Seventh Circuit strikes down Indiana’s protectionist vaping rules
Apparently we weren’t the only observers who thought the Indiana law regulating vaping products was a little over the top. A major reason why Indianapolis rated a grade of “D-” in the 52-city survey of local vaping rules that R Street released in December was a state law with some peculiarities.
We expect and support appropriately tailored regulation related to quality control of anything that is designed to be inhaled by humans. We also support bans on sales to minors and requirements for child-proof packaging. In that vein, I’m sure it appeared to most of the Indiana General Assembly who voted on the Hoosier State’s legislation in 2015 that its very specific cleanliness provisions were in line with what most food-service operations are required to maintain.
But earlier this week, the U.S, 7th Circuit Court of Appeals ruled portions of the law unenforceable against out-of-state manufacturers. They were a little just a little too specific to get a pass under the Commerce Clause’s protection of interstate commerce. The Indiana law required particular sinks and even specific cleaning products. It required manufacturers of vaping liquid to sign security contracts for five years that provide 24-hour video monitoring and high-security key systems. One telltale clue as to the draconian nature of the law was its requirement that manufacturing facilities have “clean rooms” that comply with the Indiana Kitchen Code.
I’m sure that you have guessed by now that there were only a few companies that could meet all of the Indiana requirements. Judge David Hamilton’s opinion stated that the Indiana law “is written so as to have extraterritorial reach that is unprecedented, imposing detailed requirements of Indiana law on out-of-state manufacturing organizations.” The decision noted that 99 percent of vaping-liquid revenue had come from out-of-state manufacturers before the legislation was enacted.
The security provisions are a special case, even beyond the impact of the lawsuit. Although the basic legislation was passed in 2015, an amendment to the law last year effectively granted a single Lafayette company monopoly power to approve security requirements for all manufacturers. It further set a deadline for permit applications that was backdated one week before the bill was signed into law. Involved lawmakers swear that state lawyers and the Indiana Alcohol and Tobacco Commission signed off on the language. But under the new law, only six manufacturers met the security requirements to allow Indiana sales, and four of those turned out—not so surprisingly—to bear Indiana home addresses.
The Republican-controlled Legislature will try again on this particular provision, which may or may not have to do with a rumored but unconfirmed FBI investigation. Speaker Brian Bosma, R-Indianapolis, has publicly stated that his House of Representatives leadership team will support a change to the language to solve this problem, and we can assume it will take up changes that need to be made because of the court decision.
Vaping has become exceedingly popular in this country, including in the Midwest. The out-of-state companies that challenged the Indiana law note in their lawsuit maintains that there are currently about 138 vaping shops or locations in the state, which produce annual sales of more than $77 million annually. Since the overwhelming majority of vapers are formers smokers who are looking to quit or cut down, this is good news. The evidence indicates that vaping is 95 percent less harmful than combustible tobacco cigarettes.
We are rooting for Indianapolis to rate a higher score in our next vaping friendliness survey.
Image by FabrikaSimf
