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7th Circuit Snuffs Out Indiana's Vaping Law

By William Vogeler, Esq. on February 01, 2017 | Last updated on March 21, 2019

To say that Indiana's vaping law was overreaching would be an understatement.

In snuffing out portions of the state's law, the Seventh Circuit Court of Appeals said that it could not find a single case in 200 years of precedent to support Indiana's legislation as it affected business in the state and beyond. The court said the law basically put everybody out of business except one company.

"These circumstances raise obvious concerns about protectionist purposes and what looks very much like a legislative grant of monopoly," Judge David Hamilton wrote for the unanimous court.

The Indiana legislature enacted the law in 2015, requiring vaping businesses that manufacture e-liquids to contract with a security company in order to obtain a state permit. The law was so restrictive, a dozen Indiana vaping companies soon closed their shops. Only one company -- Mulhaupt's Inc., located in Lafayette -- survived.

It's Bad

The impact was so dramatic, one of the bills sponsors called it "a mistake." Sen. Ron Alting apologized and said the legislature will revisit the law this year.

It was not much help for the vaping companies that closed, however. Even out-of-state businesses had a problem with law, and sued on the grounds that it violated their rights under the federal Commerce Clause. A trial judge upheld the legislation but the appeals court reversed.

"The Act is written so as to have extraterritorial reach that is unprecedented, imposing detailed requirements of Indiana law on out-of-state manufacturing operations," the judges said. "The Act regulates the design and operation of out-of-state production facilities, including requirements for sinks, cleaning products, and even the details of contracts with outside security firms and the qualifications of those firms' personnel."

The court said the Act violates the Commerce Clause as extraterritorial regulation because it dictates how out-of-state manufacturers run their operations. The judges said it would be like Ohio telling Indiana business how to operate.

Not All Bad

However, the court said the law fairly regulates in-state sales of e-liquids with requirements such as tamper-evident and child-proof packaging, as well as labels designating active ingredients, nicotine content, and expiration dates. The court said the Act properly prohibits sales to minors and states its purpose to protect public health and safety "in the absence of federal regulations," since the federal government has not adopted comparable regulations for safety and purity of e-cigarette products.

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