YOU ARE ACTUALLY ALLOWED TO SHOUT "FIRE!" IN A CROWDED THEATRE :o

....if you're one of the actors and one of your lines is "Fire!"

...or if there is an actual fire.

More seriously though, you are also allowed to do it if you have reasonable reason to think that it's true even if it does not turn out to be (the "Just wanted to be safe" defense).

The phrase originated in the 1919 case of Schenk VS The United States which was about propaganda against the draft. The original wording was "falsely shouting fire in a crowded theater". The popular culture version usually omits the very important word "falsely". It's mostly used by people who want to censor speech that displeases them. It was never a law or even an amendment to a law. It was never anything more than a remark from one of the judges in a decision that was overturned long ago.

Only speech that is both dangerous and completely false is punishable by law. Which means that speech that is considered dangerous but turns out to be true is allowed. So don't be intimidated by someone who throws this at you in an argument ;)