Be careful what you say about trolley conductors in Boston. That’s the message Boston’s transit officials sent to a chain of seafood restaurants that devised an irreverent ad campaign that turned into a nasty battle over free speech.

Earlier this month, the Massachusetts Bay Transportation Authority yanked a series of advertisements that Legal Sea Foods, a Boston-based chain, started running on the sides of Boston buses and trolleys.

The ad campaign, devised by the DeVito/Verdi agency in New York, plays on a “really fresh fish” theme; each ad depicts a cartoon fish with a message bubble containing a borscht-belt-style insulting (i.e., “fresh”) remark.

Though some of the tart messages passed muster with the MBTA, at least one crossed the line, and the MBTA barred it. The forbidden message which had provoked complaints from the Boston Carmen’s Union, said, “This conductor has a face like a halibut.”

MBTA spokesman Joe Pesaturo says that the authority considered the ad “disparaging to employees,” “disrespectful,” and “not appropriate.”

Another ad, which bore a simple “Bite Me” message was also pulled down, but that was only due to a “miscommunication” between the MBTA and its transit advertising contractor, according to Pesaturo. (A DeVito/Verdi representative and Legal Sea Foods lawyer both say that Pesaturo is mistaken, and that the MBTA definitely barred the “Bite me” ad, too. The miscommunication, they say, was over yet a third ad.)

The MBTA had no problem with ads that proclaimed, “Hey lady, I’ve seen smaller noses on a swordfish,” and “This trolley gets around more than your sister.”

When the two ads were initially taken down, Legal Sea Foods hired First Amendment icon Martin Garbus, a partner at Davis & Gilbert, whose previous clients have included Lenny Bruce, Daniel Ellsberg, and Don Imus. Garbus wrote a letter threatening legal action on the grounds that the MBTA was violating Legal Sea Foods’ commercial free speech rights. (Though commercial speech gets less First Amendment protection than political speech, it still gets some, which is why, for instance, ads for lawyers, tobacco, and liquor can only be regulated — not banned outright.)

The halibut ad could not violate the MBTA’s rules against “demeaning or disparaging” advertisements, he argued, because “no reasonable person would take this quip by a talking fish seriously.”

On Thursday, Legal Seafood began running a new set of advertisements that mock the MBTA’s decision to pull down the earlier ad. The new ads will be the same as the old one, except for a big, red “censored” banner covering the words that triggered the controversy.

Legal Sea Foods new “censored” campaign may have defused the controversy for the moment. After mulling over the propriety of these “censored” ads for a week, according to a DeVito/Verdi representative, the MBTA okayed them on Wednesday.

The ad agency DeVito/Verdi knows well the free advertising attracted by a public controversy. In 1997 it devised the now famous bus-side campaign for New York Magazine that poked fun at then-Mayor Rudolph Giuliani by calling itself “Possibly the only good thing in New York that Rudy hasn’t taken credit for.” Giuliani tried unsuccessfully tried to have the ad taken down.

In an interview Garbus warns that the MBTA’s actions to date have created a “chilling effect for all ad writers,” although he seems to have a little trouble working himself into a full lather over this one. “I mean, this is not Armageddon,” he admits.

To my mind, Garbus’s threatening letter was commendably understated. Under the circumstances, I suspect a lot of Bostonians would have just told the MBTA: “Get scrod.”

In an important ruling yesterday, which you may have already seen reported in either the New York Times (here) or the Wall Street Journal (here), the federal appeals court in New York rebuffed and invalidated the Federal Communications Commission’s attempt to crack down on dirty words on broadcast television. But what you might not have heard about yet was the subtle judicial exegesis (contained in footnote 18 of the dissenting opinion) on the distinction in legal status between the F-word and the S-word.

Incidentally, I am using the demure-to-the-point-of-nauseating phrases “S-word” and “F-word” because my earlier feature story about this case (entitled “Bleep Deprivation,” and published in the March 19 issue of Fortune) stirred some internal controversy at the time with some of our partners and affiliates, because it used the actual, unexpurgated Anglo-Saxon expletives at issue. That story is now available here. (Alternatively, you can see what it looked like in the magazine (with graphics) by following these instructions: click here for the digital version of that whole issue; then click on the magazine photo; then click on the window where it says “C1 of 233″; when the window goes blank, type in “53,” which is the page number of the story; then click “enter.”) (For FCC chairman Kevin Martin’s unprintable reply to the ruling, try here .)

In any event, in yesterday’s ruling, in Fox Television Stations v. FCC, two of the three judges on the appeals panel decided that the FCC had acted “arbitrarily and capriciously” when, in 2004, it did an abrupt about-face in longstanding policy and discarded its so-called “isolated and fleeting expletives doctrine.” Under that doctrine, the FCC had, until then, essentially given broadcasters of live TV a free pass if someone unexpectedly ran off the reservation and used one or two expletives in isolation. Beginning in early 2004, however, after Bono used the F-word in accepting a Golden Globe award on a live broadcast on Fox Television Stations – a unit of News Corp. (NWS) – the FCC decided to crack down and begin imposing a one-strike-you’re-out rule. It later also applied the new rule to two similar incidents on the Billboard Music Awards, which were being broadcast live by NBC, a unit of General Electric (GE). (Viacom (VIA) also intervened in the case; It is still challenging, in a federal appeals court in Philadelphia, the fine levied against it for the Janet Jackson incident during Super Bowl XXXVIII, which was broadcast on CBS (CBS) and produced by MTV.)

The two judges in the majority, Judges Rosemary Pooler and Peter Hall, said the FCC had failed to articulate a reasonable basis for the shift in policy. They also strongly hinted that the FCC should not waste its breath trying to provide a more convincing statement of reasons now since, in all likelihood, the policy it tried to enforce would probably be unconstitutionally vague in any event.

The third judge on the panel, Pierre Leval, dissented. Interestingly enough, however, he did so only as to the F-word. He felt that while the FCC had adequately justified its decision to regulate even a single use of that word, he agreed with his colleagues that such draconian regulation of the S-word would probably violate the law and, possibly, the constitution. He reasoned that back in 1976, when the U.S. Supreme Court first upheld the federal law that purports to outlaw indecency in radio and TV broadcasts, it emphasized “the accessibility of broadcasting to children.” Judge Leval then continued: “The potential for harm to children resulting from indecent broadcasting was clearly a major concern justifying the censorship scheme. In this regard, it seems to me there is an enormous difference between the censorship of references to sex and censorship of references to excrement. For children, excrement is a main preoccupation of their early years. There is surely no thought that children are harmed by hearing references to excrement.”

Though this is just a dissenting opinion of course, even dissents can become influential over the years if they have persuasive force. So tell me readers and parents, given children’s “preoccupation” with excrement, should the regulation of fleeting and isolated references to “s–t” be unconstitutional?