INDIANAPOLIS (AP) -
A federal court on Monday struck down a major portion of Indiana’s
restrictive vaping law, which created a monopoly for one security firm and
sparked an FBI probe.
A three judge-panel
of the 7th U.S. Circuit Court of Appeals in Chicago ruled that the law’s
strict requirements guiding the production of the nicotine-laced liquid
consumed through vaping imposed “unprecedented” and “extraordinary”
regulation for out-of-state companies. The ruling effectively ends the
stranglehold that Lafayette-based security company Mulhaupt’s Inc. had on
deciding who could enter the Indiana e-liquids market, although it applies
only to out-of-state manufacturers.
first approved Indiana’s vaping law in 2015, ostensibly to create safety
standards for “e-liquid” production. The law was amended last year in a way
that effectively gave Mulhaupt’s sole discretion to decide who could be
certified to produce “e-liquid” sold in Indiana. The law guided everything
from requirements for sinks and cleaning products to the details of
contracts with outside security firms and the qualifications of those firms’
personnel, the judges wrote.
The appeals court
found that the restrictions violated the Constitution’s commerce clause and
were “akin to telling out-of-state communities how to run their recycling
“At the most basic
level, one might wonder why Indiana cares,” the judges wrote, noting that
the law’s “astoundingly specific” provisions “raise still more questions
that go well beyond the Commerce Clause.”
Mulhaupt’s set a permit application deadline for e-liquid manufacturers one
week before the bill was signed into law by former Gov. Mike Pence. Then it
certified just six companies to produce the liquid, freezing out other
businesses. The company is based in the district of Republican state Sen.
Ron Alting, who helped shepherd the measure through the Senate and resisted
efforts by other lawmakers to make changes to the bill.
When the law went
into effect, it drew the attention of the FBI, which questioned a number of
people connected to it. Those who have been interviewed said the FBI asked
who was involved, what their motivations were for supporting or opposing the
law and whether they knew of anyone who was offered anything in exchange for
Since then, leaders
in the GOP-controlled Statehouse have pledged an overhaul. The federal
appeals court said the law “looks very much like a legislative grant of a
monopoly to one favored in-state company in the security business.”
A spokesman for
Mulhaupt’s did not respond to a request for comment.
chairman of the advocacy group Hoosier Vapers, said he felt vindicated by
“This is definitely
a victory,” he said. “It reaffirms ... everything we’ve been saying.”