Yes, they have a "right" to free speech, and they did follow the rules the local PD set down for them as far as distance and all that.
Yes, the cortege took a different route than planned so the mourners wouldn't have to see them.
I'm certain the father was quite distressed to know they were even there, not to mention the fact that burying your own child can be quite a lot of distress all by itself and didn't need to be added to. Thank the gods that's one thing I haven't had experience with. And don't want to.
So the suit either was dismissed or the father lost because of the "free speech" thing.
Let's see if I have any point here or if it's just my convoluted brain going way too many directions at once, shall we?
1) Libel and Slander are not protected by Free Speech, IIRC.
2) Saying "It's a good thing this person / this member of a certain group is dead" implies that either the person or the profession or both is/are not the sort of person one would bring home to mother.
3) How would a sign like "Thank God for dead Baptists" go over? Wouldn't this church be having conniptions over that?
So... I wonder if a case could be made that these picketers were slandering the name of the deceased or the profession of soldier. Likely this has already been tried and my very cursory search missed it (or my tired eyes did).