That was the incident that prompted the Federal Communications Commission's crackdown on broadcast content, under pressure from Congress.
The court concluded that the FCC was arbitrary and capricious in changing a decades-old policy of not holding fleeting nudity indecent.
It also concluded that the commission could not hold broadcasters to strict liability, which means that they could not be held "vicariously liable" for actions they did not take on their own. That means that stations could not be liable for an action they could not foresee.
In defending its decision to the Third Circuit in Philadelphia in CBS' challenge of the indecency finding, the commission had said that it was reasonable to find that CBS' violation was willful and, therefore, its owned stations deserved to be fined (a total of $550,000). That's because Jackson and Justin Timberlake were effectively CBS employees, with CBS vicariously liable for their conduct, the FCC said.
The decision struck another big blow to the FCC's indecency-enforcement regime after its crackdown on fleeting profanity was found to be arbitrary and capricious by another federal appeals court.
"We are gratified by the court's decision, which we hope will lead the FCC to return to the policy of restrained indecency enforcement it followed for decades," CBS said in a statement. "This is an important win for the entire broadcasting industry because it recognizes that there are rare instances, particularly during live programming, when it may not be possible to block unfortunate fleeting material, despite best efforts."
The Supreme Court is still reviewing the Second Circuit's smackdown of its profanity decision against Fox -- the same court where ABC is fighting an indecency finding against a bare butt in NYPD Blue.
The court conceded that the FCC has the authority to regulate indecent content, but it pointed to nearly three decades of "restraint" during which the agency "consistently explained that isolated and fleeting material did not fall within the scope of actionable indecency."
The FCC had argued that its policy applied only to fleeting expletives, not images, but the court wasn't buying it. "A review of the commission’s enforcement history reveals that its policy on fleeting material was never so limited," the court found Monday. "The FCC’s present distinction between words and images for purposes of determining indecency represents a departure from its prior policy."
The court said the FCC is free to change its policy without "judicial second-guessing," but only with sufficient notice. "Because the FCC failed to satisfy this requirement," the court added, "we find its new policy arbitrary and capricious under the Administrative Procedure Act as applied to CBS."
It also found that CBS could not be held strcitly liable for the actions of independent contractors -- another argument the FCC made for its finding. "The FCC cannot impose liability on CBS for the acts of Janet Jackson and Justin Timberlake, independent contractors hired for the limited purposes of the halftime show," the court said.
The FCC had no immediate response to the decision.
Calling it a terrible decision, Dan Isett, director of public policy for the Parents Television Council, said: "I think once again you have a situation where the broadcast networks and federal judges are subjugating the will of the people. PTC, whose complaints helped to generate the FCC's indecency finding, will push the FCC to appeal the decision."
The National Association of Broadcasters took the opportunity of the court decision to throw a dig cable’s way: "We're pleased that the courts are providing badly needed clarity on efforts to regulate broadcast content,” NAB spokesman Dennis Wharton said. “Nonetheless, given the history and tradition of free broadcasting, we're certain that our programming will remain less explicit than the fare offered on pay cable and satellite."
The Center for Creative Voices in Media -- advisors to which include Steven Bochco (NYPD Blue) and Vin Di Bona (America's Funniest Home Videos), both of whose programming has come under FCC scrutiny -- applauded the decision.
"Creative media artists understand the commission’s desire to address complaints, some well-founded, about television programming," executive director Jonathan Rintels said. "But the commission’s 'cure' for indecent programming is proving worse than the disease."
TV Watch, which the networks created to advocate for parental control over government regulation of content, said to watch out.
“In the wake of today’s court ruling, [groups like the PTC] will increase their lobbying campaign with members of Congress and regulators," TV Watch executive director Jim Dyke warned in a statement. "They will generate more television studies with scary titles using faulty analysis, biased methodology and suspect omissions to influence the debate and raise money -- all the while claiming to represent a majority of Americans. But they don’t.”