By: John Haff
Posted on September 8th , 11:30am PDT
In May of 2015, lawmakers in Indiana passed HB 1432, which requires all electronic cigarette liquid(e-liquid) manufacturers who sell their product in the state to be certified by a security firm by June 30, 2016. This includes in and out-of-state producers.
Due to the nature of how the law was written, only one security firm in the country is qualified to approve of these companies, Mulhaupt, based in Lafayette, Indiana. Mulhaupt has only approved of six companies while turning many away. The law’s original purpose was to provide rules and regulations to an unregulated space. However, the fact that only one security firm has the authority to approve these companies has many questioning if the law is even constitutional. Indiana Senator Ron Alting even stated, “This(the law) was supposed to be about safety in an unregulated industry, not about creating monopolies or anything.”
The law has required many Indiana shop owners to stop carrying popular brands of e-liquid that are produced in and out-of-state. Jared Meyer of Forbes called 90 Indiana vape shops to get a glimpse as to how this law is affecting shop owners. “Common responses to the law included moving their shops over the state border to Michigan or Ohio, laying off workers, and fully closing down”.
Goodcat LLC, an e-liquid manufacturer, based in Naples, FL, was denied permission to sell their product in the state of Indiana. In a lawsuit against the state, Goodcat challenged this decision on the basis that the law is unconstitutional. Goodcat argued that the U.S. Constitution's commerce clause “implicitly prohibits state and local governments, even in the absence of federal legislation, from enacting laws that discriminate against or excessively burden interstate commerce”. According to the Indiana Business Journal, “Richard Young, chief judge for the Southern District of Indiana, granted a preliminary injunction that applies only to the one company, GoodCat LLC, after finding that it had a reasonable likelihood of success in overturning at least part of the law”.
Despite the fact that this only ordered Mulhaupt to give GoodCat the ability to sell in the state, it is a small victory for the entire vaping community in a battle against the state law. Judge Young seems to think that they have a case against the state and that the law may even be unconstitutional. It is safe to say regulation for this industry is needed, but the way in which it was put in place in Indiana is not the way to go about it. It would be detrimental to the vaping community if something like this happened on a national scale.