Why the U.S. Court of Appeals for the Third Circuit Declined to Change Its Mind About “Nipplegate,” Despite a Recent Opportunity From the U.S. Supreme Court to Do So

On November 2, a two-judge panel majority of the U.S. Court of Appeals for the Third Circuit issued its second opinion in a high-profile broadcast indecency case.  The opinion was especially interesting, for three reasons:

First, the Supreme Court had sent the case back to the Third Circuit for a second look, in light of the High Court’s April 28, 2009, decision in FCC v. Fox Television Stations, Inc..

Second, the Third Circuit panel majority reached essentially the same decision it had reached initially, after taking another look at the case in light of the precedent set by Fox.  But this time, one judge on the panel, Judge Scirica, dissented, when he had previously joined his colleagues’ first opinion.

Third, the case centers on one of the most scandalous incidents ever broadcast on TV—the 2004 Janet Jackson “Nipplegate” moment.  As readers may well recall, in a Superbowl Halftime Show performance, Justin Timberlake ripped off Jackson’s bustier, revealing a silver sunburst ornament, and her nipple, on the air—for less than a second.

The Third Circuit—both in its first opinion, issued on July 21, 2008; and in its second opinion, issued on November 2 of this year on behalf of a two-judge majority—held that the FCC had acted arbitrarily in imposing a $550,000 penalty on CBS for the “Nipplegate” broadcast.

The Third Circuit reasoned that the penalty was based on a policy that the FCC had not yet announced, and thus, a policy as to which CBS did not have fair notice.

That policy was, the Third Circuit concluded, arbitrary and capricious and thus a violation of the Administrative Procedure Act (APA), a federal statute that aims to ensure that administrative agency decisions are fair, in that they follow the relevant rules. One of those rules requires that notice be given before a policy change can be enforced.

In this column, I’ll describe the proceedings regarding this case, and explain why I expect it will eventually end up at the Supreme Court.

The Third Circuit’s First “Nipplegate” Opinion

The first time around, the FCC conceded before the Third Circuit that it had a policy allowing fleeting expletives, but claimed that its policy did not extend to other fleeting indecency, such as fleeting nudity.  Thus, the FCC urged the Third Circuit to hold that the Nipplegate incident did not fall within the policy for fleeting broadcast material, and that CBS could therefore be properly subject to the whopping fine that had been imposed.

However, after a careful review of a full three decades’ worth of regulation, the Third Circuit concluded that, in practice, the FCC had never punished fleeting indecency, regardless of whether it was spoken or visual (like Jackson’s).  Instead, the FCC had only punished pervasive indecency, whether visual or verbal.  And, the Third Circuit held, the FCC could not suddenly change its policy retroactively, consistent with the APA.

Politically, it seems clear what probably happened here.  The FCC had given a pass to fleeting indecency in the past, on various lower-profile programs.  This, however, was the Superbowl, after all, and the calls for the FCC to penalize CBS for revealing Jackson’s nipple were very loud and very numerous.

In the face of public anger, the FCC was surely under intense pressure to impose a heavy fine on CBS, and it desperately wanted to do so.  But that kind of pressure is exactly why policies are required to be made—so that they will apply to everyone equally, not just to those who make news, or to those who agitate the public.

Another factor that may explain why the FCC departed from its usual policy here is that Jackson’s moment seemed to have been planned, not inadvertent, and that must have galled the FCC. An accident is one thing; deliberate flouting of social mores is another.

(Jackson claimed years later on Oprah that it was all an accident, and it’s still hard to determine, even now, what the truth really was.)

Yet the FCC should have accepted some blame here, too:  Its policy might easily have distinguished between planned and unintentional fleeting material from the very beginning; it’s an obvious distinction.

Moreover, the FCC also might have distinguished situations where the network was innocent of fault, but the person exposing himself or herself acted intentionally, from those where the fleeting material was planned to be broadcast all along.

Again, it’s an obvious distinction, and a matter of basic fairness:  Networks shouldn’t be held accountable for an act that surprises them, too—at least, as long as their censors quickly do what they can to minimize what is seen, and for how long.

Thus, the FCC didn’t have a sensible policy in place when the “Nipplegate” incident happened.  Also, the FCC mischaracterized its own past policy:  When the Third Circuit panel looked at the evidence that had accrued over the course of decades, it determined what the real, practical policy had been before the Nipplegate incident.  And, the Third Circuit noted that pursuant to administrative law, federal agencies cannot just change their policies and procedures without providing a reasoned analysis to explain the change.

Rather than providing such an analysis, the FCC had simply refused to admit that it had changed its policy—despite the three decades’ worth of evidence the Third Circuit analyzed showing that, in fact, it had. Unsurprisingly, then, the Third Circuit panel unanimously ruled against the FCC.

The Third Circuit’s Second “Nipplegate” Opinion

After the Supreme Court issued its decision in Fox, the Third Circuit confronted the “Nipplegate” case once again, when the High Court sent it down for reconsideration.  The result was that the panel majority stuck, essentially, with its original decision, while Judge Scirica dissented.

The panel majority noted, in its second opinion, that in the Supreme Court’s decision in Fox—unlike in the Third Circuit’s first “Nipplegate” decision—the FCC did, in fact, acknowledge that it was making a change in policy.

Now, the FCC said, it would sometimes punish even fleeting expletives—so, for instance, if a movie star swore once in his or her acceptance speech at an awards show, then that single expletive could now (after the policy change the FCC had announced) trigger a fine.  Moreover, a fine could be imposed even if the expletive was being used simply as an exclamation of joy and surprise at having won an award.

Not only did the FCC announce a change in policy, this time, it actually tried to justify the change to the public, as follows: “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.”

(In my own view, these reasons still fall short of rational.  How can a mere expletive be deemed a “blow” to a child, or anyone else?  And why do we still care about expletives, almost 40 years after George Carlin decisively debunked their mystique in his “Seven Words You Can Never Say on Television” monologue?  The taboo against expletives seems to be bending—with only certain letters of “dirty words” now omitted—but it  has yet to break.  It ought to.)

The Supreme Court, in Fox, deemed the FCC’s reasons to be sufficient rational to serve as the basis for its change in policy.  It also praised the agency for declaring that this would be a forward-looking policy, without retroactive enforcement against the offending network, NBC—since such enforcement would have raised due process problems, as the policy would be applied to those without notice of it.

Interestingly, then, the Third Circuit panel majority actually saw the Supreme Court’s Fox decision as bolstering, not undermining, its own original decision in the “Nipplegate” case. The panel majority pointed out that the FCC plainly knows how to give the public notice when its policy is changing—rather than leaving broadcasters and their attorneys to play guessing games on what the current policy really is.  That didn’t happen in the “Nipplegate” case, but it did happen in Fox.

The panel majority also pointed out that, in Fox –unlike in the “Nipplegate” case—the FCC wisely decided not to punish a broadcaster pursuant to a rule that had not yet been announced.  There, the FCC abided by the ideal of fair notice—suggesting to the Third Circuit panel majority that the agency should have done the same in the “Nipplegate” case.

The Signs Suggest That the High Court May Well Take This Case

Although much of the Third Circuit panel majority’s analysis is persuasive, it’s hard to believe that the Supreme Court will be happy with its conclusion that the Fox case only makes its original views even more correct.

Indeed, the High Court may feel that the Third Circuit panel majority, invited to step into the Supreme Court’s shoes and fully understand Fox, instead obstinately stayed glued into its own shoes, continuing to insist that its own perspective was the correct one.

The FCC and Judge Scirica, in dissent, disagreed with the panel majority’s conclusion.  They believe that an FCC enforcement notice issued just days before the 2004 “Nipplegate” Halftime Show made it clear that even fleeting nudity could be met with a fine.  But, as the panel majority points out, that was an enforcement notice—reflecting tentative conclusions, not a final decision.  Moreover, this is an area where regulatory clarity is key, since First Amendment interests are at issue, and unclear regulations create “chilling effects” on speech that themselves have a constitutional dimension.

The dissent also suggests that the FCC’s policy regarding fleeing material never covered fleeting nudity in the first place—a dispute that will require still more parsing of the record regarding FCC doctrine and enforcement.

Ultimately, it seems very likely that the Supreme Court will take up this case.  It’s complex and important, and it seems likely that the Court won’t view the Third Circuit as having done what it should have done on remand.  Finally, the First Amendment dimension of the case makes it interesting and significant—and, in light of the chilling effects I described above, it may well be ripe for Court review.