiting for EPA to bring an enforcement action, risking mounting penalties in the

meantime. The Court rejected that interpretation,

holding that the Sacketts were entitled to immediate

judicial review rather than being forced to risk “serious criminal and civil penalties” to challenge the

agency’s position. Id. at 126-27.

Likewise, in U.S. Army Corps of Engineers v.

Hawkes Co., 578 U.S. 590 (2016), the Corps issued a

jurisdictional determination that property contained

“waters of the United States,” subjecting the owners

to the Clean Water Act’s permitting regime. Without

judicial review, the owners faced a stark choice: incur

substantial compliance costs or risk civil penalties of

up to $37,500 per day and potential criminal liability.

Id. at 594-95. The Court again refused to interpret

the statute to require landowners to proceed at their

peril, explaining that regulated parties need not

“await enforcement proceedings” while facing “substantial penalties.” Id. at 600 (quotation omitted).

This Court’s unconstitutional-conditions cases reinforce the same structural principle. In Koontz v. St.

Johns River Water Management District, the Court

held that the government may not condition the grant

of a land use permit on the surrender of a constitutional right, explaining that the Constitution “forbids

12

burdening the Constitution’s enumerated rights by coercively withholding benefits from those who exercise

them.” 570 U.S. 595, 606 (2013). The vice in Koontz

was not merely the denial of a permit, it was the government’s use of leverage to pressure the relinquishment of constitutional protection. The same concern

arises here. When the availability of a jury depends

on a regulated party’s willingness to refuse payment,

accept additional exposure, and provoke further enforcement, the government is using the structure of its

enforcement scheme to burden the exercise of a constitutional right. The Seventh Amendment does not

permit the jury right to be converted into a high-risk

strategic choice.

Yet the burdens here go beyond the mounting penalties and compliance costs that drove the decisions in

Sackett and Hawkes. The administrative adjudication

itself imposes a separate, often ruinous injury: the

unrelenting litigation burden of defending against the

agency’s in-house process. Courts have long held that

“mere litigation expense, even substantial and unrecoupable cost, does not constitute irreparable injury.”

FTC v. Standard Oil Co. of Cal., 449 U.S. 232, 244

(1980). That principle may hold when the parties are

large, sophisticated entities with deep pockets, but for

smaller businesses and individuals the same process

is frequently catastrophic. The discovery burdens, expert costs, reputational harm from agency pronouncements of wrongdoing, and relentless financial pressure descend long before any Article III court is permitted to intervene. This Court’s decision in Axon Enterprise, Inc. v. FTC, 598 U.S. 175 (2023), illuminates

why these litigation burdens matter constitutionally.

There, the Court recognized that being forced to defend in an allegedly unconstitutional administrative

13

proceeding inflicts a distinct, immediate harm—“here

and now”—independent of the ultimate outcome. Id.

at 191-92. The injury is analogous to the “right not to

stand trial” protected by qualified immunity: the constitutional violation occurs the moment a party is compelled to endure the flawed process itself. Ibid.; see

also Marshall Breger, Short Circuiting the Administrative Judiciary: A Response to Linda Jellum, 101

Tex. L. Rev. Online 173, 183-86 (2023) (discussing how

petitioners in SEC v. Cochran, 20 F.4th 194, 203 (5th

Cir. 2021) (en banc), aff’d sub nom. Axon, 598 U.S.

175, and Tilton v. SEC, 824 F.3d 276, 286 (2d Cir.

2016), successfully framed subjection to an unconstitutional tribunal as irreparable harm flowing from the

proceeding, not merely its result).

Requiring the Government to comply with Article

III and the Seventh Amendment from the outset—by

adjudicating punitive monetary claims that resemble

common-law actions before an independent judge and

jury—would force agencies to think more carefully before initiating enforcement. Agencies would be forced

to scrutinize evidence more rigorously, select only the

strongest cases, and avoid overreach that disproportionately burdens those least equipped to defend

themselves.

C. For many parties, especially smaller businesses and individuals, Article III adjudication and the jury right are illusory in

practice

A forfeiture order has immediate real-world consequences even before any collection suit. It is a public

adjudication of wrongdoing that can be widely reported and relied upon in future penalty calculations.

See 47 U.S.C. § 503(b)(2)(E) (history of prior offenses);

14

FCC v. Fox Television Stations, Inc., 567 U.S. 239, 256

(2012) (noting forfeiture orders’ reputational impact).

And as the Fifth Circuit recognized, reaching a collection action requires the carrier to refuse to pay and

wait to be sued. AT&T, 149 F.4th at 503.

In practice, that posture is untenable for many regulated parties. It invites interest and additional exposure, threatens credit and contracting relationships, and prolongs uncertainty. Even for a sophisticated entity, refusing to pay a large penalty to preserve a possible jury trial may be commercially irrational. For smaller businesses and individuals who

face punitive administrative penalties in other regulatory programs, it may be impossible. A constitutional safeguard that can be exercised only by accepting outsized risk is not a meaningful safeguard.

PLF has seen how administrative enforcement regimes can impose binding and economically coercive

consequences long before any meaningful judicial process is available. In Jake’s Fireworks, Inc. v. Consumer Product Safety Commission, 105 F.4th 627 (4th

Cir. 2024), cert. denied, 145 S. Ct. 2700 (2025), the

Consumer Product Safety Commission issued formal

notices declaring the company’s consumer products

unlawful, directed that they be destroyed or removed

from commerce, and warned that continued sales

could trigger significant civil and criminal penalties.

Jake’s Fireworks disputed the Commission’s allegations and maintained that its products complied with

applicable safety standards, yet it was forced to bear

the immediate consequences of the agency’s unilateral

determination. The notices publicly labeled the products “banned” or “misbranded,” effectively adjudicating illegality through internal agency action. Faced

with those determinations, the company quarantined

15

approximately 23,000 cases of inventory worth more

than $2.6 million while attempting to obtain judicial

review. Yet access to court depended on the agency’s

enforcement posture, leaving the company in regulatory limbo while the agency’s findings carried immediate financial and reputational consequences.

Another recent example underscores the same practical reality. In Leachco, Inc. v. Consumer Product

Safety Commission, 103 F.4th 748 (10th Cir. 2024),

cert. denied, 145 S. Ct. 1047 (2025), a small, familyowned Oklahoma manufacturer of baby and pregnancy products was subjected to a multi-year, inhouse enforcement action before the Consumer Product Safety Commission. The Commission alleged that

Leachco’s infant lounger constituted a “substantial

product hazard” and sought sweeping remedies, including a mandatory recall and other corrective

measures that threatened the company’s continued viability. The proceeding did not begin in a neutral

court. Rather, the Commission itself voted to authorize the complaint, its enforcement attorneys prosecuted the case, an agency-appointed administrative

law judge presided under agency-created procedural

and evidentiary rules, and the Commission retained

authority to review and reverse the ALJ’s decision—

including making its own factual findings.

During the pendency of the proceeding, the agency

publicly warned consumers that Leachco’s product

posed a hazard, even before any adjudication. The

company endured extensive discovery demands, expert proceedings, and a multi-day evidentiary hearing

all while challenging the constitutionality of the Commission’s structure in federal court. Although the ALJ

ultimately ruled in Leachco’s favor, the Commission

16

appealed that decision to itself, prolonging the uncertainty and burden.

Leachco sought preliminary relief in federal court,

arguing that being subjected to adjudication before an

agency insulated from presidential removal inflicted

an ongoing structural injury. But the Tenth Circuit

rejected that claim and allowed the administrative

process to continue. Certiorari was denied. See 145

S. Ct. 1047 (2025). Leachco’s experience illustrates

that administrative adjudication is not a mere procedural detour. It is itself the punishment. Years of

compelled litigation, reputational harm from agency

pronouncements, and existential financial risk occur

before any Article III court or jury ever becomes involved—if one ever does.

These experiences illustrate how, in practice, administrative adjudication can impose the functional

equivalent of punishment long before any Article III

court or civil jury is permitted to exercise constitutional oversight.

Article III and the Seventh Amendment were designed to ensure that the government’s power to impose punishment is checked at the moment it is exercised. A regime that converts that protection into a

costly strategic option, available only to those willing

to endure the harms of nonpayment, reduces adjudication in a court of law before a jury to a theoretical

afterthought.

These cases therefore determine whether Jarkesy’s

constitutional rule has practical force or can be bypassed through enforcement design. If an agency may

adjudicate legal liability and impose punitive penalties in-house so long as the target could refuse payment and await a later lawsuit, then the government

17

may preserve the jury trial right in name while defeating it in operation.

The implications extend far beyond telecommunications. Numerous federal agencies—including the

SEC, CPSC, USDA, FTC, EPA, and NLRB—possess

authority to adjudicate alleged violations internally

and impose substantial monetary penalties without

first proceeding in an Article III court. A decision endorsing the Second Circuit’s theory would furnish a

template for agencies to impose punishment administratively while relegating juries to a contingent, backend option triggered only if the regulated party refuses to comply. That structural design would make

it easier to evade the constitutional boundary Jarkesy

reaffirmed between regulation and the adjudication of

private rights.

18

CONCLUSION

The Court should hold that when the government

seeks to impose punitive monetary penalties for violations analogous to common-law claims, Article III and

the Seventh Amendment require adjudication by an independent court and a civil jury. The possibility of a

later collection action cannot cure an unconstitutional

agency adjudication or render the jury-trial right meaningful for ordinary Americans. The judgment of the

Fifth Circuit should be affirmed, and the judgment of

the Second Circuit should be reversed, thereby enforcing the constitutional boundary between administrative

regulation and the adjudication of private rights.

Respectfully submitted,

O LIVER J. D UNFORD

Pacific Legal Foundation

4400 PGA Blvd.

Suite 307

Palm Beach Gardens, FL

33410

ALLISON D. D ANIEL

Counsel of Record

J OSHUA M. R OBBINS

Pacific Legal Foundation

3100 Clarendon Blvd.

Suite 1000

Arlington, VA 22201

Telephone: (202) 888-6881

ADaniel@pacificlegal.org

Counsel for Amicus Curiae Pacific Legal Foundation

FEBRUARY 2026