Two major events in Indiana have given Hoosier vapers and vendors reason for some optimism. As vapers everywhere know by now, Indiana passed a controversial law that mandated bizarre rules for manufacture and sale of e-liquid in the state, including very specific requirements for security of facilities that only one security firm in the country met.
That firm — Mulhaupt’s of Lafayette, IN — was then given the ability to choose which companies it accepted as clients, thus creating a de facto monopoly in the state. As Jared Mayer wrote in a Forbes article on the Goodcat case, “the Indiana law’s security company requirements had nothing to do with safety and everything to do with propping up a local company.”
E-liquid maker Goodcat granted an injunction
Goodcat, LLC, has been granted a preliminary injunction in its lawsuit against the state, allowing them to sell e-liquid in Indiana, despite the infamous vapor law that granted licenses to just six companies.
According to IndyPolitics.org, US District Court Judge Richard Young ruled that Goodcat had a good chance of winning based on its claim that the law violates the dormant Commerce Clause of the Constitution.
Goodcat is a Florida company that produces e-liquid sold mainly in convenience stores. They sued the state in June, claiming that the law discriminates against out of state manufacturers, and that federal law preempts the state law.
The judge granted the injunction based on the likelihood that Goodcat would prove its assertion that the law discriminates against interstate commerce. However, he ruled against the company’s preemption challenge. Judge Young ordered the state to issue Goodcat a permit to sell in Indiana until the case is decided.
Indiana Attorney General Greg Zoeller, who is defending the law, maintains that the law is a good one. According to the Indianapolis Star, he said, “From a public health standpoint, we maintain that Indiana should maintain the ability to regulate these chemicals and devices within its borders.”
FBI probes corruption
The FBI has been questioning lawmakers and other people involved in the creation of the state’s vapor law. They have also spoken with Hoosier Vapers chairman Evan McMahon, according to a story in the Indianapolis Business Journal.
McMahon told the paper that he had an in-depth conversation with an FBI agent recently, and was told that the FBI was investigating “possible anti-trust and corruption.”
State Sen. Phil Boots told the IBJ he didn’t think an official investigation was underway. He told reporter Hayleigh Colombo that “it was made clear to me this was just a discussion.” An FBI spokesperson wouldn’t confirm whether the Bureau was looking into the creation of the law.
Indiana’s unique e-liquid law goes far beyond promoting public safety. Giving one company the government-granted power to determine which products can come to market is clearly an anti-competitive decision that will limit customer choice and the growth of small businesses.
Vendors in Indiana, many of whom have been irreparably hurt by the state legislature’s crony capitalist law, are cheering for the FBI to dig deeper. Of course, nothing the FBI does now will reverse the damage that has been done to state vapor businesses. But some indictments and prosecutions would go a long way toward lifting the spirits of Indiana business owners, employees and customers.