Legal Docket: Terms and conditions

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NICK EICHER, HOST: It’s The World and Everything in It for this 8th day of June, 2026. Thank you for joining us today! 

Good morning! I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. 

Time now for Legal Docket.

Well, the Court has spent the last several years clipping the wings of federal agencies. So last week's decisions may have surprised some court watchers.

In two rulings, the justices sided with regulators at the FCC and the Securities and Exchange Commission.

But these were not reversals of the Court's recent direction. Instead, the decisions help define where the constitutional limits on agency power actually are.

One of those cases involved more than $100 million in FCC fines against two telecom giants.

EICHER: It was the consolidated case of Federal Communications Commission v AT&T and Verizon.

The FCC had proposed the fines against the companies for allegedly mismanaging customer location data. The agency did that without a jury trial. Instead, relying on its own internal administrative process to impose penalties.

REICHARD: I spoke to Richard Jolly, professor at Southwestern Law School in Los Angeles. He has expertise in administrative law in connection to the Seventh Amendment right to a jury.

He gives some more background to this case:

JOLLY: … an administrative tribunal decided that both Verizon and AT&T had violated the law and imposed fines of 47 million and 57 million dollars respectively. AT&T and Verizon were none too happy about this, but they received in the mail a letter, essentially, from the FCC saying, “you better pay this or else.” That's the question. What is the “or else?” 

On that form it said, “you need to pay this under penalty of law,” but like, kind of in little letters, it said, “or you can choose to go to a court and have a jury trial on these matters.” However, until recently, no one thought you could actually bring this type of thing in a district court before a jury.

Those “little letters” turn out to be why the Supreme Court ruled that the FCC’s lack of a jury trial passed constitutional muster.

JOLLY: If Verizon and if AT&T had chosen to do so, they could have gone to court, they could have gotten a jury trial, and the jury would have been responsible for not just determining whether there was liability, but how much liability, that is, the actual damages. The decision that the FCC made, completely irrelevant.

EICHER: Again, the Court has lately been reining in the so-called administrative state.

In 2024, the justices threw out the Chevron doctrine, ending a rule that had been in place 40 years requiring judges to defer to an agency’s interpretation of an ambiguous law.

Without Chevron now, agencies no longer get the benefit of the doubt when a law is vague. The courts decide.

Then, in another case known as SEC v. Jarkesy, the Court ruled that when an agency seeks civil penalties for fraud, the Seventh Amendment entitles the defendant to a jury trial.

REICHARD: So that raises an obvious question: if the Court required a jury trial in Jarkesy, why did the FCC prevail here?

I put question that to Professor Jolly:

JOLLY: …so the difference between FCC and Jarkesy is what effect the administrative tribunal determination actually has. Under Jarkesy, the SEC's decision was itself enforceable, automatically. Jarkesy had no right to go before an Article III court to enforce it. FCC is different. Under FCC, the court is saying you could have gone to a tribunal, an Article III tribunal before a jury whenever you wanted. You chose not to, and that's why you had to pay.

EICHER: Justice Thomas issued a lone dissent. He thought the FCC created a false impression that its internal tribunals could levy massive fines without a jury, something corporations perceive as coercive enough to make them pay.

Still, Jolly doesn’t see the court’s recent take down of the administrative state as wholesale.

JOLLY: I think what we are seeing is a Supreme Court that has finally rediscovered the Seventh Amendment. They are finally taking seriously again that the jury trial protections …apply …When the government wants to enforce a penalty against you, a monetary penalty, whether you're an individual or a huge corporation. They've gotta give you a jury trial right, not just to find fault, but to find the actual damages.

REICHARD: And practically speaking, Jolly says this case is an oddball:

JOLLY: …Most regulated entities will have no interest in fighting the FCC. Verizon and AT&T did because the damages were $50 million. The average fine imposed by the FCC, it's a thousand bucks, five thousand, ten thousand dollars, two hundred and fifty thousand would be a big one, right? We're talking about 50 million dollars! Of course, AT&T and Verizon are gonna fight that before a jury trial. 

The average regulated entity will just pay the fine and move on. This isn't about collapsing regulated entities and it’s certainly not gonna render the FCC impotent in this area.

Back during oral argument in April, Chief Justice John Roberts intimated what he thought the telecoms were really worried about:

ROBERTS: Counsel, I wonder if, though, at the end of the day, you're really just talking about a PR problem, right?

So, for now, the fines stand but the telecoms return to the lower courts to hash out things such as whether the FCC’s findings were arbitrary and capricious, or otherwise unsupported. And, if these companies face FCC fines in the future, they can just refuse to pay. Here, they paid the fines and then sued. No need for that going forward.

EICHER: Another big win for a federal agency, Sripetch v The Securities and Exchange Commission. The question here is whether the SEC can force a stock manipulator to give up ill-gotten gains without proving exactly how much money each victim lost.

The background here: The SEC ordered a man named Ongkaruck Sripetch to pay more than $3 million in illicit profits from his scheme to manipulate stock. But he argued the agency lacked authority to seize that money because it failed to prove specific dollar losses to individual victims.

REICHARD: And without that direct link, he argued, the government wasn’t restoring any victims; it was just enriching itself by punishing him.

You can hear the incredulity to that argument from Justice Ketanji Brown Jackson during oral argument in April:

JACKSON: Why is it a punishment if we're not taking anything more from the defendant than he unlawfully gained? In other words, I could see a fine or a punishment if the defendant is actually paying out of his pocket some money that was rightfully his. That's a punishment. But, if we're just disgorging his ill-gotten gains, I guess I'm not sure I understand why that's a punishment. It's depriving him of money he didn't have, that was never his.

EICHER: Justice Sonia Sotomayor put it another way, focusing on fraud:

SOTOMAYOR: The whole idea behind lost profits is you took my money and you made money from it. You're not entitled to that cause you invaded my right to have that money, and maybe I wasn't as smart as you or as corrupt as you, and I didn't make that money, but you took it from me.

A ruling for Sripetch would’ve really curtailed federal enforcement,ut all nine justices weighed the limits on federal enforcement authority and came out firmly on the side of the agency.

REICHARD: However, Justice Thomas wrote a concurrence that highlighted a big time Seventh Amendment right to a jury trial loophole.

Here’s law professor Jolly again:

JOLLY: Justice Thomas here is suggesting that disgorgement has no common law analog and that Congress seems to have been treating it differently anyways from other forms of equitable relief, that disgorgement would entitle you to a jury trial. This is interesting because put these two cases together that were decided on the same day, it suggests that some of the most powerful tools that the SEC or the FCC or other administrative agencies have might start being subjected to jury determinations.

Meaning, Justice Thomas’ concurrence could well tip off lawyers to test whether the SEC’s enforcement tools will be put to a jury.

EICHER: One final unanimous decision from Thursday involved a very different corner of the law. The ruling protects cheaper generic drugs from expensive patent litigation.

REICHARD: The conflict in Hikma Pharmaceuticals v Amarin Pharma, centers on Hikma’s generic version of a heart disease medication. Amarin holds the patent for certain uses of the drug. It says Hikma induced patent infringement because doctors and pharmacists prescribed and dispensed the generic for Amarin’s patented uses.

EICHER: But the high court disagreed, concluding the evidence only shows passive awareness of infringement rather than active encouragement of it. The generic drug maker ought not be held liable for how third parties use its product without proof of affirmative steps to promote infringement.

Deputy Solicitor General Malcolm Stewart had the winning argument in support of the generic maker back in April:

STEWART: If you sell something that can be used either in an infringing or a non-infringing way, then you still won’t be held liable for others’ infringement unless you’ve actively encouraged them to infringe.

SOTOMAYOR: That’s the bottom line, correct?

REICHARD: We expect more decisions this week, with 23 merits case rulings left. If the Court wants to wrap up by the end of the month, it’s gonna to have to get aggressive about it. 

And those remaining cases are among the most closely watched of the term: birthright citizenship; the fate of Haitian and Syrians in the U.S. under the Temporary Protected Status Program for the last decade and a half, mail-in ballots, men in women’s sports, and more.

And that’s this week’s Legal Docket!

EICHER: Well now, before we leave Legal Docket, just a quick trip behind the scenes.

You know, Mary has got a way of making these Supreme Court cases sound more straightforward than they actually are, because they are not.

What you heard today represents days of reading opinions, talking with legal experts, sorting through competing arguments, and then boiling all of that down into just a few minutes of radio. Oh, and the three years of law school kind of helps too. 

But that's the kind of work WORLD does week after week. And if you value that kind of reporting and analysis, we would be grateful for your support during our June Giving Drive: WNG.org/donate.

And Mary, thank you for doing the hard part so the rest of us can kind of keep up.

REICHARD: Very glad to do it!

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