"Shouting fire in a crowded theater" is a misquote that refers
to Oliver Wendell Holmes, Jr.'s opinion in the United States
Supreme Court case Schenck v. United States in 1919 and that is
used to express the limits upon which free speech may be expressed
under the terms of the First Amendment of the United States
Constitution.
Holmes, writing for a unanimous majority, ruled that it was illegal
to distribute fliers opposing the draft during World War I. Holmes
argued this abridgment of free speech was permissible because it
presented a "clear and present danger" to the government's
recruitment efforts for the war. Holmes wrote:
The most stringent protection of free speech would not protect a
man falsely shouting fire in a theater and causing a panic. [...]
The question in every case is whether the words used are used in
such circumstances and are of such a nature as to create a clear
and present danger that they will bring about the substantive evils
that Congress has a right to prevent.
Holmes wrote of falsely shouting fire, because, of course, if there
were a fire in a crowded theater, one may rightly indeed shout
"Fire!". Falsely shouting "Fire!" in a crowded theater, i.e.
shouting "Fire!" when one believes there to be no fire in order to
cause panic, was interpreted not to be protected by the First
Amendment.
Schenck was later overturned by Brandenburg v. Ohio, which ruled
that speech could only be banned when it was directed to and likely
to incite imminent lawless action (e.g. a riot), the test which
remains until this day.
Some now see the Schenck argument to be mistaken, contending that
pamphleteer was more like yelling fire outside a building to
prevent people from entering than it was trying to encourage people
to stampede out.
Despite Schenck being overturned, the phrase "shouting fire in a crowded
theater" has since come to be known as synonymous with an action
that the speaker believes goes beyond the rights guaranteed by free
speech, reckless or malicious speech, or an action whose outcomes
are blatantly obvious.
Jacob Hornberger of the Future of Freedom Foundation, a libertarian
think tank, has stated that in most cases, free speech issues in
the US depend on whose property one is on at the time. If someone
falsely shouted "fire" and created a stampede which was clearly
against the wishes or theatre owner's policy of conduct; then the
theatre owner would be in his right to prepare charges against the
agitator. If, however, the theatre owner decides it would be good
for business to have patrons yells "Fire! Fire!" whenever they felt
like it, then that is within his right to do so.