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Vaping industry sues state over new regulations

January 4, 2016

The advocacy group that represents Indiana’s vaping and electronic cigarette industry is suing the state, claiming new safety regulations are unconstitutional.

The not-for-profit Hoosier Vapers Inc., along with several vaping retailers and manufacturers, filed the lawsuit Dec. 18 in Marion Superior Court that names David Cook, chairman of the Indiana Alcohol and Tobacco Commission, and Matt Strittmatter, superintendent of the Indiana State Excise Police.

The companies are requesting a permanent injunction to prevent the state from enforcing the regulations passed by state lawmakers during the last legislative session.

If the law remains unchanged, all but a few e-liquid manufacturers will be forced to shut down or move out of state, said Evan McMahon, chairman of Hoosier Vapers, in a Facebook post. He could not immediately be reached for comment Monday morning.

The lawsuit draws a distinction between "electronic cigarettes" and "vapor pens." Both are relatively new technologies that allow a user to simulate smoking a tobacco product but without producing smoke. In both devices, electric coils heat a specially manufactured "e-liquid" in the device that produces a vapor to be inhaled and exhaled.

However, an electronic cigarette uses a pre-packaged and sealed cartridge of e-liquid that is not designed to be refilled, aka a "closed" system. A vapor pen is typical of an "open system," in which unsealed tanks are used to fill and refill the e-liquid.

Hoosier Vapers claims the law selectively regulates only one segment of the electronic vaping industry—the manufacture, distribution and sale of e-liquids that are used in open vaping systems. The law seeks to ensure the safety of users by addressing the e-liquid's strength, quality and purity, as well as the potential for contamination.

Closed vaping systems are not regulated by the new law, the suit contends.

“Public Law 176 does not apply to any liquid, no matter how toxic, contained within an electronic cigarette,” the complaint says. However, the e-liquids used in both open and closed systems are "virtually identical."

Manufacturers for open-system e-liquids will be forced to incur costs related to hiring specialized security firms, as well as to meet food-safety qualifications that have little to do with the production process, the suit claims.

"Because there is no rational basis for regulating only e-liquid used in open vaping systems while granting immunity to similarly situated closed vaping system," the law is unconstitutional, the suit claims.

As a result of the onerous regulations, e-liquid manufacturers will have no choice but to abandon the Indiana market, the suit claims.

In addition, the lawsuit notes, the state law eventually will be rendered moot by federal action. The U.S. Food and Drug Administration is expected to issue a comprehensive rule this year that regulates e-liquid and electronic vapor devices, the suit further says.

The state law requires that e-liquid manufacturers get a permit from the commission by June 30 before bottling or selling. Businesses would pay $1,000 for the permit, which would be good for five years. Renewals would cost $500.

The law also bans the sale of e-liquids to minors and requires manufacturers to use childproof caps.

A spokesman for the Indiana Attorney General's office told IBJ on Monday morning that it intended to defend the state laws and would file a response in court at the appropriate time.

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