A Houston Chronicle article about a proposed Brazoria ban on offensive use of what "the n-word" attempts to cover the constitutionality of such an ordinance, but doesn't quite get it all:
Gerald Treece, a constitutional law professor at South Texas College of Law, said the ordinance probably will not stand if contested in court. "It's one of those laws you can pass and put on the books, but when you try to enforce it, that's when you're going to run into some trouble," he said.
In the past, attempts by governmental bodies to ban the use of offensive language have been struck down because the laws were too vague or broad.
He said the use of offensive language is protected by the First Amendment. The only possible exception, he said, is if the use of the language is connected with a hate crime. The use of the word alone cannot be prohibited.
In 1992, the U.S. Supreme Court struck down an attempt in St. Paul, Minn., to prohibit displays of hateful symbols after a group was charged in violation of the city's Bias Motivated Crime Ordinance for allegedly burning a cross on a black family's lawn.
The ordinance prohibited the display of a symbol which "arouses anger, alarm or resentment in others on the basis of race, color, creed, religion or gender."
This neglects the more recent precedent of Virginia v. Black, in which the Supreme Court held that cross-burning can be criminalized so long as the state also proves it was done with the intent to intimidate (and Justices Scalia and Thomas thought that no intent need be proven). If a specific symbolic act can be prohibited when done to intimidate, a specific word used with the intent to offend -- the ordinance's backers say it would have an exception for friendly use, thus avoiding the mass fining of young African Americans who casually greet each other with the word* -- might not be constitutionally protected.
However, as Prof. Treece notes, the use of offensive language has some First Amendment protection. It can be punished when it rises to the level of "fighting words," but even then it isn't usually a particular word that can be prohibited so much as the idea that's communicated. I can get in trouble for trying to disturb the peace by telling someone that he is a coward and would be afraid to fight me even to protect his mother's honor from my licentious insults toward her -- with none of it using words that are unfit for broadcast -- yet not be deemed to have use fighting words if I just loose a string of George Carlin's seven words toward someone I know would be offended by hearing such. The intent to offend appears to be protected, while the intent to incite is not.
* Chris Rock has an dictionary-worthy set of examples to distinguish the various uses of the n-word.
"Nigger" is one of those words, like "fuck," that means different things depending on how you use it.
"I love you, nigger." Good.
"You're my nigger." That's nice.
"Shut up, nigger!" Not so good.
"I'm going to kill you, nigger." You better run.
Of course, "nigger" is just a word. White people could call us anything, like "butter."
"Hey, you fucking butter! Pick that cotton, butter!"
The problem is that then they wouldn't be able to use the word "butter" for anything else. But they've got to use something. Next thing you know, white folks are sitting around the breakfast table with their eggs and toast, saying, "You're kidding. I can't believe it's not nigger."