In a 5-4 decision released last week, the Supreme Court agreed with the Federal Communications Commission ("FCC"), finding the FCC's change in policy toward so-called "fleeting expletives" to be neither arbitrary nor capricious, and therefore not in violation of the Administrative Procedure Act. Significantly, however, the Court avoided the constitutional question—i.e., whether the FCC's new policy violates the First Amendment—but hinted that constitutionality may be an issue for a lower court to consider. Accordingly, although the constitutionality of the new policy is in doubt, under the current FCC regime, broadcasters may be fined up to $325,000 for a single utterance of the "F-word" or "S-word" broadcast outside of the 10:00 p.m. to 6:00 a.m. safe harbor.

A. Background

A fleeting expletive is a sexual or excretory reference only briefly expressed or shown during a live television or radio broadcast. Thirty years ago, in a case dealing with George Carlin's "Filthy Words" monologue, the FCC set forth its policy toward the regulation of indecent speech broadcast over the public airwaves. In finding Carlin's performance actionably indecent, the FCC relied in part on the fact that Carlin used his "seven dirty words" repeatedly throughout the monologue. Thus, it was FCC policy that repetitive use of an expletive be a prerequisite to finding indecency, at least where the expletive is used in a non-literal manner (i.e., where the expletive is used for emphasis or to convey emotion, rather than to describe a sexual or excretory function).

In 2004, the FCC changed its policy toward fleeting expletives. Ruling on an NBC broadcast of the Golden Globe Awards during which musician Bono commented, "This is really, really, f***ing brilliant," while accepting an award, the FCC for the first time declared that non-literal use of the expletive could be actionably indecent, even if the word is used only once. (Golden Globes Order). The FCC justified its change in policy by explaining that any variant of the "F-word" inherently has a vulgar sexual connotation, and therefore, even non-literal use of the term is patently offensive under contemporary community standards regardless of whether the word is used in isolation.

B. FCC v. Fox Television Stations, Inc.

Two years later, the FCC issued an order reaffirming its new stance on fleeting expletives. In its ruling, which gives rise to the recent Supreme Court action, the FCC found two Fox Television broadcasts of the Billboard Music Awards to contain indecent language. (Fox Order). In the first, the 2002 Billboard Music Awards, Cher stated in an acceptance speech that "[p]eople have been telling me I'm on the way out every year, right? So f*** 'em." A year later, during the 2003 Billboard Music Awards, award presenter Nicole Ritchie asked: "Have you ever tried to get cow sh** out of a Prada purse? It's not so f***ing simple." Expounding on its reasoning in support of the new policy toward fleeting expletives, the FCC explained that the old policy wrongly allowed networks an "automatic exemption" to broadcast expletives, so long as they are aired one at a time. Such an exemption, the FCC reasoned, forces viewers to take the "first blow" before a remedy can be administered. But despite finding both broadcasts to be actionably indecent, the FCC declined to levy a fine on Fox because the broadcasts occurred prior to the Golden Globes Order, which spelled out the new policy.

Nevertheless, Fox appealed the Fox Order to the U.S. Court of Appeals for the Second Circuit, arguing, among other things, that the FCC's new policy toward fleeting expletives violates the Administrative Procedure Act ("APA"). Under the relevant section of the APA, 5 U.S.C. § 706(2)(A), a court must set aside an agency decision that is arbitrary or capricious. Fox asserted that the FCC's decision to change its policy toward fleeting expletives was both arbitrary and capricious, because the FCC did not adequately explain its dramatic departure from prior rulings. The Second Circuit agreed. The court found that the agency's reason for changing its policy—the "first blow" theory"—bears no connection to the FCC's actual policy toward fleeting expletives and does not explain why a fleeting expletive was not deemed a "first blow" for the thirty years prior to the Golden Globes Order. In accordance with its decision, the Second Circuit vacated the Fox Order.

In response, the FCC appealed to the U.S. Supreme Court. Reviewing only the APA issue, the Court agreed with the FCC and reversed the Second Circuit's opinion. In an opinion written by Justice Scalia, the Court explained that the Second Circuit erroneously required a heightened standard to find compliance with the "arbitrary and capricious" language of the APA, whereby an agency must make clear why the reasons for adopting the original policy are no longer dispositive and why the new policy better effectuates the statute. According to the Court, such a heightened standard is unnecessary; all an agency must do to comply with the APA is give good reasons for the new policy.

Although the dissent argued that the FCC's new policy will stifle the speech of local broadcasters who cannot afford delay equipment, which would assist stations in complying with the new policy, the Court dismissed the argument out of hand, explaining that small town broadcasters are unlikely to face an increased risk of liability under the new policy. According to Scalia's majority opinion, because local programming typically involves less vulgarity than national broadcasts, and because local broadcasting is usually centered on breaking news programs, which are especially exempt from the indecency provisions, local broadcasters will not be subjected to greater risk under the new FCC policy.

C. What it means

Thus, the Supreme Court remanded the case back down to the Second Circuit for consideration of other matters. Currently, therefore, broadcasters must comply with the FCC's new policy that permits even a single utterance of the F-word or S-word to be actionably indecent or else risk being fined $325,000. Indeed, in the week since its ruling the Supreme Court has already ordered the U.S. Court of Appeals for the Third Circuit to re-examine its prior ruling in favor of CBS Corp. regarding the Janet Jackson "wardrobe malfunction" incident broadcast during the 2004 Super Bowl. Although the CBS case involves fleeting nudity rather than fleeting expletives, the Court has directed the Third Circuit to consider reinstating the $550,000 fine that the FCC had imposed on CBS, in light of the FCC v. Fox Television decision.

According to their risk tolerance, stations may want to consider installing delay equipment, as both the FCC and the Supreme Court believe use of such widely available delay equipment would be a pragmatic solution to the problem.

D. Constitutionality of the FCC's new policy still in question

Importantly, the Supreme Court did not consider or decide whether the FCC's new policy toward fleeting expletives violates the First Amendment. On remand, therefore, the Second Circuit may address the issue. Because that court already tipped its hand regarding the constitutional issue, it is likely the Second Circuit would find a constitutional violation. Accordingly, the case may end up back before the Supreme Court, to decide the constitutionality of the FCC's treatment of fleeting expletives as actionably indecent speech.

Based on the Supreme Court's latest decision on the Fox Order, the Court may indeed find the new policy unconstitutional. In addition to Scalia's majority opinion, Justices Thomas and Kennedy wrote separate concurring opinions, both of which hint that the constitutionality of the new policy is in question. Moreover, two dissenting justices, Justices Stevens and Ginsburg, were even more explicit in asserting the unconstitutionality of the new FCC regime. Therefore, although broadcasters must comply with the current FCC policy, that policy may not long be in place before it is found to be unconstitutional.

The First Amendment and Media attorneys at Frost Brown Todd continue to monitor this case and can provide advice on complying with the current FCC policy. If you would like more information, please contact Emily S. Meyer (513-651-6803), Richard M. Goehler (513-651-6711), or any other attorney in our First Amendment, Media & Advertising Law practice group at Frost Brown Todd LLC.