In the unanimous decision, the court ruled that the town can't make violating the smoking ban a crime because there is no statewide ban.
In May 2006, Sullivans Island was the first place in South Carolina to pass a smoking ban. The original law called for a $500 fine and 30 days in jail for violators. The town has since made violating the ban a civil violation with a much lower fine, to match more than a dozen other local governments across the state.
Town officials said the new ban should meet the requirement outlined by the state Supreme Court, which had already upheld the right of local governments to ban smoking in March.
Since that ruling, seven other cities and counties have passed their own bans, joining the dozen governments that had previously outlawed smoking in indoor public places, according to the Smoke Free Action Network.
"I think the numbers are going to keep building," said Dan Carrigan, executive director of the group.
The lawyer who represents the Sullivans Island bar that sued to overturn the ban said the ruling ends the legal fight.
"I wouldn't call it an empty victory," attorney Paul Dominick said. "People know now they are not going to jail or face a stiff fine just because they didn't follow this ordinance."