The U.S. Supreme Court appeared reluctant at oral argument to upend the Federal Communications Commission’s internal enforcement process in a dispute brought by ATT and Verizon over privacy-related penalties exceeding $100 million. The case puts a familiar administrative-law question in sharp focus: when a federal agency seeks significant civil penalties, how much process is constitutionally required before those sanctions become final?

The telecom companies are challenging the FCC’s practice of assessing penalties through its own adjudicative machinery rather than requiring the government to proceed first in federal court.

The U.S. Supreme Court appeared hesitant during oral argument to embrace ATT and Verizon’s effort to upend the Federal Communications Commission’s in-house penalty process, a challenge that could have reshaped how federal agencies pursue civil enforcement.

The dispute stems from FCC allegations that the telecom companies failed to adequately protect customers’ location data, allowing sensitive information to be sold or accessed without sufficient safeguards.