Cbs Corporation v. FCC ( 2011 )


Menu:
  •                                   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, 2008
    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)
    _____________
    Robert Corn-Revere, Esq. (ARGUED)
    Davis Wright Tremaine LLP
    1919 Pennsylvania, N.W., Suite 200
    Washington, D.C. 20005
    Jerome J. Shestack, Esq.
    WolfBlock
    1650 Arch Street, 22nd Floor
    Philadelphia, Pennsylvania 19103
    Nancy Winkelman, Esq.
    Schnader Harrison Segal & Lewis
    1600 Market Street, Suite 3600
    Philadelphia, Pennsylvania 19103
    Counsel for Petitioners
    Jacob M. Lewis, Esq. (ARGUED)
    Joseph R. Palmore, Esq.
    Nandan M. Joshi, Esq.
    Federal Communications Commission
    2
    Office of General Counsel
    445 12th Street, S.W.
    Washington, D.C. 20554
    Eric D. Miller, Esq.
    Thomas M. Bondy, Esq.
    United States Department of Justice
    Civil Division
    950 Pennsylvania Avenue, N.W., Room 5634
    Washington, D.C. 20530
    Counsel for Respondents
    John B. Morris, Jr., Esq.
    Center for Democracy & Technology
    1634 I Street, N.W., Suite 1100
    Washington, D.C. 20006
    Counsel for Amici Curiae-Petitioners,
    Center for Democracy & Technology and
    Adam Thierer, Senior Fellow,
    The Progress & Freedom Foundation
    Andrew J. Schwartzman, Esq.
    Media Access Project
    1625 K Street, N.W., Suite 1000
    Washington, D.C. 20006
    Counsel for Amicus Curiae-Petitioner,
    Center for Creative Voices in Media, Inc.
    Carter G. Phillips, Esq.
    Sidley Austin LLP
    1501 K Street, N.W.
    Washington, D.C. 20005
    Counsel for Amicus Curiae-Petitioner,
    3
    Fox Television Stations, Inc.
    Christopher T. Craig, Esq.
    Sparks & Craig LLP
    6862 Elm Street, Suite 360
    McLean, Virginia 22101
    Counsel for Amicus Curiae-Respondents,
    Parents Television Council, Inc.
    Thomas B. North
    Pro Se Amicus Curiae-Respondent
    David P. Affinito, Esq.
    Dell'Italia Affinito & Santola
    18 Tony Galento Plaza
    Orange, New Jersey 07050
    Counsel for Amicus Curiae-Respondent,
    Morality In Media, Inc.
    Steven H. Aden, Esq.
    Alliance Defense Fund
    801 G Street, N.W., Suite 509
    Washington, D.C. 20001
    Counsel for Amici Curiae-Respondents,
    Focus on the Family, Morality In Media, Inc.
    and Family Research Council
    _________________
    OPINION OF THE COURT
    _________________
    4
    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.
    5
    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
    .
    6
    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
    7
    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
    .
    8
    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.
    9
    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 . . . .
    10
    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
    11
    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
    12
    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
    .
    13
    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).
    14
    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‖:
    15
    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.
    16
    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
    17
    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 fleeting-
    material 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.
    18
    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 fleeting-
    material policy never applied to images but was always
    restricted to words. But we discern no such meaning in the
    relevant passage, which briefly observed:
    19
    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 non-
    literal, 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
    20
    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
    21
    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
    22
    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.
    23
    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 non-
    literal 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.
    24
    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.
    25
    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 fleeting-
    material 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.
    26
    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
    27
    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.
    28
    *        *    *
    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
    29
    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 nine-
    sixteenths 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,
    30
    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 single-
    interest 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,
    31
    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.
    32
    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).
    33
    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
    34
    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
    35
    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.
    36
    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.‖).
    37
    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 early-
    afternoon 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.‖).
    38
    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).
    39
    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
    .
    40
    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‖).
    41
    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).
    42
    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
    43
    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.
    44
    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
    45
    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
    46
    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
    47
    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.
    48
    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.
    49
    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
    50
    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
    51
    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:
    52
    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
    53
    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
    54
    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.‖).
    55
    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
    56
    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
    57
    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.
    58
    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).
    59
    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.
    60
    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
    61
    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
    62
    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 .
    . . .‖).
    63
    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 then-
    Mass 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.
    64
    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).
    65
    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.
    66
    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
    67
    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
    68
    (―[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)).
    69
    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.
    1
    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).
    2
    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
    3
    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
    4
    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
    5
    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
    6
    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
    7
    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
    8
    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
    9
    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
    10
    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)).
    11
    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).
    12
    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,
    13
    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.
    14
    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
    15
    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,‖
    16
    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
    17
    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
    18
    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
    19
    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
    20
    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
    21
    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.
    22
    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.‖
    23
    
    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
    24
    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
    25
    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
    26
    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.
    27
    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
    28
    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
    29
    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.
    
    30 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
    31
    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‖).
    32
    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
    33
    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.
    34
    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 non-
    delegable duty we rejected in our prior decision. Nor does it
    35
    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
    36
    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
    37
    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
    38
    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
    39
    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
    .
    40
    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).
    41
    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
    command does not include criminal prosecution‖).
    Furthermore, Pacifica did not require the FCC show specific
    intent for the civil forfeiture at issue there nor did the Court
    cite to any of the cases on which CBS relies.
    Even under the pre-Pacifica cases, this ―specific
    intent‖ requirement of § 1464 is satisfied if one should have
    known the utterance or broadcasting of such speech would
    violate the law. In Tallman v. United States, upon which
    CBS relies, the Seventh Circuit in interpreting § 1464
    concluded that ―specific intent‖ is present under the standard
    traditionally used at common law ―if the defendant knew or
    reasonably should have known that uttering the words he did
    over the air was a public wrong.‖ 
    465 F.2d at 288
    ; see also
    Smith, 
    467 F.2d at
    1130 n.2 (citing Tallman for the
    proposition ―an appropriate instruction as to specific intent
    under this statute might be that ‗the defendant knew or
    reasonably should have known that uttering the words he did
    over the air was a public wrong‘‖). Even these pre-Pacifica
    42
    blindness‖ or allow broadcasters to fail to take reasonably
    available precautions (such as implementing delay
    technologies) despite any obvious risks, and then evade
    responsibility if indecent material is broadcast, claiming they
    neither intended nor were aware that the indecent material
    would be broadcast. End runs might also be effected through
    the use of independent contractors. Accordingly, I do not
    believe liability for indecent broadcasts requires a showing of
    actual knowledge, actual awareness, or intent on the part of
    the broadcaster.16
    2.
    The question remains what is the proper standard of
    recklessness under § 1464. As an alternative argument, CBS
    precedents addressing criminal prosecutions recite an
    ―objective‖ or ―reasonable person‖ standard for scienter.
    16
    The cases cited by CBS in defense of its proposed mens rea
    standard are inapposite, because in each case Congress had
    already provided a scienter standard as to some elements of
    the statutory offense. See Flores-Figueroa v. United States,
    
    129 S. Ct. 1886
     (2009); United States v. X-Citement Video,
    Inc., 
    513 U.S. 64
     (1994). In each of these cases, the statute in
    question contained some mental state language, such as
    ―knowingly,‖ that when read naturally did not appear to
    modify all the elements in the statute, see 18 U.S.C. §
    1028A(a)(1); 
    18 U.S.C. § 2252
    . The Court only addressed
    whether the express scienter term applied to every element of
    the statutory offense or whether the term modified a single
    element of the offense. These cases do not address what
    mental state requirement should be read into provisions like
    
    47 U.S.C. § 503
    (b)(1)(D) and 
    18 U.S.C. § 1464
     that contain
    no mens rea language whatsoever.
    43
    contends there is more than one possible definition of
    recklessness, and the more demanding criminal standard
    ought to apply here. As the Supreme Court has explained:
    [t]he civil law generally calls a person reckless
    who acts or (if the person has a duty to act) fails
    to act in the face of an unjustifiably high risk of
    harm that is either known or so obvious that it
    should be known. The criminal law, however,
    generally permits a finding of recklessness only
    when a person disregards a risk of harm of
    which he is aware.
    Farmer, 511 U.S. at 836-37 (internal citations omitted); see
    also Safeco Ins. Co. of Am. v. Burr, 
    551 U.S. 47
    , 68 n.18
    (2007) (―Unlike civil recklessness, criminal recklessness also
    requires subjective knowledge on the part of the offender.‖).
    In my view, the FCC may on remand seek a civil
    forfeiture under 
    47 U.S.C. § 503
    (b)(1)(D), but CBS‘s alleged
    liability is predicated on its violation of 
    18 U.S.C. § 1464
    , a
    criminal statute. For this reason, CBS contends the level of
    scienter cannot vary based on whether the FCC pursues civil
    remedies or the Department of Justice charges criminal
    offenses. Notwithstanding the civil character of the forfeiture
    action, CBS contends it can be held liable for a forfeiture
    penalty only if it were criminally reckless—if it disregarded
    an unjustifiably high risk of broadcast indecency of which it
    was aware. Farmer, 511 U.S. at 836-37. The FCC counters
    that in Pacifica the Supreme Court already interpreted the
    standard for civil forfeitures for indecency violations
    independent from § 1464‘s criminal applications, making
    clear the civil recklessness standard applies.
    44
    I believe a civil standard best comports with
    Congressional intent. In 1960, Congress expanded the civil
    forfeiture provisions of the Federal Communications Act to
    allow the FCC greater flexibility to regulate the broadcast
    medium. Before the 1960 Act, the FCC‘s regulatory tools
    were limited to revoking the broadcaster‘s license or asking
    the Department of Justice to commence criminal
    proceedings.17 Communication Act Amendments, 1960, H.R.
    Rep. No. 86-1800, at 17. The FCC asked Congress to
    ―provide it with an effective tool in dealing with violations
    where revocation or suspension does not appear to be
    appropriate.‖     Id.    The House Report explaining the
    amendments indicated that to achieve the desired flexibility
    the civil forfeiture provisions should be read as independent
    from other enforcement provisions. The Report states ―the
    FCC will not be precluded from ordering a forfeiture merely
    because another type of sanction or penalty has been or may
    be applied to the licensee or permittee.‖ Id.
    The most telling argument in favor of a civil standard
    is the Supreme Court‘s opinion in Pacifica. As noted by the
    FCC, the plurality in Pacifica recognized that Congress
    intended the civil provisions of the Communications Act to be
    interpreted and applied apart from the criminal provisions.
    The plurality stated in footnote 13:
    The statutes authorizing civil penalties
    incorporate § 1464, a criminal statute. See 47
    17
    Prior to 1960, § 503 only authorized forfeitures for
    accepting rebates or offsets that deviated from the tariff rates
    for the transmission of wire or radio messages. Federal
    Communications Act of 1934, Pub. L. No. 73-416, § 503, 
    48 Stat. 1064
    , 1101 (1934).
    
    45 U.S.C. §§ 312
    (a)(6),     312(b)(2),     and
    503(b)(1)(E) (1970 ed. and Supp. V). But the
    validity of the civil sanctions is not linked to the
    validity of the criminal penalty. The legislative
    history of the provisions establishes their
    independence. As enacted in 1927 and 1934,
    the prohibition on indecent speech was separate
    from the provisions imposing civil and criminal
    penalties for violating the prohibition. Radio
    Act of 1927, §§ 14, 29, and 33, 
    44 Stat. 1168
    and 1173; Communications Act of 1934, §§
    312, 326, and 501, 
    48 Stat. 1086
    , 1091, and
    1100, 
    47 U.S.C. §§ 312
    , 326, and 501 (1970 ed.
    and Supp. V). The 1927 and 1934 Acts
    indicated in the strongest possible language that
    any invalid provision was separable from the
    rest of the Act. Radio Act of 1927, § 38, 
    44 Stat. 1174
    ; Communications Act of 1934, §
    608, 
    48 Stat. 1105
    , 
    47 U.S.C. § 608
    . Although
    the 1948 codification of the criminal laws and
    the addition of new civil penalties changed the
    statutory structure, no substantive change was
    apparently intended. Cf. Tidewater Oil Co. v.
    United States, 
    409 U.S. 151
    , 162. Accordingly,
    we need not consider any question relating to
    the possible application of § 1464 as a criminal
    statute.
    Pacifica, 
    438 U.S. at
    739 n.13. Under Pacifica, the level of
    scienter to prove a violation of § 1464 need not be the same
    for both criminal and civil applications. Of course, the
    respective penalties are different. Violation of 
    18 U.S.C. § 1464
     carries a statutory maximum penalty of up to two years
    46
    imprisonment and a fine of up to $250,000 for individuals and
    $500,000 for organizations. 
    18 U.S.C. §§ 1464
    , 3571(b)-(c).
    At the time of the alleged violation,18 a forfeiture under 
    47 U.S.C. § 503
    (b)(1) carried a maximum forfeiture of §27,500
    for each station. Reconsideration Order, 21 FCC Rcd. at
    6654, ¶ 2. As the FCC found twenty stations aired the
    indecent material in the Halftime Show, it imposed a
    forfeiture on CBS of $550,000 (twenty violations at the
    maximum $27,500 per violation). Id.
    CBS relies on FCC v. American Broadcasting Co., 
    347 U.S. 284
     (1954). In ABC, the FCC desired to ban ―give
    away‖ contests where radio and television stations would
    distribute prizes to listeners and viewers who called in and
    correctly answered a question or solved a puzzle. 
    347 U.S. at 286-87
    . To this end, the FCC promulgated regulations
    interpreting 
    18 U.S.C. § 1304
    , which prohibits broadcasting
    ―any advertisement of or information concerning any lottery,
    gift enterprise, or similar scheme, offering prizes dependent
    in whole or in part upon lot or chance.‖ 
    Id. at 285
    . The FCC
    defined games of chance to include ―give away‖ contests. 
    Id. at 286
    . Prior to adopting the regulation, the FCC had failed to
    persuade the Department of Justice to pursue criminal actions
    against such programs and had urged Congress
    unsuccessfully to amend the law. 
    Id. at 296
    . Additionally,
    the Post Office, which administered a similar statute
    involving the mails, and the Department of Justice had
    18
    In 2006, Congress added 
    47 U.S.C. § 503
    (b)(2)(C) which
    raised maximum penalties for those found ―to have broadcast
    obscene, indecent, or profane language‖ to $325,000 per
    violation, not to exceed an aggregate of $3 million for any
    single act of failure to act. Broadcast Decency Enforcement
    Act of 2005, Pub. L. No. 109-235, 
    120 Stat. 491
    , 491 (2006).
    47
    interpreted the same statutory language to exclude the type of
    program the FCC wished to regulate. 
    Id. at 294
    . The Court
    concluded ―[t]here cannot be one construction for the Federal
    Communications Commission and another for the
    Department of Justice.‖ 
    Id. at 296
    ; see also Leocal v.
    Ashcroft, 
    543 U.S. 1
    , 11-12 n.8 (2004); United States v.
    Thompson/Center Arms Co., 
    504 U.S. 505
    , 506-07 (1992)
    (plurality).19 CBS contends we must construe § 1464 in the
    exact same manner as if this were a criminal prosecution.20
    There is some merit in CBS‘s position that, as a
    general matter, a statute should be read consistently in its
    criminal and civil applications. But in ABC (and also Leocal
    and Thompson), the Court construed the literal text of a
    statute, finding no good reason to apply different
    19
    In Leocal v. Ashcroft, 
    543 U.S. 1
     (2004), when interpreting
    the definition of ―crime of violence‖ contained in 
    18 U.S.C. § 16
     as applied to a civil deportation proceeding, the Court
    noted that if the definition were ambiguous it would apply the
    rule of lenity used in criminal proceedings because the statute
    ―has both criminal and noncriminal applications.‖ 
    Id.
     at 12
    n.8. Similarly, in United States v. Thompson/Center Arms
    Co., the Court had to define when a firearm was ―made‖ to
    determine if a tax on the ―making‖ was owed to the
    government. 
    504 U.S. 505
    , 506-07 (1992) (plurality). To
    resolve the issue, the Court applied the rule of lenity because
    ―although it is a tax statute that we construe now in a civil
    setting, the [statute] has criminal applications.‖ 
    Id. at 517
    ;
    see also 
    id. at 523
     (Scalia, J., concurring in judgment).
    20
    Justice Stewart‘s dissent raised the argument CBS raises
    here that the statute must be read in keeping with ABC,
    Pacifica, 
    438 U.S. at
    780 n.8 (Stewart, J., dissenting), a
    proposition the plurality rejected in footnote 13.
    48
    constructions for civil actions and criminal prosecutions. In
    this case, there is no text to interpret. The statutes (18 U.S.C
    § 1464 and 
    47 U.S.C. § 503
    (b)(1)(D)) are silent on scienter;
    as a consequence, we must apply the constitutionally required
    level of scienter. Furthermore, ―[i]f [Congress‘s] intent is
    made plain, it is unnecessary for us to refer to other canons of
    statutory construction, and indeed we should not do so.‖ In re
    Am. Home Mortg. Holdings, Inc., 
    637 F.3d 246
    , 254-55 (3d
    Cir. 2011). As I have noted, the Supreme Court in Pacifica
    concluded Congress intended the specific provision at issue to
    be interpreted for civil forfeitures without regard to its
    application in criminal prosecutions. Pacifica, 
    438 U.S. at
    739 n.13. Accordingly, I would read into the statute only the
    scienter necessary in this context for a civil forfeiture order—
    the objective standard of civil recklessness.
    3.
    If we were to reject, as I think we should, CBS‘s
    arguments under the APA, at issue would be whether the
    standard of recklessness for a civil forfeiture under
    §503(b)(1)(D) is subjective (knowledge or awareness of an
    unjustifiably high risk of harm) or objective (should have
    been aware of such a risk). I believe an objective standard for
    recklessness is sufficient to separate wrongful from otherwise
    innocent conduct.21 Adoption of a subjective standard,
    21
    In practice the distinction between a subjective or an
    objective standard may not always result in differences on
    liability. The law has traditionally allowed the use of
    objective evidence to prove a party‘s subjective state of mind.
    See Schiavone Constr. Co. v. Time, Inc., 
    847 F.2d 1069
    , 1090
    (3d Cir. 1988) (―[O]bjective circumstantial evidence can
    49
    namely that for live television broadcasts the broadcaster
    must know or be aware indecency will occur, risks
    encouraging deliberate ignorance or failure to use available
    preventive measures such as delay technology.
    In addition to comporting with Congress‘s intent in
    creating the civil forfeiture provision of § 503(b)(1)(D), a
    civil recklessness standard provides protection commensurate
    with indecency‘s constitutional status. The First Amendment
    requires we apply ―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)
    suffice to demonstrate actual malice.‖). The Supreme Court
    has noted:
    We might observe that it has been some time
    now since the law viewed itself as impotent to
    explore the actual state of a man‘s mind. See
    [Roscoe] Pound, The Role of the Will in Law,
    
    68 Harv. L. Rev. 1
     [1954]. Cf. American
    Communications Ass‟n, C.I.O., v. Douds, 
    339 U.S. 382
    , 411 [1950]. Eyewitness testimony of
    a bookseller‘s perusal of a book hardly need be
    a necessary element in proving his awareness of
    its contents. The circumstances may warrant the
    inference that he was aware of what a book
    contained, despite his denial.
    Smith v. California, 
    361 U.S. 147
    , 154 (1959); see also
    Colorado v. Hall, 
    999 P.2d 207
    , 220 (Colo. 2000) (―In
    addition to the actor‘s knowledge and experience, a court may
    infer the actor‘s subjective awareness of a risk from what a
    reasonable person would have understood under the
    circumstances.‖).
    50
    (quoting X-Citement Video, 
    513 U.S. at 72
    ). The issue
    presents a difficult question of constitutional law, as the
    plurality in Pacifica noted when it stated, ―the constitutional
    protection accorded to a communication containing such
    patently offensive sexual and excretory language need not be
    the same in every context‖ and noted the Court ―tailored its
    protection‖ of speech ―to both the abuses and the uses to
    which it might be put.‖ Pacifica, 
    438 U.S. at
    747 & n.24. At
    a minimum, the FCC must show CBS had a sufficient level of
    culpability to justify a civil forfeiture. Because displays of
    indecent material ―surely lie at the periphery of the First
    Amendment concern‖ an objective standard is appropriate.
    Fox, 
    129 S. Ct. at 1819
     (quoting Pacifica, 
    438 U.S. at 743
    ).
    Furthermore, an objective standard is not without precedent.22
    22
    In other areas such as use of ―fighting words‖—words
    inherently likely to provoke a violent reaction—the Court has
    looked at what reaction a reasonable speaker would expect
    from the utterance of her speech. See Chaplinsky v. New
    Hampshire, 
    315 U.S. 568
    , 573 (1942). Recent Supreme
    Court cases have reaffirmed that some categories of speech
    are entitled to lesser or even no constitutional protection.
    There are traditional, though limited, categories where the
    First Amendment has not protected those who would
    ―disregard these traditional limitations.‖ United States v.
    Stevens, 
    130 S. Ct. 1577
    , 1584 (2010) (internal quotation
    omitted). These categories (including obscenity) ―are ‗well-
    defined and narrowly limited classes of speech, the
    prevention and punishment of which have never been thought
    to raise any Constitutional problem.‘‖           
    Id.
     (quoting
    Chaplinsky, 
    315 U.S. at 571-72
    ).
    Unlike      obscenity,    indecency     enjoys   some
    constitutional protection, but of a lesser kind. See Pacifica,
    51
    It is not sufficient to show that CBS should have acted
    differently or was merely negligent. Inadvertence or common
    negligence will not suffice. CBS contends there is no
    evidence to support a finding that it acted recklessly. But this
    is a question of proof committed to the FCC in the first
    instance. CBS and the FCC continue to contest critical
    issues.       One consideration is the availability of delay
    technology. CBS and the FCC dispute whether video delay
    technology could have been implemented at the time of the
    incident. They also dispute whether CBS should have
    anticipated that indecent material could be broadcast—e.g.,
    whether Jackson‘s choreographer‘s ―shocking moments‖
    prediction should have put CBS on notice. Since the FCC
    appears to have based its forfeiture orders on an erroneous—
    or, at the least, unclear—standard of liability, after rejecting
    CBS‘s APA arguments, I would remand to allow the agency
    to measure CBS‘s conduct against the proper mens rea
    standard.
    IV.
    In addition to the arguments addressed, CBS contests
    the FCC‘s forfeiture orders on the ground that the agency‘s
    multi-factor,    contextual     indecency     standard     is
    unconstitutionally vague. In its most recent decision in Fox,
    the United States Court of Appeals for the Second Circuit
    endorsed this view, see Fox Television Stations, Inc. v. FCC,
    
    438 U.S. at 748
     (―Patently offensive, indecent material
    presented over the airwaves confronts the citizen, not only in
    public, but also in the privacy of the home, where the
    individual‘s right to be left alone plainly outweighs the First
    Amendment rights of an intruder.‖). An objective standard
    comports with this peripheral status.
    52
    
    613 F.3d 317
     (2d Cir. 2010), and CBS encourages us to
    follow suit. In Fox, however, the constitutional question was
    the primary, if not exclusive, issue left in the case after the
    Supreme Court‘s remand. Here, it may be possible to dispose
    of the action without resolving the constitutional question.
    ―A fundamental and longstanding principle of judicial
    restraint requires that courts avoid reaching constitutional
    questions in advance of the necessity of deciding them.‖
    Lyng v. Nw. Indian Cemetery Protective Assn., 
    485 U.S. 439
    ,
    445 (1988). Therefore, I would not address the constitutional
    issue.
    V.
    For the foregoing reasons, I would grant the petition
    for review, vacate the FCC‘s forfeiture orders, and remand for
    consideration of the forfeiture order under the proper
    standard.
    53
    

Document Info

Docket Number: 06-3575

Filed Date: 11/2/2011

Precedential Status: Precedential

Modified Date: 12/22/2014

Authorities (51)

Castaneda Castillo v. Gonzales , 488 F.3d 17 ( 2007 )

South Shore Hospital, Inc. v. Thompson , 308 F.3d 91 ( 2002 )

Crédit Agricole Corporate & Investment Bank New York Branch ... , 637 F.3d 246 ( 2011 )

United States v. Various Articles of Merchandise, Schedule ... , 230 F.3d 649 ( 2000 )

national-audubon-society-sierra-club-the-wilderness-society-conservation , 132 F.3d 7 ( 1997 )

fox-television-stations-inc-cbs-broadcasting-inc-wls-television , 489 F.3d 444 ( 2007 )

action-for-childrens-television-american-civil-liberties-union-the , 58 F.3d 654 ( 1995 )

The George Hyman Construction Company v. James E. Brooks , 963 F.2d 1532 ( 1992 )

Dominic Peter Gagliardo v. United States , 366 F.2d 720 ( 1966 )

United States v. Charles P. Smith, Jr. , 467 F.2d 1126 ( 1972 )

CBS Corp. v. Federal Communication Commission , 535 F.3d 167 ( 2008 )

Richard L. Tallman v. United States , 465 F.2d 282 ( 1972 )

Schiavone Construction Co. And Ronald A. Schiavone, ... , 847 F.2d 1069 ( 1988 )

sierra-club-wilderness-society-texas-committee-on-natural-resources-v-r , 185 F.3d 349 ( 1999 )

Trinity Broadcasting of Florida, Inc. v. Federal ... , 211 F.3d 618 ( 2000 )

Lemoyne-Owen College v. National Labor Relations Board , 357 F.3d 55 ( 2004 )

Pacifica Foundation v. Federal Communications Commission ... , 556 F.2d 9 ( 1977 )

Worldcom, Inc. v. Federal Communications Commission and ... , 288 F.3d 429 ( 2002 )

Ramaprakash v. Federal Aviation Administration , 346 F.3d 1121 ( 2003 )

Cassell v. Federal Communications Commission , 154 F.3d 478 ( 1998 )

View All Authorities »