Verizon’s $47 Million FCC Penalty Upheld by Second Circuit (1)

Verizon Communications Inc. will have to pay nearly $47 million to the Federal Communications Commission for failing to protect customers’ location data, the Second Circuit ruled Wednesday.

Device-location data is protected under federal law, and the FCC “reasonably determined Verizon’s liability,” Judge Alison Nathan of the US Court of Appeals for the Second Circuit said in upholding the agency’s fine.

The ruling splits from the Fifth Circuit, which sided with AT&T in a similar case in April. That court vacated a $57 million penalty against the company, applying a US Supreme Court decision in SEC v. Jarkesy to find the FCC violated the company’s constitutional right to a jury trial. However, last month the DC Circuit upheld a $92 million fine against T-Mobile and Sprint for failing to vet access to customer location data.

Companies are preparing for the FCC’s enhanced data breach reporting requirements after the Sixth Circuit in August upheld a rule that would require companies to notify the agency as soon as possibly when information from more than 500 customers is exposed.

At issue in the Second Circuit case is an FCC order that required Verizon to pay $46.9 million after prison telecom contractor Securus Technologies Inc. let a law enforcement officer track wireless customers without authorization, as part of Verizon’s location-based services program that included more than 60 service providers. The company argues it was entitled to a jury trial before the agency issued its order.

Verizon’s approach to executing its contract agreements, confirming customer consent, and remedying data breach issues “makes little sense,” Nathan said.

While Verizon argued the Fifth Circuit ruling supported its argument that the FCC violated the telecom company’s right to a jury trial, Nathan said that “Nothing in the Communication Act’s guarantee of a ‘trial de novo’ suggests” that a jury trial “would not follow the same course.”

The judges also said Verizon is “mistaken” when it argued device location data isn’t protected under the federal Communications Act because—unlike call location data—it’s not considered customer proprietary network information. The court concluded device location data relates to the location of the telecommunications service and can only be accessed when a customer signs up for Verizon’s mobile voice services, triggering federal privacy protections.

No Deference

Judges disagreed with Verizon’s allegation that FCC’s penalty calculation was wrong. The agency imposed penalties for each day that Verizon’s 63 service providers remained able to use its location-based services program after the privacy concerns were brought to light, treating each provider as a separate violation. Verizon believes the violations should have been treated as one act and kept within the statutory cap of $2 million total.

Nathan emphasized the court isn’t deferring to the agency’s interpretation of the law, rather the court came to that conclusion based on its “own independent analysis of the statute.” During oral arguments in April, Nathan questioned whether the court should defer to FCC, something she said “dances with the ghost of Chevron.”

The Communications Act gives the FCC discretion to determine when to issue a penalty and how much it should be, and when someone has failed to comply with the law, so it can also determine what qualifies as a single act, Nathan said.

“Verizon may have had one overarching set of flawed policies, which insufficiently protected customer proprietary network information, but those policies were implemented through separate relationships with 63 different entities. Verizon approved and terminated each entity’s participation separately,” the judge wrote.

Judges Gerard Lynch and Eunice Lee also sat on the panel.

Verizon and the FCC didn’t immediately respond to requests for comment.

Kellogg, Hansen, Todd, Figel & Frederick PLLC represents Verizon. The US Department of Justice represents the FCC.

The case is Verizon Commc’ns Inc. v. U.S. Fed. Commc’ns Comm’n, 2d Cir., No. 24-1733, 9/10/25.