A federal appeals court has thrown out a $1.21 million penalty against 44 ABC television stations for showing a womanâ€™s nude buttocks.
Walt Disney (NYSE:DIS), which owns ABC, traded 3% higher Tuesday.
The 2nd U.S. Circuit Court of Appeals dismissed the two-year old case, and the $27,500 fine for each of the 44 channels.
The investigation sought to determine whether the station violated broadcast indecency standards by showing the naked buttocks on an episode of â€śNYPD Blue.â€ť In the controversial episode, the female character was shown disrobing in preparation for a shower.
The decision arose from a ruling last year that the Federal Communication Commissionâ€™s indecency policy was unconstitutionally vague, according to a report by Reuters.
The regulator had tightened its indecency policy in 2004 after Janet Jacksonâ€™s shirt was accidentally ripped off, showing her bare breast during a half-time show at the Super Bowl.