press release indicates that Colle McVoy represented that the image would be used for a pro bono project, but in fact the image was used for a for-profit project instead.
I recall seeing the MPLS Unite Bike photo (above) used in Metro Magazine's article on Minneapolis' big bad bike culture, which came out around the same timeframe as the Bicycling Magazine's "MPLS is No. 1" edition was published. The MPLS Unite Bike image is still up on the Metro website, so it may not be that use which is at issue.
This is a tough issue for Unite Bike and I am sure they did not take this action lightly; they probably don't have limitless resources to take on a legal case, and it puts them in the position of suing a client, too. However, fair use and intellectual property is an important issue for any small business with creative talent. A lot of people I know even have Creative Commons licenses on their Flickr accounts, as a matter of fact.
If Colle McVoy did violate the use agreement, then I hope that this case get settled very quickly in Unite Bike's favor. I think it's really, really important that the Creatives that actually produce Content (i.e. the stuff people are willing to pay to see) don't get fleeced by publishers and advertisers that would do anything they can to improve margins.
If you are not familiar with Unite Bike or what Clark Patrick is trying to do with this project, here's a link that will shed a light on the back story here.