Earlier today, the federal court of appeals for the 3rd Circuit overturned the FCC’s $550,000 fine on CBS for the broadcast of Janet Jackson’s infamous 2004 Super Bowl Halftime Show.

The Third Circuit overturned the FCC’s decision on much the same grounds as the Court of Appeals for the Second Circuit overturned the FCC’s "Golden Globes" decision. Specifically, the Third Circuit held that the FCC could not abruptly abandon its long-standing policy of restrained enforcement of its indecency rules without sufficient notice of the change in policy or a reasonable justification for the change. Because the FCC failed to provide such notice or justification, its decision could not stand.

In addition, the Third Circuit found that the FCC improperly held the CBS stations liable for the actions of Ms. Jackson and fellow performer Justin Timberlake. CBS argued (the Third Circuit agreed) that Ms. Jackson and Mr. Timberlake were independent contractors and not employees for the purposes of that broadcast. Thus, CBS argued, the CBS stations should not have been held responsible for actions of individuals that were not its employees.
The FCC argued that, regardless of whether or not Ms. Jackson and Mr. Timberlake were employees, a broadcast licensee is in and of itself responsible for what is broadcast on its station. Although the Third Circuit found that such "strict liability" was appropriate in some circumstances, cases involving the First Amendment require the FCC to prove some degree of "scienter". "Scienter" roughly means "prior knowledge" or "prior intent", although the Third Circuit acknowledged that it is possible to find scienter even without actual prior knowledge if the party in question acts recklessly with regard what is being broadcast. For instance, according to the Third Circuit, a broadcaster’s failure to use available preventative technology, such as a delay for live programming, might be reckless and the broadcaster might have sufficient scienter to be held liable for anything contained in the live broadcast. With respect to CBS, the Third Circuit found that the evidence was insufficient for the court to make a determination.

The Third Circuit vacated the FCC’s order imposing the forfeiture on CBS and sent the case back to the FCC for further consideration. However, as the Supreme Court agreed to hear the FCC’s appeal on the substantially similar "Golden Globes" case from the Second Circuit, it seems likely that the FCC would want to consolidate that case with the Third Circuit’s decision and seek review of both at the same time.