A New Jersey appeals court has ordered that a legal challenge to smoking in Atlantic City casinos be returned to a lower court and re-heard, citing errors on the part of the judge in the previous 2024 decision.
The United Auto Workers Region 9 union and Casino Employees Against Smoking Effects (CEASE) filed suit in April 2024 opposing the current casino-based exemption to New Jersey’s statewide indoor smoking ban, alleging that workers were being unfairly exposed to health risks and that the exemption violates their constitutional right to safety. In August 2024, a Superior Court of New Jersey Chancery Division judge denied a motion for an injunction and dismissed the case.
On Jan. 26, 2026, a three-judge Appellate Division panel upheld the denial of a preliminary injunction but vacated the denial of a permanent injunction and the dismissal of the case, remanding it back to the Chancery Division.
Judge did not conduct proper fact-finding, says appeals court
The casino exemption within the 2006 Smoke-Free Air Act allows casinos and some other facilities to allow smoking on up to 25% of their floor space.
In their Jan. 26 decision, judges explained that they affirmed the denial of a preliminary injunction to restrain the exemption because the Supreme Court has not determined that the right to pursue and obtain health and safety is a fundamental standalone right. They also rejected the plaintiffs’ argument that the casino exemption amounts to unconstitutional “special legislation.”
However, in its reasoning, the appeals court wrote that the Chancery judge dismissed a key constitutional claim too soon and did not conduct appropriate fact-finding during the case. In particular, the judges ruled that the lower court relied on an incomplete legal framework when assessing whether the challenge to the casino exemption violates the equal protection guarantees of New Jersey’s constitution. The judges found that the trial court should have used a three-part balancing test that is in place for equal protection cases, and also that it didn’t properly weigh conflicting research conclusions on how a smoking ban would impact the industry.
“The trial court, after discerning no fundamental right is at stake, applied a mistaken ‘rational basis’ approach to plaintiffs’ state equal protection challenge without conducting a fulsome balancing of the competing interests,” wrote the judges. “In addition, the trial court improvidently accepted at face value respondents’ disputed economic contentions and the untested premise that ending the smoking exemption will inexorably result in drastic revenue and job losses, without a development of a fuller record and detailed factual findings addressing plaintiffs’ competing factual proofs and arguments.”
Casino smoking can continue in meantime
Because of what it deemed to be the erroneous approach and the lack of sufficient due diligence, the appeals court remanded the case for further proceedings. In the meantime, without a preliminary injunction in place, smoking can continue on casino floors in the state.
“On remand, the court shall allow the record to be developed and litigated to address the hotly contested projections of revenue loss, and for the court to make appropriate findings of fact concerning the reliability and credibility of the competing expert projections,” added the appeals court. “Such findings are especially crucial to the ultimate disposition of plaintiffs’ state equal protection arguments, with the health of thousands of casino employees and, perhaps, millions of dollars at stake.”
Casino workers want Supreme Court to intervene
While the appeals court threw the ball back to the Chancery court, an attorney for the workers group told NJ.com that it wants the Supreme Court to hear the case now, to save the process of another trial and another potential appeal.
“We agree with the appellate division that the New Jersey Supreme Court should decide the important constitutional issues raised by this case. We don’t think we need more evidence beyond what’s in the record,” said Nancy Erika Smith.
Meanwhile, legislative proposals to end the smoking exemption have been filed in multiple past sessions in New Jersey. The latest effort, Senate Bill 212, was introduced this month after last year’s push never received a full vote in either chamber.
