The court found that the Federal Communications Commission had unevenly applied its standards for judging whether broadcast content was indecent when it fined CBS $550,000 for the notorious "wardrobe malfunction." It said many other examples of broadcast nudity had gone unpunished before the incident, which triggered widespread viewer complaints.

CBS applauded the ruling, of course, saying it could point the way to a more restrained approach toward regulating the public airwaves. But the decision was denounced by the Parents Television Council, which said the court had ignored the views of parents who object to sexually explicit programming.

"If a striptease during the Super Bowl in front of 90 million people - including millions of children - doesn't fit the parameters of broadcast indecency, then what does?" asked Tim Winter, president of the group.

And FCC chairman Kevin Martin, while not saying what further course his agency would take in the case, suggested the legal fight over decency standards will continue when the U.S. Supreme Court hears arguments this fall in a similar case involving entertainer Cher, who used an obscenity during a 2002 broadcast of the Billboard Music Awards.

"I am surprised by today's decision and disappointed for families and parents," Martin said. "The Super Bowl is one of the most watched shows on television, aired during the hours when children are most likely to be in the audience. . . . This only highlights the importance of the Supreme Court's consideration of our indecency rules this fall."

Singer Jackson's right breast was briefly exposed - for about one-half of one second - at the end of a sexually suggestive dance routine during the halftime show, as her coperformer Justin Timberlake ripped away her bustier.

A three-judge panel of the U.S. Court of Appeals for the Third Circuit, calling the finale of the dance routine a "deceitful and manipulative act," said yesterday that the dancers had submitted a script and participated in rehearsals that gave no hint of what would really happen during the halftime show.

The majority opinion also said CBS could not be held liable for their conduct because Jackson and Timberlake were functioning as independent contractors.

Yet the court said that because the FCC had overlooked on numerous other occasions examples of broadcast nudity it was in effect changing the rules in the middle of the game.

"In finding CBS liable for a forfeiture policy, the FCC arbitrarily and capriciously departed from its prior policy," wrote chief judge Anthony J. Scirica. "Moreover, the FCC cannot impose liability on CBS for the acts of Janet Jackson and Justin Timberlake, independent contractors hired for the limited purposes of the halftime show."

The case hinged to a large degree on a series of rulings by the FCC in various decency cases going back to the late comedian George Carlin's filthy-words monologue.

Over the years, the FCC developed what the courts recognized as a restrained approach, tending to avoid penalties in cases where the use of obscenities or other offensive content was fleeting or spontaneous and not part of a calculated effort to shock audiences.

Although Jackson's breast baring also could arguably be called fleeting, the FCC found that such exceptions applied only to verbally offensive material and not to images.

"They established a new rule without notice and tried to put it in retroactively," said Jerome Shestack of the Philadelphia law firm Wolf Block. Shestack is a former president of the American Bar Association and one of the lawyers for CBS.

The Third Circuit panel evidently agreed.

"The FCC contends its restrained policy applied only to fleeting utterances - specifically fleeting expletives - and did not extend to fleeting images," the judges said. "But a review of the commission's enforcement history reveals that its policy on fleeting material was never so limited."

The case was joined by two former FCC officials, Henry Geller, its former general counsel, and Glen Robinson, a former FCC chairman, who argued in support of CBS that the FCC had gone too far.

Their lawyer, Nancy Winkelman, of Center City's Schnader Harrison, Segal & Lewis, said that as former FCC officials, Geller and Robinson had concluded that the agency was overreaching.

"Their concern is that the current FCC had gone too far on the side of . . . regulatory [control]," she said.

Carl Tobias, a constitutional law professor at the University of Richmond Law School, said the Third Circuit decision was straightforward - that the FCC had changed the rules in the middle of the game.

"Basically, the court said that the agency had not justified what it is doing," Tobias said.

Read the court ruling via http://go.philly.com/CBS-FCC

Inquirer staff writer Peter Mucha contributed to this report.