The three-judge panel of the 3rd U.S. Circuit Court of Appeals ruled that the Federal Communications Commission "acted arbitrarily and capriciously" in issuing the fine for the fleeting image of nudity.

The 90 million people watching the Super Bowl, many of them children, heard Justin Timberlake sing, "Gonna have you naked by the end of this song," as he reached for Jackson's bustier.

The court found that the FCC deviated from its nearly 30-year practice of fining indecent broadcast programming only when it was so "pervasive as to amount to 'shock treatment' for the audience."

"Like any agency, the FCC may change its policies without judicial second-guessing," the court said. "But it cannot change a well-established course of action without supplying notice of and a reasoned explanation for its policy departure."

The 3rd Circuit judges — Chief Judge Anthony J. Scirica, Judge Marjorie O. Rendell and Judge Julio M. Fuentes — also ruled that the FCC deviated from its long-held approach of applying identical standards to words and images when reviewing complaints of indecency.