I did fire off an email to Priority Club stating that I was charged for something I didn't do, and I am going to reserve the right to dispute when I hear back from them.
The Front Desk just didn't care, and wouldn't give me a time when the GM would be available. She just repeated "You smoked in the room, and you weren't supposed to".
This is horrible, I only stay 200 nights a year, split between IC and Choice. Now I may have to move to another chain, after I was so happy with IC.