But the 3rd Circuit ruled on a narrower issue, overturning the $550,000 fine because it found that the FCC had changed its policy about nudity when it fined CBS. The fine was "arbitrary and capricious," the court ruled.
"We are pleased that the court did not question the FCC’s statutory responsibility to regulate indecent broadcasting," an FCC spokesman said. "While we are disappointed by the court of appeal’s decision, we note that the court overturned the FCC’s 2006 forfeiture order on narrow procedural grounds."
Singer Justin Timberlake famously described Jackson's exposure as a "wardrobe malfunction."
The Parents Television Council, which lobbied the FCC to levy the fine, was "outraged" by the decision.
“Today’s ruling reaches the level of judicial stupidity and is a sucker-punch to families everywhere," the group's president, Tim Winter, said in a statement. He urged the Supreme Court to reverse the decision.
This post was updated at 3:12 p.m.