"Shouting fire in a crowded theater" is a popular metaphor for speech or actions made for the principal purpose of creating unnecessary panic. The phrase is a paraphrasing of Oliver Wendell Holmes, Jr.'s opinion in the United States Supreme Court case Schenck v. United States in 1919, which held that the defendant's speech in opposition to the draft during World War I was not protected free speech under the First Amendment of the United States Constitution.
The paraphrasing does not generally include (but does usually imply) the word falsely, i.e., "falsely shouting fire in a crowded theater", which was the original wording used in Holmes's opinion and highlights that speech that is dangerous and false is not protected, as opposed to speech that is dangerous but also true.
Holmes, writing for a unanimous Court, ruled that it was a violation of the Espionage Act of 1917 (amended by the Sedition Act of 1918), to distribute flyers 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.
The First Amendment holding in Schenck was later partially overturned by Brandenburg v. Ohio in 1969, which limited the scope of banned speech to that which would be directed to and likely to incite imminent lawless action (e.g. a riot). The test in Brandenburg is the current Supreme Court jurisprudence on the ability of government to proscribe speech after that fact. Despite Schenck being limited, 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 obvious.