Federal Courts Reinforce Statutory Limits on Liability and Agency Power

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ByLila Hayes

June 9, 2026

Recent rulings and settlements involving the DMCA and FCC highlight a judicial trend toward strict statutory interpretation to curb administrative discretion and protect constitutional order.

The federal judiciary continues to move toward a more disciplined application of statutory text, signaling a shift that prioritizes written law over administrative discretion. This trend was underscored this week by developments across the appellate and district courts, ranging from copyright safe harbors to the constitutional standing of federal agencies. As judges look to the original intent and plain meaning of the law, broad agency power faces a significant challenge from the bench.

In the Eleventh Circuit, a decision regarding Section 512(c) of the Digital Millennium Copyright Act (DMCA) clarified ‘safe harbor’ protections for online service providers. The court held that platforms retain immunity from copyright liability unless plaintiffs demonstrate knowledge of specific infringing material. By aligning with the Second and Ninth Circuits, the Eleventh Circuit raised the evidentiary bar, rejecting the notion that generalized knowledge of infringement is sufficient to strip a provider of its statutory protections. This reinforces the principle that courts will not expand liability beyond the parameters established by Congress.

A similar focus on statutory boundaries led to the settlement of a long-running piracy liability lawsuit between filmmakers and the internet service provider WOW! in a Colorado federal court. The case centered on whether the ISP could be held liable for the actions of its subscribers. The litigation ended shortly after the court refused to resolve the safe harbor defense on summary judgment in late March. This settlement underscores that while ISPs are not immune, the path to liability remains narrow and strictly defined by the text of the DMCA.

Beyond copyright, the constitutional basis for administrative power is facing renewed scrutiny. Legal commentators are increasingly challenging the Federal Communications Commission’s (FCC) ‘public interest’ authority. Critics argue that this broad discretion has become a ‘constitutional relic’ in an era of diverse media competition and modern First Amendment doctrine. This reasoning suggests the judiciary may soon reconcile the FCC’s historical mandate with a contemporary understanding of limited government, potentially stripping agencies of powers not explicitly granted by the Constitution.

In the realm of consumer law, the finalization of a $7.4 million class-action settlement involving Trader Joe’s demonstrates the application of the Fair and Accurate Credit Transactions Act (FACTA). The settlement, addressing allegations regarding credit card information on receipts, follows a preliminary approval on February 5, 2026. While such settlements avoid a final judicial ruling on the merits, they reflect the role of federal statutes in regulating commercial conduct and the importance of strict compliance to avoid penalties.

Finally, the limits of judicial reach are being tested in the dispute between Meta and the NSO Group. Meta has moved for a federal contempt motion, alleging the spyware firm violated a permanent injunction by launching new phishing campaigns against WhatsApp users. Supported by amicus briefs from civil rights organizations, the case serves as a test of whether U.S. court orders can effectively restrain foreign entities. These cases illustrate a judiciary committed to the Rulebook of Power, ensuring that both private actors and government agencies operate within the fixed standards of the law.

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