It actually isn’t.

“Shouting fire in a crowded theater” is a popular analogy for speech or actions whose principal purpose is to create panic, and in particular for speech or actions which may for that reason be thought to be outside the scope of free speech protections. The phrase is a paraphrasing of a dictum, or non-binding statement, from Justice 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 case 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).[1]

The paraphrasing differs from Holmes’s original wording in that it typically does not include the word falsely, while also adding the word “crowded” to describe the theatre.[2]