CBS Ruling on Janet Jackson’s Super Bowl Exposure Upheld by Appeals Court

A U.S. appeals court upheld its earlier decision throwing out a $550,000 indecency fine against CBS Corp. (CBS) for the split-second exposure of singer Janet Jackson’s breast during the 2004 Super Bowl halftime show.

The U.S. Court of Appeals in Philadelphia ruled in 2008 that the fine should be voided because the U.S. Federal Communications Commission’s policy on indecency in broadcasting was arbitrary. The U.S. Supreme Court asked the panel to review its opinion after a ruling in a case involving News Corp. (NWSA)’s Fox Television revived the issue.

“While we are disappointed by the court of appeal’s decision, we note that the court overturned the FCC’s 2006 forfeiture order on narrow procedural grounds,” Neil Grace, a spokesman for the FCC, said in an e-mailed statement.

The FCC fined New York-based CBS after viewers got a glimpse of Jackson’s breast for 9/16 of a second during the show. Her singing partner, Justin Timberlake, called the incident a “wardrobe malfunction.”

CBS cheered the ruling in an e-mailed statement today.

“We are gratified that once again the court has ruled in our favor,” the company said. “We are hopeful that this will help lead the FCC to return to the policy of restrained indecency enforcement it followed for decades.”

The appeals court in Philadelphia ruled in July 2008 that the FCC’s policy on determining indecency was “arbitrary and capricious” and tossed the agency’s $550,000 fine. The dispute reopened in 2009 after the Supreme Court ruled in the Fox Television case that the “coarsening of public entertainment” justified the commission’s more stringent regulation of broadcast programming.

2-1 Ruling

The FCC failed to acknowledge that its order against CBS reflected a policy change and improperly imposed a penalty on the network for violating a previously unannounced policy, the three-judge panel said today in a 2-1 ruling.

The Fox Television case “confirms our previous ruling in this case and that we should readopt our earlier analysis and holding that the commission acted arbitrarily in this case,” Circuit Judge Marjorie Rendell wrote for the majority.

Judge Anthony Scirica wrote in dissent that based on the Supreme Court’s account of the history of the FCC enforcement policy in the Fox case, the Philadelphia appeals court “cannot adhere to our earlier determination that prior FCC policy had granted a per se exemption to all fleeting indecent material.”

Still, the FCC can’t impose a penalty unless CBS knew about the impropriety associated with the act, Scirica said, adding that he would send the case back to the trial court for further proceedings.

The Parents Television Council, an advocacy group for broadcast decency, condemned the decision, saying in a statement that the appeals court has chosen to ignore the law and the will of the American people.

“Today’s ruling reaches the level of judicial stupidity and is a sucker-punch to families everywhere,” PTC President Tim Winter said in the statement.

CBS rose 1.4 percent to $24.95 in New York trading. The stock has gained 31 percent this year.

The case is CBS Corp. v. FCC, 08-04474, U.S. Court of Appeals for the Third Circuit (Philadelphia).

To contact the reporter on this story: Sophia Pearson in Philadelphia at spearson3@bloomberg.net

To contact the editor responsible for this story: Andrew Dunn at adunn8@bloomberg.net

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