“Hate speech” is often protected by the First Amendment, particularly when it concerns political issues and takes places in a public forum (which bus advertising has been found to be). There are exceptions to 1st Amendment protection of speech against government restriction, such as when speech is obscene, libelous, or constitutes “fighting words” likely to inflict injury and provoke a breach of the peace. .
In the NY case, the MTA refused Geller’s ad because it violated their “no-demeaning” rules (a form of the “fighting words” exception) which applied to cases where specified categories of people were being demeaned – because of their race, religion, gender, and the like. The court decision against MTA turned on the fact that the no-demeaning rule was not generally applied, but singled out specified classes of people for protection. It was therefore a “content-based” prohibition on speech, which is presumptively invalid under the 1st Amendment. Had the “no-demeaning” rule been written to apply to people more broadly. it would have been “content-neutral”, and passed constitutional muster. In fact, the NY federal district court postponed its ruling for 30 days, in which time the MTA could presumably redraft the rule to be “content-neutral”.
Muni doesn’t have anything like a no-demeaning” law as in the MTA case. What has been described in the media as a “no-politics” rule actually applies only to political candidates and ballot initiatives, and not to other kinds of political messaging. Maybe Muni could have refused to accept Geller’s ad on the basis that it constituted a “fighting words” exception to free speech (even though Muni had not articulated such a rule in its advertising policy). But Muni was leary of litigation, particularly after the NY MTA case.
We have to be careful about what we wish for, because, of course, we’re accused of engaging in “hate speech” against Israel/the Jewish people all the time. If the government is given increased power to proscribe speech that offends, we’ll be a likely target. ACLU’s advice is: Fight hate speech with more speech