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Full Appeals Court Ruling on Super Bowl Fine

A federal court reaffirmed its decision that the FCC had improperly levied a $550,000 penalty for Janet Jackson’s ”wardrobe malfunction“

A federal appeals court reaffirmed its decision that the Federal Communications Commission had improperly levied a $550,000 penalty against CBS and Janet Jackson's "wardrobe malfunction." 

Also read: Appeals Court Rules for CBS, Janet Jackson in 'Wardrobe Malfunction' Case

Here's the decision: 

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

No. 06-3575

___________

CBS CORPORATION;

CBS BROADCASTING INC.;

CBS TELEVISIONSTATIONS INC.;

CBS STATIONS GROUP OF TEXAS L.P.;

and KUTV HOLDINGS, INC.,

Petitioners

v.

FEDERAL COMMUNICATIONS COMMISSION;

UNITED STATES OF AMERICA,

Respondents

_______________________

Petition for Review of Orders of the

Federal Communications Commission

FCC Nos. 06-19 and 06-68

______________

Argued September 11, 2007

Decided July 21, 20082

Certiorari Granted, Judgment Vacated and Remanded

from the Supreme Court of the United States

May 4, 2009

Argued on Remand from the

Supreme Court of the United States

February 23, 2010

Before: SCIRICA, RENDEL and FUENTES, Circuit Judges.

(Opinion Filed November 2, 2011)

_________________

OPINION OF THE COURT

_________________5

RENDELL, Circuit Judge.

This matter comes before us on remand from the

United States Supreme Court in light of its ruling in F.C.C. v.

Fox Television Stations, Inc., 129 S. Ct. 1800 (2009). This

case, like Fox, involves a tightening of the Federal

Communications Commission‘s standards for the broadcast

of fleeting indecent material. Fox concerned the FCC‘s

decision to abandon its safe harbor for expletives that are not

repeated; this case considers the FCC‘s departure from its

earlier policy exempting fleeting images from the scope of

actionable indecency. While we can understand the Supreme

Court‘s desire that we re-examine our holdings in light of its

opinion in Fox — since both involve the FCC‘s policy

regarding ―fleeting material‖ — in Part A of this opinion we

conclude that, if anything, Fox 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.

See CBS Corp. v. F.C.C., 535 F.3d 167 (3d Cir. 2008),

vacated by F.C.C. v. CBS Corp., 129 S. Ct. 2176 (2009).

Accordingly, in Part B of this opinion we again set forth our

reasoning and conclusion that the FCC failed to acknowledge

that its order in this case reflected a policy change and

improperly imposed a penalty on CBS for violating a

previously unannounced policy. See id. at 188-89. We have

reconsidered certain other aspects of our previous opinion and

will not remand, but, instead, will rule in Part B that CBS‘s

petition for review is granted in toto.6

Part A: Our Prior Opinion and the Impact of Fox

I.

The treatment of fleeting indecency over the airwaves

has been the subject of much consideration by the FCC and

the courts over the last thirty years. This case involves a

February 1, 2004 incident: the exposure, for nine-sixteenths

of one second, of Janet Jackson‘s bare right breast during the

live halftime performance of the National Football League‘s

Super Bowl XXXVIII.

1

The FCC issued a forfeiture order

against CBS in March 2006, imposing a penalty of $550,000.

See In re Complaints Against Various Television Licensees

Concerning Their February 1, 2004 Broadcast of the Super

Bowl XXXVIII Halftime Show, 21 F.C.C.R. 2760 (2006)

(―Forfeiture Order‖). We described the FCC‘s reasoning in

our previous opinion:

Affirming its preliminary findings, the

Commission concluded the Halftime Show

broadcast was indecent because it depicted a

sexual organ and violated ―contemporary

community standards for the broadcast

medium.‖ Id. at ¶ 10. In making this

determination, the FCC relied on a contextual

analysis to find the broadcast of Jackson‘s

exposed breast was: (1) graphic and explicit, (2)

shocking and pandering, and (3) fleeting. Id. at

¶ 14. It further concluded that the brevity of the

 

1

Our original opinion in this matter provided additional

factual and procedural background. See CBS Corp., 535 F.3d

at 171-74. 7

image was outweighed by the other two factors.

Id. The standard applied by the Commission is

derived from its 2001 policy statement setting

forth a two-part test for indecency: (1) ―the

material must describe or depict sexual or

excretory organs or activities,‖ and (2) it must

be ―patently offensive as measured by

contemporary community standards for the

broadcast medium.‖ In re Industry Guidance

on the Commission's Case Law Interpreting 18

U.S.C. § 1464 and Enforcement Policies

Regarding Broadcast Indecency, 16 F.C.C.R.

7999, 8002 ¶¶ 7-8 (2001) (emphasis in original)

. . . .

Additionally, the FCC determined CBS‘s

actions in broadcasting the indecent image were

―willful‖ and therefore sanctionable by a

monetary forfeiture under 47 U.S.C. §

503(b)(1). See Forfeiture Order at ¶ 15.

CBS Corp., 535 F.3d at 172. CBS sought reconsideration

under 47 C.F.R. § 1.106, which the FCC denied. See In re

Complaints Against Various Television Licensees Concerning

Their February 1, 2004 Broadcast of the Super Bowl XXXVIII

Halftime Show, 21 F.C.C.R. 6653 (2006). Neither of these

two orders acknowledged, much less explained, any change

in the FCC‘s enforcement policy for fleeting indecent images.

CBS filed a petition for review in our Court,

contending that the FCC‘s ruling that the fleeting nude image

was actionable indecency constituted a change in policy, and

its application to CBS was, therefore, arbitrary and capricious 8

under the Administrative Procedure Act (―APA‖), 5 U.S.C. §

706. Specifically, CBS urged that, before the incident in

question, FCC policy provided that the ―isolated use of

expletives in broadcasts did not constitute actionable

indecency under 18 U.S.C. § 1464.‖ CBS Corp., 535 F.3d at

176 (citing See In re Application of Pacifica Found., 95

F.C.C.2d 750 (1983)).

The FCC defended its actions on the basis that its

earlier fleeting-material policy applied only to fleeting

utterances and did not extend to fleeting images.

2

We

rejected this contention:

During a span of nearly three decades, the

Commission frequently declined to find

broadcast programming indecent, its restraint

punctuated only by a few occasions where

programming contained indecent material so

pervasive as to amount to ―shock treatment‖ for

the audience. Throughout this period, the

Commission consistently explained that isolated

or fleeting material did not fall within the scope

of actionable indecency.

 

2

The FCC abandoned its ―restrained enforcement policy for

fleeting broadcast material,‖ at least as it applied to fleeting

expletives, in its March 2004 order in In re Complaints

Against Various Broadcast Licensees Regarding the Airing of

the “Golden Globe Awards” Program, 19 F.C.C.R. 4975

(2004) (―Golden Globes‖). See CBS Corp., 535 F.3d at 180.

Because that policy change post-dated the February 2004

broadcast at issue in this case, it cannot serve as the basis for

the penalty imposed on CBS. See id. at 180-81. 9

At the time the Halftime Show was broadcasted

by CBS, the FCC‘s policy on fleeting material

was still in effect. The FCC contends its

restrained policy applied only to fleeting

utterances — specifically, fleeting expletives —

and did not extend to fleeting images. But a

review of the Commission‘s enforcement

history reveals that its policy on fleeting

material was never so limited. The FCC‘s

present distinction between words and images

for purposes of determining indecency

represents a departure from its prior policy.

Id. at 174-75.

Reviewing in detail the progression of FCC rulings

leading up to the present, we could not find the distinction

advocated by the FCC. Indeed, we could only reach the

opposite conclusion:

[T]he balance of the evidence weighs heavily

against the FCC‘s contention that its restrained

enforcement policy for fleeting material

extended only to fleeting words and not to

fleeting images. As detailed, the Commission's

entire regulatory scheme treated broadcasted

images and words interchangeably for purposes

of determining indecency. Therefore, it follows

that the Commission‘s exception for fleeting

material under that regulatory scheme likewise

treated images and words alike. Three decades

of FCC action support this conclusion. 10

Accordingly, we find the FCC‘s conclusion on

this issue, even as an interpretation of its own

policies and precedent, ―counter to the evidence

before the agency‖ and ―so implausible that it

could not be ascribed to a difference in view or

the product of agency expertise.‖

Id. at 188 (quoting Motor Vehicle Mfrs. Ass‟n of U.S., Inc. v.

State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

Thus, we found that the ruling in this case represented

a departure from prior policy that required an explanation:

The Commission‘s determination that CBS‘s

broadcast of a nine-sixteenths of one second

glimpse of a bare female breast was actionably

indecent evidenced the agency‘s departure from

its prior policy. Its orders constituted the

announcement of a policy change — that

fleeting images would no longer be excluded

from the scope of actionable indecency . . . .

[A]n agency cannot ignore a substantial

diversion from its prior policies. See

Ramaprakash v. FAA, 346 F.3d 1121, 1124

(D.C. Cir. 2003) (agency must ―provide a

reasoned analysis indicating that prior policies

and standards are being deliberately changed,

not casually ignored‖). As the Supreme Court

explained in State Farm, an agency must be

afforded great latitude to change its policies, but

it must justify its actions by articulating a

reasoned analysis behind the change . . . .11

CBS Corp., 535 F.3d at 181-82 (citing State Farm, 463 U.S.

at 42-43).

We then noted that in Fox Television Stations, Inc. v.

F.C.C., the United States Court of Appeals for the Second

Circuit had analyzed under State Farm the FCC‘s change in

its fleeting-expletive policy (announced in its Golden Globes

order, after the 2004 Halftime Show broadcast at issue here)

and had ―rejected the agency‘s proffered rationale as

‗disconnected from the actual policy implemented by the

Commission.‘‖ Id. at 183 (quoting 489 F.3d 444, 459 n.8 (2d

Cir. 2007), rev‟d, Fox, 129 S. Ct. 1800). We then

distinguished the FCC‘s actions in Fox from its order in this

case:

There, as Judge Leval noted in dissent, the FCC

provided an explanation for changing its policy

on fleeting expletives. The critical question

splitting the court was whether that explanation

was adequate under State Farm. Here, unlike in

Fox, the FCC has not offered any

explanation — reasoned or otherwise — for

changing its policy on fleeting images. Rather,

the FCC asserts it never had a policy of

excluding fleeting images from the scope of

actionable indecency, and therefore no policy

change occurred when it determined that the

Halftime Show‘s fleeting image of Janet

Jackson's breast was actionably indecent.

Id. (emphasis added). Because our analysis of three decades

of FCC enforcement contradicted the Commission‘s assertion

in this regard, we concluded that ―the FCC‘s new policy of 12

including fleeting images within the scope of actionable

indecency is arbitrary and capricious under State Farm and

the Administrative Procedure Act, and therefore invalid as

applied to CBS.‖ Id. at 189.

We next engaged in a discussion regarding the degree

of scienter necessary for the imposition of a forfeiture, and

concluded the opinion by remanding to the agency, finding

this course of action to be appropriate where the agency has

issued an arbitrary decision. See id. at 209.

Eight months later the Supreme Court issued its

decision in Fox, on certiorari from the Second Circuit. See

Fox, 129 S.Ct. 1800. As noted above, the issue in that case

was ―the adequacy of the Federal Communications

Commission‘s explanation of its decision that [the statutory

prohibition on indecent language] sometimes forbids the

broadcasting of indecent expletives even when the offensive

words are not repeated,‖ not, as here, the question whether the

FCC‘s order amounted to a policy change.

3

Id. at 1805

(emphasis added).

 

3

In this regard, the Supreme Court noted that, in the orders

at issue in Fox:

The Commission forthrightly acknowledged

that its recent actions have broken new ground,

taking account of inconsistent ―prior

Commission and staff action‖ and explicitly

disavowing them as ―no longer good law.‖

Golden Globes, 19 F.C.C.R. at 4980 . . . . There

is no doubt that the Commission knew it was

making a change. That is why it declined to 13

The Court reviewed the statutory and regulatory

background in the introductory section of the opinion,

concluding with a discussion of the FCC‘s ruling in Golden

Globes, where ―the Commission took one step further by

declaring for the first time that a nonliteral (expletive) use of

the F- and S-Words could be actionably indecent, even when

the word is used only once,‖ Fox, 129 S. Ct. at 1807. The

Supreme Court observed:

The [Golden Globes] order acknowledged that

―prior Commission and staff action have

indicated that isolated or fleeting broadcasts of

the ‗F-Word‘ . . . are not indecent or would not

be acted upon.‖ It explicitly ruled that ―any

such interpretation is no longer good law.‖ It

―clarif[ied] . . . that the mere fact that specific

words or phrases are not sustained or repeated

does not mandate a finding that material that is

otherwise patently offensive to the broadcast

medium is not indecent.‖ Because, however,

―existing precedent would have permitted this

broadcast,‖ the Commission determined that

―NBC and its affiliates necessarily did not have

the requisite notice to justify a penalty.‖

Id. at 1808 (internal citations omitted).

 

assess penalties; and it relied on the Golden

Globes Order as removing any lingering doubt.

Remand Order, 21 F.C.C.R. at 13308.

Fox, 129 S. Ct. at 1812.14

The Court next considered the case before it, which

involved two instances of celebrities‘ use of the ―F-Word‖ in

live broadcasts. Id. (discussing Cher‘s and Nicole Richie‘s

statements at two consecutive Billboard Music Awards

broadcasts). The Commission had initially issued Notices of

Apparent Liability, but imposed no fines. See In re

Complaints Regarding Various Television Broadcasts

Between February 2, 2002 and March 8, 2005, 21 F.C.C.R.

2664 (2006). In further proceedings, the Commission gave

Fox the opportunity to object, then upheld the indecency

findings. See In re Complaints Regarding Various Television

Broadcasts Between February 2, 2002, and March 8, 2005,

21 F.C.C.R. 13299 (2006) (―Remand Order‖). The FCC‘s

order explained its reason for departing from the position that

fleeting expletives were exempt from otherwise applicable

indecency standards:

In the Commission‘s view, ―granting an

automatic exemption for ‗isolated or fleeting‘

expletives unfairly forces viewers (including

children)‖ to take ―‗the first blow‘‖ and would

allow broadcasters ―to air expletives at all hours

of a day so long as they did so one at a time.‖

Fox, 129 S. Ct. at 1809 (internal citations omitted). The FCC

appeared to hedge to some degree as to the extent of, and

timing of, its change in policy for fleeting material, but, as the

Supreme Court noted, it ―made clear [that] the Golden Globes

Order eliminated any doubt that fleeting expletives could be

actionably indecent, and the Commission disavowed the

bureau-level decisions and its own dicta that had said

otherwise.‖ Id. (internal citations omitted).15

Regarding the adequacy of the FCC‘s explanation for

its policy change, the Court rejected the Second Circuit‘s

view that an agency must ―make clear ‗why the original

reasons for adopting the [displaced] rule or policy are no

longer dispositive‘ as well as ‗why the new rule effectuates

the statute as well as or better than the old rule.‘‖ Fox, 129 S.

Ct. at 1810 (quoting Fox, 489 F.3d at 456-57) (internal

quotations omitted; alteration in original). It held:

To be sure, the requirement that an agency

provide reasoned explanation for its action

would ordinarily demand that it display

awareness that it is changing position. An

agency may not, for example, depart from a

prior policy sub silentio or simply disregard

rules that are still on the books. See United

States v. Nixon, 418 U.S. 683 (1974). And of

course the agency must show that there are

good reasons for the new policy. But it need

not demonstrate to a court's satisfaction that the

reasons for the new policy are better than the

reasons for the old one; it suffices that the new

policy is permissible under the statute, that there

are good reasons for it, and that the agency

believes it to be better, which the conscious

change of course adequately indicates.

Id. at 1811.

The Court concluded that, in that case, the

Commission‘s ―reasons for expanding the scope of its

enforcement activity were entirely rational‖:16

It was certainly reasonable to determine that it

made no sense to distinguish between literal and

nonliteral uses of offensive words, requiring

repetitive use to render only the latter indecent.

As the Commission said with regard to

expletive use of the F-Word, ―the word‘s power

to insult and offend derives from its sexual

meaning.‖ And the Commission's decision to

look at the patent offensiveness of even isolated

uses of sexual and excretory words fits with the

context-based approach we sanctioned in

[F.C.C. v. Pacifica Foundation], 438 U.S.

[726], 750 [(1978)]. Even isolated utterances

can be made in ―pander[ing,] . . . vulgar and

shocking‖ manners, and can constitute harmful

―‗first blow[s]‘‖ to children. It is surely rational

(if not inescapable) to believe that a safe harbor

for single words would ―likely lead to more

widespread use of the offensive language.‖

Fox, 129 S. Ct. at 1812-13 (internal citations omitted).

Notably, the Court‘s discussion of the Commission‘s action

concluded with the following statement: ―[T]he agency‘s

decision not to impose any forfeiture or other sanction

precludes any argument that it is arbitrarily punishing parties

without notice of the potential consequences of their action.‖

Id. at 1813.

Accordingly, the Court reversed the Second Circuit‘s

order and upheld the FCC‘s decision.17

II.

We must decide the extent to which Fox affects our

previous ruling in this case. We conclude that, if anything,

the Supreme Court‘s decision fortifies our original opinion, in

two ways.

For one thing, in Fox, unlike in this case, the FCC

acknowledged that its orders had ―broken new ground,‖ as

noted above. See 129 S. Ct. at 1812. The Supreme Court

specifically noted that the FCC‘s ―decision not to impose any

forfeiture or other sanction‖ in that case signaled its

recognition that assessing penalties based on violations of

previously unannounced policies would amount to ―arbitrarily

punishing parties without notice of the potential consequences

of their actions.‖ Id. at 1813. The same logic implies that the

FCC erred in imposing a fine on CBS in this case, as the

chronology of events that are the subject of these cases

demonstrates.

The FCC Enforcement Bureau‘s original, 2003 ruling

in Golden Globes applied its then-controlling policy of

exempting all fleeting indecent material from enforcement,

determining that the singer Bono‘s use of the ―F- Word‖

(―this is really, really f– brilliant‖) did ―not fall within the

scope of the Commission‘s indecency prohibition.‖ CBS

Corp., 535 F.3d at 177 (quoting In re Complaints Against

Various Broadcast Licensees Regarding Their Airing of the

“Golden Globe Awards” Program, 18 F.C.C.R. 19859, ¶ 6

(FCC Enforcement Bureau 2003)). But, in March 2004, the

full Commission reversed the Enforcement Bureau‘s decision,

overruling all of its prior cases that held fleeting expletives

were not actionable. The Commission declined to impose a 18

penalty on the Golden Globes broadcasters, however, because

―‗existing precedent would have permitted [the Golden Globe

Awards] broadcast‘ and therefore it would be ‗inappropriate‘

to sanction licensees for conduct prior to notice of policy

change.‖ Id. at 178 (quoting Golden Globes, 19 F.C.C.R. at

4981-82).

The expletive utterances by Cher and Nicole Richie

that were considered in Fox took place, respectively, during

the 2002 and 2003 Billboard Music Awards telecasts, before

the full Commission‘s March 2004 Golden Globes decision.

Accordingly, and applying the same rationale as in Golden

Globes, the FCC declined to impose a fine. As the Fox Court

observed and affirmed, the decision not to impose a fine in

that case signaled the FCC‘s understanding that imposing

sanctions for conduct that occurred before the FCC‘s policy

change was announced would raise due process concerns.

See Fox, 129 S. Ct. at 1813.

The same principle applies here. The relevant

Halftime Show broadcast occurred in February 2004,

preceding the FCC‘s ruling in Golden Globes. But despite its

earlier consistent policy exempting all fleeting material —

words and images — from its indecency rules, see CBS

Corp., 535 F.3d at 188, the FCC assessed a fine against CBS.

Fox confirms our earlier observation that because the

Commission did not announce any change in its fleetingmaterial policy until March 2004, and because the offensive

conduct in this case (like the offending conduct in Golden

Globes and Fox) preceded that date, the FCC‘s assessment of

a forfeiture and imposition of a penalty against CBS

constitutes arbitrary, and therefore unlawful, punishment. 19

Fox, 129 S. Ct. at 1813; see also CBS Corp., 535 F.3d at 180-

81.

The FCC and our dissenting colleague contend that, in

all events, the FCC‘s decision in Young Broadcasting of San

Francisco, Inc., 19 F.C.C.R. 1751 (2004), issued just days

before CBS‘s Halftime Show, provided CBS with adequate

notice that the FCC might impose a forfeiture for fleeting

nude images. But as we pointed out in our earlier opinion,

the 2004 Young Broadcasting decision was a non-final notice

of apparent liability; ―the final disposition of Young

Broadcasting was still unresolved‖ at the time of the Halftime

Show broadcast. Id. at 187 & n.18. The decision therefore

reflects only ―tentative conclusions‖ of the FCC, and, in our

view, provides insufficient notice of the FCC‘s official policy

on fleeting nude images, particularly when viewed in the

context of the agency‘s consistent refusal over three decades

to consider such fleeting material indecent, to justify the

imposition of sanctions against CBS.

Therefore, we must reaffirm our conclusion that the

penalty imposed in this case is arbitrary unless we find,

contrary to the extensive analysis in our earlier opinion, that

the FCC‘s pre-Golden Globes fleeting-material policy did not

also apply to fleeting images. But, here again, Fox supports

our previous conclusion. The Commission, and our

dissenting colleague, point to one small portion of the

background section in the Supreme Court‘s lengthy Fox

opinion as support for the position that the FCC‘s fleetingmaterial policy never applied to images but was always

restricted to words. But we discern no such meaning in the

relevant passage, which briefly observed:20

Although the Commission had expanded its

enforcement beyond the ―repetitive use of

specific words or phrases,‖ it preserved a

distinction between literal and nonliteral (or

―expletive‖) uses of evocative language. The

Commission explained that each literal

―description or depiction of sexual or excretory

functions must be examined in context to

determine whether it is patently offensive,‖ but

that ―deliberate and repetitive use . . . is a

requisite to a finding of indecency‖ when a

complaint focuses solely on the use of nonliteral

expletives.

129 S. Ct. at 1807 (quoting In re Pacifica Found., Inc., 2

F.C.C.R. 1191, 2699, ¶ 13 (1987)).

The FCC argues that images fall into the category of

literal ―descriptions or depictions‖ of sexual organs or

functions, and that the Court‘s language indicates that the

FCC‘s previous fleeting-material policy applied only to nonliteral, or expletive, depictions or descriptions, and not, as we

previously concluded, to fleeting images as well as

expletives. We disagree.

First, we do not see how this summary recitation of the

Commission‘s opinions affects the reasoning or result in our

case. It appears in the Court‘s background discussion of the

FCC‘s historical approach to indecent language, and is neither

reasoning nor holding; it is mere characterization. Second,

this language narrowly addresses words and phrases, with no

discussion of images. Although the phrase ―description or

depiction,‖ considered in isolation, could be construed to 21

include images, Justice Scalia is paraphrasing the language of

the FCC‘s 1987 Pacifica Foundation opinion, involving

words alone, in which the complete phrase used by the FCC

was ―speech involving the description or depiction of sexual

or excretory functions.‖

4

In re Pacifica Found., Inc., 2

 

4

The full text of the relevant paragraph from Pacifica

Foundation is as follows:

While speech that is indecent

must involve more than an

isolated use of an offensive

word . . . , repetitive use of

specific words or phrases is not

an absolute requirement for a

finding of indecency. If a

complaint focuses solely on the

use of expletives, we believe that

under the legal standards set forth

in Pacifica, deliberate and

repetitive use in a patently

offensive manner is a requisite to

a finding of indecency. When a

complaint goes beyond the use of

expletives, however, repetition of

specific words or phrases is not

necessarily an element critical to a

determination of indecency.

Rather, speech involving the

description or depiction of sexual

or excretory functions must be

examined in context to determine

whether it is patently offensive 22

F.C.C.R. 2698, 2699 ¶ 13 (1987), quoted in Fox, 129 S. Ct. at

1807. As the dissent concedes, dissenting op. at 26-27 n.7,

Fox says nothing at all about images. Nor does it suggest that

the FCC‘s previous fleeting-material policy applied only to

―words,‖ or distinguished between words and images, as the

Commission originally argued to us (an argument we

forcefully rejected after reviewing three decades of rulings).

Indeed, the Fox Court had no occasion to consider the

application of the FCC‘s pre-Golden Globes fleeting-material

policy to images, since that case involved the use of spoken

fleeting expletives.

5

 

 

under contemporary community

standards applicable to the

broadcast medium. The mere fact

that specific words or phrases are

not repeated does not mandate a

finding that material that is

otherwise patently offensive to the

broadcast medium is not indecent.

2 F.C.C.R. at 2699 ¶ 13 (emphases added).

5

Our dissenting colleague contends that the Supreme

Court‘s omission of any discussion of fleeting images in Fox

―strongly suggests‖ that images never fell within the FCC‘s

fleeting-material policy. Dissenting op. at 28. By contrast,

we are unwilling to read the Court‘s silence as overruling our

conclusion, based on a careful review of three decades of

FCC precedent to discern the agency‘s policy on precisely

this issue, that the FCC historically did not distinguish

between fleeting images and words. See 535 F.3d at 188

(―[T]he Commission‘s entire regulatory scheme treated 23

More to the point, read in context, this language does

not refer to the FCC‘s pre-Golden Globes fleeting-material

policy at all. Instead, it describes the evolution of the

Commission‘s overall approach to a separate issue, i.e.,

whether ―its enforcement power was limited to ‗deliberate,

repetitive use of the seven words actually contained in the

George Carlin monologue.‘‖

6

Id. at 1807 (quoting Pacifica

Found., 2 F.C.C.R. at 2699 ¶ 12). Critically, the relevant

portion of the Pacifica Foundation opinion that Fox quoted

clearly distinguished between these two concepts, explaining

that ―speech that is indecent must involve more than an

isolated,‖ i.e., fleeting, ―use of an offensive word,‖ but that

―repetitive use of specific words or phrases‖ (i.e., the

expletive words or phrases from the Carlin monologue) was

not required. Pacifica Found., 2 F.C.C.R. at 2699 ¶ 13

(emphasis added). The Supreme Court in the quoted

language from Fox, and the FCC in the Pacifica Foundation

opinion that Fox quoted, were focused entirely on the FCC‘s

earlier policy (arising out of the Carlin monologue) regarding

the ―‗use of specific words or phrases‘‖ as a prerequisite to a

finding of indecency, not the question whether the reference

to a particular word or image that might otherwise be deemed

indecent was passing or fleeting in nature. Just as Fox

involved spoken fleeting expletives, not fleeting images,

 

broadcasted images and words interchangeably for purposes

of determining indecency. Therefore, it follows that the

Commission‘s exception for fleeting material under that

regulatory scheme likewise treated words and images alike.‖).

Images simply were not involved in the case.

6

See Fox, 129 S. Ct. at 1806, and CBS Corp., 535 F.3d at

175, for additional background on the Carlin monologue. 24

Pacifica Foundation involved sustained, repeated use of

expletives and sexually explicit language, not fleeting words

or images.

7

 

Moreover, the very next paragraph of Fox confirms

that neither the Supreme Court nor the FCC interpreted

Pacifica Foundation‘s distinction between literal and nonliteral uses of specific words or phrases to impact the

otherwise applicable policy for fleeting material. Fox, 129 S.

Ct. at 1807. In that paragraph, quoting an FCC policy

statement from 2001, the Court made clear that, even after

Pacifica Foundation, the exception for fleeting material still

applied, separate and apart from any distinction arising

between ―literal‖ and ―non-literal‖ words referring to sexual

or excretory functions. Quoting a 2001 FCC policy

statement, the Court said, ―‗No single factor,‘ the

Commission said, ‗generally provides the basis for an

indecency finding,‘ but ‗where sexual or excretory references

have been made once or have been passing or fleeting in

nature, this characteristic has tended to weigh against a

 

7

Pacifica Foundation concerned a radio station‘s airing of a

program entitled ―Shocktime America,‖ which allegedly

contained a narration and song lyrics using words and phrases

such as ―eat shit,‖ ―mother-fucker,‖ and ―fuck the U.S.A.,‖

and a program featuring excerpts from a play with dramatic

readings of sexual fantasies and containing language highly

descriptive of sexual and excretory activities. Pacifica

defended that the Shocktime remarks were not scripted, and

asserted that the language of the play was taken out of context

and the broadcast was at night when children would not be

listening. 25

finding of indecency.‘‖ Fox, 129 S. Ct. at 1807 (quoting In re

Industry Guidance on the Commission‟s Case Law

Interpreting 18 U.S.C. § 1464 and Enforcement Policies

Regarding Broadcast Indecency, 16 F.C.C.R. 7999, 8003

¶ 10, 8008 ¶ 17 (2001) (―Industry Guidance‖)) (emphasis

added).

8

 

If we were to read the Supreme Court‘s background

discussion in Fox as indicating that the history of FCC

enforcement in the area of fleeting material recognized an

exception only for non-literal expletives, to the exclusion of

images, we would be accusing the Supreme Court of

rewriting history. This is because, in Young Broadcasting,

which involved a fleeting image of a body part much like the

one presented here, the Commission had the opportunity to

explain that, after Pacifica Foundation, its fleeting-material

policy did not apply to images. But the FCC did not say that,

nor did it mention, much less rely on, Pacifica Foundation in

analyzing the broadcast images at issue in that case.

9

See

Young Broadcasting, 19 F.C.C.R. at 1755 ¶ 12 & n.35.

 

8

Interestingly, we cited this exact language as evidence of

the FCC‘s ―restrained enforcement policy‖ for fleeting

indecent material in our earlier opinion. See CBS Corp., 535

F.3d at 177.

9

Just as Young Broadcasting did not mention Pacifica

Foundation‘s literal / non-literal distinction, Fox does not

reference or attempt to reconcile Young Broadcasting,

confirming that the Court did not consider, much less decide,

whether the FCC‘s pre-Golden Globes fleeting-material

policy applied to images as well as words. 26

Instead, the FCC noted the fact that ―the actual

exposure of the performer‘s penis‖ in that case ―was fleeting

in that it occurred for less than a second.‖ Id. It then

compared the overall circumstances in the case to other cases

in which it had applied the fleeting-material exception, and

held that Young Broadcasting was different — an exception

to the exception — because ―the material was apparently

intended to pander to, titillate and shock viewers‖ and

because the station knew in advance that ―the interview

involved performers who appear nude in order to manipulate

and stretch their genitalia,‖ but ―failed to take adequate

precautions to ensure that no actionably indecent material was

broadcast.‖ Id. at 1755-56 ¶¶ 12-13 & n.35; see also CBS

Corp., 535 F.3d at 186 & n.16-17.

The Commission did not distinguish Young

Broadcasting because it involved images rather than words,

and its language demonstrates that it viewed the case as just

another ―instance‖ involving ―fleeting remarks in live,

unscripted broadcasts.‖ See Young Broadcasting, 19

F.C.C.R. at 1755 ¶ 12 (―We reject Young‘s assertion that this

material is equivalent to other instances in which the

Commission has ruled that fleeting remarks in live, unscripted

broadcasts do not meet the indecency definition.‖). As we

pointed out in our previous CBS opinion, had the FCC

believed that its fleeting-material policy categorically did not

apply to sexually explicit images, it most certainly would

have said so rather than relying on distinctions that could

apply to all fleeting material — remarks and images alike. Id.

at 187. The FCC has not persuaded us that the fleetingmaterial exception was ever limited to words or expletives,

and it cannot do so when in Young Broadcasting it treated a

fleeting image just as it would have treated fleeting words. 27

Considering all of these facts, we do not see any basis

to conclude that Fox alters our previous analysis of the

fleeting-material exception. At bottom, the Commission

attempts to convert a passing reference in Fox‘s background

section into a holding that undermines what the opinion

otherwise makes clear: an agency may not apply a policy to

penalize conduct that occurred before the policy was

announced. The Commission‘s argument also rewrites

history, marginalizing the Supreme Court‘s recognition in

Fox that Golden Globes reflected a clear change in FCC‘s

fleeting-material policy, and ignoring the agency‘s consistent

practice — over three decades before its order in this case —

of exempting all fleeting material, whether words or images,

from enforcement under its indecency policy.

10

 

 

10

Our prior opinion chronicled that history at length. As we

discussed:

The Commission‘s conclusion on the nature

and scope of its indecency regime-including its

fleeting material policy – is at odds with the

history of its actions in regulating indecent

broadcasts. In the nearly three decades between

the Supreme Court‘s ruling in Pacifica

Foundation and CBS‘s broadcast of the

Halftime Show, the FCC had never varied its

approach to indecency regulation based on the

format of broadcasted content. Instead, the

FCC consistently applied identical standards

and engaged in identical analyses when

reviewing complaints of potential indecency 28

Thus, we conclude that Fox does not alter our

reasoning or initial resolution of this case.

Part B: Opinion Regarding the Merits

In reasoning through Part A of this opinion, we

referred extensively to our prior opinion, which the Supreme

Court vacated before remanding the case to us in light of Fox.

While we ordinarily would simply reinstate our prior opinion

after determining that Fox did not undermine it, we cannot do

that here, for two reasons. First, the previous opinion was a

unanimous opinion authored by Judge Scirica, whereas the

opinion we now will issue is non-unanimous, with Judge

Scirica dissenting. Second, the new majority does not believe

that the earlier opinion‘s discussion of the scienter required

for a violation was necessary, and we decline to readopt that

portion of the analysis.

Accordingly, we do not reinstate our previous opinion.

Instead, we incorporate below those portions of the opinion

that we wish to readopt as part of our resolution of this case.

11

 

whether the complaints were based on words or

images.

CBS Corp., 535 F.3d at 184.

11 We incorporate the pertinent portions of our previous

opinion as they were filed on July 21, 2008 and amended on

August 6, 2008. Thus, the citation information in Part B of

our opinion is current as of that date and does not reflect any

subsequent updates.29

* * *

In this petition for review, CBS appeals orders of the

Federal Communications Commission imposing a monetary

forfeiture under 47 U.S.C. § 503(b) for the broadcast of

―indecent‖ material in violation of 18 U.S.C. § 1464 and 47

C.F.R. § 73.3999. The sanctions stem from CBS‘s live

broadcast of the Super Bowl XXXVIII Halftime Show, in

which two performers deviated from the show‘s script

resulting in the exposure of a bare female breast on camera, a

deceitful and manipulative act that lasted nine-sixteenths of

one second. CBS transmitted the image over public airwaves,

resulting in punitive action by the FCC.

CBS challenges the Commission‘s orders on

constitutional, statutory, and public policy grounds. Two of

the challenges are paramount: (1) whether the Commission

acted arbitrarily and capriciously under the Administrative

Procedure Act, 5 U.S.C. § 706, in determining that CBS‘s

broadcast of a fleeting image of nudity was actionably

indecent; and (2) whether the Commission, in applying three

theories of liability – traditional respondeat superior doctrine,

an alternative theory of vicarious liability based on CBS‘s

duties as a broadcast licensee, and the ―willfulness‖ standard

of the forfeiture statute – properly found CBS violated the

indecency provisions of 18 U.S.C. § 1464 and 47 C.F.R. §

73.3999. We will vacate the FCC‘s orders.

I.

On February 1, 2004, CBS presented a live broadcast

of the National Football League‘s Super Bowl XXXVIII,

which included a halftime show produced by MTV 30

Networks.

12

Nearly 90 million viewers watched the Halftime

Show, which began at 8:30 p.m. Eastern Standard Time and

lasted about fifteen minutes. The Halftime Show featured a

variety of musical performances by contemporary recording

artists, with Janet Jackson as the announced headlining act

and Justin Timberlake as a ―surprise guest‖ for the final

minutes of the show.

Timberlake was unveiled on stage near the conclusion

of the Halftime Show. He and Jackson performed his popular

song ―Rock Your Body‖ as the show‘s finale. Their

performance, which the FCC contends involved sexually

suggestive choreography, portrayed Timberlake seeking to

dance with Jackson, and Jackson alternating between

accepting and rejecting his advances. The performance ended

with Timberlake singing, ―gonna have you naked by the end

of this song,‖ and simultaneously tearing away part of

Jackson‘s bustier. CBS had implemented a five-second audio

delay to guard against the possibility of indecent language

being transmitted on air, but it did not employ similar

precautionary technology for video images. As a result,

Jackson‘s bare right breast was exposed on camera for ninesixteenths of one second.

Jackson‘s exposed breast caused a sensation and

resulted in a large number of viewer complaints to the Federal

Communications Commission.

13

In response, the

 

12

At that time, both CBS and MTV Networks were

divisions of Viacom, Inc.

13

The record is unclear on the actual number of complaints

received from unorganized, individual viewers. In its brief, 31

Commission‘s Enforcement Bureau issued a letter of inquiry

asking CBS to provide more information about the broadcast

along with a video copy of the entire Super Bowl program.

CBS supplied the requested materials, including a script of

the Halftime Show, and issued a public statement of apology

for the incident. CBS stated Jackson and Timberlake‘s

wardrobe stunt was unscripted and unauthorized, claiming it

had no advance notice of any plan by the performers to

deviate from the script.

On September 22, 2004, the Commission issued a

Notice of Apparent Liability finding CBS had apparently

violated federal law and FCC rules restricting the broadcast of

indecent material. After its review, the Commission

determined CBS was apparently liable for a forfeiture penalty

of $550,000.

14

CBS submitted its Opposition to the Notice of

Apparent Liability on November 5, 2004.

 

the FCC asserts it received ―‗an unprecedented number‘ of

complaints about the nudity broadcast during the halftime

show.‖ FCC Br. at 12 (citation omitted). CBS disputes the

calculation and significance of the viewer complaints. See

CBS Reply Br. at 15 n.6 (―Of the ‗over 542,000 complaints

concerning the broadcast‘ the FCC claims to have received,

over 85 percent are form complaints generated by singleinterest groups. Approximately twenty percent of the

complaints are duplicates, with some individual complaints

appearing in the record up to 37 times.‖ (citations omitted)).

14

This figure represented the aggregate of proposed

penalties against individual CBS stations. At the time the

Commission issued its Notice of Apparent Liability, 32

The Commission issued a forfeiture order over CBS‘s

opposition on March 15, 2006, imposing a forfeiture penalty

of $550,000. In re Complaints Against Various Television

Licensees Concerning Their February 1, 2004 Broadcast of

the Super Bowl XXXVIII Halftime Show, 21 F.C.C.R. 2760

(2006) (―Forfeiture Order‖). Affirming its preliminary

findings, the Commission concluded the Halftime Show

broadcast was indecent because it depicted a sexual organ and

violated ―contemporary community standards for the

broadcast medium.‖ Id. at ¶ 10. In making this

determination, the FCC relied on a contextual analysis to find

the broadcast of Jackson‘s exposed breast was: (1) graphic

and explicit, (2) shocking and pandering, and (3) fleeting. Id.

at ¶ 14. It further concluded that the brevity of the image was

outweighed by the other two factors. Id. The standard

applied by the Commission is derived from its 2001 policy

statement setting forth a two-part test for indecency: (1) ―the

material must describe or depict sexual or excretory organs or

activities,‖ and (2) it must be ―patently offensive as measured

by contemporary community standards for the broadcast

medium.‖ In re Industry Guidance on the Commission‟s

Case Law Interpreting 18 U.S.C. § 1464 and Enforcement

Policies Regarding Broadcast Indecency, 16 F.C.C.R. 7999,

8002 ¶¶ 7-8 (2001) (emphasis in original). The Commission

had informed broadcasters in its 2001 policy statement that in

performing the second step of the test – measuring the

offensiveness of any particular broadcast – it would look to

three factors: ―(1) the explicitness or graphic nature of the

 

forfeiture penalties for indecency violations were statutorily

capped at $27,500. The Commission proposed the maximum

penalty for each CBS station.33

description or depiction of sexual or excretory organs or

activities; (2) whether the material dwells on or repeats at

length descriptions of sexual or excretory organs or activities;

(3) whether the material appears to pander or is used to

titillate, or whether the material appears to have been

presented for its shock value.‖ Id. at ¶ 10 (emphasis omitted).

Additionally, the FCC determined CBS‘s actions in

broadcasting the indecent image were ―willful‖ and therefore

sanctionable by a monetary forfeiture under 47 U.S.C. §

503(b)(1). See id. at ¶ 15. Adopting the definition of

―willful‖ found in section 312(f)(1) of the Communications

Act,

15

the Commission offered three explanations for its

determination of willfulness. Id. First, the FCC found CBS

―acted willfully because it consciously and deliberately

broadcast the halftime show, whether or not it intended to

broadcast nudity . . . .‖ Id. Second, the FCC found CBS

acted willfully because it ―consciously and deliberately failed

to take reasonable precautions to ensure that no actionably

indecent material was broadcast.‖ Id. Finally, the FCC

applied a respondeat superior theory in finding CBS

vicariously liable for the willful actions of its agents, Jackson

and Timberlake. Id.

 

15

This section of the Communications Act provides: ―The

term ‗willful‘, when used with reference to the commission or

omission of any act, means the conscious and deliberate

commission or omission of such act, irrespective of any intent

to violate any provision of this Act or any rule or regulation

of the Commission authorized by this Act or by a treaty

ratified by the United States.‖ 47 U.S.C. § 312(f)(1).34

On April 14, 2006, CBS submitted a Petition for

Reconsideration under 47 C.F.R. § 1.106, raising several

arguments against the Commission‘s findings and

conclusions. In its Order on Reconsideration, the FCC

rejected CBS‘s statutory and constitutional challenges and

reaffirmed its imposition of a $550,000 forfeiture. In re

Complaints Against Various Television Licensees Concerning

Their February 1, 2004 Broadcast of the Super Bowl XXXVIII

Halftime Show, 21 F.C.C.R. 6653 (2006) (―Reconsideration

Order‖). The Reconsideration Order revised the

Commission‘s approach for determining CBS‘s liability

under the willfulness standard. The Commission reiterated its

application of vicarious liability in the form of respondeat

superior and its determination that CBS was directly liable

for failing to take adequate measures to prevent the broadcast

of indecent material. See id. at ¶ 16. But it abandoned its

position that CBS acted willfully under 47 U.S.C. § 503(b)(1)

by intentionally broadcasting the Halftime Show irrespective

of its intent to broadcast the particular content included in the

show. Instead, it determined CBS could be liable ―given the

nondelegable nature of broadcast licensees‘ responsibility for

their programming.‖ Id. at ¶ 23. The Commission has since

elaborated on this aspect of the Reconsideration Order,

explaining it as a separate theory of liability whereby CBS

can be held vicariously liable even for the acts of its

independent contractors because it holds non-delegable duties

as a broadcast licensee to operate in the public interest and to

avoid broadcasting indecent material. See, e.g., FCC Br. at

44-45.

CBS timely filed a petition for review of the

Reconsideration Order on July 28, 2006. It challenges the 35

FCC‘s orders on several grounds, and both parties are

supported by briefing from several amici.

II.

Our standard of review of agency decisions is

governed by the Administrative Procedure Act, 5 U.S.C. §

706. Under the Administrative Procedure Act, we ―hold

unlawful and set aside agency action, findings, and

conclusions‖ that are found to be ―arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with the

law.‖ Id. § 706(2)(A); see, e.g., Motor Vehicle Mfrs. Ass‟n v.

State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 41 (1983).

The scope of review under the ―arbitrary and

capricious‖ standard is ―narrow, and a court is not to

substitute its judgment for that of the agency.‖ State Farm,

463 U.S. at 43. Nevertheless, the agency must reach its

decision by ―examin[ing] the relevant data,‖ and it must

―articulate a satisfactory explanation for its action including a

‗rational connection between the facts found and the choice

made.‘‖ Id. (quoting Burlington Truck Lines, Inc. v. United

States, 371 U.S. 156, 168 (1962)). We generally find agency

action arbitrary and capricious where:

the agency has relied on factors which Congress

has not intended it to consider, entirely failed to

consider an important aspect of the problem,

offered an explanation for its decision that runs

counter to the evidence before the agency, or is

so implausible that it could not be ascribed to a

difference in view or the product of agency

expertise. The reviewing court should not 36

attempt itself to make up for such deficiencies;

we may not supply a reasoned basis for the

agency‘s action that the agency itself has not

given.

Id. at 43 (citing SEC v. Chenery Corp., 332 U.S. 194, 196

(1947)).

Our review of the constitutional questions is more

searching. In cases raising First Amendment issues, we have

―an obligation ‗to make an independent examination of the

whole record‘ in order to make sure that ‗the judgment does

not constitute a forbidden intrusion on the field of free

expression.‘‖ United States v. Various Articles of Merch.,

Schedule No. 287, 230 F.3d 649, 652 (3d Cir. 2000) (quoting

Bose Corp. v. Consumers Union, 466 U.S. 485, 499 (1984)

(citations omitted)).

III.

The FCC possesses authority to regulate indecent

broadcast content, but it had long practiced restraint in

exercising this authority. During a span of nearly three

decades, the Commission frequently declined to find

broadcast programming indecent, its restraint punctuated only

by a few occasions where programming contained indecent

material so pervasive as to amount to ―shock treatment‖ for

the audience. Throughout this period, the Commission

consistently explained that isolated or fleeting material did

not fall within the scope of actionable indecency.

At the time the Halftime Show was broadcasted by

CBS, the FCC‘s policy on fleeting material was still in effect. 37

The FCC contends its restrained policy applied only to

fleeting utterances – specifically, fleeting expletives – and did

not extend to fleeting images. But a review of the

Commission‘s enforcement history reveals that its policy on

fleeting material was never so limited. The FCC‘s present

distinction between words and images for purposes of

determining indecency represents a departure from its prior

policy.

Like any agency, the FCC may change its policies

without judicial second-guessing. But it cannot change a

well-established course of action without supplying notice of

and a reasoned explanation for its policy departure. Because

the FCC failed to satisfy this requirement, we find its new

policy arbitrary and capricious under the Administrative

Procedure Act as applied to CBS.

A.

Section 326 of the Communications Act prohibits the

FCC from censoring its licensees‘ broadcasts.

16

Subject to

this constraint, the FCC retains authority to regulate obscene,

indecent, or profane broadcast content. See 18 U.S.C. § 1464

(―Whoever utters any obscene, indecent, or profane language

 

16

See 47 U.S.C. § 326 (―Nothing in this chapter shall be

understood or construed to give the Commission the power of

censorship over the radio communications or signals

transmitted by any radio station, and no regulation or

condition shall be promulgated or fixed by the Commission

which shall interfere with the right of free speech by means of

radio communication.‖).38

by means of radio communication shall be fined under this

title or imprisoned not more than two years, or both.‖).

Indecency and obscenity are distinct categories of speech.

See FCC v. Pacifica Found., 438 U.S. 726, 739-41 (1978)

(plurality opinion) (―Pacifica‖). Indecency, unlike obscenity,

is protected by the First Amendment. Sable Commc‟ns of

Cal., Inc. v. FCC, 492 U.S. 115, 126 (1989). The FCC‘s

authority to restrict indecent broadcast content is nevertheless

constitutionally permissible because of the unique nature of

the broadcast medium. Pacifica, 438 U.S. at 750-51; see also

id. at 755-56 (Powell, J., concurring).

Congress authorized the FCC to impose forfeiture

penalties for violations of 18 U.S.C. § 1464 in 1960.

17

But

the FCC did not exercise its authority to find a broadcast

statutorily ―indecent‖ until 1975, when it issued a forfeiture

penalty against Pacifica Foundation for broadcasting

comedian George Carlin‘s ―Filthy Words‖ monologue. See

In re Citizen‟s Complaint Against Pacifica Found., Station

WBAI(FM), N.Y., N.Y., 56 F.C.C.2d 94 (1975). Carlin‘s

monologue, which Pacifica aired on the radio in an earlyafternoon time slot, contained extensive and repetitive use of

several vulgar expletives over a period of twelve minutes.

See Pacifica, 438 U.S. at 739.

Pacifica appealed the FCC‘s forfeiture order to the

United States Court of Appeals for the D.C. Circuit. The

 

17

See 47 U.S.C. § 503(b)(1)(D) (―Any person who is

determined by the Commission . . . to have . . . violated any

provision of section . . . 1464 of title 18 . . . shall be liable to

the United States for a forfeiture penalty.‖). 39

FCC issued a clarification order while Pacifica‘s appeal was

pending, expressly limiting its prior forfeiture order to the

specific facts of the Carlin monologue. In re „A Petition for

Clarification or Reconsideration‟ of a Citizen‟s Complaint

Against Pacifica Found., Station WBAI(FM), N.Y., N.Y., 59

F.C.C.2d 892 (1976) (―Pacifica Clarification Order‖).

Expressly acknowledging the forfeiture order‘s potential

negative impact on broadcast coverage of live events where

―there is no opportunity for journalistic editing,‖ the FCC

stated its intention to exclude such circumstances from the

scope of actionable indecency. Id. at ¶ 4 n.1.

Following the Pacifica Clarification Order, the D.C.

Circuit reversed the FCC‘s forfeiture order against Pacifica as

vague and overbroad and found the agency‘s indecency

regime constituted invalid censorship under 47 U.S.C. § 326.

Pacifica Found. v. FCC, 556 F.2d 9, 14 (D.C. Cir. 1977).

The FCC appealed and the Supreme Court reversed in a

narrow plurality opinion. See Pacifica, 438 U.S. at 726. The

Court rejected Pacifica‘s statutory argument that the term

―indecent‖ in 18 U.S.C. § 1464 only covered obscene speech.

Pacifica, 438 U.S. at 739. But the Court confirmed the

general validity of the FCC‘s indecency regime,

―emphasiz[ing] the narrowness of [its] holding,‖ which it

confined to the facts of the Carlin monologue. Id. at 750.

Justices Powell and Blackmun concurred in the judgment,

writing separately in part to reiterate the narrowness of the

decision and to note the Court‘s holding did not ―speak to

cases involving the isolated use of a potentially offensive

word in the course of a radio broadcast, as distinguished from

the verbal shock treatment administered by respondent here.‖

Id. at 760-61 (Powell, J., concurring).40

Shortly after the Court‘s ruling in Pacifica, a

broadcaster‘s license renewal was challenged on the basis that

the broadcaster had aired indecent programming. See In re

Application of WGBH Educ. Found., 69 F.C.C.2d 1250

(1978) (―WGBH‖). Viewer complaints alleged the

broadcaster aired several programs containing nudity and

other allegedly offensive material. Id. at ¶ 2. Distinguishing

the facts of WGBH from the Court‘s ruling in Pacifica, the

FCC rejected the challenge and denied that Pacifica afforded

it any ―general prerogative to intervene in any case where

words similar or identical to those in Pacifica are broadcast

over a licensed radio or television station.‖ Id. at ¶ 10. The

FCC, noting it ―intend[ed] strictly to observe the narrowness

of the Pacifica holding‖ and emphasizing the language in

Justice Powell‘s concurring opinion, id. at ¶ 10, concluded the

single use of an expletive in a program ―should not call for us

to act under the holding of Pacifica.‖ Id. at ¶ 10 n.6.

The FCC‘s restrained enforcement policy continued in

the years following Pacifica. Rejecting another challenge to

a broadcaster‘s license renewal based on the airing of

allegedly indecent material, the FCC reaffirmed that isolated

use of expletives in broadcasts did not constitute actionable

indecency under 18 U.S.C. § 1464. See In re Application of

Pacifica Found., 95 F.C.C.2d 750 (1983). The complaint

alleged the broadcaster had on multiple occasions aired

programming containing language such as ―motherfucker,‖

―fuck,‖ and ―shit.‖ Id. at ¶ 16. The FCC held these facts did

not constitute a prima facie showing of actionable indecency

under 18 U.S.C. § 1464, because the complainant had failed

to show the broadcasts amounted to ―verbal shock treatment‖

as opposed to ―isolated use.‖ Id. at ¶ 18.41

In April 1987, the FCC issued three simultaneous

indecency decisions. See In re Pacifica Found., Inc., 2

F.C.C.R. 2698 (1987); In re Regents of the Univ. of Cal., 2

F.C.C.R. 2703 (1987); In re Infinity Broad. Corp., 2 F.C.C.R.

2705 (1987). These decisions reaffirmed the Commission‘s

restrained enforcement policy and reiterated the agency‘s

policy that isolated or fleeting material would not be

considered actionably indecent. See, e.g., Regents of the

Univ. of Cal. at ¶ 3 (―Speech that is indecent must involve

more than an isolated use of an offensive word.‖).

Later in 1987, reconsidering these decisions, the

Commission abandoned the view that only the particular

―dirty words‖ used in the Carlin monologue could be

indecent.

18

Instead, the FCC explained it would thereafter

rely on the broader terms of its generic indecency standard,

which defined indecent material as ―language that describes,

in terms patently offensive as measured by contemporary

community standards for the broadcast medium, sexual or

excretory activities or organs, when there is a reasonable risk

 

18

See In re Infinity Broad. Corp., 3 F.C.C.R. 930, ¶ 5

(1987), vacated in part on other grounds, Action for

Children‟s Television v. FCC, 852 F.2d 1332, 1337 (D.C. Cir.

1988) (―ACT I‖), superseded by Action for Children‟s

Television v. FCC, 58 F.3d 654 (D.C. Cir. 1995) (en banc)

(―ACT II‖).42

that children may be in the audience.‖ Id. at ¶¶ 2, 5.

19

Even

so, the FCC affirmed all three decisions on reconsideration,

never indicating disagreement with those decisions‘ express

statements that isolated or fleeting material could not be

actionably indecent. Id.

In 2001, the broadcast industry sought clarification of

the policies and rules of the FCC‘s indecency enforcement

regime. Guidance for the industry came in the form of a

policy statement issued by the Commission. See Industry

Guidance on the Commission‟s Case Law Interpreting 18

U.S.C. § 1464 and Enforcement Policies Regarding

Broadcast Indecency, 16 F.C.C.R. 7999, ¶ 19 (2001)

(―Industry Guidance‖). The policy statement included

multiple examples of FCC rulings as ―case comparisons‖

 

19

As described in greater detail infra, subsequent litigation

determined what time of day broadcasters could reasonably

air indecent programming without expecting children to be in

the audience. The D.C. Circuit Court of Appeals rejected a

total ban on indecency, instructing the FCC to identify a

precise time period during which broadcasters could air

indecent material. See ACT I, supra. In response, the

Commission adopted the safe-harbor rule of 47 C.F.R. §

73.3999. After further instruction from the D.C. Circuit in

1995, ACT II, supra, the Rule was amended to its current

form, which confines enforcement of indecency restrictions to

the hours ―between 6:00 a.m. and 10:00 p.m.‖ See 47 C.F.R.

§ 73.3999; In re Enforcement of Prohibitions Against

Broadcast Indecency in 18 U.S.C. § 1464, 10 F.C.C.R. 10558

(1995).43

highlighting the factors that had proved significant in prior

indecency determinations. One of the factors noted as

leading to prior determinations that a program was not

actionably indecent was the ―fleeting or isolated‖ nature of

potentially indecent material in the context of the overall

broadcast. See id. at ¶¶ 17-18.

Soon after the Commission‘s issuance of the Industry

Guidance policy statement, its restrained enforcement policy

changed. In an unscripted remark during a live NBC

broadcast of the Golden Globe Awards on January 19, 2003,

musician Bono said ―this is really, really fucking brilliant‖

while accepting an award. See In re Complaints Against

Various Broadcast Licensees Regarding Their Airing of the

“Golden Globe Awards” Program, 19 F.C.C.R. 4975, ¶ 3 n.4

(2004) (―Golden Globes‖). Viewers complained to the FCC

about Bono‘s speech, but the Commission‘s Enforcement

Bureau rejected the complaints in part because the utterance

was fleeting and isolated and therefore did ―not fall within the

scope of the Commission‘s indecency prohibition.‖ See In re

Complaints Against Various Broadcast Licensees Regarding

Their Airing of the “Golden Globe Awards” Program, 18

F.C.C.R. 19859, ¶ 6 (FCC Enforcement Bureau 2003). The

Enforcement Bureau specifically reaffirmed that ―fleeting and

isolated remarks of this nature do not warrant Commission

action.‖ Id.

On March 3, 2004, the full Commission reversed the

Enforcement Bureau‘s decision. See generally Golden

Globes, supra. Although the FCC acknowledged the

existence of its restrained enforcement policy for isolated or

fleeting utterances, it overruled all of its prior cases holding

such instances not actionable. Id. at ¶ 12 (―While prior 44

Commission and staff action have indicated that isolated or

fleeting broadcasts of the ‗F-Word‘ such as that here are not

indecent or would not be acted upon, consistent with our

decision today we conclude that any such interpretation is no

longer good law.‖). But the Commission made it clear that

licensees could not be held liable for broadcasting fleeting or

isolated indecent material prior to its Golden Globes decision.

See id. at ¶ 15 & n.40 (declining to impose a forfeiture

penalty because ―existing precedent would have permitted

[the Golden Globe Awards] broadcast‖ and therefore it would

be ―inappropriate‖ to sanction licensees for conduct prior to

notice of policy change).

20

The FCC‘s new indecency policy created in Golden

Globes was soon challenged by the broadcast industry. On

February 21, 2006, the Commission issued an omnibus order

resolving multiple indecency complaints against television

broadcasters in an effort to ―provide substantial guidance to

broadcasters and the public about the types of programming

that are impermissible under our indecency standard.‖ In re

Complaints Regarding Various Television Broadcats Between

February 2, 2002 and March 8, 2005, 21 F.C.C.R. 2664, ¶ 2

(2006) (―Omnibus Order‖). The Omnibus Order found four

 

20

The Commission also cited Trinity Broad. of Fla., Inc. v.

FCC, 211 F.3d 618 (D.C. Cir. 2000), explaining that the court

in Trinity ―reversed [a] Commission decision that denied a

renewal application for abuse of process in connection with

the Commission‘s minority ownership rules because the court

found the Commission had not provided sufficiently clear

notice of what those rules required.‖ Golden Globes at ¶ 15

n.40.45

programs indecent and profane: (1) Fox‘s broadcast of the

2002 Billboard Music Awards, in which performer Cher used

an unscripted expletive during her acceptance speech; (2)

Fox‘s broadcast of the 2003 Billboard Music Awards, in

which presenter Nicole Richie used two unscripted

expletives; (3) ABC‘s broadcast of various episodes of its

NYPD Blue series, in which assorted characters used scripted

expletives; and (4) a CBS broadcast of The Early Show, in

which a guest used an unscripted expletive during a live

interview. Id. at ¶¶ 101, 112 n.64, 125, 137. Applying its

policy announced in Golden Globes, the Commission found

the broadcasts indecent despite the fleeting and isolated

nature of the offending expletives. Id. at ¶¶ 104, 116, 129,

140.

As in Golden Globes, the Commission recognized the

inequity in retroactively sanctioning the conduct of broadcast

licensees. Because the offending broadcasts occurred prior to

the issuance of its Golden Globes decision, the FCC

concluded that existing precedent would have permitted the

broadcasts. Id. Accordingly, the FCC did not issue forfeiture

orders against any of the licensees. Id. at ¶¶ 111, 124, 136,

145.

The networks appealed the Omnibus Order, and the

cases were consolidated before the United States Court of

Appeals for the Second Circuit. Granting a request by the

FCC, the court remanded the matter to allow the Commission

an opportunity to address the petitioners‘ arguments. After

soliciting public comment, the FCC issued a new order on

November 6, 2006, reaffirming its indecency findings against

Fox for the 2002 and 2003 Billboard Music Awards but

reversing its finding against CBS for The Early Show 46

broadcast and dismissing the complaint against ABC on

procedural grounds. See In re Complaints Regarding Various

Television Broadcasts Between February 2, 2002 and March

8, 2005, 21 F.C.C.R. 13299 (2006) (―Fox Remand Order‖).

The networks‘ original appeal to the Second Circuit

was reinstated on November 8, 2006, and consolidated with a

petition for review of the Fox Remand Order. Fox Television

Stations, Inc. v. FCC, 489 F.3d 444, 454 (2d Cir. 2007)

(―Fox‖), cert. granted, 76 U.S.L.W. 3490 (U.S. Mar. 17,

2008) (No. 07-582). The court granted motions to intervene

by other networks, including CBS, and the networks

collectively raised several challenges to the validity of the

Fox Remand Order essentially mirroring those raised in this

case. See Fox, 489 F.3d at 454.

Undertaking a thorough review of the history of the

FCC‘s indecency regime similar to that which we engage in

here, the Second Circuit found the FCC‘s ―consistent

enforcement policy‖ prior to the Golden Globes decision

excluded fleeting or isolated expletives from regulation. Id.

at 455. The court concluded ―there is no question‖ that the

FCC changed its policy with respect to fleeting expletives,

and that the policy ―changed with the issuance of Golden

Globes.‖ Id. (citations omitted). Judge Leval, dissenting in

Fox for other reasons, agreed with the majority‘s conclusion

that the FCC changed its position on fleeting utterances,

although he considered the change of standard ―relatively

modest.‖ See id. at 469 (Leval, J., dissenting); see also id. at

470 (Leval, J., dissenting) (stating that the FCC changed its

position and finding that the FCC clearly acknowledges that

its Golden Globes and Fox Remand Order rulings were not

consistent with its prior standard). We agree that the Golden 47

Globes decision represented a policy departure by the FCC.

The extensive history detailed above demonstrates a

consistent and entrenched policy of excluding fleeting

broadcast material from the scope of actionable indecency.

In spite of this history, the FCC contends that by

February 1, 2004 (the date of the Halftime Show), a

broadcaster in CBS‘s position should have known that even

isolated or fleeting indecent material in programming could

be actionable. Despite its announced reversal of prior policy

in its Golden Globes decision on March 3, 2004, the

Commission points to one sentence in its 2001 policy

statement to support its position: ―[E]ven relatively fleeting

references may be found indecent where other factors

contribute to a finding of patent offensiveness.‖ Industry

Guidance at ¶ 19.

21

But when read in its original context

 

21

In its 2001 policy statement, the Commission described

the ―principal factors that have proved significant in [its]

decisions to date‖ as: ―(1) the explicitness or graphic nature

of the description or depiction of sexual or excretory organs

or activities; (2) whether the material dwells on or repeats at

length descriptions of sexual or excretory organs or activities;

(3) whether the material appears to pander or is used to

titillate, or whether the material appears to have been

presented for its shock value.‖ Industry Guidance at ¶ 10

(emphasis in original). It has since contended that its fleeting

material policy was no policy at all, asserting instead that the

fleeting nature of material was only a consideration under the

second factor and could be outweighed by the other two

factors depending on the specific facts of a case. But as we

detail infra, this assertion contradicts the history of the 48

rather than as an isolated statement, this sentence does not

support the Commission‘s assertion here. The ―relatively

fleeting references‖ identified by that sentence are

distinguishable from the truly ―fleeting‖ broadcast material

the FCC had included in its fleeting material policy. The

paragraph cites, for instance, a notice of apparent liability

against WEZB-FM, New Orleans, to exemplify the kind of

―relatively fleeting references‖ the FCC considered

actionably indecent. See id. (citing EZ New Orleans, Inc.

(WEZB(FM)), 12 F.C.C.R. 4147 (MMB 1997) (―WEZB-FM

NAL‖)). The citation to WEZB-FM NAL specifically

describes as indecent an ―announcer joke‖ involving incest,

forceful sexual contact with children, and a reference to

cleaning ―blood off [a] diaper.‖ Id. The ―announcer joke‖ is

distinguishable on its face from ―fleeting‖ material such as a

brief glimpse of nudity or isolated use of an expletive.

Moreover, the ―announcer joke‖ was merely one incident

 

Commission‘s indecency enforcement regime and is

foreclosed by the agency‘s admissions in Golden Globes and

Fox, which are controlling here, that its prior policy was to

exclude fleeting material from the scope of actionable

indecency. Although the FCC disputes the breadth of its

policy, now contending the policy was limited only to fleeting

expletives or alternatively to fleeting utterances, the fleeting

nature of broadcast material was unquestionably treated by

the FCC as more than one of several contextual factors

subject to balancing.49

among dozens included in a transcript supporting the

forfeiture liability determination in the WEZB-FM NAL.

22

 

Nevertheless, as it clarified at oral argument, the FCC

relies on its 2001 Industry Guidance to contend its policy on

fleeting or isolated material ―was a policy with respect to

cases relying solely on the use of expletives.‖ As the

Commission explained at oral argument, ―[t]here was not a

policy that all short utterances were exempt.‖ This reading of

the Commission‘s policy on fleeting material is untenable.

Even the FCC‘s Industry Guidance fails to support such a

narrow characterization. See, e.g., Industry Guidance at ¶ 18

(quoting L.M. Commc‟ns of S. C., Inc. (WYBB(FM)), 7

F.C.C.R. 1595 (MMB 1992), for the proposition that ―‗a

fleeting or isolated utterance . . . , within the context of live

and spontaneous programming, does not warrant a

Commission sanction.‘‖).

Accordingly, we find the Commission‘s

unsubstantiated contentions in this regard contradict the

 

22

The WEZB-FM NAL found a broadcast licensee

apparently liable for a forfeiture penalty of $12,000 for its

broadcast of indecent material during six radio broadcasts

spanning fourteen hours of airtime over nearly a one year

period. The WEZB-FM NAL provides transcript excerpts

from these broadcasts, which involved very graphic segments

discussing a variety of sexual topics in extended detail. The

―announcer joke‖ included in the FCC‘s Industry Guidance

was merely one of these factual predicates for the broadcast

licensee‘s forfeiture liability for indecency.50

lengthy history of the Commission‘s restrained enforcement

policy. While ―an agency‘s interpretation of its own

precedent is entitled to deference,‖ Cassel v. FCC, 154 F.3d

478, 483 (D.C. Cir. 1998), deference is inappropriate where

the agency‘s proffered interpretation is capricious. Until its

Golden Globes decision in March of 2004, the FCC‘s policy

was to exempt fleeting or isolated material from the scope of

actionable indecency. Because CBS broadcasted the

Halftime Show prior to Golden Globes, this was the policy in

effect when the incident with Jackson and Timberlake

occurred.

B.

If the FCC‘s restrained enforcement policy for fleeting

broadcast material was intact until the Golden Globes

decision in March of 2004, our inquiry would end with a

simple examination of the chronology of the FCC‘s actions.

CBS broadcasted the Halftime Show more than a month prior

to Golden Globes. The Commission‘s orders here would

amount to a retroactive application of the new policy it

announced in Golden Globes, which would raise due process

concerns. The Commission has recognized the inequity in

such an outcome. See Omnibus Order, supra, at ¶¶ 111, 124,

136, 145 (declining to issue forfeiture orders because the

offending broadcasts occurred prior to the issuance of its

Golden Globes decision, and therefore ―existing precedent

would have permitted [the] broadcasts‖); see also Trinity

Broad. of Fla., Inc., 211 F.3d at 628 (―Because ‗[d]ue process

requires that parties receive fair notice before being deprived

of property,‘ we have repeatedly held that ‗[i]n the absence of

notice–for example, where the regulation is not sufficiently

clear to warn a party about what is expected of it–an agency 51

may not deprive a party of property by imposing civil or

criminal liability.‘‖ (citation omitted)).

But the FCC urges another reading of Golden Globes,

perhaps less obvious yet still plausible, which interprets

Golden Globes as addressing only the broadcast of fleeting

expletives, not other fleeting material such as brief images of

nudity. Further, the Commission contends its fleeting

material policy, as initially adopted, was limited to fleeting

words and did not extend to fleeting images. Under this view,

Golden Globes would be inapposite here – the Commission‘s

sanction against CBS would be in line with its treatment of

images as part of its historical indecency enforcement regime.

If, as the FCC contends, Golden Globes was limited to

fleeting expletives, then its orders issuing forfeiture penalties

in this case did not constitute a retroactive application of the

policy change in Golden Globes.

But even if we accept the FCC‘s interpretation of

Golden Globes and read it as only addressing fleeting

expletives, the Commission‘s view of the scope of its fleeting

materials policy prior to Golden Globes is unsustainable. As

we will explain, the Commission – before Golden Globes –

had not distinguished between categories of broadcast

material such as images and words. Accordingly, even if, as

the FCC contends, Golden Globes only addressed expletives,

it nevertheless represented the first time the Commission

distinguished between formats of broadcast material or

singled out any one category of material for special treatment

under its fleeting material policy. That is, it altered the scope

of the FCC‘s fleeting material policy by excising only one

category of fleeting material – fleeting expletives – from the

policy. And it therefore did not constitute an abdication of its 52

fleeting material policy. Rather, a residual policy on other

categories of fleeting material – including all broadcast

content other than expletives – remained in effect.

Accordingly, subsequent agency action was required to

change the fleeting material policy as it applied to broadcast

content other than expletives. By targeting another category

of fleeting material – fleeting images – in its orders against

CBS in this case, the FCC apparently sought to further narrow

or eliminate the fleeting material policy as it existed

following Golden Globes. The Commission‘s determination

that CBS‘s broadcast of a nine-sixteenths of one second

glimpse of a bare female breast was actionably indecent

evidenced the agency‘s departure from its prior policy. Its

orders constituted the announcement of a policy change – that

fleeting images would no longer be excluded from the scope

of actionable indecency.

The question is whether the FCC‘s departure from its

prior policy is valid and enforceable as applied to CBS. As

noted, agencies are free to change their rules and policies

without judicial second-guessing. See, e.g., Chevron, U.S.A.,

Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 863

(1984). But an agency cannot ignore a substantial diversion

from its prior policies. See Ramaprakash v. FAA, 346 F.3d

1121, 1124 (D.C. Cir. 2003) (agency must ―provide a

reasoned analysis indicating that prior policies and standards

are being deliberately changed, not casually ignored‖). As

the Supreme Court explained in State Farm, an agency must

be afforded great latitude to change its policies, but it must

justify its actions by articulating a reasoned analysis behind

the change:53

Petitioner . . . contend[s] that the rescission of

an agency rule should be judged by the same

standard a court would use to judge an agency‘s

refusal to promulgate a rule in the first place–a

standard Petitioner believes considerably

narrower than the traditional arbitrary and

capricious test and ―close to the borderline of

nonreviewability.‖ We reject this view. . . .

Petitioner‘s view would render meaningless

Congress‘ authorization for judicial review of

orders revoking . . . rules. Moreover, the

revocation of an extant regulation is

substantially different than a failure to act.

Revocation constitutes a reversal of the

agency‘s former views as to the proper course.

A ―settled course of behavior embodies the

agency‘s informed judgment that, by pursuing

that course, it will carry out the policies

committed to it by Congress. There is, then, at

least a presumption that those policies will be

carried out best if the settled rule is adhered to.‖

Accordingly, ―an agency changing its course by

rescinding a rule is obligated to supply a

reasoned analysis for the change beyond that

which may be required when an agency does

not act in the first instance.‖

463 U.S. at 42-43 (citations omitted).

The agency‘s obligation to supply a reasoned analysis

for a policy departure requires an affirmative showing on

record. It ―must examine the relevant data and articulate a

satisfactory explanation for its action including a ‗rational 54

connection between the facts found and the choice made.‘‖

Id. at 43 (quoting Burlington Truck Lines v. United States,

371 U.S. 156, 168 (1962)). A reviewing court ―must

‗consider whether the decision was based on a consideration

of the relevant factors and whether there has been a clear

error of judgment.‘‖ Id. (citations omitted). The agency‘s

actions will then be set aside as ―arbitrary and capricious‖ if

the agency failed to provide a ―reasoned explanation‖ for its

decision to change course. Massachusetts v. EPA, — U.S. —

, 127 S.Ct. 1438, 1463 (2007); see State Farm, 463 U.S. at

42-43; Nat‟l Cable & Telecomms. Ass‟n v. Brand X Internet

Servs., 545 U.S. 967, 981 (2005) (―unexplained

inconsistency‖ in agency practice is a reason for holding a

policy reversal ―arbitrary and capricious‖ under the APA,

unless ―the agency adequately explains the reasons for a

reversal of policy‖).

In Fox, the Second Circuit analyzed the FCC‘s

changed policy on fleeting expletives under State Farm,

23

but

 

23

It was undisputed that the FCC changed its policy on

fleeting expletives in Golden Globes, which was decided

prior to Fox. But as the Fox court explained, the actual

moment the agency changed its course was not pertinent in

determining whether the change was valid under State Farm:

[W]e . . . reject the FCC‘s contention that our

review here is narrowly confined to the specific

question of whether the two Fox broadcasts . . .

were indecent. The [Fox Remand Order]

applies the policy announced in Golden Globes.

If that policy is invalid, then we cannot sustain 55

the panel split on the outcome of its analysis. Judge Pooler,

writing for the majority, found the policy change arbitrary

and capricious because the FCC failed to provide a reasoned

explanation for the change. Fox, 489 F.3d at 455 (―The

Networks contend that the Remand Order is arbitrary and

capricious because the FCC has made a 180-degree turn

regarding its treatment of ‗fleeting expletives‘ without

providing a reasoned explanation justifying the about-face.

We agree.‖). Scrutinizing the sufficiency of the

Commission‘s explanation for its policy change, the court

rejected the agency‘s proffered rationale as ―disconnected

from the actual policy implemented by the Commission.‖ Id.

at 459 n.8 (citation omitted).

Judge Leval, writing in dissent, also applied State

Farm, but he disagreed with the amount of deference the

majority afforded the FCC‘s policy decision. Although he

 

the indecency findings against Fox. Thus, as

the Commission conceded during oral

argument, the validity of the new ―fleeting

expletive‖ policy announced in Golden Globes

and applied in the [Fox Remand Order] is a

question properly before us on this petition for

review.

Fox, 489 F.3d at 454. To hold otherwise would create a

situation ripe for manipulation by an agency. Cf. ACT I,

supra, 852 F.2d at 1337 (―[A]n agency may not resort to [ad

hoc] adjudication as a means of insulating a generic standard

from judicial review.‖).56

agreed that the FCC was obligated to provide a reasoned

explanation for its policy shift, he found the agency‘s

explanation sufficient. As Judge Leval explained:

In my view, in changing its position on the

repetition of an expletive, the Commission

complied with these requirements. It made

clear acknowledgment that its Golden Globes

and Remand Order rulings were not consistent

with its prior standard regarding lack of

repetition. It announced the adoption of a new

standard. And it furnished a reasoned

explanation for the change. Although one can

reasonably disagree with the Commission‘s new

position, its explanation . . . is not irrational,

arbitrary, or capricious. The Commission thus

satisfied the standards of the Administrative

Procedure[] Act.

Id. at 470 (Leval, J., dissenting).

In this case, State Farm also provides the correct

standard of review, but we need not engage in the substantive

inquiry that divided the Second Circuit panel in Fox. There,

as Judge Leval noted in dissent, the FCC provided an

explanation for changing its policy on fleeting expletives.

The critical question splitting the court was whether that

explanation was adequate under State Farm. Here, unlike in

Fox, the FCC has not offered any explanation – reasoned or

otherwise – for changing its policy on fleeting images.

Rather, the FCC asserts it never had a policy of excluding

fleeting images from the scope of actionable indecency, and

therefore no policy change occurred when it determined that 57

the Halftime Show‘s fleeting image of Janet Jackson‘s breast

was actionably indecent. Accordingly, we must determine

whether the FCC‘s characterization of its policy history is

accurate. If it is not, then the FCC‘s policy change must be

set aside as arbitrary and capricious, because it has failed to

even acknowledge its departure from its former policy let

alone supply a ―reasoned explanation‖ for the change as

required by State Farm.

CBS contends the FCC‘s indecency regime treated

words and images alike, so the exception for fleeting material

applied with equal force to words and images. The

Commission rejects this assertion, contending its prior policy

on fleeting material was limited to words alone. Although the

FCC acknowledges it had never explicitly distinguished

between images and words for the purpose of defining the

scope of actionable indecency, it contends the existence of

such a distinction was obvious, even if unstated.

24

 

24

The FCC‘s position is difficult to reconcile with the

source of its authority to regulate broadcast content. The text

of 18 U.S.C. § 1464 provides: ―Whoever utters any obscene,

indecent, or profane language by means of radio

communication shall be fined under this title or imprisoned

not more than two years, or both.‖ Id. (emphasis added).

Although the text on its face only reaches spoken words, it is

applied broadly, as here, to reach all varieties of indecent

content. But this broad interpretation of the text requires that

the FCC treat words and images interchangeably in order to

fit its regulation of indecent images within the boundaries of

its statutory authority. Where the FCC‘s entire enforcement

regime is built on the agency‘s treatment of words and images 58

The Commission‘s conclusion on the nature and scope

of its indecency regime – including its fleeting material policy

– is at odds with the history of its actions in regulating

indecent broadcasts. In the nearly three decades between the

Supreme Court‘s ruling in Pacifica and CBS‘s broadcast of

the Halftime Show, the FCC had never varied its approach to

indecency regulation based on the format of broadcasted

content. Instead, the FCC consistently applied identical

standards and engaged in identical analyses when reviewing

complaints of potential indecency whether the complaints

were based on words or images.

In 2000, for example, the FCC rejected a complaint of

indecency based on scenes of nudity in a television broadcast

of the film ―Schindler‘s List.‖ In re WPBN/WTOM License

Subsidiary, Inc., 15 F.C.C.R. 1838 (2000). Finding the

broadcasted images not actionably indecent, the FCC noted

―nudity itself is not per se indecent‖ and applied the identical

indecency test the agency used to review potentially indecent

language. Id. at ¶ 11. The Commission did not treat the

nudity complaint differently – factually or legally – from a

complaint for indecency based on a spoken utterance. See id.

at ¶ 10 n.5 (―The Supreme Court has observed that contextual

assessments may involve (and are not limited to) an

 

as functionally identical, it is unclear how the difference

between words and images is ―obvious.‖ At minimum, the

FCC cannot reasonably expect the difference between words

and images to be so self-evident that broadcast licensees

seeking to comply with indecency standards would interpret

FCC enforcement orders narrowly based on whether the

reviewed content consisted of words or images.59

examination of whether the actual words or depictions in

context are, for example, vulgar or shocking, a review of the

manner in which the words or depictions are portrayed, and

an analysis of whether the allegedly indecent material is

isolated or fleeting.‖ (emphasis added)). The Commission

even referred in a footnote to its policy towards fleeting

material, never suggesting the policy would be inapplicable

because the offending broadcast content was an image rather

than a word. See id. at ¶ 5 n.10 (explaining that contextual

assessments of whether certain programming is patently

offensive, and therefore actionably indecent, ―may involve . .

. analysis of whether the allegedly indecent material is

isolated or fleeting‖).

The Commission took the same approach when

reviewing viewer complaints against a television station for

multiple broadcasts of programs containing expletives,

nudity, and other allegedly indecent material. See WGBH,

supra.

25

Categorically denying that the programming in

 

25

Among several broadcasts at issue in WGBH were: (1)

―numerous episodes of Monty Python‟s Flying Circus, which

allegedly consistently relie[d] primarily on scatology,

immodesty, vulgarity, nudity, profanity and sacrilege for

humor‖; (2) ―a program entitled Rock Follies . . . which [the

petitioner] describe[d] as vulgar and as containing profanity‖

including ―obscenities such as shit, bullshit, etc., and action

indicating some sexually-oriented content in the program‖;

and (3) ―other programs which allegedly contained nudity

and/or sexually-oriented material.‖ 69 F.C.C.R. 1250 at ¶ 2

(internal quotation marks omitted).60

WGBH was actionably indecent,

26

the FCC distinguished the

facts of WGBH from the Carlin monologue in Pacifica by

invoking its restrained enforcement policy for fleeting or

isolated material. See id. at ¶ 10 (―We intend strictly to

observe the narrowness of the Pacifica holding. . . . Justice

Powell‘s concurring opinion . . . specifically distinguished

‗the verbal shock treatment [in Pacifica]‘ from ‗the isolated

use of a potentially offensive word in the course of a radio

broadcast.‘ . . . In the case before us, petitioner has made no

comparable showing of abuse by WGBH-TV of its

programming discretion.‖); id. at ¶ 10 n.6 (finding that

WGBH-TV‘s programs ―differ[ed] dramatically from the

concentrated and repeated assault involved in Pacifica‖). In

its indecency analysis in WGBH, the FCC made no distinction

between words and images (nudity or otherwise).

As evidence that the FCC‘s policy on fleeting material,

as it existed at the time of the Halftime Show, did not

 

26

The FCC contends WGBH is inapposite because it was a

license revocation proceeding rather than a direct complaint

for indecency. But its analysis in reaching its decision is

instructive. Because the complainant in WGBH challenged

the broadcaster‘s license based on a pattern of allegedly

indecent broadcasts, the Commission expressly answered the

threshold question of whether the broadcasts were indecent.

Separate from the question of whether the broadcaster‘s

actions were sufficient to revoke its license, the

Commission‘s analysis illustrates that ―words‖ and

―depictions‖ were treated identically for purposes of

determining whether a broadcast was actionably indecent.61

distinguish between words and images, CBS presented

several complaints viewers had submitted to the FCC about

allegedly indecent broadcasts. CBS Letter Br., submitted

pursuant to Fed R. App. P. 28(j) (Aug. 13, 2007).

Accompanying each complaint is a corresponding reply letter

by the FCC rejecting the indecency allegation. Each

complaint involves some variety of sexually explicit imagery.

One letter, for example, describes the early-evening broadcast

of a female adult dancer at a strip club and alleges the

broadcast contained visible scenes of the woman nude from

the waist down revealing exposed buttocks and ―complete

genital nudity‖ for approximately five to seven seconds.

Another letter describes in part a Sunday-morning television

broadcast of the movie ―Devices and Desires,‖ which

included ―scenes of a topless woman in bed with her lover,

with her breast very clearly exposed, several scenes of a

topless woman running on the beach, and several scenes of a

nude female corpse, with the breasts clearly exposed.‖

Citing Pacifica and the indecency standard used to

review the broadcast of potentially indecent language, the

FCC summarily rejected each of these complaints as ―not

actionably indecent.‖ The FCC contends these ―form letters‖

are irrelevant, as the letters ―do not even explain the grounds

for the staff‘s conclusions that the broadcasts were not

indecent, much less rely on the ‗fleeting‘ nature of any

alleged nudity as a reason for rejecting the complaints.‖ FCC

Letter Br., submitted pursuant to Fed R. App. P. 28(j) (Aug.

27, 2007). But the relevance of the FCC‘s rejection letters is

not found in their specific reasons for finding the images not

actionably indecent. Rather, the rejection letters illustrate that

the FCC used the identical form letters and indecency 62

analyses to address complaints of indecent nudity that it had

long used to address complaints of indecent language.

Confronted with this history of FCC enforcement of

restrictions on broadcast indecency, the entirety of which

reveals no distinction in treatment of potentially indecent

images versus words, the FCC nevertheless finds such a

distinction evident in its prior decisions. See, e.g., FCC Br. at

26-27. To support this view, the FCC offers its Notice of

Apparent Liability for Forfeiture in In re Young Broadcasting

of San Francisco, Inc., 19 F.C.C.R. 1751 (2004), issued four

days before CBS‘s broadcast of the Halftime Show. See

Reconsideration Order at ¶¶ 10, 36; FCC Br. at 26-27. Young

Broadcasting involved a morning news show segment in

which two performers from a production titled ―Puppetry of

the Penis‖ appeared in capes but were otherwise naked

underneath the capes. Young Broadcasting at ¶ 13. The two

men, whose act involved manipulating and stretching their

genitalia to simulate various objects, performed a

demonstration of their act with the agreement of the show‘s

hosts and at the urging of off-camera station personnel. Id.

Although the performance was directed away from the

camera, the penis of one performer was fully exposed on

camera for less than one second as the men turned away to act

out their performance. See id. at ¶¶ 12, 13. Based on these

facts, the Commission found the station apparently liable for

a forfeiture penalty for broadcasting indecent material. Id. at

¶ 16.

The FCC contends Young Broadcasting was not a

departure from its prior indecency regime. Rather, as it

explains, Young Broadcasting merely represented the first

instance in which the Commission expressly articulated its 63

pre-existing (but unstated) policy of treating fleeting images

differently from fleeting words.

27

On this view, according to

the FCC, Young Broadcasting should have dispelled any

doubts about the historical breadth of its fleeting material

policy prior to the Halftime Show because it was issued a few

days before CBS‘s broadcast. But Young Broadcasting is

unavailing for this purpose. It makes no distinction, express

or implied, between words and images in reaching its

indecency determination. To the contrary, it discusses and

compares several other FCC determinations on potentially

indecent utterances and depictions, treating the cases

interchangeably and ultimately distinguishing those cases‘

outcomes without any indication that the format of the

 

27

Several statements in the FCC‘s own press release

announcing the Young Broadcasting Notice of Apparent

Liability belie the agency‘s contention here that Young

Broadcasting accorded with its prior policies. See Press

Release, FCC, Comm‟n Proposes to Fine Young

Broadcasting of San Francisco, Inc., Statutory Maximum for

Apparent Violation of Indecency Rules (Jan. 27, 2004)

(statement of Chairman Michael K. Powell: ―Today, we open

another front in our increased efforts to curb indecency on our

nation‘s airwaves . . . .‖); id. (statement of Commissioner

Michael J. Copps: ―I am pleased that this Commission is

finally taking an initial step against indecency on

television.‖); id. (statement of Commissioner Kevin J. Martin:

―I hope that this step today represents the beginning of a

commitment to consider each indecency complaint seriously .

. . .‖).64

offending material was a relevant consideration. See, e.g., id.

at ¶ 12 & n.35; id. at ¶ 14.

28

Accordingly, Young Broadcasting does not support the

FCC‘s assertion here that its policy on fleeting material had

always excluded images and applied only to words. Young

Broadcasting appears instead to be best understood as the

 

28

One of the cases the FCC distinguished in Young

Broadcasting was its Notice of Apparent Liability in Flambo

Broadcasting, Inc. (KFMH-FM), 9 F.C.C.R. 1681 (MMB

1994), which involved ―a radio station‘s broadcast of sexual

material in a crude joke‖ that was not found actionably

indecent. Young Broadcasting at ¶ 12 n.35. As with the other

cases it discussed in its Young Broadcasting Notice of

Apparent Liability, the FCC did not draw any distinction

between Young Broadcasting and Flambo Broadcasting

based on the subject material there being words or images.

But it did distinguish the two notices of apparent liability in

part because: ―assuming that the joke [at issue in Flambo

Broadcasting] was cut off immediately, the staff of the thenMass Media Bureau found that it would not have been

actionably indecent because it was brief, live, unscripted and

from an outside source.‖ Young Broadcasting at ¶ 12 n.35

(emphasis added). Notably, the facts here – a brief image of a

bare female breast during the live Halftime Show broadcast

resulting from an unscripted stunt by Jackson and Timberlake

– are remarkably similar to the Flambo Broadcasting fact

pattern that the FCC found readily distinguishable from the

actionably indecent material in Young Broadcasting.65

Commission‘s initial effort to abandon its restrained

enforcement policy on fleeting material. While the final

disposition of Young Broadcasting was still unresolved,

29

the

overarching policy departure that the Commission sought to

accomplish there was effectuated by a combination of its

Golden Globes order and its orders on appeal here. The

Commission‘s reasoning in Young Broadcasting is therefore

illuminating here.

 

29

Young Broadcasting was a notice of apparent liability,

which is non-final until the implicated licensee either declines

to dispute the findings in the notice or the licensee‘s

responsive opposition is fully adjudicated. See FCC Br. at 13

(describing content of CBS Notice of Apparent Liability as

―tentative conclusions‖); see also 47 U.S.C. § 504(c) (―In any

case where the Commission issues a notice of apparent

liability looking toward the imposition of a forfeiture under

this chapter, that fact shall not be used, in any other

proceeding before the Commission, to the prejudice of the

person to whom such notice was issued, unless (i) the

forfeiture has been paid, or (ii) a court of competent

jurisdiction has ordered payment of such forfeiture, and such

order has become final.‖). At the time the Commission

issued its Reconsideration Order against CBS and after its

determination in Golden Globes, the question of whether the

broadcast licensee in Young Broadcasting would contest the

Notice of Apparent Liability in that case was still unresolved.

See Reconsideration Order at ¶ 6 n. 25 (indicating the status

of the Young Broadcasting Notice of Apparent Liability as

―response pending‖ at the time of the Reconsideration

Order‘s issuance). 66

In Young Broadcasting, the Commission distinguished

that case‘s facts from several of its prior orders. But in so

doing, the Commission overlooked the fact that application of

its fleeting material policy had been a determinative factor in

those prior orders. For example, the licensee in Young

Broadcasting cited for support L.M. Communications, 7

F.C.C.R. 1595 (1992), in which the radio broadcast of a

single expletive was found not actionably indecent. Young

Broadcasting at ¶ 12 n.35. The FCC found L.M.

Communications ―distinguishable because there was no

finding that the material, in context, was pandering, titillating

or intended to shock the audience.‖ Id. But L.M.

Communications made no reference to the pandering,

titillating or shocking nature of the subject broadcast material.

Rather, it determined the material was not actionably indecent

because the ―broadcast contained only a fleeting and isolated

utterance which, within the context of live and spontaneous

programming, does not warrant a Commission sanction.‖

L.M. Commc‟ns, 7 F.C.C.R. at 1595.

The Commission‘s failure to acknowledge the

existence of its prior policy on fleeting material in Young

Broadcasting is illustrative of its approach here. In Young

Broadcasting, it read the policy out of existence by

substituting new rationales for its prior indecency

determinations that had applied the policy. Here, the

Commission is foreclosed from adopting the same approach

by its admission in Golden Globes that the fleeting material

policy existed. So it instead apparently seeks to revise the

scope of the policy by contending the policy never included

fleeting images. But extensive precedent over thirty years of

indecency enforcement demonstrates otherwise. 67

Our reluctant conclusion that the FCC has advanced

strained arguments to avoid the implications of its own

fleeting indecency policy was echoed by our sister circuit in

Fox:

In [its Omnibus Order], the FCC ―reject[s]

Fox‘s suggestion that Nicole Richie‘s [use of

two expletives] would not have been actionably

indecent prior to our Golden Globes decision,‖

and would only concede that it was ―not

apparent‖ that Cher‘s [use of one expletive] at

the 2002 Billboard Music Awards would have

been actionably indecent at the time it was

broadcast. [Id.] at ¶¶ 22, 60. Decisions

expressly overruled in Golden Globes were now

dismissed as ―staff letters and dicta,‖ and the

Commission even implied that the issue of

fleeting expletives was one of first impression

for the FCC in Golden Globes. Id. at ¶ 21 (―[I]n

2004, the Commission itself considered for the

first time in an enforcement action whether a

single use of an expletive could be considered

indecent.‖).

Fox, 489 F.3d at 456 n.6. When confronted with these

troublesome revisionist arguments, the FCC conceded the

existence of its prior policy. See id. at 456 (―[I]n its brief to

this court, the FCC now concedes that Golden Globes

changed the landscape with regard to fleeting expletives.‖

(citations omitted)); see also id. at 470 (Leval, J., dissenting)

(―[The FCC] made clear acknowledgment that its Golden

Globes and Remand Order rulings were not consistent with

its prior standard regarding lack of repetition.‖). But it has 68

made no such concession here. Faced with extensive

evidence to the contrary, the Commission nevertheless

continues to assert that its fleeting material policy was limited

to words and did not exclude fleeting images from the scope

of actionable indecency.

In sum, the balance of the evidence weighs heavily

against the FCC‘s contention that its restrained enforcement

policy for fleeting material extended only to fleeting words

and not to fleeting images. As detailed, the Commission‘s

entire regulatory scheme treated broadcasted images and

words interchangeably for purposes of determining

indecency. Therefore, it follows that the Commission‘s

exception for fleeting material under that regulatory scheme

likewise treated images and words alike. Three decades of

FCC action support this conclusion. Accordingly, we find the

FCC‘s conclusion on this issue, even as an interpretation of

its own policies and precedent, ―counter to the evidence

before the agency‖ and ―so implausible that it could not be

ascribed to a difference in view or the product of agency

expertise.‖ State Farm, 463 U.S. at 43.

Because the Commission fails to acknowledge that it

has changed its policy on fleeting material, it is unable to

comply with the requirement under State Farm that an agency

supply a reasoned explanation for its departure from prior

policy.

19

See id.; cf. Ramaprakash, 346 F.3d at 1125

 

19

In its brief and at oral argument, the Commission

continues to assert it has not changed its policy on fleeting

material, yet it also suggests several reasons why a policy

including fleeting images within the scope of actionable

indecency is reasonable. But see State Farm, 463 U.S. at 50 69

(―[F]ailure to come to grips with conflicting precedent

constitutes an [agency‘s] inexcusable departure from the

essential requirement of reasoned decision making.‖);

LeMoyne-Owen College v. NLRB, 357 F.3d 55, 61 (D.C. Cir.

2004) (Roberts, J.) (―[W]here, as here, a party makes a

significant showing that analogous cases have been decided

differently, the agency must do more than simply ignore that

argument. . . . The need for an explanation is particularly

acute when an agency is applying a multi-factor test through

case-by-case adjudication.‖). Consequently, the FCC‘s new

policy of including fleeting images within the scope of

actionable indecency is arbitrary and capricious under State

Farm and the Administrative Procedure Act, and therefore

invalid as applied to CBS.

IV.

In finding CBS liable for a forfeiture penalty, the FCC

arbitrarily and capriciously departed from its prior policy

excepting fleeting broadcast material from the scope of

actionable indecency. Therefore, we will grant CBS‘s

petition for review and will vacate the Commission‘s order in

its entirety.

 

(―[T]he courts may not accept appellate counsel‘s post hoc

rationalizations for agency action. It is well-established that

an agency‘s action must be upheld, if at all, on the basis

articulated by the agency itself.‖ (internal citations omitted)).1

CBS v. FCC, No. 06-3575

SCIRICA, Circuit Judge, Dissenting

This case comes to us on remand from the Supreme

Court of the United States. CBS petitions for review of

orders by the Federal Communications Commission imposing

a monetary forfeiture under 47 U.S.C. § 503(b) for the

broadcast of ―indecent‖ material in violation of 18 U.S.C. §

1464 and 47 C.F.R. § 73.3999. I believe the Supreme Court‘s

intervening opinion in FCC v. Fox Television Stations, Inc.,

129 S. Ct. 1800 (2009), undermines the basis of our prior

holding on the Administrative Procedure Act.

1

Accordingly,

I respectfully dissent and would hold the FCC‘s imposition of

a civil forfeiture here is neither arbitrary nor capricious.

Furthermore, I would hold precedent requires we remand to

the FCC for it to apply the proper standard for ordering a civil

forfeiture for the broadcast of indecent material.

The alleged indecency occurred during the Halftime

Show of Super Bowl XXXVIII, broadcast live by CBS on

February 1, 2004. The Show‘s finale involved a routine by

Janet Jackson and Justin Timberlake. In an unscripted

moment at the end of the performance, Timberlake tore away

part of Jackson‘s bustier, exposing her bare right breast to the

camera. The image was broadcast over public airwaves for

nine-sixteenths of one second.

At issue is the responsibility of television broadcasters

for the transmission of unscripted ―indecent‖ material during

 

1

My colleagues incorporate portions of our earlier decision in

Part B of their opinion. Since I believe Fox requires a

different result, I would omit our prior opinion.2

live, contemporaneous television shows. Broadcast television

(as opposed to transmissions over cable, satellite, or internet)

is subject to greater oversight because the finite number of

broadcast frequencies are allocated among competing

applicants. See Red Lion Broad. Co. v. FCC, 395 U.S. 367,

376 (1969) (―Without government control, the medium would

be of little use because of the cacophony of competing voices,

none of which could be clearly and predictably heard.‖); cf.

FCC v. Pacifica Found., 438 U.S. 726, 748 (1978) (―[O]f all

forms of communication, it is broadcasting that has received

the most limited First Amendment protection.‖). The

―scarcity doctrine‖—the idea that limited broadcast spectrum

and practical factors make television broadcasting unique

among media—―has required some adjustment in First

Amendment analysis.‖ FCC v. League of Women Voters, 468

U.S. 364, 376-77 (1984).

2

 

 

2

CBS and others have questioned whether broadcasting

continues to be a unique medium. The Court, however, has

so far declined to abandon the scarcity doctrine without the

support of Congress or the FCC. See League of Women

Voters, 468 U.S. at 376 n.11 (―The prevailing rationale for

broadcast regulation based on spectrum scarcity has come

under increasing criticism . . . . We are not prepared,

however, to reconsider our longstanding approach without

some signal from Congress or the FCC that technological

developments have advanced so far that some revision of the

system of broadcast regulation may be required.‖); see also

Petition for Writ of Certiorari at 2-8, FCC v. Fox Television

Stations, Inc., 131 S. Ct. 3065 (2011) (No. 10-1293), 2011

WL 1540430 at *2-8 (providing the Solicitor General‘s view

on the development of indecency policy and the unique

position of broadcast television). 3

In our earlier decision, we invalidated the FCC‘s

determination that CBS‘s broadcast of a fleeting image of

nudity was actionably indecent. Examining the history of the

FCC‘s enforcement of the indecency standard, we concluded

the FCC‘s policy had been to treat unscripted fleeting

material as per se exempt from regulation. Because we

believed the FCC‘s forfeiture orders against CBS constituted

an unacknowledged change in policy, we held they violated

the Administrative Procedure Act‘s (APA) prohibition on

arbitrary and capricious agency action. See 5 U.S.C. §

706(2)(A). Furthermore, even assuming the fleeting image of

nudity was actionably indecent, we concluded CBS could not

be held liable for the broadcast unless it acted with scienter,

and it was unclear whether the FCC had applied the proper

standard. Accordingly, we vacated the FCC‘s orders and

remanded to allow the FCC an opportunity to reconsider its

indecency standard and the mens rea for broadcaster liability.

The FCC filed a petition for certiorari. While that

petition was pending, the Supreme Court decided FCC v. Fox

Television Stations, Inc., 129 S. Ct. 1800 (2009). The

question presented in Fox was whether the FCC had violated

the APA in issuing orders holding Fox liable for isolated

expletives broadcast during the 2002 and 2003 Billboard

Music Awards. The Court held the FCC had adequately

explained its decision such that its orders were neither

arbitrary nor capricious under the APA. Soon after deciding

Fox, the Court granted the FCC‘s petition for certiorari in this

case, vacated our judgment, and remanded for us to

reconsider the case in light of Fox. FCC v. CBS Corp., 129 S.

Ct. 2176 (2009).

In Fox, unlike here, the FCC acknowledged it was

departing from precedent. Nevertheless, I believe the Court‘s 4

intervening decision in Fox requires us to revise our prior

APA holding. Based on the Supreme Court‘s account of the

history of the FCC‘s enforcement policy, we cannot adhere to

our earlier determination that prior FCC policy had granted a

per se exemption to all fleeting indecent material; instead,

Fox compels the conclusion that the fleeting exemption was

limited to a particular type of words. Accordingly, under

Fox, I cannot say the orders in this case represented a change

in agency policy, and I would hold the FCC‘s indecency

finding passes muster under the APA. The FCC, however,

cannot impose a forfeiture penalty unless CBS acted with the

requisite scienter. Because I believe the FCC‘s forfeiture

orders rested on the wrong statutory provision, and

misapprehended the proper mens rea standard, I would vacate

the orders and remand for further proceedings.

I.

A.

Our previous opinion set forth the relevant facts:

On February 1, 2004, CBS presented a

live broadcast of the national Football League‘s

Super Bowl XXXVIII, which included a

halftime show produced by MTV Networks.

Nearly 90 million viewers watched the Halftime

Show, which began at 8:30 p.m. Eastern

Standard Time and lasted about fifteen minutes.

The Halftime Show featured a variety of

musical performances by contemporary

recording artists, with Janet Jackson as the

announced headlining act and Justin Timberlake

as a ―surprise guest‖ for the final minutes of the 5

show.

Timberlake was unveiled on stage near

the conclusion of the Halftime Show. He and

Jackson performed his popular song ―Rock

Your Body‖ as the show‘s finale. Their

performance, which the FCC contends involved

sexually suggestive choreography, portrayed

Timberlake seeking to dance with Jackson, and

Jackson alternating between accepting and

rejecting his advances. The performance ended

with Timberlake singing, ―gonna have you

naked by the end of this song,‖ and

simultaneously tearing away part of Jackson‘s

bustier. CBS had implemented a five-second

audio delay to guard against the possibility of

indecent language being transmitted on air, but

it did not employ similar precautionary

technology for video images. As a result,

Jackson‘s bare right breast was exposed on

camera for nine-sixteenths of one second.

CBS Corp. v. FCC, 535 F.3d 167, 171-72 (3d Cir. 2008)

(footnote omitted).

After fielding a large number of complaints from

viewers of the Halftime Show, the FCC issued a letter of

inquiry to CBS seeking additional information about the

broadcast. CBS complied. It also made ―a public statement

of apology for the incident,‖ stating that ―Jackson and

Timberlake‘s wardrobe stunt was unscripted and

unauthorized‖ and ―claiming it had no advance notice of any

plan by the performers to deviate from the script.‖ Id. at 172.

On September 22, 2004, the FCC issued a Notice of 6

Apparent Liability finding that CBS had apparently violated

federal law and FCC rules regulating the broadcast of

indecency and was apparently liable for a forfeiture penalty of

$550,000. CBS submitted its Opposition to the Notice.

On March 15, 2006, the FCC issued a forfeiture order

and imposed a penalty of $550,000. In re Complaints Against

Various Television Licensees Concerning Their Feb. 1, 2004

Broad. of the Super Bowl XXXVIII Halftime Show, 21 FCC

Rcd. 2760 (2006) (―Forfeiture Order‖). Applying the

standard set forth in its 2001 policy statement, the FCC found

the Halftime Show incident satisfied the two-part test for

indecency: (1) ―the material must describe or depict sexual or

excretory organs or activities,‖ and (2) it must be ―patently

offensive as measured by contemporary community standards

for the broadcast medium.‖ In re Industry Guidance on the

Comm‟n‟s Case Law Interpreting 18 U.S.C. § 1464 and

Enforcement Policies Regarding Broad. Indecency, 16 FCC

Rcd. 7999, 8002, ¶¶ 7–8 (2001) (―Industry Guidance‖); see

Forfeiture Order, 21 FCC. Rcd. at 2764–65, ¶ 9. Finding the

―broadcast of an exposed female breast‖ met the first part of

the test, the FCC focused most of its analysis on whether the

broadcast was ―patently offensive.‖ Forfeiture Order, 21

FCC Rcd. at 2764–67, ¶¶ 9–14.

The FCC‘s 2001 policy statement had explained that in

determining whether broadcast material is patently offensive,

―the full context in which the material appeared is critically

important.‖ Industry Guidance, 16 FCC Rcd. at 8002, ¶ 9.

Three factors are of principal significance: ―(1) the

explicitness or graphic nature of the description or depiction

of sexual or excretory organs or activities; (2) whether the

material dwells on or repeats at length descriptions of sexual

or excretory organs or activities; (3) whether the material 7

appears to pander or is used to titillate, or whether the

material appears to have been presented for its shock value.‖

Id. at 8003, ¶ 10 (emphasis removed). According to the

policy statement, ―[n]o single factor generally provides the

basis for an indecency finding‖; the three factors ―must be

balanced‖ to determine whether a given broadcast is patently

offensive. Id.

Applying these factors in its Forfeiture Order, the

FCC determined that, ―in context and on balance,‖ the

Halftime Show material was ―patently offensive.‖ 21 FCC

Rcd. at 2765, ¶ 10. The FCC conceded the second factor

weighed against a finding of indecency because ―the image of

Jackson‘s uncovered breast . . . is fleeting.‖ Id. at 2766, ¶ 12.

It noted, however, that ―‗even relatively fleeting references

may be found indecent where other factors contribute to a

finding of patent offensiveness,‘‖ and concluded ―[i]n this

case, . . . the brevity of the partial nudity is outweighed by the

first and third factors of our contextual analysis.‖ Id. (quoting

Industry Guidance, 16 FCC Rcd. at 8009, ¶ 19). In the FCC‘s

view, the image was ―graphic and explicit‖ because ―although

the camera shot is not a close-up, the nudity is readily

discernible[,] . . . Jackson and Timberlake, as the headline

performers, are in the center of the screen, and Timberlake‘s

hand motion ripping off Jackson‘s bustier draws the viewer‘s

attention to her exposed breast.‖ Id. at 2765, ¶ 11. The FCC

also believed, taken in context, the material appeared to

shock, pander to, or titillate the audience:

The offensive segment in question did not

merely show a fleeting glimpse of a woman‘s

breast . . . . Rather, it showed a man tearing off

a portion of a woman‘s clothing to reveal her

naked breast during a highly sexualized 8

performance and while he sang ―gonna have

you naked by the end of this song.‖

Id. at 2767, ¶ 13. On the strength of these two factors, the

FCC found the image actionably indecent.

The Forfeiture Order also found that CBS was liable

under 47 U.S.C. § 503(b)(1) for Timberlake and Jackson‘s

performance. CBS claimed ―it had no advance knowledge

that Timberlake planned to tear off part of Jackson‘s clothing

to reveal her breast.‖ Id. at 2768, ¶ 17. The FCC did not

dispute this contention, but it nonetheless determined CBS

was subject to a monetary forfeiture. Id. at 2769-74, ¶¶ 18–

25.

CBS submitted a Petition for Reconsideration

challenging several aspects of the FCC‘s analysis. In an

Order on Reconsideration filed on May 31, 2006, the FCC

reaffirmed the $550,000 forfeiture. In re Complaints Against

Various Television Licensees Concerning Their Feb. 1, 2004

Broad. of the Super Bowl XXXVIII Halftime Show, 21 FCC

Rcd. 6653 (2006) (―Reconsideration Order‖). The Order

rejected CBS‘s constitutional arguments and reiterated the

FCC‘s indecency finding. The Reconsideration Order

revised the FCC‘s approach for determining CBS‘s liability

under § 503(b)(1). According to the Order, there were three

independent bases for CBS‘s liability. First, despite the fact

the network ―was acutely aware of the risk of unscripted

indecent material in [the Halftime Show],‖ it ―consciously

and deliberately failed to take reasonable precautions to

ensure that no actionably indecent material was broadcast.‖

Reconsideration Order, 21 FCC Rcd. at 6660, ¶ 17; accord

id. at 6662, ¶ 23 (stating that the FCC‘s ―finding of

willfulness is based on CBS‘s knowledge of the risks and its 9

conscious and deliberate omissions of the acts necessary to

address them‖). Second, the FCC found Jackson and

Timberlake performed as employees of CBS, not independent

contractors. Accordingly, CBS was vicariously liable for

their actions under the doctrine of respondeat superior. Id. at

6662-64, ¶¶ 24–28. Third, even if Timberlake and Jackson

were independent contractors, CBS would still be liable for

their actions in the FCC‘s view because of ―the nondelegable

nature of broadcast licensees‘ responsibility for their

programming.‖ Id. at 6662, ¶ 23. For these reasons, the FCC

refused to rescind or reduce its forfeiture penalty.

B.

CBS timely filed a petition for review of the

Reconsideration Order on July 28, 2006. In our previous

opinion, we agreed with CBS that the order‘s indecency

finding violated the APA. CBS, 535 F.3d at 175. We

acknowledged that ―[t]he scope of review under the [APA‘s]

‗arbitrary and capricious‘ standard is ‗narrow, and a court is

not to substitute its judgment for that of the agency,‘‖ and that

―[l]ike any agency, the FCC may change its policies without

judicial second-guessing.‖ Id. at 174–75 (quoting Motor

Vehicle Mfrs. Ass‟n v. State Farm Mut. Auto. Ins. Co., 463

U.S. 29, 43 (1983)). But we noted the FCC ―cannot change a

well-established course of action without supplying notice of

and a reasoned explanation for its policy departure.‖ Id. at

175.

We concluded the FCC violated that principle here by

failing to acknowledge or explain a departure from ―a

consistent and entrenched policy of excluding fleeting

broadcast material from the scope of actionable indecency.‖

Id. at 179. In our view, it was not until its Golden Globes 10

decision, issued more than a month after the Halftime Show,

that the agency expressly ―overruled all of its prior cases

holding [isolated or fleeting material] not actionable.‖ Id. at

178; see In re Complaints Against Various Broad. Licensees

Regarding Their Airing of the “Golden Globe Awards”

Program, 19 FCC Rcd. 4975, 4980, ¶ 12 (2004) (―Golden

Globes‖) (―While prior Commission and staff action had

indicated that isolated or fleeting broadcasts of the ‗F-Word‘

such as that here are not indecent or would not be acted upon,

consistent with our decision today we conclude that any such

interpretation is no longer good law.‖). Before this date, we

believed, ―the FCC‘s policy was to exempt fleeting or

isolated material‖ from indecency regulation. CBS, 535 F.3d

at 180. ―Because CBS broadcasted the Halftime Show prior

to Golden Globes, this was the policy in effect when the

incident with Jackson and Timberlake occurred.‖ Id.

Accordingly, by finding the fleeting image here to be

actionably indecent, the FCC‘s orders in this case broke with

agency policy. And since these orders failed to acknowledge

the existence of that policy, we determined they were ―unable

to comply with the [APA‘s] requirement . . . that an agency

supply a reasoned explanation for its departure‖ from its prior

policy. Id. at 188.

As this account suggests, our construction of the

FCC‘s enforcement history played a decisive role in our

previous opinion. That opinion recounted this history in

detail, see id. at 175–89, but a synopsis is necessary here in

order to make clear the significance of the Supreme Court‘s

decision in Fox. The FCC‘s indecency policy had its genesis

in 1975, when the FCC issued a forfeiture penalty against

Pacifica Foundation for broadcasting comedian George 11

Carlin‘s ―Filthy Words‖ monologue.

3

See In re Citizen‟s

Complaint Against Pacifica Found., Station WBAI(FM), New

York, N.Y., 56 F.C.C. 2d 94 (1975). ―Carlin‘s monologue,

which Pacifica aired in an early-afternoon time slot, contained

extensive and repetitive use of several vulgar expletives over

a period of twelve minutes.‖ CBS, 535 F.3d at 175 (citing

Pacifica, 438 U.S. at 739). While Pacifica‘s appeal was

pending before the United States Court of Appeals for the

D.C. Circuit, the FCC ―issued a clarification order . . .

expressly limiting its prior forfeiture order to the specific

facts of the Carlin monologue.‖ Id. (citing In re a „Petition

for Clarification or Reconsideration‟ of a Citizen‟s Complaint

against Pacifica Found., Station WBAI(FM), New York, N.Y.,

59 F.C.C. 2d 892 (1976)). The D.C. Circuit reversed the

FCC‘s forfeiture order as vague and overbroad, Pacifica

Found. v. FCC, 556 F.2d 9, 14 (D.C. Cir. 1977), but the

Supreme Court upheld the agency‘s action in a narrow

plurality opinion, 438 U.S. 726 (1978). The plurality

―confirmed the general validity of the FCC‘s indecency

regime‖ while at the same time ―‗emphasiz[ing] the

narrowness of [its] holding,‘ which it confined to the facts of

the Carlin monologue.‖ CBS, 535 F.3d at 176 (quoting

Pacifica, 438 U.S. at 750) (alterations in original). Justices

Powell and Blackmun concurred in the judgment and wrote

separately to underscore ―the narrowness of the decision and

to note the Court‘s holding did not ‗speak to cases involving

the isolated use of a potentially offensive word in the course

 

3

―Congress authorized the FCC to impose forfeiture penalties

for violations of 18 U.S.C. § 1464 in 1960.‖ CBS, 535 F.3d at

175; see Communications Act Amendments, 1960, Pub. L.

No. 86-752, § 7, 74 Stat. 889, 894 (codified as amended at 47

U.S.C. § 503(b)(1)).12

of a radio broadcast, as distinguished from the verbal shock

treatment administered by respondent here.‘‖ Id. (quoting

Pacifica, 438 U.S. at 760–61 (Powell, J., concurring)).

Our previous opinion found that the FCC adopted a

―restrained enforcement policy . . . in the years following

Pacifica.‖ Id. In a 1978 opinion, the FCC rejected a

challenge to ―several programs containing nudity and other

allegedly offensive material.‖ Id.; see In re Application of

WGBH Educ. Found., 69 F.C.C. 2d 1250 (1978) (―WGBH‖).

The agency, noting it ―‗intend[ed] strictly to observe the

narrowness of the Pacifica holding‘ and emphasizing the

language in Justice Powell‘s concurring opinion, concluded

the single use of an expletive in a program ‗should not call for

us to act under the holding of Pacifica.‘‖ Id. (quoting WGBH,

69 F.C.C. 2d at 1254, ¶ 10 n.6) (alteration in CBS).

In our view, three decisions issued in 1987 had

―reaffirmed the Commission‘s restrained enforcement policy

and reiterated the agency‘s policy that isolated or fleeting

material would not be considered actionably indecent.‖ Id.

We acknowledged that, in a subsequent order reconsidering

these decisions, ―the Commission abandoned the view that

only the particular ‗dirty words‘ used in the Carlin monologue

could be indecent,‖ but we observed that the order on

reconsideration ―never indicat[ed] disagreement with those

decisions‘ express statements that isolated or fleeting material

could not be actionably indecent.‖ CBS, 535 F.3d at 177; see

In re Infinity Broad. Corp., 3 FCC Rcd. 930 (1987), vacated

in part on other grounds, Action for Children‟s Television v.

FCC, 852 F.2d 1332, 1337 (D.C. Cir. 1988), superseded in

part by Action for Children‟s Television v. FCC, 58 F.3d 654

(D.C. Cir. 1995) (en banc).13

As noted, our earlier opinion concluded the Golden

Globes opinion of March 3, 2004, was the first time the FCC

indicated that fleeting material could be held indecent. That

case involved an unscripted remark during a live NBC

broadcast of the Golden Globe Awards on January 19, 2003,

in which ―musician Bono said ‗this is really, really f[* * *]

brilliant‘ while accepting an award.‖ CBS, 535 F.3d at 177;

see Golden Globes, 19 FCC Rcd. at 4976, ¶ 3 n.4. The FCC

held the broadcast actionable, but it declined to impose a

forfeiture penalty because ―existing precedent would have

permitted th[e] broadcast.‖ See Golden Globes, 19 FCC Rcd.

at 4981-82, ¶ 15 n.40 (citing Trinity Broad. of Fla., Inc. v.

FCC, 211 F.3d 618 (D.C. Cir. 2000)). We believed Golden

Globes itself ―made it clear that licensees could not be held

liable for broadcasting fleeting or isolated indecent material

prior to its Golden Globes decision.‖ CBS, 535 F.3d at 178.

On February 21, 2006, the FCC issued an omnibus

order resolving multiple indecency complaints against

television broadcasters. See In re Complaints Regarding

Various Television Broads. Between Feb. 2, 2002 and Mar. 8,

2005, 21 FCC Rcd. 2664 (2006). The Order found four

programs, all of which involved the use of expletives,

4

to be

 

4

The four programs were: ―(1) Fox‘s broadcast of the 2002

Billboard Music Awards, in which performer Cher used an

unscripted expletive during her acceptance speech; (2) Fox‘s

broadcast of the 2003 Billboard Music Awards, in which

presenter Nicole Richie used two unscripted expletives; (3)

ABC‘s broadcast of various episodes of its NYPD Blue

series, in which assorted characters used scripted expletives;

and (4) a CBS broadcast of The Early Show, in which a guest

used an unscripted expletive during a live interview.‖ CBS, 14

indecent. But ―[b]ecause the offending broadcasts occurred

prior to the issuance of its Golden Globes decision, the FCC

concluded that existing precedent would have permitted the

broadcasts. Accordingly, the FCC did not issue forfeiture

orders against any of the licensees.‖ CBS, 535 F.3d at 178

(internal citations removed).

The networks nonetheless appealed the Order, which,

as revised,

5

was invalidated in a 2-1 decision by the United

States Court of Appeals for the Second Circuit. See Fox

Television Stations, Inc. v. FCC, 489 F.3d 444 (2d Cir. 2007),

rev‟d, 129 S. Ct. 1800 (2009). Our earlier opinion explicitly

refrained from engaging the issue that split the Second Circuit

panel, see CBS, 535 F.3d at 182–83; we focused instead on

that court‘s unanimous finding that the FCC‘s enforcement

policy ―prior to the Golden Globes decision [had consistently]

excluded fleeting or isolated expletives from regulation,‖ id.

at 179 (citing Fox, 489 F.3d at 455). That conclusion, we

believed, confirmed our view that until Golden Globes, the

FCC‘s policy ―was to exclude fleeting material from the

scope of actionable indecency.‖ Id. at 179 n.10.

The FCC did not categorically deny that its policy had

 

535 F.3d at 178 (citing Various Television Broads., 21 FCC

Rcd. at ¶¶ 101, 112 n.64, 125, 137).

5

See In re Complaints Regarding Various Television Broads.

Between Feb. 2, 2002 and Mar. 8, 2005, 21 FCC Rcd. 13299

(2006). The revised order reversed the finding that The Early

Show broadcast was indecent and dismissed the complaint

against ABC on procedural grounds. Id. at 13299, ¶ 1. The

order reviewed by the Second Circuit (and subsequently by

the Supreme Court) thus contained indecency determinations

only as to the two Billboard Music Awards broadcasts.15

exempted fleeting content from regulation. But it

contended—and continues to contend—that the exemption

had been limited to fleeting expletives and had never applied

to fleeting images such as the one at issue here. According to

the FCC, the Golden Globes opinion simply eliminated the

exceptional treatment of fleeting expletives and subjected all

broadcast content to the same contextual, multi-factor test, in

which the material‘s fleeting nature is but one consideration

to be weighed in the balance. Our previous opinion rejected

this interpretation. We concluded that, on the contrary, ―[i]n

the nearly three decades between the Supreme Court‘s ruling

in Pacifica and CBS‘s broadcast of the Halftime Show, the

FCC had never varied its approach to indecency regulation

based on the format of broadcasted content.‖ Id. at 184; see

id. at 181 (―[T]he Commission—before Golden Globes—had

not distinguished between categories of broadcast material

such as images and words.‖); see also id. at 180 (―Until its

Golden Globes decision . . . the FCC‘s policy was to exempt

fleeting or isolated material from the scope of actionable

indecency.‖ (emphasis added)). In our view, fleeting images,

like all other fleeting content, were immune from regulation

under the pre-Golden Globes regime. Accordingly, we

believed that if the FCC were right that ―Golden Globes only

addressed expletives, . . . a residual [per se exemption] policy

on other categories of fleeting material—including all

broadcast content other than expletives—remained in effect,‖

and that ―subsequent agency action was required to change

the fleeting material policy as it applied‖ to these remaining

categories. Id. at 181.

The FCC had insisted that ―any doubts about the

historical breadth of its fleeting material policy prior to the

Halftime Show‖ should have been ―dispelled‖ by the FCC‘s 16

decision in In re Young Broadcasting of San Francisco, Inc.,

19 FCC Rcd. 1751 (2004), issued a few days before CBS‘s

Super Bowl broadcast. CBS, 535 F.3d at 186. There, the

FCC issued a Notice of Apparent Liability for Forfeiture to:

a morning news show segment in which two

performers from a production titled ―Puppetry

of the Penis‖ appeared in capes but were

otherwise naked underneath the capes. The two

men, whose act involved manipulating and

stretching their genitalia to simulate various

objects, performed a demonstration of their act

with the agreement of the show‘s hosts and at

the urging of off-camera station personnel.

Although the performance was directed away

from the camera, the penis of one performer

was fully exposed on camera for less than one

second as the men turned away to act out their

performance.

Id. (citing Young Broad., 19 FCC Rcd. at 1755-56, ¶¶ 12, 13).

The FCC conceded that the offending image was ―fleeting‖

but concluded it was nonetheless indecent given its explicit

and pandering qualities. Young Broad., 19 FCC Rcd. at

1755-57, ¶¶ 11–14. In the FCC‘s view, Young Broadcasting

should have made clear to CBS that the fleetingness of an

offending image would not necessarily immunize the

broadcaster from liability.

Our previous opinion found this argument

unconvincing. We believed the FCC‘s action in Young

Broadcasting was hobbled by the same flaw that afflicted the

forfeiture orders against CBS: it ―fail[ed] to acknowledge the

existence of [the FCC‘s] prior policy on fleeting material,‖ 17

instead ―read[ing] the policy [of exempting fleeting material]

out of existence by substituting new rationales for its prior

indecency determinations that had applied the policy.‖ CBS,

535 F.3d at 187. Because Young Broadcasting was, we

believed, an invalid ―initial effort to abandon [the FCC‘s]

restrained enforcement policy on fleeting material,‖ id., that

policy remained in effect at the time of the Halftime Show.

And since the forfeiture orders against CBS similarly

―fail[ed] to acknowledge‖ a change in FCC policy ―on

fleeting material,‖ they were ―unable to comply with the

requirement . . . that an agency supply a reasoned explanation

for its departure from prior policy.‖ Id. at 188 (citing State

Farm, 463 U.S. at 43). In sum, Young Broadcasting did not

alter our conclusion that the FCC‘s orders violated the APA.

This violation of the APA was not the only flaw we

identified in the FCC‘s orders. Even assuming the FCC‘s

indecency finding had been valid, we would have found ―the

Commission [had] incorrectly determined CBS‘s liability for

Jackson and Timberlake‘s Halftime Show performance.‖ Id.

at 189. Two of the FCC‘s three arguments for liability were

untenable. First, the agency ―contend[ed] the performers‘

intent c[ould] be imputed to CBS under the common law

doctrine of respondeat superior.‖ Id. We concluded,

however, that ―Jackson and Timberlake were independent

contractors, who are outside the scope of respondeat

superior, rather than employees as the FCC found.‖ Id. at

189–98. Second, the FCC argued ―because broadcast

licensees hold non-delegable duties to avoid the broadcast of

indecent material and to operate in the public interest,‖ they

are vicariously liable for the acts of even their independent

contractors. Id. at 198. This proposition, we believed, could

not be reconciled with the First Amendment. ―[A]n unwitting 18

broadcaster might be held liable for its independent

contractor‘s negligence in monitoring and maintaining a

tower antenna without raising a constitutional question,‖ but

―the same cannot be said of imposing liability for the speech

or expression of independent contractors.‖ Id. at 199. ―A

broadcast licensee,‖ we explained, ―should not be found

liable for violating the indecency provisions of [federal law]

without proof the licensee acted with scienter. Because the

Commission‘s proffered ‗non-delegable duty‘ theory of

CBS‘s vicarious liability, which functionally equates to strict

liability for speech or expression of independent contractors,

appears to dispense with this constitutional requirement,‖ we

concluded it could ―not be sustained.‖ Id. at 203.

―As an alternative to vicarious liability, the FCC found

CBS directly liable for a forfeiture penalty . . . for failing to

take adequate precautionary measures to prevent potential

indecency during the Halftime Show.‖ Id. According to the

FCC, the touchstone under this theory was whether CBS had

―acted willfully.‖ Reconsideration Order, 21 FCC Rcd. at

6655, ¶ 5. The FCC did ―not dispute‖ that CBS ―neither

planned Jackson and Timberlake‘s offensive actions nor knew

of the performers‘ intent to incorporate those actions into

their performance.‖ CBS, 535 F.3d at 189. But the FCC

believed CBS had satisfied the ―willfulness‖ requirement

based on the agency‘s finding that ―CBS was acutely aware

of the risk of unscripted indecent material‖ in the Halftime

Show, but had nonetheless ―consciously and deliberately

failed to take reasonable precautions to ensure that no

actionably indecent material was broadcast.‖

Reconsideration Order, 21 FCC Rcd. at 6660, ¶ 17.

Without ruling on whether this third theory might

ultimately sustain a finding of liability on the facts of this 19

case, we found certain key aspects of the FCC‘s reasoning

―unclear.‖ CBS, 535 F.3d at 189. First, we had doubts about

whether the agency had ―properly applied the forfeiture

statute.‖ Id. at 203; see 47 U.S.C. § 503(b)(1). Under 47

U.S.C. § 503(b)(1)(B), the FCC has authority to order

forfeiture penalties upon determining that a person ―willfully

or repeatedly failed to comply with any of the provisions of

this chapter or of any rule, regulation, or order issued by the

Commission under this chapter.‖ Another statutory

subsection, § 503(b)(1)(D), authorizes forfeitures for

violations of several specific statutory provisions, including

the indecency statute, 18 U.S.C. § 1464. See 47 U.S.C. §

503(b)(1)(D). Although the FCC‘s orders sometimes

specifically invoked § 503(b)(1)(B), see, e.g., Forfeiture

Order, 21 FCC Rcd. at 2778, ¶ 36, and its ―willfulness‖

standard appears to represent the agency‘s interpretation of

that subsection‘s express mens rea element, the orders

referred in other places to § 503(b) or § 503(b)(1) only

generally, without specifying the applicable subsection, see,

e.g., Forfeiture Order, 21 FCC Rcd. at 2760, ¶ 1 n.1;

Reconsideration Order, 21 FCC Rcd. at 6655, ¶ 5. Given that

§ 503(b)(1)(D) expressly authorizes forfeitures for indecency

violations, we questioned ―whether the statutory scheme

permits violations of 18 U.S.C. § 1464 to be penalized by

forfeitures issued under section 503(b)(1)(B) instead of, or in

addition to, section 503(b)(1)(D).‖ CBS, 535 F.3d at 205.

As noted, our previous opinion determined that ―a

showing of scienter is constitutionally required to penalize

broadcast indecency.‖ Id. Although § 503(b)(1)(B)

contained an express mens rea standard, i.e. willfulness, and

§ 503(b)(1)(D) did not, we believed both provisions must be

interpreted to ―set a bar‖ to liability ―at least as high as 20

scienter.‖ Id. A key question, then, was what level of

scienter was necessary to sustain a penalty for indecent

expression. ―Where a scienter element is read into statutory

text,‖ we observed, ―scienter would not necessarily equate to

a requirement of actual knowledge or specific intent.‖ Id. at

206. Instead, ―[t]he presumption in favor of scienter requires

a court to read into a statute only that mens rea which is

necessary to separate wrongful conduct from otherwise

innocent conduct.‖ Id. (quoting Carter v. United States, 530

U.S. 255, 269 (2000)). Applying this principle, we surmised

that recklessness was a sufficiently culpable mental state for

purposes of 18 U.S.C. § 1464. ―It is likely,‖ we explained,

―that a recklessness standard would effectively separate

wrongful conduct from otherwise innocent conduct of

broadcasters without creating an end-around indecency

restrictions that might be encouraged by an actual knowledge

or intent standard.‖ Id. (internal quotation marks and citation

omitted). Moreover, we noted that recklessness had been

found to be an adequate scienter standard in other contexts,

including First Amendment contexts. Id. at 206–07.

The parties here had disputed whether CBS took

adequate precautions with regard to the risk of indecency in

the Halftime Show. The parties disagreed about whether

certain events leading up to the broadcast—including public

comments by Jackson‘s choreographer that the performance

would include ―some shocking moments‖— indicated a high

risk of indecent material. Another point of contention

involved the role of video delay technology. Although CBS

utilized a five-second audio delay, it did not delay its video

broadcast. We found ―[b]ecause the Commission carries the

burden of showing scienter, it should have presented evidence

to demonstrate, at a minimum, that CBS acted recklessly and 21

not merely negligently when it failed to implement a video

delay mechanism for the Halftime Show broadcast.‖ Id. at

208. Because we found the ―record at present‖ was wanting

in this regard, we were ―unable to decide whether the

Commission‘s determination that CBS acted ‗willfully‘ was

proper in light of the scienter [i.e., recklessness]

requirement.‖ Id.

Having determined the FCC‘s enforcement actions

here were arbitrary and capricious, our previous decision

vacated the forfeiture orders and remanded. Although we

recognized the FCC could ―not retroactively penalize CBS‖

for material that was not indecent under FCC policy at the

time of broadcast, we explained the agency could still enter a

declaratory order on remand, ―set[ting] forth a new policy and

proceed[ing] with its indecency determination even though a

retroactive monetary forfeiture [would be] unavailable.‖ Id.

at 209. The remand also afforded the agency an opportunity

to address the constitutionally required scienter element of the

indecency standard.

C.

While the FCC‘s petition for certiorari in this case was

pending, the Supreme Court decided Fox. As noted, Fox

reviewed the Second Circuit‘s decision invalidating monetary

forfeitures issued against Fox and its affiliates for several

unscripted expletives broadcast live during two different

Billboard Music Awards ceremonies.

6

The FCC‘s forfeiture

 

6

The first incident occurred during the 2002 Awards, ―when

the singer Cher exclaimed, ‗I‘ve also had critics for the last

40 years saying that I was on my way out every year. Right.

So f* * * ‗em.‘‖ Fox, 129 S. Ct. at 1808. The second took 22

orders for fleeting expletives in Fox, unlike its orders

penalizing a fleeting image here, ―forthrightly acknowledged

that [they were breaking] new ground.‖ Fox, 129 S. Ct. at

1812. Nonetheless, the Second Circuit had found the

agency‘s explanation for its policy change inadequate. In

reviewing this determination, the Supreme Court gave its own

account of the FCC‘s enforcement history.

The Court‘s chronicle, like ours, began with Pacifica‘s

sanction of George Carlin‘s ―Dirty Words‖ routine. Id. at

1806. The Court explained that ―[i]n the ensuing years, the

Commission took a cautious, but gradually expanding,

approach to enforcing the statutory prohibition against

indecent broadcasts.‖ Id. Like our previous opinion, Fox

noted the FCC decided in 1987 that its enforcement power

was not limited to ―the seven words actually contained in the

George Carlin monologue.‖ Id. at 1807 (quoting In re

Pacifica Found., Inc., 2 FCC Rcd. 2698, 2699, ¶ 12 (1987)).

But the Court in Fox observed something in the 1987

decisions that we had not mentioned: it found the FCC

opinions expanding the scope of the agency‘s enforcement

also

preserved a distinction between literal and

nonliteral (or ‗expletive‘) uses of evocative

language. The Commission explained that each

literal ―description or depiction of sexual or

excretory functions must be examined in

context to determine whether it is patently

 

place during the 2003 Awards, when Nicole Richie

―proceeded to ask the audience, ‗Why do they even call it

‗The Simple Life‘? Have you ever tried to get cow s* * * out

of a Prada purse? It‘s not so f* * *ing simple.‘‖ Id.23

offensive,‖ but that ―deliberate and repetitive

use . . . is a requisite to a finding of indecency‖

when a complaint focuses solely on the use of

nonliteral expletives.

Id. (quoting Pacifica Found., 2 FCC Rcd. at 2699, ¶ 13)

(alteration in original) (citation omitted).

The Court in Fox found the Golden Globes decision

was ―the first time‖ the FCC declared ―that a nonliteral

(expletive) use of the F- and S-words could be actionably

indecent, even when the word is used only once.‖ Id.

Because the broadcasts at issue in Fox had occurred prior to

the Golden Globes order, the FCC had ―declined to assess

penalties.‖ Id. at 1812. Accordingly, the indecency

determinations in Fox did not pose a notice or due process

problem, and the Court‘s majority opinion limited itself

exclusively to the question of whether the FCC‘s explanation

for holding fleeting or isolated expletives indecent—which

largely echoed the justification proffered in Golden Globes—

passed muster under the APA.

The Court answered that question in the affirmative.

The Court rejected the principle (espoused by the Second

Circuit) that ―agency action that changes prior policy‖

requires ―a more substantial explanation‖ than does action in

an area previously untouched. Id. at 1810. Although ―[a]n

agency may not . . . depart from a prior policy sub silentio or

simply disregard rules that are still on the books . . . it need

not demonstrate to a court‘s satisfaction that the reasons for

the new policy are better than the reasons for the old one.‖

Id. at 1811. Accordingly, the Court concluded an ―agency

need not always provide a more detailed justification than

what would suffice for a new policy created on a blank slate.‖ 24

Id.

Judged under this clarified standard, the FCC orders at

issue in Fox were not arbitrary and capricious. Id. at 1812–

19. The FCC acknowledged its change in policy, and the

Court found its reasons for including fleeting expletives

within the scope of actionable indecency to be ―entirely

rational.‖ Id. at 1812. In making this determination, the

Court compared the FCC‘s policy toward fleeting expletives

with its treatment of other offensive material. ―It was

certainly reasonable,‖ the Court believed, for the agency ―to

determine that it made no sense to distinguish between literal

and nonliteral uses of offensive words, requiring repetitive

use to render only the latter indecent.‖ Id. The per se

exemption for fleeting expletives, the Court explained, had

been an anomaly:

When confronting other requests for per se

rules governing its enforcement of the

indecency prohibition, the Commission ha[d]

declined to create safe harbors for particular

types of broadcasts. The Commission could

rationally decide it needed to step away from its

old regime where nonrepetitive use of an

expletive was per se nonactionable because that

was at odds with the Commission‘s overall

enforcement policy.

Id. at 1813 (internal citations and quotation marks omitted).

Because ―[e]ven isolated utterances can be made in

pand[ering,] . . . vulgar and shocking manners,‖ the Court

found it rational for the FCC to cease providing ―a safe harbor

for single words‖ and subject them instead to the agency‘s

general ―context-based‖ test for ―patent offensiveness.‖ Id. at 25

1812–13 (internal quotation marks omitted) (second alteration

and omission in original).

II.

According to the FCC, Fox stands for the proposition

that the safe harbor had extended only to isolated expletives,

i.e. non-literal language, and not, as we had originally

concluded, to all fleeting material. The FCC points to Fox‘s

statement that FCC policy historically subjected

―description[s] or depiction[s]‖ of sexual organs or functions

to a contextual standard, reserving a safe harbor only for

―nonliteral expletives.‖ Id. at 1807 (quoting Pacifica Found.,

2 FCC Rcd. at 2699, ¶ 13). Because images are ―depictions,‖

the FCC argues, Fox tells us that images were not entitled to a

safe harbor.

CBS, by contrast, denies that anything in Fox

undermines our previous conclusion that the FCC‘s forfeiture

orders represented a change in policy. ―Fox,‖ CBS argues,

―does not involve allegedly indecent images, and focuses

solely on words uttered.‖ CBS Letter-Brief 6 (Jan. 29, 2010).

In CBS‘s view, Fox‘s discussion of the 1987 FCC opinion

Pacifica Foundation is ―utterly irrelevant‖ to the issue before

us. Id. at 1. In its view, Fox‘s identification of a distinction

between the treatment of literal utterances and nonliteral

expletives is merely background information incidental to the

Supreme Court‘s holding and therefore dicta. The FCC, on

the other hand, argues the Court‘s description of the FCC‘s

historic enforcement policy is integral to its holding that the

FCC orders in Fox complied with the APA.

I believe Fox‘s distinction between the FCC‘s historic

treatment of different kinds of fleeting material undermines a 26

key premise of our earlier opinion. Our opinion did not rest

on an explicit statement by the FCC that fleeting images

would be per se exempt from indecency regulation. Instead,

we identified FCC decisions that had held certain isolated

words immune from the enforcement regime. See, e.g., CBS,

535 F.3d at 176 (quoting WGBH, 69 F.C.C. 2d at 1254, ¶ 10

n.6). In addition, after reviewing the entirety of the agency‘s

enforcement history up until the Halftime Show, we found

―the FCC had never varied its approach to indecency

regulation based on the format of broadcasted content.‖ Id. at

184. Accordingly, we concluded the FCC‘s enforcement

policy had contained a blanket rule exempting all fleeting

material, without qualification, from the indecency standard.

In Fox, however, the Supreme Court states that FCC

policy did, in fact, make distinctions ―based on the format of

broadcasted content.‖ As the Court interpreted the FCC‘s

pre-Golden Globes enforcement history, ―literal

‗description[s] or depiction[s] of sexual or excretory

functions‘‖ were subject to a multi-factor test and could

potentially be found indecent notwithstanding their fleeting or

nonrepetitive character, Fox, 129 S. Ct. at 1807 (quoting

Pacifica Found., 2 FCC Rcd. at 2699, ¶ 13); the safe harbor

for fleetingness encompassed only the ―use of nonliteral

expletives,‖ id. ―Although the Commission had expanded its

enforcement beyond the ‗repetitive use of specific words or

phrases,‘ it preserved a distinction between literal and

nonliteral (or ‗expletive‘) uses of evocative language.‖ See

id. at 1807. Fox therefore contradicts and undermines our

previous holding that FCC enforcement policy embodied a

general exemption for all fleeting material.

7

Moreover, Fox

 

7

I acknowledge that the allegedly indecent material at issue

in Fox involved only words, and that Fox‘s discussion of the 27

describes the narrow safe harbor for fleeting ―nonliteral

expletives‖ or ―evocative language‖ as a deviation from the

default rule of contextual analysis. The per se exemption,

Fox explains, was ―at odds with the Commission‘s overall

enforcement policy.‖ Id. at 1813. ―When confronting other

requests for per se rules governing its enforcement of the

indecency prohibition, the Commission ha[d] declined to

create safe harbors for particular types of broadcasts.‖ Id.

In other words, Fox identifies contextual analysis as

the default policy for all broadcast content, with the narrow

exception of nonliteral expletives. Although my colleagues

emphasize the omission of any specific discussion of images

in Fox, our earlier opinion‘s finding of a safe harbor for

fleeting images was premised on a per se exemption for

fleeting content generally. As Fox portrays the FCC‘s

enforcement history, however, no such general policy existed.

Instead, the Court concluded that the safe harbor for fleeting

nonliteral expletives was an isolated exception rather than an

instance of a more general rule. It reasoned that the removal

 

FCC enforcement policy is not on its face addressed to the

agency‘s treatment of images. But the Court‘s account of

FCC enforcement policy and history limits the fleeting

exemption solely to nonliteral use of ―evocative language.‖

See id. at 1807. The Court noted that the FCC had rejected

other types of exemptions. See id. at 1813 (―When

confronting other requests for per se rules governing its

enforcement of the indecency prohibition, the Commission

has declined to create safe harbors for particular types of

broadcasts.‖). The structure of the Court‘s discussion

conveys that the Court viewed the exception for nonliteral

expletive language as an exception at odds with the FCC‘s

treatment of all other material, including images.28

of this exception allowed the FCC to bring treatment of

fleeting indecent language into harmony with its overall

enforcement policy. Fox, 129 S. Ct. at 1813. The existence

of a similar safe harbor for fleeting images would have

undermined this key holding of Fox. The Court‘s omission of

any discussion of fleeting images strongly suggests that,

rather than constituting a per se exception, such instances fell

within the contextual approach that the Court identified as the

―Commission‘s prior enforcement practice.‖ Fox, 129 S. Ct.

at 1814. It follows that the FCC‘s decision to apply a

contextual analysis to the fleeting image in this case did not

represent a change in policy.

The Court‘s holding expressly relied on the

distinctions it identified in the FCC‘s historic treatment of

different types of fleeting content. In concluding the

agency‘s reasons for eliminating a safe harbor for fleeting

―nonliteral expletives‖ were ―entirely rational,‖ the Court

explained that ―[i]t was certainly reasonable to determine that

it made no sense to distinguish between literal and nonliteral

uses of offensive words, requiring repetitive use to render

only the latter indecent.‖ Id. at 1812. The very fact that the

safe harbor for fleeting expletives was an isolated exception

to the FCC‘s general contextual standard was itself, the Court

said, a defensible reason for the policy change announced in

Golden Globes and Fox: ―The Commission could rationally

decide it needed to step away from its old regime where

nonrepetitive use of an expletive was per se nonactionable

because that was at odds with the Commission‘s overall

enforcement policy.‖ Id. at 1813 (internal quotation marks

omitted).

As this examination of Fox makes clear, the Supreme

Court‘s account of the FCC‘s pre-Golden Globes enforcement 29

policy is not characterization, but central to Fox‘s holding.

Given that account, I would hold that the FCC‘s indecency

determination in this case did not constitute a change of

policy—unacknowledged or otherwise—and was not

arbitrary and capricious under the APA.

8

 

 

8

Our previous opinion identified several FCC decisions in

which the FCC had found that certain fleeting images did not

violate the indecency standard. See CBS, 535 F.3d at 184–86.

We believed these decisions supported our conclusion that

FCC policy had afforded a safe harbor to all fleeting material.

In none of these cases, however, did the FCC state that

fleeting images were per se nonactionable. In light of Fox, I

believe that these decisions are also compatible with a

contextual standard. Precisely because the reasoning in many

of these opinions is sparse, they may be read as holding not

that the fleeting quality of the images was per se dispositive

but rather that, in the particular context presented, the image‘s

transience outweighed any countervailing factors.

CBS argues that even if fleeting material did not enjoy

a per se exemption under FCC policy, the agency applied its

contextual standard differently here that it had in earlier cases

where fleetingness proved dispositive. ―[P]atently

inconsistent applications of agency standards to similar

situations are by definition arbitrary.‖ South Shore Hosp.,

Inc. v. Thompson, 308 F.3d 91, 103 (1st Cir. 2002). But CBS

has not shown that the facts in this case are materially

indistinguishable from a case in which the agency found no

indecency. As we have recognized, ―an agency‘s

interpretation of its own precedent is entitled to deference.‖

CBS, 535 F.3d at 180 (quoting Cassell v. FCC, 154 F.3d 478,

483 (D.C. Cir. 1998)). Given the nature of the FCC‘s

contextual standard, each case is likely to present a unique 30

In our earlier opinion, we determined that if the policy

change set forth in Golden Globes and Fox addressed only

fleeting expletives, as the FCC has asserted, then it left in

place a safe harbor for all other fleeting content. CBS, 535

F.3d at 181. Fox held precisely the opposite—that in

eliminating a safe harbor for fleeting expletives in Golden

Globes and Fox, the FCC made a reasonable decision to

abolish an anomalous exception and establish a uniform

contextual test for all allegedly indecent material. The

rationale of the FCC decision suggested by our earlier

opinion—to eliminate a safe harbor for presumptively less

offensive fleeting expletives while maintaining a per se

exemption for fleeting literal utterances and potentially

graphic images—would appear more dubious. In short, our

earlier opinion is irreconcilable with the reasoning by which

the Supreme Court upheld the FCC orders in Fox.

CBS argues that even if the indecency determination

here did not constitute a change of policy, the forfeiture

penalty must be invalidated because CBS was not sufficiently

―on notice‖ of its potential liability for fleeting images.

―Because due process requires that parties receive fair notice

before being deprived of property. . . in the absence of

notice—for example, where the regulation is not sufficiently

clear to warn a party about what is expected of it—an agency

may not deprive a party of property by imposing civil or

criminal liability.‖ Trinity Broad. of Fla., Inc. v. FCC, 211

 

balance of factors, and I cannot say that the FCC acted

unreasonably in determining that the fleetingness of the

image here was outweighed by its graphic and pandering

qualities.31

F.3d 618, 628 (D.C. Cir. 2000) (internal quotation marks and

alterations omitted). Referring to the 1987 FCC decision

quoted by Fox, CBS submits that ―no fine [in this case] can

be justified based on a cryptic reference in dictum that was

never discussed or applied for over two decades.‖ CBS

Letter-Brief at 18.

CBS‘s argument implicitly assumes that the 1987

decision was the only indication by the FCC that fleeting

images were potentially actionable. But that is not the case.

At the very least, the FCC‘s opinion in Young Broadcasting,

which involved somewhat similar facts and was issued only

days before the Halftime Show, made clear that fleeting

images of nudity could be found indecent if presented in a

sufficiently explicit and pandering fashion. In issuing its

Notice of Apparent Liability in that case, the FCC explained

that ―although the actual exposure of the performer‘s penis

was fleeting in that it occurred for less than a second,‖ this

mitigating factor was outweighed by the explicitness and

pandering quality of the image‘s presentation. Young Broad.,

19 FCC Rcd. at 1754–55, ¶¶ 10–12; see also id. (―In

particular cases, one or two of the factors may outweigh the

others, either rendering the broadcast material patently

offensive and consequently indecent, or, alternatively,

removing the broadcast material from the realm of

indecency.‖ (footnotes omitted)).

9

 

9

It is true, as we noted in our previous opinion, that Young

Broadcasting ―makes no distinction, express or implied,

between words and images.‖ CBS, 535 F.3d at 186. The

FCC‘s opinion suggests that all fleeting content is subject to a

contextual standard and fails to acknowledge even the limited

safe harbor for fleeting expletives identified in Fox. See 32

In our earlier opinion, we acknowledged that Young

Broadcasting found a nude image indecent despite its

fleetingness, but we declined to give effect to the FCC‘s

decision because we believed it amounted to an

unacknowledged change in policy in contravention of the

APA. See CBS, 535 F.3d at 187 (describing Young as ―the

Commission‘s initial effort to abandon its restrained

enforcement policy on fleeting material‖). We held, in other

words, that Young Broadcasting could not have validly

changed the FCC‘s policy with regard to fleeting material and

could not therefore have relieved the FCC of the obligation to

acknowledge and explain its new policy. As noted, however,

I would revisit and revise our APA conclusion on the basis of

Fox and no longer find that FCC policy historically

 

Young Broad., 19 FCC Rcd. at 1754–55, ¶¶ 10, 12 n.35; see

also Industry Guidance 16 FCC Rcd. at 8003, ¶ 10 (stating,

without any mention of a per se exemption for fleeting

expletives, that under the FCC‘s analytical framework, ―[n]o

single factor generally provides the basis for an indecency

finding‖). That Young Broadcasting overstated the historic

scope of liability, however, does not preclude that case from

furnishing adequate notice of broadcast licensees‘ potential

liability for fleeting images; if anything, this error served to

underscore the risk of liability. The FCC‘s forfeiture order

here reflected the FCC‘s understanding that all fleeting

material would be subject to a contextual standard. See

Forfeiture Order, 21 FCC Rcd. at 2766, ¶12 (concluding that

―even though we find that the partial nudity [broadcast at the

end of the Halftime Show] was fleeting, the brevity of the

partial nudity is outweighed by the first and third factors of

our contextual analysis‖).33

immunized fleeting material from regulation.

10

The finding

of indecency for the fleeting imagery in Young Broadcasting

put CBS on notice that FCC policy did not afford fleeting

images an automatic exemption from indecency regulation.

My colleagues offer an alternate interpretation of

Young Broadcasting as an application of ―an exception within

the [per se] exception.‖

11

Majority op. at 26. They also

believe that Young Broadcasting could not provide CBS with

notice because it was a non-final notice of apparent liability.

Id. at 19. Both interpretations are inapposite. The most

straightforward reading of Young Broadcasting reveals the

FCC applying a contextual standard rather than a set of nested

exceptions, weighing all three factors with no one being

determinative.

12

Moreover, despite my colleagues‘ emphasis

 

10

I will not address CBS‘s constitutional challenge to the

indecency standard. See infra Section IV.

11

It bears noting that the FCC in this case made the same

finding as in Young Broadcasting that ―the material was

apparently intended to pander to, titillate and shock viewers.‖

Forfeiture Order, 21 FCC Rcd. at 2763, ¶ 3, 2766-67, ¶13,.

If there is indeed an ―exception within the exception‖ for

titillating and shocking content, it would appear to apply in

this instance as well.

12

My colleagues argue that the FCC recognized an exemption

in Young Broadcasting because it cited prior FCC decisions

concluding that the fleetingness of an image tended to weigh

in favor of a finding of no liability. Majority op. at 26. But

the FCC discussed fleetingness in Young Broadcasting in the

context of the three-factor contextual standard. See Young

Broad., 17 FCC Rcd. at 1755 (―In particular cases, one or two

of the factors may outweigh the others, either rendering the

broadcast material patently offensive and consequently 34

on notice, this standard was not a new departure for the FCC.

Young Broadcasting‘s use of a contextual standard is

consistent with the FCC‘s 2001 Industry Guidance and the

Court‘s account of FCC enforcement in Fox. The case‘s

unexceptional application of an established legal standard was

sufficient to alert CBS to the possibility that fleeting images

might be deemed indecent.

Following Fox, I cannot say that the FCC changed its

policy by applying its contextual, three-factor standard to a

fleeting image. Therefore I cannot join the majority‘s holding

that the forfeiture orders were arbitrary and capricious under

the APA. Under Young Broadcasting, it was apparent before

the Halftime Show that fleeting images could, depending on

the context, be deemed indecent. For this reason, CBS was

adequately on notice of the policy the FCC applied in this

case.

III.

Whether Jackson and Timberlake‘s performance was

indecent is a distinct question from whether CBS can be held

liable for the live broadcast of that performance. Because I

would uphold the FCC‘s orders under the APA, the latter

question, which we examined in our prior ruling, has

heightened importance.

A.

 

indecent, or, alternatively, removing the broadcast material

from the realm of indecency. In this case, we examine all

three factors. . . .‖ (footnote omitted)). It did not state there

was a per se exception for all fleeting images.35

CBS challenges the ability of Congress or the FCC to

regulate any indecency on broadcast television within the

bounds of the First Amendment. It contends technological

change has undercut the traditional rationale for providing

lesser protection to broadcasting in relation to other modes of

speech. In Pacifica, the plurality noted the scarcity of

available frequencies and the need for licensing has always

subjected broadcasters‘ speech to greater regulation—

including restrictions on speech that is indecent but not

obscene. See Pacifica, 438 U.S. at 748 (―[I]t is broadcasting

that has received the most limited First Amendment

protection. Thus, although other speakers cannot be licensed

except under laws that carefully define and narrow official

discretion, a broadcaster may be deprived of [its] license and

[its] forum if the Commission decides that such an action

would serve ‗the public interest, convenience, and

necessity.‘‖). Pacifica noted that broadcast television is

uniquely pervasive in American life and uniquely accessible

to children. Id. at 748-50. Given the array of media currently

available, CBS argues broadcast television no longer inhabits

the unique and ubiquitous role in American society that the

Court found made it deserving of lesser First Amendment

protection. Notwithstanding this criticism, the Supreme

Court has given no hint it views subsequent technological

changes as undermining Pacifica‘s rationale that the unique

characteristics of this medium allows Congress to regulate

indecent speech on broadcast television.

B.

After oral argument on remand, we requested

supplemental briefing on the proper standard of scienter. The

FCC no longer presses theories of vicarious liability and nondelegable duty we rejected in our prior decision. Nor does it36

appear to contest our prior judgment that CBS can be held

liable only if it acted recklessly in broadcasting the offending

image. Accordingly, the FCC requests a remand so that it

may determine whether CBS acted with the required mens

rea. CBS disputes the FCC‘s characterization of the scienter

threshold and contends there is no factual basis for a

forfeiture penalty.

Congress has authorized the FCC to impose monetary

forfeitures in several circumstances. See 47 U.S.C. §

503(b)(1). Two provisions are relevant here. Section

503(b)(1)(B) permits a penalty for ―willfully or repeatedly

fail[ing] to comply with any of the provisions of this chapter

or of any rule, regulation, or order issued by the Commission

under this chapter,‖ and § 503(b)(1)(D) authorizes a forfeiture

for ―violat[ing] any provision of section . . . 1464 . . . of Title

18.‖ 47 U.S.C. § 503(b)(1)(B), (D). Although the FCC

referenced § 503(b)(1)(D), its forfeiture orders in this case

appear to rest solely on the authority of § 503(b)(1)(B). See,

e.g., Forfeiture Order, 21 FCC Rcd. at 2776, ¶ 29 n.103

(explaining that because the FCC had found CBS liable under

§ 503(b)(1)(B), there was no need to ―address whether [CBS]

could also be held responsible under Section 503(b)(1)(D)‖).

Our previous opinion expressed skepticism about the

applicability of § 503(b)(1)(B) to indecency violations. CBS,

535 F.3d at 203-04. I would hold Congress intended the FCC

to proceed under § 503(b)(1)(D) when sanctioning indecency

violations. ―Ordinarily, where a specific provision conflicts

with a general one, the specific governs.‖ Edmond v. United

States, 520 U.S. 651, 657 (1997). Here, § 503(b)(1)(B)

speaks generally of violations of ―any of the provisions of this

chapter or of any rule, regulation, or order issued by the

Commission under this chapter.‖ Section 503(b)(1)(D), on 37

the other hand, refers specifically to having ―violated any

provision of section . . . 1464 . . . of Title 18.‖

The history of the forfeiture statute supports the view

that Congress intended § 503(b)(1)(D) as the vehicle to

impose forfeitures for airing indecent material. Both

forfeiture provisions were originally enacted as part of the

same set of amendments to the Communications Act. See

Communications Act Amendments, 1960, Pub. L. No. 86-

752, § 7, 74 Stat. 889, 894. At the time of enactment, §

503(b)(1)(B) could not have applied to indecency violations

because 18 U.S.C. § 1464 was the only provision of federal

law proscribing indecency; none of the ―provisions of th[e]

chapter‖ containing § 503(b)(1)(B), nor ―any rule, regulation,

or order issued by the Commission under th[at] chapter‖

addressed the subject of indecency. The FCC has argued that

47 C.F.R. § 73.3999, which was not promulgated until 1988,

brought the indecency standard within the scope of §

503(b)(1)(B). But § 73.3999, which is entitled ―Enforcement

of 18 U.S.C. § 1464,‖ merely establishes the hours of the day

when 18 U.S.C. § 1464 will be enforced. Given the statutory

history, I believe Congress intended violations of 18 U.S.C. §

1464 to be enforced under 47 U.S.C. § 503(b)(1)(D) and not §

503(b)(1)(B). And since 47 C.F.R. § 73.3999 merely

enforces 18 U.S.C. § 1464‘s substantive standard, it did not

serve to bring indecency violations under the authority of §

503(b)(1)(B).

Even if § 503(b)(1)(B) were applicable to indecency

actions, I am skeptical that it would authorize a forfeiture in

this case. The provision requires a showing that a licensee

―willfully or repeatedly‖ violated a statutory or regulatory

standard. According to the statutory definition, ―the term

‗willful,‘ when used with reference to the commission or 38

omission of any act, means the conscious and deliberate

commission or omission of such act.‖ 47 U.S.C. § 312(f).

The FCC does not contend that CBS knew that Timberlake

would expose Jackson‘s breast, or intended that display to

occur. Instead, the FCC believes CBS‘s actions were

―willful‖ insofar as the network ―consciously and

deliberately‖ failed to take precautions despite the alleged

existence of a known or obvious risk that indecent material

would be broadcast. But since the act that must be ―willful‖

is, in this context, the violation of 18 U.S.C. § 1464, it would

appear that CBS cannot be held liable unless it ―consciously

and deliberately‖ broadcast the specific material deemed

indecent. The FCC argues the act can be either a commission

or omission—here (in the view of the FCC) the failure to take

necessary precautions. But even if an omission can support a

finding of a violation of § 503(b)(1)(B), the omission still

must be ―willful.‖ The reckless omission of ―precautions‖

would seem insufficient to satisfy the willfulness requirement

of § 503(b)(1)(B).

Although I would find the FCC‘s orders relied on

inapposite statutory authority, I do not believe this error

precludes the FCC from applying § 503(b)(1)(D) on remand.

See WorldCom, Inc. v. FCC, 288 F.3d 429, 430 (D.C. Cir.

2002) (remanding rulemaking where the FCC had relied on

an inapposite statutory provision ―[b]ecause there may well

be other legal bases for adopting the rules chosen by the

Commission‖); see also Castaneda-Castillo v. Gonzales, 488

F.3d 17, 25 (1st Cir. 2007) (―If the agency decision is flawed

by mistaken legal premises, . . . remanding to give the agency

an opportunity to cure the error is the ordinary course.‖

(emphasis omitted)); cf. SEC v. Chenery Corp., 332 U.S. 194,

200-01 (1947) (―The fact that the [agency] had committed a 39

legal error in its first disposition of the case certainly gave

[the prejudiced party] no vested right to receive the benefits

of such an order.‖).

The Supreme Court has directed as a general matter:

If the record before the agency does not

support the agency action, if the agency has not

considered all relevant factors, or if the

reviewing court simply cannot evaluate the

challenged agency action on the basis of the

record before it, the proper course, except in

rare circumstances, is to remand to the agency

for additional investigation or explanation.

Florida Power & Light Co. v. Lorion, 470 U.S. 729, 744

(1985). There have been few instances where courts have

found ―rare circumstances.‖ One such circumstance is ―when

there has been a strong showing in support of a claim of bad

faith or improper behavior on the part of agency

decisionmakers or where the absence of formal administrative

findings makes such investigation necessary in order to

determine the reasons for the agency's choice.‖ Sierra Club

v. Peterson, 185 F.3d 349, 369 (5th Cir. 1999) (quoting Nat‟l

Audubon Soc‟y v. Hoffman, 132 F.3d 7, 14 (2d Cir. 1997)).

Of course, remand is not required where a proper application

of the correct standard could yield only one possible result.

See George Hyman Constr. Co. v. Brooks, 963 F.2d 1532,

1539 (D.C. Cir. 1992) (―[W]e find that a remand would be

futile on certain matters as only one disposition is possible as

a matter of law.‖). But where ―the answer the [agency] might

give were it to bring to bear on the facts the proper

administrative and statutory considerations‖ is ―[s]till

unsettled,‖ remand is the proper course. Chenery, 332 U.S. at 40

200. As I believe, following Fox, the FCC did not act in an

arbitrary and capricious manner, whether CBS can be held

liable for its broadcast of the Halftime Show is still

unsettled.

13

That is the case here; the ―function‖ of applying

the proper liability standard to the facts of this case ―belongs

exclusively to the Commission in the first instance.‖ Id.

C.

1.

Section 503(b)(1)(D), unlike § 503(b)(1)(B), does not

contain an express scienter requirement. On remand, both

parties agree that scienter is a prerequisite of liability under §

503(b)(1)(D) and 18 U.S.C. § 1464, but they dispute what

mental state is required. The FCC contends that recklessness

suffices, while CBS insists it can be liable only if it had

knowledge the Halftime Show would contain indecent

material and it intended to violate the indecency standard.

In most criminal or civil actions for obscenity or

indecency, the element of scienter as to the broadcast‘s

content will not be in doubt as ―the defendant will necessarily

know the contents of his utterances.‖ United States v. Smith,

467 F.2d 1126, 1129 (7th Cir. 1972). Scienter will be an

issue in forfeitures under § 1464, where, as here, live,

unscripted events are broadcast. The broadcaster may not

have forewarning of a potentially-indecent unscripted or

 

13

Accordingly, I believe, as our prior opinion held, that even

if the FCC‘s forfeiture order were arbitrary and capricious,

the FCC could on remand issue a finding of indecency

without a civil forfeiture as it did in Golden Globes. CBS,

535 F.3d at 209.41

spontaneous event. Nor might the conduct of a third-party or

independent contractor necessarily be imputed to the

broadcaster. Live broadcasts, as opposed to scripted or

―taped‖ programming, will always carry the possibility or risk

of transmitting indecent material.

Against this backdrop, I believe recklessness is the

constitutional minimum standard for scienter when imposing

forfeiture penalties. ―The presumption in favor of scienter

requires a court to read into a statute only that mens rea

which is necessary to separate wrongful conduct from

otherwise innocent conduct.‖ Carter v. United States, 530

U.S. 255, 269 (2000) (internal quotation marks omitted).

Recklessness provides sufficient protection under the First

Amendment to speech in similar contexts. See New York

Times Co. v. Sullivan, 376 U.S. 254, 280 (1964) (allowing the

imposition of liability upon a showing that the defendant

published a statement with ―reckless disregard‖ of the risk it

was false); see also CBS, 535 F.3d at 206–07 (citing Osborne

v. Ohio, 495 U.S. 103 (1990)) (―Also instructive here are

other cases determining recklessness to be an adequate level

of scienter for imposing liability in related First Amendment

contexts where speech or expression is restricted based on its

content.‖).

14

 

Imposing a higher scienter standard than recklessness,

such as the actual knowledge or intent standard urged by

CBS, dilutes the duty imposed by Congress in 18 U.S.C. §

 

14

At common law, the concept of recklessness could be

expressed in a variety of ways. Historically, terms such as

malicious or wanton ―were used interchangeably with

recklessness.‖ David M. Treiman, Recklessness and the

Model Penal Code, 9 Am. J. Crim. L. 281, 293 (1981).42

1464 and risks creating an end-around indecency

restrictions.

15

Such a standard could permit ―willful

 

15

CBS also argues that the FCC must show it specifically

intended to violate the indecency prohibition in § 1464. CBS

relies on pre-Pacifica case law addressing prosecutions for

scripted broadcasts of obscene or indecent material. See

United States v. Smith, 467 F.2d 1126 (7th Cir. 1972);

Tallman v. United States, 465 F.2d 282 (7th Cir. 1972);

Gagliardo v. United States, 366 F.2d 720 (9th Cir. 1966).

These cases have limited value as they address criminal

prosecutions for scripted content. See Pacifica, 438 U.S. at

747 n.25 (Stevens, J., plurality op.) (differentiating precedents

addressing criminal prosecutions and the First Amendment by

noting ―[e]ven the strongest civil penalty at the Commission‘s

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