This bothers me. The Chicago Transit Authority owns the ad space and can contract it out to anyone they damn well please, and (assuming they obey the contract/buyout/refund terms) terminate said contract at will.
This is not a free speech issue. If it were, then in theory, consider the following scenario:
US Department of Agriculture and National Dairymen's Association decide that they want to address the issue of widespread vitamin D deficiency (look it up) by promoting the consumption of more milk by schoolchildren.
PeTA gets wind of this, buys ad space on billboards along school bus routes and near schools with their latest anti-milk propaganda bullshit.
Whoever owns the billboards (Viacom/Clear Channel/whoever), realizing they've got a public-relations nightmare on their hands, sets internal policy barring the use of their billboards for advertising by "extremist groups" or whatever term they care to use to make PeTA persona non grata.
PeTA sues, gets injunction forcing anti-milk ads to stay up.
Quoth Jon Stewart: "Oh, it's not funny when it's YOUR guy!"