INDIANAPOLIS - Evansville’s 2012 ordinance banning smoking in all indoor eating and drinking establishments was struck down by the Indiana Supreme Court in a 3-2 decision filed Tuesday, the Evansville Courier and Press reported .
The court’s majority was troubled by Tropicana Evansville’s exemption from the ban. Justices ruled the ordinance violated the Indiana Constitution’s Equal Privileges and Immunities Clause, which prohibits giving any citizen or class of citizen privileges or immunities not extended to everybody.
"Today we hold that this clause invalidates an Evansville ordinance expanding the city’s smoking ban to bars and restaurants but exempting its only riverboat casino ("the Casino")," wrote Chief Justice Brent E. Dickson.
The smoking ban was approved by the Evansville City Council in February 2012 and went into effect on March 1, 2012.
City officials exempted the riverboat casino, then known as Casino Aztar, because of its economic importance to local government. They said the casino was worthy of the exemption because it is not a competitor with other local food and drink establishments because a large majority of casino patrons come from outside the city.
Casino officials told the City Council in January 2012, while the ordinance was being discussed, that the facility’s revenue would plummet by 30 percent (about $4.3 million) if it was included in any smoking ban.
Local bars and clubs, though, said that sort of consideration should not be used to justify special treatment, a contention that eventually led to the lawsuits that Tuesday's ruling addressed. A group of 27 plaintiffs, led by Paul Stieler Enterprises, Inc., challenged the ordinance on behalf of bar and and tavern owners. Another group of nine fraternal organizations, led by VFW Post 2953, filed a similar challenge.
Dickson wrote in Tuesday's Supreme Court majority opinion that the smoking ordinance "standing alone and without its exemption for riverboat casinos" would pass legal muster, "(but) the evidence indicates that the City and its Council did not intend for the 2012 (ordinance) to stand without such an exemption."
He also wrote: "In short, the City's economic rationale fails to reasonably relate the divergent treatment to the inherent differences involved" and that granting the exemption to the casino was "tantamount to the the government selling exemption ... for the bonus of anticipated financial benefits."
The court’s decision noted at least four City Council members commented the ordinance would not have passed without the casino’s exemption.
Dickson was joined in the majority by justices Steven H. David and Mark S. Massa.
A minority opinion, written by Justice Loretta Rush, held that exempting a riverboat casino "is reasonably related to a riverboat’s inherent characteristics — fiscal impact on the local economy and tax revenues, and out-of-town clientele that other local businesses lack." Justice Robert Rucker agreed with Rush.
Indiana Supreme Court justices heard arguments in the case in October.
Previously, in February 2013, the state Court of Appeals rejected the challenge, saying that the casino provides revenue for the city of Evansville “apart from and in addition to general taxation” to which those taverns are subject.
“The majority of that revenue is derived from the operation of slot machines. Accordingly, the casino is in direct competition with other casinos but not local bars, which lack slot machines,” the appeals court wrote in its ruling.
The struck-down ordinance is more stringent than the statewide ban, which exempts bars and taverns, private clubs, tobacco stores and casinos.
The statewide ban, which passed in 2012, still applies to Evansville establishments.