Indiana Supreme Court Strikes Down Evansville's Smoking Ban Ordinance Due To Casino Exemption

The Indiana Supreme Court in a divided 3-2 opinion held today that Evansville's smoking ban ordinance is unconstitutional due to an exemption it granted to the city's riverboat casino. Because the majority in an opinion written by Chief Justice Brent Dickson determined that the offending exemption could not be severed from the ordinance, it struck the entire smoking ban ordinance enacted by the Evansville city council. The Court's decision specifically found that the special exemption for casinos violated Indiana Constitution's Equal Privileges and Immunities Clause. The Court stood behind its defining case on this area of state constitutional jurisprudence, Collins v. Day.

The issue is thus whether the unequal prohibition of smoking is reasonably related to the sole remaining distinguishing characteristic: the Casino's authorization to conduct gambling under Indiana's Riverboat Gambling statute.

Collins requires that, to comply with Indiana's Equal Privileges and Immunities Clause, the disparate treatment must be reasonably related to the inherent differences that distinguish the unequally-treated classes. It does not merely require that sound policy reasons exist to justify the special privilege or immunity. In determining a claimed violation of the Equal Privileges and Immunities Clause, we focus not on the purposes presumably motivating the enactment, but on the disparate treatment it accords. It is "the treatment, not the legislative purpose, which must be reasonably related to the inherent distinctions between the classes . . . ." In making this determination, however, the legislative purpose may be considered. (citations omitted). 

The Court reasoned that the council's principal purpose in enacting the smoking ban ordinance was the protection of public health. Yet it relied on the "significant economic impact and employment considerations," the large number of outside patrons who frequented the casino and the fact that the casino had recently installed a new ventilation system as factors supporting special treatment under the law only applicable to the casino. The majority concluded that these latter two factors were "clearly not inherent distinguishing characteristics" or factors "reasonably related to the Casino's authority to conduct gambling." As to the economic impact, the majority found that the "rationale fails to reasonably relate the divergent treatment to the inherent differences involved" because it was inconsistent with "the expressed intent of our founding fathers in adopting the Equal Privileges and Immunities Clause in 1851."

It is tantamount to the government "selling" an exemption from the Smoking Ban for the bonus of anticipated financial benefits while burdening other citizens and snubbing our framers' intent in drafting Article 1, Section 23. This limitation on government power cannot be evaded on the sole grounds of financial benefit to a city's coffers. Permitting discriminatory special treatment to be so dispensed erases the assurance of Equal Privileges and Immunities guaranteed under our Constitution . . .

As to the first prong of Collins, we find that the Amending Ordinance violates Article 1, Section 23 of the Indiana Constitution because by prohibiting smoking in bars and clubs but permitting smoking in riverboat casinos, the enactment provides an unequal privilege that is not reasonably related to the inherent distinguishing characteristics of the two affected groups. Because compliance with Section 23 requires satisfaction of both the first and second prong of Collins, the failure to satisfy the first prong obviates the need to discuss the second prong . . .  

We hold that the Amending Ordinance, on its face, violates the Equal Privileges and Immunities Clause of the Indiana Constitution because the disparate treatment—exempting floating casinos with "riverboat" statutory gambling authorization but not land-based bars and clubs, including those with gambling authorization from other statutory sources—is not reasonably related to the inherent differences between the divergently-treated classes.

If you read a footnote in the opinion, it appears the City of Evansville can easily reshape its ordinance more similarly to Indianapolis' smoking ban ordinance, which the Court notes that the 7th Circuit Court of Appeals upheld as being constitutional.

We do not foreclose the possibility that a partial smoking ban could be supported by justifications reasonably relating the ban to distinguishing inherent characteristics relevant to public health, such as the age of patrons and employees. For example, the State of Indiana’s smoking ban exempts (a) cigar and hookah bars that prohibit entry to individuals less than 21 years of age, among other requirements; (b) traditional bars that do not employ individuals less than 18 years of age or admit individuals less than 21 years of age, among other requirements; and (c) private clubs that prohibit entry to individuals less than 18 years of age, among other requirements. See Ind. Code 7.1-5-12-5 (2013); see also Lafayette, Ind., Code § 9.04.050 (2008) ("[T]he following areas shall not be subject to the smoking restrictions of this chapter: . . . (8) Any business that, during all hours of operation: a. allows no customer to enter any area of the business therein who is under the age of twenty-one (21); and b. employs no person in any area of the business therein who is under the age of twenty-one (21) .

We observe that the Seventh Circuit Court of Appeals, in a challenge brought under the federal Constitution, recently upheld the 2012 Indianapolis-Marion County smoking ban, which exempts "proprietors of cigar and hookah bars" but not "owners of traditional neighborhood bars." Goodpaster v. City of Indianapolis, 736 F.3d 1060, 1076 (7th Cir. 2013). Noting the important differences between the United States and the Indiana Constitutions, however, the Goodpaster court noted that the Equal Privileges and Immunities Clause of the Indiana Constitution, which bears "similarities" to the Equal Protection Clause of the federal Constitution, "should be given independent interpretation and application." Id. at 1075 (citing Collins, 644 N.E.2d at 75). 

UPDATE: Indianapolis attorney Mark Small, who represents Indianapolis bar owners who sought to overturn Indianapolis' smoking ban ordinance in federal court unsuccessfully, tells me that he has another lawsuit filed in the Marion Superior Court challenging the ordinance on the same legal grounds advanced by the opponents of Evansville's ordinance. His lawsuit focuses on the exemption for the satellite off-track betting parlor. Small has filed an emergency declaratory judgment based on today's Supreme Court ruling seeking to invalidate Indianapolis' smoking ban ordinance. I'm told that unlike Evansville's smoking ban ordinance, the Indianapolis ordinance contains a severability clause, which might allow a court to strike the offensive part of the ordinance without striking the entire ordinance as the court did with Evansville's ordinance.

More importantly, striking down a local ordinance doesn't leave affected businesses without any smoking regulation. In the absence of a local ordinance, the statewide smoking law applies. It includes exemptions for casinos, horse racing tracks and their satellite off-track betting parlors,  private clubs, cigar and hookah bars, and bars and taverns that meet certain requirements.