5th Circuit Denies Request for En Banc Hearing of Opinion Overturning AT&T Data Fine
A three-judge panel of the 5th U.S. Circuit Court of Appeals denied an en banc rehearing of the rejection of a $57 million FCC fine against AT&T for violating the agency's data protection rules. The panel modified its April opinion slightly, taking out language that referred to a 2012 5th Circuit decision in U.S. v. Stevens (see 1208210038).
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The 5th Circuit rejected the fine against AT&T in an April decision, saying the order was unconstitutional in that it denied the carrier’s Seventh Amendment rights to a jury trial. The FCC and DOJ in July asked the 5th Circuit to rehear the decision en banc (see 2507180032). In its Friday opinion, the panel said that “because no member of the panel or judge in regular active service requested that the court be polled on rehearing en banc,” the petition was denied.
The panel took out language referring to Stevens. “As our court has explained,” in an action involving Section 504(a) of the Communications Act, “the district court is ‘limited to considering the factual basis for the agency action’ but not petitioner’s ‘legal arguments,’” the April opinion said (see 2504180021). “So, even assuming an after-the-fact jury trial could potentially satisfy the demands of the Constitution, the one provided here amputates the carrier’s ability to challenge the legality of the forfeiture order.”
That language is gone from the revised opinion. The panel said in a footnote that Stevens is in doubt following the U.S. Supreme Court ruling in McLaughlin Chiropractic Associates v. McKesson, which found that lower courts “must independently determine the law’s meaning under ordinary principles of statutory interpretation while affording appropriate respect to the agency’s interpretation.” SCOTUS handed down that decision in June, and court watchers said it means less certainty for actions by agencies like the FCC, which are now subject to an additional layer of review by district courts (see 2506200053).
“Because Stevens has possibly been called into question by a Supreme Court decision issued after our panel opinion, we excise that part of the opinion as unnecessary to our holding,” the footnote said.
Whether the 5th Circuit opinion will stand remains in doubt. The D.C. Circuit recently upheld the FCC’s $80 million data breach fine against T-Mobile, creating a split in the circuits, which raises the likelihood of SCOTUS review (see 2508150044). The 5th Circuit is widely viewed as the most right-leaning court. Judge Stuart Duncan, who wrote the opinion, and Judge Cory Wilson, were appointed by President Donald Trump, and the third member of the panel, Catharina Haynes, by President George W. Bush.