An animal rights group claimed that its proposed sculpture of a sad-faced circus elephant in shackles was a form of political speech that should not be silenced.

But a federal appeals court said yesterday that it could not quarrel with the city's view of the statue: This wasn't a case about free speech. This was just bad art.

The ruling was a victory for the District's arts commission, which turned down a proposal to display the teary-eyed elephant during the "Party Animals" street art project in 2002. The court concluded that art is an arbitrary business, ruling that the commission could make its own decisions about the project's designs and messages.

The aesthetic question triggered a court fight after the city asked artists to compete to design one of 200 statues of donkeys or elephants for public display. The program was patterned after humorous public art exhibits in other cities.

People for the Ethical Treatment of Animals proposed a polyurethane statue of a chained elephant as a way to convey a somewhat discordant message: that circuses were abusive and not a place where animals were doing a lot of partying. The elephant wore a blanket that read: "The CIRCUS is Coming, See SHACKLES, BULL HOOKS, LONELINESS -- All Under The Big Top."

The D.C. Commission on the Arts and Humanities turned down the design. Anthony Gittens, the commission's executive director, explained at the time that it was unacceptable because it was a "political billboard." PETA sued.

Until yesterday, PETA had the upper hand in the court fight.

U.S. District Judge Richard J. Leon issued an order in August 2002 that cleared the way for the sculpture's display. But by then, only one month remained in the five-month exhibit. The judge later ordered the city to refund $4,000 in sponsorship fees paid by PETA.

Leon ruled that the arts commission violated PETA's free speech rights because it allowed many other political messages in other designs. One elephant, for example, held a note that read "Just Say No To Ivory," and another carried the message "In GOP we trust."

In its ruling yesterday, the U.S. Court of Appeals said that the District had a right to be aesthetically choosy in a campaign it hoped would capture the "whimsical and imaginative side" of the capital.

"As a speaker and as a patron of the arts, the government is free to communicate some viewpoints while disfavoring others, even if it is engaging -- in PETA's words -- in utter arbitrariness," the appellate judges wrote.

The D.C. attorney general's office said it was pleased with the decision, which means the city will not have to pay back the $4,000.

"The ruling ensures that the Commission on the Arts and Humanities is able to control the projects it sponsors," said Traci Hughes, spokeswoman for the attorney general's office.

Art Spitzer, legal director of the D.C. chapter of the American Civil Liberties Union, and Matt Penzer, legal counsel for PETA, who worked on the case, said they were disappointed in the decision but had not decided whether to continue with an appeal.

"We know the artistic expression wasn't really the reason for the decision," Penzer said. "They accepted the same design with a happy face, and rejected the one with a sad face."