Citing its First Amendment rights, the Utah Animal Rights Coalition filed suit Monday in U.S. District Court for Utah.
It wants a temporary restraining order so it can demonstrate outside Alaska Fur Gallery, 537 Main St., during the annual Sundance Film Festival.
"The Constitution allows us to speak our minds whether there are five of us or 15 of us," said UARC spokesman Sean Diener.
A group of nine protesters Friday were carrying placards and passing out leaflets decrying cruelty to animals outside the furrier's storefront when police informed them of a Park City regulation that restricts such demonstrations.
Diener's explanation that the group was not blocking foot traffic during the star-studded gala fell on deaf ears, he said.
Under threat of citation or arrest, the UARC activists were ordered to move their demonstration to a small "protest zone" on Park Avenue at 9th Street, where the municipality has set aside an area for such exercises in freedom of speech.
"It's not lighted, it's full of snow, and it's nowhere near the festival goings-on," Diener said of the designated protest area. "The Sundance Film Festival is full of a lot of people who have a lot of influence. This thwarts our ability to make our presence known. Our strength is in our numbers."
But Park City officials say large demonstrations on Main Street could hamper public safety.
John Holliday, assistant Park City attorney, said the regulation is aimed at keeping auto and pedestrian traffic flowing along the cramped confines of the historic street.
"We don't feel the regulation impinges on the Constitution," he said, adding that Park City instituted the restriction before the 2002 Winter Games.
But civil-rights attorney Brian Barnard, who represents UARC, argued that an arbitrary limit of five people is nonsense.
"There is no history to squelch the First Amendment like that simply because it's inconvenient."