Nine-sixteenths of a second has haunted CBS Corp. for nearly eight years. But a recent 3rd Circuit decision may have temporarily put the broadcast company at ease.

The 2004 Super Bowl, which CBS broadcast live, included a now- infamous split-second shocker: During the halftime show featuring musical artists Justin Timberlake and Janet Jackson, Timberlake “accidentally” tore off a piece of Jackson’s costume, briefly exposing her right breast to more than 90 million TV viewers. The so-called “wardrobe malfunction,” which aired for less than one second, prompted the Federal Communications Commission (FCC) to fine CBS and its affiliates a total of $550,000 for depicting a sexual organ, which violates its indecency policy.

CBS challenged the fine, arguing that the FCC had traditionally excused fleeting indecent images and profanity. The 3rd Circuit agreed and struck down the FCC’s fine, noting that the agency had inexplicably departed from its prior policy of excluding fleeting material from the scope of actionable indecency.

The FCC appealed, and in May 2009, the Supreme Court vacated and remanded the 3rd Circuit’s decision in CBS Corp. v. FCC. The high court reasoned that it should do so because of its ruling less than a week earlier in a similar case, FCC v. Fox Television Stations, in which it decided the FCC hadn’t acted improperly when it toughened up its indecency policy and found another broadcaster, Fox, liable for airing fleeting expletives that celebrities Cher and Nicole Richie uttered during the live broadcasts of the Billboard Music Awards in 2002 and 2003, respectively.

But on Nov. 2, 2011, the 3rd Circuit again threw out the FCC’s fine against CBS.

“While we can understand the Supreme Court’s desire that we re-examine our holdings in light of its opinion in Fox … we again set forth our reasoning and conclusion that the FCC … improperly imposed a penalty on CBS for violating a previously unannounced policy,” Judge Marjorie Rendell wrote for the 2-1 majority.

The 3rd Circuit’s ruling quells CBS’s legal troubles associated with the halftime mishap. But media law experts say CBS’s ultimate outcome won’t truly be clear until the Supreme Court renders its second decision in Fox, for which arguments are scheduled Jan. 10. The high court’s Fox decision, expected by June, should determine whether the FCC’s indecency standards are unconstitutionally vague.

Parallel Tracks

CBS and Fox have been “proceeding on parallel tracks,” says Kathleen Kirby, a partner at Wiley Rein. While CBS concerns fleeting nudity and Fox concerns fleeting expletives, both cases ultimately center on whether the FCC revised its indecency policy to crack down on fleeting material without explanation or sufficient warning to broadcasters, and whether the new policy is unconstitutionally ambiguous and arbitrary when it comes to repercussions against broadcasters.

For decades, the FCC had excused broadcasters for airing fleeting indecent content. But that changed during NBC’s live broadcast of the 2003 Golden Globe Awards, when music artist Bono said the “F-word” during an acceptance speech.

Initially, the FCC said Bono’s fleeting expletive didn’t violate its indecency policy. “That decision was consistent with the then-existing FCC case precedent and policy with respect to fleeting expletives occurring on live broadcasts,” says Brooks Pierce Partner Wade Hargrove.

But Congress took issue with the FCC’s decision to excuse NBC. Facing political pressure, the FCC adopted a tougher enforcement policy in 2004. However, the FCC didn’t fine NBC for Bono’s swearing because it wouldn’t have violated the indecency policy that existed at the time the Golden Globes aired. The 3rd Circuit argued in CBS that, following this logic, the FCC also should not have fined CBS for Jackson’s nudity, which aired before the policy change.

Chilling Effect

Since 2004, the FCC has boosted its scrutiny of broadcasters’ content, even content that is seemingly educational. For instance, a PBS affiliate was fined $15,000 in 2006 for airing a documentary on blues musicians because it featured foul language.

In 2007, the commission also in- creased the maximum forfeiture for violating its indecency regulations tenfold, from $32,500 per violation to $325,000 per violation. “And they’re imposing [the fine] not just on the broadcaster, but on all the affiliates that have aired the show, so it adds up to quite a lot of money,” says Elaine Goldenberg, a partner at Jenner & Block.

Experts say the FCC’s intensified enforcement, blurry definition of what is indecent, and potentially hefty fines has created a chilling effect among broadcasters (see “Possible Porn,” p. 68). Most recently, some news stations are hesitant to report live from the Occupy protests across the country. “That coverage is sanitized,” Kirby says. “They’re self-censoring because they are afraid that the mic might pick up some kind of fleeting expletive, and since Congress has increased the allowable fine for indecency violations to $325,000 per incident, that’s a potentially enterprise-threatening fine.”

Goldenberg agrees that the FCC’s policy has diminished informative programming. “Broadcasters have reluctantly chosen not to air documentaries about 9/11, documentaries about the war in Iraq—all kinds of things that have a lot of value,” she says.

While experts hesitate to predict the outcome of Fox and its impact on CBS, which the FCC may appeal, many hope that the high court will side with broadcasters.

“It seems to me it would be the right outcome if the court decides that the FCC’s indecency policy is unconstitutionally vague,” Goldenberg says.