3rd Circuit Rejects FCC's “Fleeting Images” Policy, Reverses Super Bowl Fine

On July 21, 2008, the United States Court of Appeals for the 3rd Circuit unanimously rejected the $550,000 forfeiture penalty and finding of indecency violation levied against CBS for the 2004 Super Bowl halftime show featuring Janet Jackson and Justin Timberlake. The appeal involved the live broadcast of the show, which culminated in an unscripted nine-sixteenth-second exposure of Janet Jackson’s breast.

The court held that the FCC arbitrarily and capriciously departed from its prior policy of excepting fleeting broadcast material from the scope of actionable indecency. It also determined the FCC could not impose strict liability on CBS, or hold it liable for the conduct of Jackson and Timberlake because they were independent contractors and not CBS employees.

FCC's decision was arbitrary and capricious

In the court's opinion, authored by Judge Scirica, the 3rd Circuit found that at the time of the 2004 Super Bowl halftime show, the FCC's policy was to exempt fleeting or isolated material—both images and words—from the scope of actionable indecency. “During a span of three decades,” the court observed, “the Commission frequently declined to find broadcast programming indecent, its restraint punctuated by only a few occasions where programming contained indecent material so pervasive as to amount to ‘shock treatment' for the audience.” Contrary to the FCC's argument that it always treated fleeting images differently from fleeting expletives, the 3rd Circuit found that the agency's indecency enforcement history proved otherwise.

Moreover, regardless of whether the Super Bowl fine was unprecedented because the FCC had previously treated fleeting images and fleeting words the same, or because it never had had a specific policy on how it would treat fleeting images, the court held that the FCC's current policy of including fleeting images within the scope of actionable indecency is a departure from prior policy, for which the FCC failed to provide a rational explanation, and that it unfairly applied to CBS retroactively. Therefore, the fine against CBS was arbitrary and capricious under the Administrative Procedure Act and was invalid as to CBS.

FCC cannot impose liability on CBS for the acts of independent contractors

The 3rd Circuit also explained that, even if the departure from precedent did not invalidate the Super Bowl forfeiture, the FCC could not impose liability on CBS for the actions of Jackson and Timberlake because they were independent contractors and not CBS employees. The court also rejected the FCC's argument that CBS had a nondelegable duty to comply with the indecency policy, because the First Amendment precludes punishing a speaker for the content of expression absent a showing of scienter, i.e., a knowing or reckless violation of indecency law. Noting that “the scienter element of the indecency provisions—as a constitutional requirement—is paramount,” the court explained that “when a broadcaster endeavors to exercise proper control, but ultimately fails, to prevent unscripted indecency, it will not have acted with scienter if its actions were negligent rather than reckless,” such that “when unscripted indecent material occurs during a live or spontaneous broadcast, as it did here, the FCC should show that the broadcaster was, at minimum, reckless in causing the indecent material to be transmitted.”

No decision on FCC's “willful” conduct argument

Finally, the 3rd Circuit did not reach a decision on FCC's alternative argument—that CBS was directly liable because its own conduct was “willful.” The court determined that it would need further clarification on the FCC's interpretation of relevant provisions of the Communications Act to decide the matter. However, even if the FCC's interpretation of the statute were permissible, and CBS's conduct were held to be willful, the outcome would be the same because the court rejected the forfeiture order under the Administrative Procedure Act.

Accordingly, the court vacated the Super Bowl order and invalidated the imposition of a fine against CBS. In addition, although it cautioned that any further FCC action would be declaratory in nature, as the agency may not retroactively penalize CBS, the court remanded the case for further proceedings consistent with its opinion. On this point, Judge Rendell dissented. Although she agreed entirely with the holding that the FCC's action unlawfully constituted an unexplained departure from precedent, she dissented on the need for a remand. Judge Rendell noted that the FCC could explain any change in policy in future orders or declaratory rulings without involving CBS as a direct party in the proceedings.

Davis Wright Tremaine attorneys Bob Corn-Revere, Ronnie London, Amber Husbands and David Shapiro represented CBS before the 3rd Circuit and the FCC.