My answer was based on the assumption that it was a defamation case. As a civil rights violation case, it is even weaker. I expect it to be thrown out of court forthwith. A declaration by a city council that an organization is "terrorist" has no legal effect. It's just their unsupported opinion, and it's beyond the scope of the council's authority. For example, it doesn't place the NRA and its members on a "watch list," preventing them from flying, etc.
What we really have here are two opposing sides each exercising their right of free speech. Perhaps the SF Council is wrong to attempt to stifle the NRA's free speech, but the NRA is equally wrong to try to stifle the Council's free speech. The courts are going to wash their hands of the whole thing.