Lawsuit Filed Over E-Liquid Regulations in Indiana
An Indiana Vaping trade and consumer advocacy group has filed a lawsuit against the state of Indiana for a law that is set to take effect in July of 2016. House Bill 1432 sets several new regulations for the makers of E-liquids, which Hoosiers Vapers, Inc says will hurt Indiana small vaping vendors. Chairman of Hoosier Vapers Evan McMahon points out two specific issues that he says will shut down many of Indiana's small eliquid stores.
The new law will require stores that make their own eliquids to have specific security standards at their place of business, standards that security companies like ADT and Siemens have said they cannot comply with--and without that security individual stores will not qualify for the state’s new license standards. Therein lays McMahon's second issue with the legislation. The law sets a date of June 30th, 2016 for all permits to be issued for eliquid manufacturers that plan to operate in Indiana. McMahon says that after that date no more permits will be issued, and notes that this is the only industry in the state with such restrictions.
He says that what most people fail to realize is that the eliquids and the vaping industry is not an extension of big tobacco, and 95% of the industry is mom and pop shops that make the liquids for e-cigarettes—which equates to about 2500 jobs in Indiana. It’s unknown when the lawsuit will get its first review.
The organizations full release is below:
Hoosier Vapers Inc, an Indiana based trade and consumer advocacy group for electronic cigarettes, filed a lawsuit against the State of Indiana in the Marion County Superior Court. The lawsuit seeks to remedy the anti-competitive portions of a recently enacted law regulating the manufacturing and sale of eliquids in Indiana.
In July of 2016, portions of House Enrolled Act 1432, as passed by the Indiana General Assembly, will go into effect. The recently enacted law states that in absence of regulation by the FDA, the Indiana legislature would craft a national industry wide set of regulations for eliquid industry.
While Hoosier Vapers understands the legislature, from time to time, will act to regulate an industry for health and safety reasons, the unintended consequences of this law will have dramatic and permanent effect on hundreds of small Indiana businesses without achieving those stated goals.
“If this law remains unchanged, all, but a select few, of the eliquid manufactures in Indiana will be forced to shut down or move out of state, manufacturers outside of Indiana will no longer be able to sell their products to Indiana retailers, and Indiana retailers will no longer be able to carry the national and local brands that their adult customers enjoy,” said Evan McMahon, Chairman of Hoosier Vapers.
The law currently requires eliquid manufactures to enter into an expensive 5 year service agreement with a “qualified” security firm. It was said many times, during the last legislative session, that the security requirements were nothing more than an ‘ADT style security system’. The problem is that representatives from ADT, and other major security companies such as Koorsen Fire and Security, Siemens, and Vivint Security, have stated that they cannot meet the unnecessary additional certification requirements to be considered a “qualified” security firm.
“Think about that for a second. This law says that some of the biggest names in the security industry aren’t good enough to monitor eliquid in Indiana. That’s just absurd,” McMahon said.
A search of security firms in Indiana, as well as national firms, will show there is no security firm that meets these requirements or one that is willing to service all manufacturers. Without a 5 year service agreement with a qualified security firm, no eliquid manufacture will be able to be issued a manufacturing permit from the state.
Another troubling deficiency in the law is that products made by big tobacco companies are completely exempt from these regulations. The products manufactured by companies like RJ Reynolds and Altria, formerly Philip Morris, and typically sold at gas stations are not regulated because they are not intended to be refillable by the consumer and they are less than 4 milliliters in volume.
“So even though they use the same ingredients, manufacturing methods, and are intended for the same use as eliquids produced and sold by Indiana companies…big tobacco gets to side-step these regulations? That just doesn’t seem right,” McMahon said.
One other major issue with the law is that it states that no new permits can be issued to eliquid manufactures after June 30th, 2016. That means if a company, anywhere in the world, doesn’t have a permit issued by the state by that deadline they will never be able to do business in Indiana. Their products will be considered contraband and you would be committing a crime just by possessing it in Indiana.
“We aren’t trying to undue the entire law or kill regulations that make since. We just want to be able to keep our stores open, our employees working, and providing our adult customers with a safer alternative to traditional tobacco cigarettes,” McMahon said.
Hoosier Vapers is joined in the lawsuit by Indy Vapor Shop, an Indianapolis based retail store, Just Vapor, a Fishers based retail store, Big Willie’s Eliquids, an Indianapolis based eliquid manufacturer, Boosted E-Juice, a Colorado based eliquid manufacturer, Glass City Vapory, an Ohio based retail store, and Brent Taylor, an adult resident of Indianapolis that uses eliquids. The plaintiffs are represented by Mark Rutherford, an attorney with the Indianapolis based law firm of Thrasher Buschmann and Voelkel.