Supreme Court Backs Trump administration on Telecom Regulation
Continuing Education
The Supreme Court sided with the Trump administration Thursday in upholding the power of federal regulators to enforce data privacy laws on telecommunications companies.
The 8-1 decision preserved one of the Federal Communications Commission's key tools, though the companies also won a concession from the Republican administration that could shift the regulatory landscape.
The appeal from telecommunications giants Verizon and AT&T challenged a combined $100 million in penalties imposed after the agency determined that the companies had failed to safeguard customer location data.
The companies argued that the FCC's process was unconstitutional because it gave them little opportunity to tell their side of the story in front of a jury.
The administration defended the fines as an essential regulatory tool. But the government also said companies did not have to pay the penalties right away, a regulatory shift in the companies' favor.
The Supreme Court agreed, affirming the FCC's power to order fines when challenges are still available.
"The orders at issue did not settle the carriers' legal obligations because, stated simply, they did not create an obligation to pay," Chief Justice John Roberts wrote for the majority.
Justice Clarence Thomas, the lone dissenter, said he would have given the two telecom companies a clearer path to recouping the fines they already paid.
Other agencies use similar enforcement methods, so a sweeping victory for AT&T and Verizon could have had widespread effects, advocates said.
The environmental group Earthjustice applauded the ruling, saying it has direct implications for other agencies and a key energy-efficiency case.
"By rejecting this unsupported attack on agency authority, the Court's decision safeguards the government's ability to enforce laws that protect people, communities, and the environment," said Caroline Flynn, the group's Supreme Court counsel.
The libertarian-leaning New Civil Liberties Alliance was disappointed by the decision, but expected it to help other companies in the future. "In fact, it may even buttress their willingness to challenge future agency orders in federal court before paying any penalties," said the alliance's president, Mark Chenoweth.
A few more carriers may decide to litigate, but the decision leaves the FCC with the power to "publicly announce large fines with much fanfare," said Doug Orvis, a veteran telecom attorney. "It will be interesting to see what happens going forward."
The Supreme Court's conservative majority has sided against federal agencies and limited their power before. That includes overturning a decades-old decision that had given regulators an advantage in court and stripping another agency of a major tool in fighting securities fraud.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.