Circuit Judge Thomas Hughston ruled that the town can continue to operate as it appeals his decision that the state law that allowed it to form was unconstitutional.
The ruling takes the town out of a monthlong limbo that followed his original decision, during which it was unclear whether the town could operate.
Hughston's decision Friday relieved town officials and supporters, some of whom had braced themselves for a decision that would have shut down the town while its appeal is pending.
"We're back at it," said Councilman Joe Qualey.
However, Hughston suggested that the town not do anything drastic while its future remains in doubt.
"I am sure the town will act with restraint and common sense," he said. "There's no way to put toothpaste back in the tube once it's out."
James Island Mayor Mary Clark already had a plan B if the town could not operate. That plan involved spreading the word of the town's plight across the country. With Friday's ruling, she said she won't have to do that.
"I don't have to hit the road," she said. "We'll operate as a town."
The city of Charleston, which is challenging the town's right to exist, had asked that the town not be allowed to operate during the appeal. City attorney Bill Regan had noted that the town could take shared revenues away from other county municipalities if allowed to operate in the meantime.
James Island town attorney Trent Kernodle argued that the greater harm would be to nullify the wishes of town voters.
The town's operations have been limited so far. It has set up a zoning process, but mainly relies on services, such as garbage pickup, provided by the James Island Public Service District, and others such as policing through Charleston County.
The decision to allow the town to continue to operate for now could be of interest to late-night drinkers. Charleston County recently passed an ordinance that requires bars to close at 2 a.m. That could have affected bars in the town such as The Reef, where business has picked up since the city of Charleston passed a similar ordinance. If the town didn't exist, the bars would have fallen under the county's ordinance.
James Island might consider passing a similar ordinance, however. Clark said the town needs to study the issue to see whether late-night bars are burdening law enforcement and affecting nearby neighborhoods.
James Island's fate now will depend on whether the S.C. Supreme Court reverses Hughston's ruling that the town was not formed legally. He ruled in February that a law that allowed the town to incorporate by sharing marshes and waterways already in the city was unconstitutional special legislation because it does not generally apply elsewhere.
Kernodle said Friday that the law can and does apply elsewhere and that the presumption should be that legislation is sound unless shown otherwise beyond a reasonable doubt.
Hughston refused to reconsider his earlier ruling, however, setting up the town's appeal.