united states district court southern district of … · southern district of indiana indianapolis...

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF INDIANA

INDIANAPOLIS DIVISION

LEGATO VAPORS, LLC, JET SETTER )JUICE LLC, ROCKY MOUNTAIN )ECIGS LLC, AND DERB E CIGS )INDIANA LLC )

)Petitioners, )

v. ))

DAVID COOK, DAVID COLEMAN, )DALE GRUBB, and MARJORIE MAGINN, )in their official capacities for )the Indiana Alcohol and Tobacco )Commission, MATT STRITTMATTER, in )his official capacity as the ) Case No. 1:15-cv-00761-SEB/TABSuperintendent of the Indiana )Excise Police, and THE STATE OF )INDIANA, )

)Respondents, )

)and )

)RIGHT TO BE SMOKE-FREE )COALITION, INC. )

)Intervenor-Petitioner. )

)

PETITIONERS’ AND INTERVENOR-PETITIONER’SJOINT COMBINED RESPONSE AND REPLY ONCROSS MOTIONS FOR SUMMARY JUDGMENT

Case 1:15-cv-00761-SEB-TAB Document 86 Filed 04/13/16 of 39 PageID #: 1164

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TABLE OF CONTENTS

TABLE OF CONTENTS................................................................................................................. i

TABLE OF AUTHORITIES .......................................................................................................... ii

INTRODUCTION ..........................................................................................................................1

PRELIMINARY STATEMENT .....................................................................................................1

STATEMENT OF MATERIAL FACTS NOT IN DISPUTE.........................................................5

ARGUMENT...................................................................................................................................6

I. Respondents Fail To Show That The Indiana Statute Only Indirectly RegulatesE-Liquid Manufacturing Activities Occurring Outside The State ….…….........................6

II. Respondents Fail To Identify A Rational Basis Under The Equal Protection Clause ForOnly Regulating E-Liquids Manufactured For Open Systems …..……………………...22

III. Respondents Fail To Identify Grounds Under The Indiana Constitution For OnlyRegulating E-Liquids Manufactured For Open Systems………………………………...30

IV. Respondents Fail To Cite A Rational Basis For Regulating Open SystemE-Liquid As A Tobacco Product Under Indiana Tobacco Laws ……………………......31

V. Respondents Fail To Cite A Rational Basis For Only Regulating RetailersWho Sell E-Liquid Used In Open Systems……….…………………………………...…33

CONCLUSION..............................................................................................................................34


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TABLE OF AUTHORITIES

CASES

Alliant Energy Corp. v. Bie, 336 F.3d 545 (7th Cir. 2003)……………………………………......7

Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511 (1935)…….…………………………………..12, 13

Brown-Forman Distillers Corp. v. New York State Liquor Auth., 476 U.S. 573 (1986)……….....6

Collins v. Day, 644 N.E.2d 72 (Ind. 1994)………………………………………………………30

Dairy Foods Ass’n v. Boggs, 622 F.3d 628 (6th Cir. 2010)………………………………………8

Eby-Brown Co., LLC v. Wisconsin Dep’t of Agric., 295 F.3d 749 (7th Cir. 2002)……………...10

Healy v. Beer Inst., 491 U.S. 324 (1989)……………………………………………………...7, 15

Little Arm, Inc. v. Prosecutors: Adams, 13 F. Supp. 3d 893 (S.D. Ind. 2014)……………...22, 26

Midwest Title Loans, Inc. v. Mills, 593 F.3d 660 (7th Cir. 2010)………………6, 7, 10, 12, 15, 21

Midwest Title Loans, Inc. v. Ripley, 616 F. Supp. 2d 897 (S.D. Ind. 2009)……………....7, 12, 15

Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456 (1981)…………………………………22

Mintz v. Baldwin, 289 U.S. 346 (1933)…………………………………………………………..13

Morley-Murphy Co. v. Zenith Elec. Corp., 142 F.3d 373 (7th Cir. 1998)…………………....16,18

Nat’l Collegiate Athletic Ass’n v. Miller, 10 F.3d 633 (9th Cir. 1993)………………………….15

Nat’l Elec. Mfrs. Ass’n v. Sorrell, 272 F.3d 104 (2d Cir. 2001)………………………………..…8

Nat’l Solid Wastes Mgt. Ass’n v. Meyer, 63 F.3d 652 (7th Cir. 1995)……………………………6

Paul Stieler Enter., Inc. v. City of Evansville, 2 N.E.3d 1269 (Ind. 2014)………………………30

People v. Thomas, 2016 N.Y. Slip. Op. 26033 (City of New York Crim. Ct.) (Feb. 5, 2016)…. 33

Pike v. Bruce Church, 397 U.S. 137 (1970)………………………………………………..…7, 15

Reid v. Colorado, 187 U.S. 137 (1902)………………………………………………………….13

Rocky Mtn. Farmers Union v. Corey, 730 F.3d 1070 (9th Cir. 2013)………………………...…14

Romer v. Evans, 517 U.S. 620 (1996)……………………………………………………………22

State v. Price, 724 N.E.2d 670 (Ind. Ct. App. 2000)…………………………………………….31


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STATUTES AND REGULATIONS

A.C.A. § 26-57-257.……………………………………………………………………………..16

Indiana HEA 1035 .……………………………………………………………………………...31

Indiana HEA 1386 .…………………………………………………………………………...1, 27

Indiana HEA 1432 .……………………………………………………………………………...31

Utah Code Ann. § 26-57-103(4)(b) .…………………………………………………………….17

21 U.S.C. § 321.………………………………………………………………………………….32

21 U.S.C. § 387.………………………………………………………………..………...23, 24, 32

78 Fed. Reg. 16 (Mar. 19, 2013) .……………………………………………………………..…25

79 Fed. Reg. 23 (Apr. 25, 2014) .………………………………………………………………..24

IC 7.1-7……………………………………………………………………………………...passim


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INTRODUCTION

Petitioners and Intervenor-Petitioner, by their respective counsel, jointly submit this

combined response and reply regarding the parties’ cross motions for summary judgment. See

Dkt. No. 63 (Petitioners’ and Intervenor-Petitioner’s opening brief in support of motion for

summary judgment and permanent injunction) (“Pet’r Memo. Supp.”); Dkt. No. 70

(Respondents’ opening brief in support of cross motion for summary judgment and response in

opposition) (“Resp’t Memo. Supp.”).1

PRELIMINARY STATEMENT

Before addressing Respondents’ arguments related to the cross motions for summary

judgment, Petitioners and Intervenor-Petitioner want to make absolutely clear that this lawsuit

will have little to no impact on the overall regulation of e-liquids in Indiana.

First and foremost, we are not challenging the vast majority of provisions in the Indiana

statute that seek to protect consumers. For example, regardless of the outcome in this case,

Indiana will still be able to: (i) prohibit teens from purchasing e-liquids; (ii) ensure that only

certain ingredients are used to manufacture e-liquids; (iii) prevent accidental ingestion through

the use of child-proof caps; (iv) require labels with ingredient and content information; (v)

prohibit tampering through the use of tamper-evident packaging; and (vi) conduct tests on e-

liquid samples for unapproved ingredients or mislabeled nicotine levels.

1 Petitioners and Intervenor-Petitioner have withdrawn from their motion for summary judgmentCount II of Intervenor-Petitioner’s Petition, which claims that the Indiana statute violates theDue Process Clause as to the security requirements. See Pet’r Memo. Supp. at 27-36. This wasdone in response to a recent amendment to the statute’s security requirements. See Ex. 1, HEA1386, P.L. 214-2016 at ¶ 33. The parties filed an Agreed Motion to reopen discovery on CountII, as well as Count III (Pike Balancing), in light of the amendment, and this Court recentlygranted that motion. See Dkt. Nos. 84-85.


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Second, we note that the Indiana statute does not address other purported risks identified

by Respondents and amici. For instance, the statute explicitly approves the use of certain

ingredients (e.g., nicotine) despite their claims of potential health risks, and does not address

underage consumers using e-vapor devices for illicit drug use (presumably leaving that up to the

State’s criminal code). Thus, in that respect, this lawsuit will have no impact on those issues.

Finally, Petitioners and Intervenor-Petitioner are only challenging a very narrow set of

provisions – the security, clean room, and audit requirements – because they are unconstitutional.

While Indiana has every right to adopt laws for the public health and safety, it has no right to

impose requirements on manufacturers that run afoul of the federal and Indiana constitutions.

In addition, it is undisputed in this case that the specific risks addressed by the security

and clean room requirements – namely, adulteration and intentional sabotage – have a very low

probability of actually manifesting themselves. For example, the Indiana statute requires

manufacturers to construct a clean room that complies with the Indiana Commercial Kitchen

Code (“Kitchen Code”) that is, in turn, designed to protect against microorganisms and viral

pathogens that cause foodborne illness. Ex. 2, Retail Food Establishment Sanitation

Requirements, 410 IAC 7-24, at (i). But as established by Petitioners and Intervenor-Petitioner,

there are no reasonably foreseeable risks of foodborne illness in e-liquids, a fact that

Respondents have not contested. See Pet’r Memo. Supp. at App. 6, Seward Decl. Specifically,

such risk is extremely low due to, among other reasons, the following:

• The manufacturing processes (e.g., solvent extraction, steam distillation, and dryingat 300° F) used to make the ingredients approved for use under the Indiana statutepreclude any health risks, such as allergens or mycotoxins. Id. at ¶ 24.

• The primary ingredient in e-liquid, propylene glycol, is an effective antimicrobialagainst common bacteria (e.g., E. coli, Staphylococcus aureus, Streptococcuspyogenes), as well as viruses and yeasts. Id. at ¶¶ 34-46.


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• The high temperatures (320° F and above) at which open system devices vaporize e-liquid are more than sufficient to kill microbiological hazards and viruses (includingNorovirus, the number one known cause of foodborne illness), which are generallykilled at 165° F. Id. at ¶¶ 48-52.

• The lack of any scientific or illness-outbreak data identifying e-liquid ingredients ascontaining microbiological hazards. Id. at ¶ 30.

See also Pet’r Memo. Supp. at App. 4, Stip. at ¶¶ 16-17 (Respondents stipulating that they have

no position on the likelihood of e-liquid becoming contaminated with a foodborne illness or

human pathogen, and that they are not aware of any instance, whether in Indiana or elsewhere, of

e-liquid being adulterated in this manner); id. at App. 3, Farsalinos Decl. at ¶¶ 57-61 (concluding

that contamination is unlikely). Along similar lines, Respondents are not aware of any instances

of e-liquids being shipped into or otherwise sold anywhere in the United States, including

Indiana, which had been tampered with or sabotaged during the manufacturing process. Pet’r

Memo. Supp. at App. 4, Stip. at ¶ 47. While Petitioners and Intervenor-Petitioner do not

discount these concerns, the point is that this lawsuit is not challenging provisions that guard

against reasonably anticipated or expected risks.2

Lastly, evidence has been presented in this lawsuit that e-vapor products, and in

particular open systems, are “tobacco harm reduction products” in two respects – they pose

2 Respondents have stipulated to sections of the Kitchen Code that will specifically apply to e-liquid manufacturers, including sections 269-70, 276, 292, 294, 296, and 303. Pet’r Memo.Supp. at App. 4, Stip. at ¶ 20. These provisions contain detailed and extensive protocols forcleaning and sanitizing food preparation equipment, including the use of specialized mechanicalor manual warewashing equipment, application of corrosive chemicals and solutions, andrequirements for the frequent disassembly of equipment coming into contact with food materials.Ex. 2, 410 IAC 7-24, at 66-75; Ex. 3, Munoz Decl. at ¶¶ 25-31. What has gone undisputed inthis case, however, is that these protocols are completely inappropriate for cleaning andsanitizing e-liquid manufacturing equipment and, in many cases, are simply impossible to apply.Ex. 3, Munoz Decl. at ¶¶ 33-46. For example, semi-automated and automated e-liquid bottlingmachines are far too large to be cleaned in mechanical or manual warewashing equipment,contain electronic components that cannot be exposed to water or harmful chemicals, and are notdesigned to be disassembled on a regular basis. Id.


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substantially less risk than traditional cigarettes and have proven for many addicted smokers to

be the only way to quit their tobacco habit. Pet’r Memo. Supp. at 3, Farsalinos Decl. at ¶¶ 80-98.

For example, there is extensive research showing that most of the toxic chemicals found in

cigarette smoke are completely absent from vaporized e-liquid, which is due in large part to the

fact that e-liquids do not contain tobacco and that there are no combustion byproducts (like tar).

Id. at ¶¶ 66, 93. Indeed, the British government recently concluded that, based on current

evidence, e-vapor products are 95% less harmful than tobacco cigarettes. Id. at ¶ 96.

Even the exhibits attached to amici’s brief, offered in support of the Indiana statute, cite

anti-smoking advocates who believe that overregulation of e-vapor products (in the way that

Indiana has proposed) would be detrimental to the public health:

Some public health officials and vaping advocates think that regulating e-cigarettes as tobacco products is overkill; after all, the devices don’t even holdtobacco. They also worry that if e-cigarettes are regulated too heavily or barredfrom the market, the public could miss out on a device that could have saved lives.Some experts also think heavy regulation could halt innovation, deterringmanufacturers from creating more advanced devices with better nicotine deliverysystems that could help reduce smoking.

See Amici Br., Ex. 2. In a similar vein:

Regulators need to watch out for [un]intended [sic] consequences of overzealousregulation, such as stifling such developments or making e-cigarettes moreexpensive and less attractive to smokers; and also avoid conveying a message thate-cigarettes are regulated as strictly [as] or even more strictly than cigarettesbecause they are bad.

Id. (quoting Dr. Peter Hajek of the Queen Mary University of London).

In fact, the American Heart Association, in its official policy statement on e-vapor

products, in which it notes that all of the data to date reveals little or no evidence of severe

adverse events associated with e-vapor use, is a proponent of effective regulation of these

products that “addresses marketing, youth access, labeling, quality control over manufacturing,


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free sampling, and standards for contaminants.” See Amici Br., Ex. 13. Petitioners and

Intervenor-Petitioner completely agree, and are only challenging those aspects of the Indiana

statute that are plainly unconstitutional.

STATEMENT OF MATERIAL FACTS IN DISPUTE

In their opening brief, Respondents did not dispute any material facts proffered by

Petitioners and Intervenor-Petitioner. Resp’t Memo. Supp. at 11. They also did not submit

during discovery any rebuttal expert reports. Finally, Respondents did not set forth in their

opening brief any additional material facts not in dispute. However, in response to various

factual allegations made by Respondents in their opening brief, Petitioners and Intervenor-

Petitioner set forth additional material facts not in dispute (and have attached to this brief

additional supporting affidavits).

1. There is only one security company in the United States, which is located in

Indiana, that might satisfy the Indiana statute’s security firm qualification and certification

requirements necessary to provide services to e-liquid manufacturers under the statute. Ex. 4,

BPS Decl. at ¶¶ 4-9.

2. The security company retained by an e-liquid manufacturer under the Indiana

statute must be within a two hour travel time of the manufacturer so that it can quickly repair any

malfunctioning equipment and minimize the chances of a security breach. Pet’r Memo. Supp. at

App. 8, BPS Decl. at ¶¶ 36-37.

3. Most traditional tobacco companies that also make e-liquids for closed e-vapor

systems do not produce e-liquids in the same facilities as other products (e.g., cigarettes).

Rather, they either maintain a separate facility for e-liquid production or subcontract with an

independent manufacturer. Ex. 5, Hesse Decl. at ¶ 5.


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4. Traditional tobacco companies that also make e-liquids for closed systems use

different equipment and production processes for manufacturing other products (e.g., cigarettes)

and e-liquids. Id. at ¶¶ 5-6.

5. Traditional tobacco companies do not manufacture e-liquids for closed systems

and other products (e.g., cigarettes) in the same facilities or production areas because that would

be insanitary and risk contaminating e-liquid with tobacco constituents. Id. at ¶ 6.3

ARGUMENT

I. Respondents Fail To Show That The Indiana Statute Only Indirectly Regulates E-Liquid Manufacturing Activities Occurring Outside The State

Respondents agree that a State statute that directly regulates interstate commerce is per se

invalid under the Dormant Commerce Clause. Resp’t Memo. Supp. at 13 (citing Brown-Forman

Distillers Corp. v. New York State Liquor Auth., 476 U.S. 573, 578-79 (1986) and Nat’l Solid

Wastes Mgt. Ass’n v. Meyer, 63 F.3d 652, 657 (7th Cir. 1995) (“NSWM”)). If the statute has

such an extraterritorial effect, no further inquiry is required. Id. Accordingly, a court may not

ask whether the State had a rational basis for adopting the statute or if the out-of-state burdens

imposed by the statute are excessive in relation to the in-state benefits. See, e.g., Midwest Title

Loans, Inc. v. Mills, 593 F.3d 660, 665 (7th Cir. 2010) (rejecting notion that any sort of

balancing is required where a State regulates activities in another State); Midwest Title Loans,

3 Respondents also attach to their opening brief a video containing two segments. The firstsegment is supported by the Declaration of Lee Kelso. Resp’t Memo. Supp. at Ex. B. However,the second segment, allegedly featuring a vape shop employee mixing open system e-liquidsomewhere in Indianapolis, is not supported by any proper foundation and, to the extent it isoffered for the truth of the matter, constitutes hearsay. As conceded by Respondents, “[i]t isunknown who produced the video.” Id. at 6 n.6. In fact, there is no information on the “who,what, where, or how” of this segment. Neither we nor the Indiana General Assembly (whichapparently saw the video) has any idea when it was filmed, who recorded it, where it was filmed,or who appears in it. As such, Petitioners and Intervenor-Petitioner object to the use of thissegment as it would not be admissible as evidence at trial.


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Inc. v. Ripley, 616 F. Supp. 2d 897, 903 (S.D. Ind. 2009) (distinguishing the extraterritoriality

principle from other types of analyses under the Dormant Commerce Clause). Nor may a court

inquire into the motivation of the State for adopting the law, even where the statute is intended to

protect public health and safety. Ripley, 616 F. Supp. 2d at 907 (citation omitted). Such

considerations are irrelevant. Rather, all that is required of the petitioner is to show that the State

statute has the “practical effect of regulating commerce occurring wholly outside the state’s

borders.” Healy v. Beer Inst., 491 U.S. 324, 332 (1989). If so, that is the end of the matter.

Where Respondents run astray, however, is in mischaracterizing the nature and scope of

the Indiana statute and, in particular, the security, clean room, and audit requirements. As noted

by this Court in Ripley, State regulations can actually have one of two “extraterritorial” impacts –

either by directly regulating out-of-state commerce or imposing indirect effects. 616 F. Supp. 2d

at 906-07 (citing Alliant Energy Corp. v. Bie, 336 F.3d 545, 548-49 (7th Cir. 2003)) (additional

citations omitted). Under the former, the State regulation is always invalid. And this includes

any State statute that has the “practical effect” of controlling commerce outside its borders,

regardless of whether the State actually intended to regulate conduct in other States. Healy, 491

U.S. at 336; Ripley, 616 F. Supp. 2d at 907 (citing NSWM, 63 F.3d at 658-60). As to the latter,

mere incidental effects are not necessarily unlawful. Instead, they are subject to the Pike

balancing test – named after the seminal U.S. Supreme Court case Pike v. Bruce Church, 397

U.S. 137 (1970) – in which a State statute is only unconstitutional if the burdens placed on

interstate commerce clearly outweigh the local benefits. Mills, 593 F.3d at 665 (citing Pike, 397

U.S. at 142). As discussed below, the Indiana statute results in more than just indirect effects; as

a practical matter, it directly regulates commerce beyond Indiana’s borders – a fact, moreover,

that ATC has already conceded in this case. See Pet’r Memo. Supp. at App. 4, Stip. at ¶ 36.


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Respondents, in arguing that the Indiana statute does not directly regulate out-of-state

conduct, rely on several cases involving State labeling laws which they argue are

indistinguishable from Indiana’s extensive security and clean room requirements. Resp’t Memo.

Supp. at 17-20 (citing Int’l Dairy Foods Ass’n v. Boggs, 622 F.3d 628 (6th Cir. 2010) (“IDFA”)

and Nat’l Elec. Mfrs. Ass’n v. Sorrell, 272 F.3d 104 (2d Cir. 2001) (“NEMA”). In IDFA, the

Ohio Department of Agriculture (“ODA”) prohibited dairy processors wishing to sell their

products in the State from making labeling claims that their milk products do not contain

artificial hormones and otherwise required them to include certain disclaimers when making

claims about their production processes. 622 F.3d at 634. NEMA involved a Vermont statute

requiring manufacturers of certain mercury-containing products sold in the State to include on

the label a consumer warning regarding the presence of mercury and instructions to properly

recycle or dispose of the product as a hazardous waste. 272 F.3d at 107. In both cases, out-of-

state manufacturers argued that the labeling requirements resulted in direct extraterritorial

regulation because, in order to avoid burdensome and costly adjustments to their distribution

channels, they would be forced to adopt the State labels on a nationwide basis (i.e., dairy and

mercury-containing products never sold in Ohio or Vermont, respectively, would have to follow

the labeling conventions of those States). IDFA, 622 F.3d at 647; NEMA, 272 F.3d at 110.

The courts deciding those cases disagreed. Specifically, the courts found that the

manufacturers were not forced or compelled to apply the States’ labeling rules across the

country; rather, it was possible for the manufacturers to appropriately label goods sold in Ohio or

Vermont without having to apply the same labels for products heading to markets elsewhere.

IDFA, 622 F.3d at 647 (finding that the ODA regulation does not have the “undeniable effect of


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controlling” labeling activities occurring out-of-state); NEMA, 272 F.3d at 110 (the “statute does

not inescapably require manufacturers to label all lamps wherever distributed”).

In other words, the manufacturers ultimately had a choice as to whether they should

adopt a nationwide labeling scheme, employ special labels for States requiring them, or abandon

those particular State markets entirely. See, e.g., NEMA, 272 F.3d at 110 (“To the extent the

statute may be said to ‘require’ labels on lamps sold outside Vermont, then, it is only because the

manufacturers are unwilling to modify their production and distribution systems to differentiate

between Vermont-bound and non-Vermont-bound lamps”). While those manufacturers who

elected to alter their distribution schemes might incur substantial costs, those burdens were

deemed incidental effects subject to Pike balancing. IDFA, 622 F.3d at 108-09; NEMA, 272 F.3d

at 649-650. Indeed, the Ohio and Vermont regulations did not specify any conditions under

which distribution channels were to operate; instead, they simply regulated labeling content.

The Indiana statute, however, stands in stark contrast to the labeling statutes. It leaves

out-of-state e-liquid manufacturers with no choice but to apply the extensive security and clean

room requirements to their entire operations, not only to those covering the production of e-

liquids bound for Indiana, but also e-liquids that are never sold in that State. And this fact is

undisputed. Indeed, the ATC has stipulated to the following:

[I]f an e-liquid manufacturer has one facility where it makes e-liquid for sale inboth Indiana and elsewhere, the e-liquid which is produced for sale in other Stateswill, as a practical matter: (i) be videotaped by the same cameras used to complywith the Indiana statute; (ii) have access controlled by the same high security keysystem installed under the Indiana statute; (iii) be remotely monitored by the samesystems set up under the Indiana statute; and (iv) be manufactured in a clean roomthat complies with the Indiana statute’s requirements, including the IndianaCommercial Kitchen Code.

Pet’r Memo. Supp. at App. 4, Stip. at ¶ 36 (emphasis added). In fact, Respondents again concede

the point in their opening brief by arguing that manufacturers of both open and closed system e-


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liquids will, “as a practical matter” have to subject their entire production operations to Indiana’s

security and clean room regime despite the fact that only open system e-liquids are governed by

the Indiana statute. Resp’t Memo. Supp. at 31. This holds particularly true for the key system,

video cameras, and remote monitoring, as those systems must operate 24/7 (or else the

manufacturer would be deemed out of compliance). Pet’r Memo. Supp. at App. 4, Stip. at ¶¶ 32-

34. In short, Indiana will necessarily control how e-liquid is produced regardless of its

destination, giving out-of-state manufacturers no choice in the matter.4

In contrast to the manufacturers in the labeling cases, as well as other cases cited by

Respondents (see, e.g., Eby-Brown Co., LLC v. Wisconsin Dep’t of Agric., 295 F.3d 749 (7th Cir.

2002)), Petitioners and Intervenor-Petitioner have not based their challenge on broader incidental

effects that are not explicitly regulated by the statute (e.g., by maintaining that impacts on

national supply chain or distribution systems makes compliance too costly or cumbersome and,

therefore, unduly burden interstate commerce).5 Instead, underpinning the instant lawsuit is the

application of the security and clean room requirements themselves to manufacturing activities

conducted entirely outside of Indiana (i.e., the fact that Indiana is expressly telling out-of-state

manufacturers how to produce e-liquids and under what conditions).6

4 While the foregoing points focus on the direct regulation of e-liquid produced by out-of-statemanufacturers that is sold in non-Indiana markets, as discussed later in this brief, the fact that theIndiana statute also regulates the out-of-state manufacture of e-liquid that will eventually be soldin that State raises the same constitutional concerns. See Pet’r Memo. Supp. at 20-23; Mills, 593F.3d at 666 (finding Indiana car title loan statute unconstitutional even though it did not interferewith loan transactions involving non-Indiana residents).

5 That said, in both their opening memorandum in support, as well as this brief, Petitioners andIntervenor-Petitioner discuss the substantial costs that will be incurred by out-of-state e-liquidmanufacturers to comply with the Indiana statute, not as a basis for a finding of extraterritorialityper se, but instead to highlight the extensive nature of Indiana’s demands, as well as the fact thatthe unconstitutionality of these provisions is no small matter for these companies.

6 The same conclusion can be drawn regarding the Indiana statute’s audit requirements. TheATC’s recently amended Emergency Rule maintains the provisions allowing inspectors acting


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For these reasons, the 7th Circuit’s decision in NSWM is, contrary to Respondents claim,

precisely on-point. The Wisconsin statute at issue in that case required out-of-state

municipalities that wanted to dispose of their waste in Wisconsin landfills to implement an

extensive recycling and waste reduction program as prescribed by Wisconsin. 63 F.3d at 654-55.

The court held that the statute violated the constitutional ban on extraterritorial regulation.

Wisconsin’s solid waste legislation conditions the use of Wisconsin landfills bynon-Wisconsin waste generators on their home communities’ adoption andenforcement of Wisconsin recycling standards; all persons in that non-Wisconsincommunity must adhere to the Wisconsin standards whether or not they dumptheir waste in Wisconsin. If the out-of-state community does not conform to theWisconsin way of doing things, no waste generator in that community may utilizea Wisconsin disposal site. . . . The practical impact of the Wisconsin statute oneconomic activity completely outside the State reveals its basic infirmity: Itessentially controls the conduct of those engaged in commerce occurring whollyoutside . . . Wisconsin and therefore directly regulates interstate commerce.

Id. at 658 (emphasis added).

Indiana, in regulating out-of-state e-liquid manufacturers, takes a similar “our way or the

highway” approach. If a manufacturer located outside the State wants to sell e-liquid in Indiana,

it must, as a practical matter, produce all of its e-liquid – even product that is eventually sold in

places like California, Florida, Texas, or overseas – according to Indiana’s security and clean

room standards. See Pet’r Memo. Supp. at App. 1 (IC 7.1-7-2-15) (defining a “Manufacturer”

subject to the statute to include those “located inside or outside Indiana”). Like the Wisconsin

statute, Indiana seeks to force its own judgment on how manufacturers should guard against

adulteration or tampering “at the pain of an absolute ban on the flow” of product into the State.

NSWM, 63 F.3d at 660-61. As such, Respondents’ claim that the Indiana statute “only regulates

e-liquids that will be sold in Indiana” rings completely hollow. See Resp’t Memo. Supp. at 16.

on ATC’s behalf to audit out-of-state manufacturers. Ex. 6, 905 IAC 1-54-5(c). As the securityand clean room requirements will be applied to all operations, those inspectors will necessarilybe auditing operations that otherwise have no connection to Indiana.


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To the extent that Respondents argue that Indiana could have simply banned all sales of

e-liquid in the State, that point misconstrues the principle of extraterritoriality. See Resp’t

Memo. Supp. at 22. A ban does not directly regulate commerce outside a State’s borders.

Prohibiting the sale of e-liquid in Indiana says nothing about what security or clean room regime

out-of-state manufacturers must follow to sell product in other States. As demonstrated above,

the same cannot be said about the Indiana statute. Moreover, Respondents appear to claim that

out-of-state manufacturers can avoid the extraterritorial effect of the statute by simply deciding

not to sell product in Indiana. Resp’t Memo. Supp. at 19. That is not, and cannot be, the law. If

that were so, no petitioner would ever prevail in an extraterritorial case and any concerns about a

State regulating beyond its borders would be read entirely out of the Constitution. For example,

the car title company in Ripley and Mills could have foregone doing any business with Indiana

consumers; or the municipalities in NSWM could have sent all their refuse to non-Wisconsin

landfills. But the 7th Circuit in those cases did not require petitioners to take such drastic

measures, and neither should this Court in the instant case. See also Mills, 593 F.3d at 666-67

(also rejecting any suggestion that the car title company, which only had offices in Illinois, could

avoid any constitutional problems by merely opening a branch office in Indiana).

Respondents nevertheless maintain that Supreme Court precedent allows Indiana, in the

name of consumer safety, to condition the importation of e-liquids into the State, and that

Petitioners and Intervenor-Petitioner have no “constitutionally-protected right to sell [their] e-

liquids in Indiana without being subject to any Indiana regulation.” Resp’t Memo. Supp. at 14

(emphasis added).7 For support, Respondents cite to Baldwin v. G.A.F. Seelig, Inc., 294 U.S.

7 Contrary to Respondents’ claims, Petitioners and Intervenor-Petitioner have not argued thatthey should be able to sell e-liquid in Indiana without being subject to any health and safetyregulations. As noted above, they have not challenged a whole host of requirements aimed at


13

511 (1935), a case involving a New York statute which prohibited the sale of milk in that State

which was originally purchased in Vermont below a minimum price established by New York.

Id. at 519-20. In holding that the statute constituted extraterritorial regulation by dictating milk

prices in Vermont, the Court also denied New York’s attempt to save the statute in which the

State argued that by maintaining a minimum price for milk sold in Vermont it would be ensuring

a sufficient amount of income for Vermont farmers to pay for and establish sanitary dairy

operations, thus protecting the health of New York consumers. Id. at 523-24. The Court then

stated in dicta that New York had other options to ensure the public health, such as requiring out-

of-state farmers to certify that their milk is produced in sanitary conditions. Id. at 524 (citing

two cases in which the Supreme Court upheld State requirements that imported cattle be certified

as disease free).8 In Respondents’ mind, the Indiana statute is no different – all an e-liquid

manufacturer is required to do is submit an application to ATC certifying that it complies with

the statute’s various manufacturing requirements. Resp’t Memo. Supp. at 14.

Respondents once again mischaracterize the nature of the Indiana statute. The

certification requirements referenced in Baldwin only required ranchers to test their cattle prior

to importation and certify that they are free of infectious disease. This does not raise the same

extraterritorial concerns as the Indiana statute. Specifically, the certifications did not impose any

affirmative duties on ranchers regarding how they raise their cattle, what steps must be taken to

ensure sanitary operations, or where they must otherwise direct their limited resources. The

protecting Indiana consumers, including ingredient restrictions, labeling obligations, child-proofand tamper-evident packaging requirements, and a bar on sales to underage consumers. If thoseprovisions do not run afoul of the Dormant Commerce Clause or other constitutional limitations,Indiana is free to take such steps to ensure public health and safety.

8 See Mintz v. Baldwin, 289 U.S. 346 (1933); Reid v. Colorado, 187 U.S. 137 (1902).


14

ranchers were free to run their operations as they saw fit, and if they wanted to import into one of

the certification States, it was up to them on how to raise disease-free cattle.

The Indiana statute, on the other hand, is much more than a certification requirement.

Indiana imposes on out-of-state manufacturing activities a detailed regulatory scheme, including:

(i) stringent security obligations (e.g., installing cameras, operating a high security key system,

and running a 24/7 offsite monitoring and video-surveillance system); (ii) clean room

requirements (e.g., using specialized materials for walls and ceilings that are not easily

contaminated); and (iii) various portions of the Kitchen Code (e.g., disinfecting e-liquid bottling

machines using designated equipment and protocols). E-liquid manufacturers operating in other

States have no choice but to comply if they want to sell their product in Indiana. Moreover,

because these requirements will necessarily dictate how e-liquid sold in other States is

manufactured, Indiana is, as a practical matter, mandating compliance with its own regulatory

scheme for wholly out-of-state commerce.9

9 A similar analysis applies to yet another case cited by Respondents. In Rocky Mtn. FarmersUnion v. Corey, 730 F.3d 1070, 1080 (9th Cir. 2013), the California Air Resource Board(“CARB”) adopted a regulation aimed at reducing the average Greenhouse Gas (“GHG”)emissions attributable to transportation fuels used in the State. This so called “Fuel Standard”required fuel blenders selling product (e.g., gasoline, ethanol) in California to keep the average“carbon intensity” of that fuel (measured by the amount of lifecycle GHGs that are emitted whena given type of fuel is manufactured and transported to market) below an annual limit establishedunder the regulation. Id. Significantly, the Fuel Standard established a market-based systemunder which blenders could generate, sell, and buy credits to meet the annual cap, thus allowinga blender, for example, to sell product in California that actually exceeded the carbon intensitylimit provided it bought enough credits to cover the difference. In other words, “no regulatedparty is required to sell any particular fuel or blend of fuels with a certain carbon intensity.” Id.The goal of the regulation was to provide incentives for blenders to develop and produce lowcarbon intensity fuels for sale in California. Id. The Court held that this did not amount toextraterritorial regulation, in part, because no blender “was required to meet a particular carbonstandard, and no jurisdiction [needed to] adopt a particular regulatory standard” so that blenderscould gain access to the California market. Id. at 1101. Stated another way, California was nottelling out-of-state blenders how their product was to be “produced, sold, and used” beyond itsborders. Id. at 1102-03. While the Fuel Standard might compel blenders to make certain


15

Respondents also fail to adequately address the fact that the Indiana statute will subject e-

liquid manufacturers operating outside the State to inconsistent regulations, yet another hallmark

of unlawful extraterritorial regulation. See, e.g., Healy, 491 U.S. at 336-37 (noting that the

Commerce Clause protects against “inconsistent legislation arising from the projection of one

state regulatory regime into the jurisdiction of another state”).

The 7th Circuit in Mills articulated several guidelines when determining whether such

inconsistencies exist. First, there is no need for the petitioner to demonstrate that there is a direct

conflict between the challenged statute and another State’s law (i.e., that it is impossible to

comply with both laws at the same time). 593 F.3d at 667. Rather, it is sufficient to show that

another State has made different policy choices such that the extraterritorial application of the

challenged statute would effectively render the other State’s law moot. Id. at 667-68 (“To allow

Indiana to apply its law against title loans when its residents transact in a different state that has a

different law would be arbitrarily to exalt the public policy of one state over that of another”);

see also Ripley, 616 F. Supp. 2d at 908 (rejecting the notion that States may “impose their

diverse regulatory schemes on any commercial activity which affects any other state’s

interests”).10 Second, the absence of a counterpart regulation in another State can be viewed as

decisions to lower their product’s carbon intensity (e.g., use more fuel efficient transportation todeliver product to California), the point here is that California was not dictating how thosechoices were to be made. The State was not “impos[ing] its own regulatory standards on anotherjurisdiction” Id. at 1103-04 (citing NSWM, 63 F.3d at 658-62). As a consequence, the Court heldthat the Fuel Standard only resulted in indirect impacts more appropriately analyzed under Pike.Id. at 1106. In contrast, the Indiana statute does more than create mere incentives to produce e-liquid in sanitary conditions. Rather, it forces out-of-state e-liquid manufacturers who want tomarket in Indiana to follow the detailed manufacturing protocols, which will also necessarilyapply to the production of any e-liquid that is manufactured and sold in other States.

10 The Mills Court also cited to a 9th Circuit decision, Nat’l Collegiate Athletic Ass’n v. Miller,10 F.3d 633 (9th Cir. 1993), in which the Court explicitly rejected the argument that noinconsistency exists if complying with a more stringent standard would necessarily mean that aless stringent standard would also be satisfied (i.e., it would be possible to comply with both).


16

implying a policy choice not to regulate in the same manner or to the same degree. Id. (citing

Morley-Murphy Co. v. Zenith Elec. Corp., 142 F.3d 373, 379 (7th Cir. 1998)) (“In fact, any state

that has chosen a policy more laissez faire than Wisconsin’s would have its choices stymied,

because the state that has chosen more regulation could always trump its deregulated neighbor”).

As discussed below, the Indiana statute clearly fails on both counts.

We begin by noting that Respondents completely ignore the existence of another State

law that specifically regulates the manufacture of e-liquid, but in a much different manner than

that seen in the Indiana statute. Under Arkansas Code, Section 26-57-257 (Pet’r Memo. Supp. at

App. 17), the Arkansas State Legislature authorized the regulation of e-liquid manufacturers,

including “safety and hygiene rules.” Id. at § 26-57-257(s). However, none of these provisions

discuss security regimes, such as video surveillance or high security key systems, nor do they

require e-liquid to be produced in a “clean room” or pursuant to an extensive commercial kitchen

code. Instead, Arkansas takes a common sense approach and simply requires “hand washing

sinks,” the “[c]leanliness and maintenance of e-liquid preparation and mixing equipment,” and

the “[p]rohibition of food and drink” or “animals” in the mixing areas. Id. But if an Arkansas e-

liquid manufacturer wants to sell some of its product in Indiana, it will be required to outfit its

That case involved a Nevada statute which established additional procedural standards that hadto be followed in NCAA enforcement proceedings conducted in that State. Id. at 637. The Courtheld that the statute directly regulated out-of-state activities because all NCAA proceedingsconducted across the country must be applied even-handedly and on a uniform basis. Id. at 638-39. As a result, the NCAA would have no choice but to adopt Nevada’s rules for all enforcementproceedings, even those outside of Nevada. Id. In so holding, the Court gave a hypothetical inwhich one State required proof beyond a reasonable doubt, while another only required clear andconvincing evidence, and yet another applied a preponderance of the evidence standard. Id. at639-40. The Court noted that “[n]or would it do to say that it need only comply with the moststringent burden of persuasion (beyond a reasonable doubt), for a state with a less stringentstandard might well consider its standard a maximum as well as a minimum.” Id. In otherwords, one State’s law cannot, in essence, supplant another State’s regulatory approach,regardless of whether there is a direct conflict.


17

entire production process with all of the security and clean room equipment required by the

Indiana statute, thus effectively trumping Arkansas’ choice not to regulate e-liquid

manufacturing in a similar fashion. It is irrelevant that by applying Indiana’s provisions that the

Arkansas manufacturer might also meet its own State’s standard for safety and sanitation. The

salient point is that Arkansas will not be able to effectuate the balance it struck between too little

or too much regulation where Indiana, as a practical matter, has the final say.

And Arkansas is not the only State facing this problem. Last year, the Utah State

Legislature adopted an e-liquid bill that grants to local health departments the authority to

regulate the manufacture of e-liquids within their respective jurisdictions. Ex. 7, Utah Code

Ann. § 26-57-103(4)(b). Various counties in the State have since taken up the call and

promulgated ordinances aimed at the sanitation and safety of e-liquid production. See, e.g., Exs.

8 and 9 (Bear River Board of Health and Southeastern Utah District Health Department). As

with the Arkansas statute, these regulations take a reasonable approach, requiring: (i) good

hygienic practices (e.g., washing hands, not working while sick, keeping work areas clean and

free of food and drink); (ii) easily cleanable preparation surfaces, floors, walls, ceilings, and

equipment; and (iii) storage of e-liquid ingredients so as to prevent contamination. Id. (both at

section 5.4). Nowhere to be found in those regulations, however, is any mention of a security

protocol or extensive clean room or kitchen code requirements. Utah gave local health

departments discretion on what level of oversight is appropriate. Indiana cannot step-in and

entirely replace that exercise of judgment if a Utah manufacturer wants to sell in Indiana.

Respondents also acknowledge that the 7th Circuit may “characterize a lack of regulation

as a policy choice that should not be thwarted by another state’s decision to regulate an

industry.” Resp’t Memo. Supp. at 20-21. In other words, according to Respondents, “if a state


18

has chosen a laissez faire policy by choosing not to regulate, it would always have its choices

stymied because a state that has chosen more regulation would always trump its decisions.” Id.

(citing Morley-Murphy, 142 F.3d at 379). As to the instant case, they also conclude that “[e]-

liquid is currently manufactured and consumed with no regulation or oversight whatsoever.” Id.

Respondents then argue, however, that the principle articulated above does not apply here

because States cannot be said to have taken a laissez faire approach given that the industry is

new and that States are unsure how to proceed in the face of potential federal regulation. Id.

Not only is this position completely belied by the Arkansas and Utah statutes, but also by

the fact that no less than 48 States have adopted some form of e-liquid regulation over the past

few years.11 Like the Indiana statute, these laws cover a variety of areas, including child-proof

packaging requirements, sales restrictions, and labeling obligations. But they do not require

manufacturers located outside their respective States to adhere to substantial security, clean

room, and kitchen code standards. Far from speculating as to what States might do, it is clear the

11 Many states have enacted sales restrictions pertaining to e-liquids. See Colo. Rev. Stat. § 24-35-503; Fla. Stat. § 877.112 (10); Fla. Stat. § 569.14; Ga. Code. Ann. § 16-12-172; Haw. Rev.Stat. § 709-908(2) (2013); Idaho Code Ann. § 39-5717A; Idaho Code Ann. § 39-5715; 720 Ill.Comp. Stat. 677 / 10; Ill. HB No. 5868 (2015); Iowa Code § 453A.36A; Kan. Stat. Ann. § 79-3321(r); Ky. Rev. Stat. § 438.310(2); 940 CMR 22.00 (Massachusetts); Minn. Stat. § 461.21;Mo. Rev. Stat. § 407.927 (2014); Mont. Code Ann. § 16-11-304 (2015); N.H. Rev. Stat. Ann. §126-K:7; N.M. Stat. Ann. § 30-49-3; N.Y. Pub. Health § 1399-cc; N.C. Gen. Stat. § 14-313;N.D. Cent. Code § 51-32-01 (2015); Ohio Rev. Code Ann. § 2927.02; Okla. Stat. tit. 37, § 600.8;Or. Rev. Stat § 431.840(2); R.I. Gen. Laws § 11-9-13.10 (2014); S.C. Code Ann. § 16-17-500(C); Tenn. Code Ann. § 39-17-1504(c) (2015); Tex. Health & Safety Code Ann. § 161.452-.457 (2015); Vt. Stat. Ann. tit. 7, § 1003(d); Va. Code Ann. § 18.2-371.2(C) (2015); and Wyo.Stat. Ann. § 14-3-302(a). Some states have enacted regulations concerning where e-liquids maybe used. See 2015 Conn. Acts No. 15-206; Del. Code Ann. tit. 16 § 2903 (2015); Me. Rev. Stat.tit. 22, §§ 1541-1550; and N.J. Stat. Ann. § 26:3D-58. Other states have enacted age restrictionswith respect to the use of e-cigarettes. See Ala. Code §28-11-13 (2013); Alaska Stat. §11.76.109 (2014); Ariz. Rev. Stat. Ann. § 13-3622(A); Cal. Health & Safety Code § 119405; La.Rev. Stat. Ann. § 14:91.8(C); Md. Code. Ann., Health—Gen. § 24-305(b) (2015); Miss. CodeAnn. § 97-32-51 (2015); Neb. Rev. Stat. § 28-1429.01; Nev. Rev. Stat. § 202.2493(6) (2015);Wash. Rev. Code § 26.28.080; W. Va. Code § 16-9A-2(b) (2014); and Wis. Stat. § 134.66(2).


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vast majority of States have chosen to regulate e-liquids, but not like Indiana. The Dormant

Commerce Clause is designed to ensure that those policy choices have effect.12

Finally, Respondents argue that the Indiana statute “only applies to manufacturers that

are selling e-liquid within Indiana” and thus no out-of-state sales transactions are being

regulated. Resp’t Memo. Supp. at 15 (emphasis in original). This again completely

mischaracterizes the Indiana statute and, in particular, fails to recognize that it regulates several

types of commercial activity aside from the actual sale of e-liquids.

The statute itself explicitly “applies” to a number of aspects associated with the e-liquid

industry. Pet’r Memo. Supp. at App. 1, IC 7.1-7-1-1. Among the enumerated items is

“commercial manufacturing.” Id. It then defines “manufacturer[s]” covered by the statute as

including any entity “located inside or outside Indiana, that is engaged in the manufacturing of e-

liquid.” Id. at IC 7.1-7-2-15 (emphasis added). As such, the statute explicitly targets out-of-state

manufacturing activities. See also Ex. 6, 905 IAC 1-54-5(c) (ATC’s Emergency Rule providing

for out-of-state and out-of-country audits of manufacturing facilities). Lastly, the statute goes on

to define its underlying “purposes,” not based on any sales terms themselves, but rather on the

characteristics of what is being manufactured and sold. Specifically, the “purpose of this article

is . . . to protect public health and safety by:

(1) ensuring the safety and security of e-liquid manufactured for sale in Indiana;(2) ensuring that e-liquid manufactured or sold in Indiana conforms to appropriate

standards of identity, strength, quality, and purity; and(3) ensuring that e-liquid is not contaminated or adulterated by the inclusion of

ingredients or other substances that might pose an unreasonable risk to public healthand safety.”

12 The existence of numerous State statutes, which do not include the countless local ordinancesaround the country that also regulate e-liquids, certainly stands in sharp contrast withRespondents’ claim that this industry is the “Wild West.” Resp’t Memo. Supp. at 7.


20

Pet’r Memo. Supp. at App. 1, IC 7.1-7-1-2 (emphasis added). These goals are met under the

statute by dictating how and under what conditions e-liquid must be produced outside of Indiana,

a form of regulation taking place separate and apart from the ultimate sale of the e-liquid.

Accordingly, while it is the sale of e-liquid in Indiana that triggers the statutory provisions, all of

the compliance obligations that must be satisfied to access that market, including the security and

clean room requirements, will occur completely outside of Indiana.

In virtually identical circumstances, the 7th Circuit in NSWM struck down the Wisconsin

recycling law even though it only applied in instances where refuse was disposed of in a

Wisconsin landfill. Just as Indiana is ultimately trying to control the characteristics of e-liquid

sold in the State, Wisconsin was attempting to regulate the types and amounts of out-of-state

trash sent there for disposal. 63 F.3d at 654-655. The Court in NSWM found, under these facts,

direct extraterritorial regulation even though the last step in the whole process (i.e., the

landfilling of refuse) actually occurred in Wisconsin. In other words, while disposal in

Wisconsin triggered the statute, the dispositive factor for purposes of Dormant Commerce

Clause analysis was that all of the required compliance activities – i.e., implementing an

“effective recycling program” – occurred outside that State and effectively applied to all citizens

of participating municipalities even if their own trash never made it to Wisconsin Id. at 661 (“As

a price for access to the Wisconsin market, [Wisconsin] attempts to assume control of the

integrity of the product that is moving in interstate commerce”). As discussed above, this is

precisely what is happening as a result of the Indiana statute. Any e-liquid manufacturer outside

of Indiana who, in the end, sells some of its product in Indiana must implement the security and


21

clean room regimes, but must do so in a manner that applies, as conceded by Respondents, to

their entire production process, even for e-liquid that is sold elsewhere.13 14

We also note, however, that the 7th Circuit has made clear that a statute still violates the

ban on extraterritorial regulation even if it does not otherwise have the impact seen in NSWM,

whereby citizens and conduct having nothing to do with the regulating State must also, as a

practical matter, adhere to the offending statute. In Mills, the Indiana law regulating the terms of

car title loans did not interfere “with residents of another state.” Id. at 593 F.3d at 666. In other

words, there was nothing about the Indiana statute in that case that would apply to loans issued

to, for example, Illinois residents. But as the Court stated, “that cannot be a complete defense.”

Id. Under these facts, out-of-state loan companies would still be forced to either stop issuing

loans to Indiana residents or submit to Indiana’s wishes. The same holds true in the instant case.

Even if out-of-state e-liquid manufacturers are not forced to apply the security and clean room

regimes to product sold in other States, they must still apply Indiana’s extensive regulations to

the production of e-liquid bound for Indiana. This, standing alone, is unconstitutional.

13 It is also untrue, contrary to Respondents’ claim, that the Indiana statute only regulates salesoccurring wholly within Indiana. Respondents have stipulated that it also applies to out-of-statemanufacturers who sell e-liquid to “(ii) a distributor who is located outside of Indiana who thensells or distributes the product to a retailer located in Indiana; . . . [and] (iv) an out-of-stateretailer who then sells the product to a consumer or end-user in Indiana over the Internet. Pet’rMemo. Supp. at App. 4, Stip. at ¶ 13. In both instances, the sales transaction involving themanufacturer occurs outside Indiana’s borders. Respondents also wrongfully claim that an“Indiana resident could travel to Illinois and purchase an e-liquid product that is free ofregulation by Indiana.” Resp’t Memo. Supp. at 15. The statute explicitly prohibits any “person”from acquiring and possessing e-liquid from another who is not permitted by Indiana to sell theproduct. Pet’r Memo. Supp. at App. 1, IC 7.1-7-6-3(b).

14 As we pointed out in our opening brief, the Indiana statute also discriminates against interstatecommerce. Pet’r Memo. Supp. at 25-27 (citing NWMA, 63 F.3d at 662). By conditioning thesale of e-liquid in Indiana on the adoption of a particular regulatory scheme, an embargo isessentially created if an out-of-state manufacturer does not want to play by Indiana’s rules. Andif Indiana can insist on its own regulations applying out-of-state, then other States can as well.See id. This results in the very Balkanization that the Dormant Commerce Clause seeks to avoid.


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II. Respondents Fail To Identify A Rational Basis Under The Equal Protection ClauseFor Only Regulating E-Liquids Manufactured For Open Systems

Respondents agree that the Indiana statute fails on Equal Protection grounds if the

“legislative facts on which the classification is apparently based could not reasonably be

conceived to be true by the governmental decision maker.” Resp’t Memo. Supp. at 29-30 (citing

Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 464 (1981)). While Petitioners and

Intervenor-Petitioner acknowledge that they must overcome the “rational basis” test, in which a

challenged statute will be upheld if its goal bears a rational relationship to a legitimate state

interest (see Romer v. Evans, 517 U.S. 620, 631 (1996)), no State has the authority to draw

classifications “based on impermissible criteria or [those that are] used to burden a group of

individuals.” Little Arm, Inc. v. Prosecutors: Adams, 13 F. Supp. 3d 893, 912 (S.D. Ind. 2014).

As discussed below, Respondents’ sole rationale offered in support of the General Assembly’s

decision to distinguish between open and closed system e-liquids – that e-liquids manufactured

for closed systems are already regulated by the federal government – is patently untrue.

Specifically, the Respondents claim that the General Assembly believed (or could have

believed) that the U.S. Food and Drug Administration (“FDA”), under the Family Smoking

Prevention and Tobacco Control Act (codified at 21 U.S.C. §§ 387 et seq.) (“TCA”), already

regulates the production of e-liquid in closed systems. Resp’t Memo. Supp. at 30-31. According

to Respondents, this is so because the TCA regulates tobacco companies who also control about

85% of the closed system market in the United States. Id. The General Assembly therefore:

was able to observe that a large portion of e-liquids for closed systems [was]already being produced by highly regulated tobacco companies. The [GeneralAssembly] may have thought those products were being regulated by other meansand did not find it necessary to include them in the Statute’s purview. For manyof the manufacturers of e-liquids in closed systems, the [General Assembly’s]legitimate goals of preventing unintentional adulteration and contamination, as


23

well as intentional tampering or sabotage, was already furthered by the tobaccoindustry regulations.

Id. at 31 (quotations and citation omitted) (also citing FDA’s responsibility for promulgating

“good manufacturing practices” for tobacco products (21 U.S.C. § 387f(e)(1)(A)). Respondents

further state that “[h]ad the [General Assembly] chosen to subject manufacturers of e-liquids for

closed systems to these same standards, there would have been regulatory overlap by the Indiana

statute and the tobacco regulations.” Id. The Respondents conclude:

This was unnecessary, as the tobacco regulations already furthered Indiana’slegitimate interests without the statute. Thus, by choosing to regulatemanufacturers of e-liquids for use in open systems, nearly all manufacturers arethus held to a level of regulation that furthers the [General Assembly’s] legitimategoals, whether by the Indiana statute or by the tobacco regulations, without theoverlap of a manufacturer having to comply with both vaping regulations andtobacco regulations. The distinction between manufacturers is an example ofefficient legislative line-drawing that took into consideration the practicalimplications of the statute’s interaction with other regulatory frameworks.

Id. at 31-32.

The problem with this proffered rationale is that it is completely false. The federal

government, whether under the TCA or otherwise, does not regulate in any manner the

manufacture of closed (or open) system e-liquids. There is simply no basis for the General

Assembly to have believed that closed system e-vapor products manufactured by tobacco

companies – or anyone else – were already regulated by FDA and, therefore, that only targeting

open system e-liquid manufacturers would avoid unnecessary “regulatory overlap.” As closed

system e-liquids remain unregulated at the federal level, no potential duplication exists.

The TCA amended the existing Food, Drug and Cosmetic Act (“FDCA”) to give FDA

authority, for the first time, to regulate the manufacture, distribution, and marketing of “tobacco

products” in the United States. The term “tobacco product” is defined broadly in the new law to

include anything made or derived from tobacco intended for human consumption, including the


24

components, parts and accessories of the product. 21 U.S.C.§ 387(rr)(1). While this broad

definition captures any products made or derived from tobacco, the TCA did not give FDA the

immediate authority to regulate all such products. Rather, Congress only gave FDA authority to

regulate four specific types of tobacco products – i.e., cigarettes, cigarette tobacco, smokeless

tobacco and roll-your-own tobacco – along with the ability to use its rulemaking procedures in

the future to promulgate a regulation that would “deem” other, currently unregulated, tobacco

products as subject to its authority. 21 U.S.C. § 387a(b).

As a result, no manufacturer of a closed system e-liquid, regardless of whether it is a

tobacco company or not, is currently regulated by FDA. At this point, only the four, specifically

designated products are regulated under the TCA. It is true that FDA published in 2014 a

proposed regulation, known as the “Deeming Rule,” which proposed, among other things, to

deem all products that meet the broad definition of “tobacco product” as subject to the TCA,

including open and closed system e-liquids that contain nicotine derived from tobacco. 79 Fed.

Reg. 23,142 (Apr. 25, 2014).15 But not even the proposed rule, if finalized, would result in the

type of duplication articulated by Respondents as it would apply to both types of e-liquid (hence,

the point made by Intervenor-Petitioner in its Petition that portions of the Indiana statute will

likely be preempted once the “Deeming Rule” is finalized (Pet. at 7-8 (Dkt. No. 25-3)).

Moreover, to the extent Respondents are arguing that a tobacco company making closed

system e-liquids would, by default, use the same manufacturing processes it employs under the

TCA for traditional tobacco products, this demonstrates a complete misunderstanding of how e-

liquids are made. Tobacco companies that also market closed system e-liquids do not

manufacture those products using the same facilities, and certainly not the same production

15 That proposed rule is still pending and is currently being reviewed by the White House Officeof Management and Budget. See http://www.reginfo.gov/public/do/eoDetails?rrid=125646.


25

areas, where traditional tobacco-leaf products are produced. This is due to the hazards associated

with tobacco, as doing so would be insanitary and risk contaminating e-liquid with tobacco

constituents. Ex. 5, Hesse Decl. at ¶¶ 5-6 (noting that while e-liquid manufacturers focus on

sterile environments, tobacco facilities are not considered “clean” environments; dust and

particles from the production process are in the air and a natural part of leaf processing and

cigarette manufacturing). Further, traditional tobacco products, like cigarettes and smokeless

tobacco, are agricultural products made with tobacco leaf, whereas e-liquids do not contain

tobacco. Pet’r Memo. Supp. at App. 3, Farsalinos Decl. at §§ 66-67, 92. In this regard, the

tobacco processing, blending machines, and other equipment used to make cigarettes, for

example, differ drastically from the equipment used to produce and mix e-liquids. Ex. 5, Hesse

Decl. at ¶¶ 5-6. For this reason, like many open-system e-liquid manufacturers, most tobacco

companies that have entered the e-vapor arena either use facilities completely separate from their

tobacco plants or hire third-party contract laboratories to manufacture their products, neither of

which are presently subject to FDA regulation for e-liquid production. Id. at ¶ 5.16

In short, Respondents do not dispute that closed and open system e-liquids are made from

the same ingredients, and they have offered no evidence that the General Assembly could have

rationally believed that the manufacturing processes for closed system e-liquids produced by

16 We also note that not even traditional tobacco products are subject to “Good ManufacturingPractices” (“GMPs”) under the TCA. Although the TCA became effective nearly seven yearsago, FDA has not yet promulgated GMPs specific to currently regulated tobacco products. InJanuary 2012, several tobacco companies submitted a proposed version of GMPs for traditionalproducts (not e-vapor) to FDA for consideration, and FDA subsequently published a noticerequesting comment on the industry proposal. See 78 Fed. Reg. 16,824 (Mar. 19, 2013). FDAhas not yet taken any further action to propose or implement GMPs and, as noted above, does notyet have authority to do so with regard to e-liquids.


26

tobacco companies are any different. Indeed, it had no basis whatsoever to conclude that closed

systems are already regulated, whether under the TCA or on a de facto basis.17

Respondents also argue that the General Assembly could have decided to take a

piecemeal approach, regulating only open system e-liquids because those products comprise a

larger portion of the marketplace, with consumer interest growing. Resp’t Memo. Supp. at 32.

Of course, this does not justify the statute in and of itself, as the statute must be based on a

rational basis which, as demonstrated above, does not exist. Nevertheless, even this claim will

not hold true in Indiana. As discussed below, the Indiana statute, and in particular the security

firm requirement, has been structured so that virtually no open system e-liquids will be sold in

the State, leaving closed system e-liquids to completely dominate the Indiana market.

Petitioners and Intervenor-Petitioner detailed in their opening brief the stringent security

requirements imposed under the Indiana statute. Pet’r Memo. Supp. at 6-9, 29-32. Of particular

concern were provisions setting forth criteria that must be met by a security company to provide

services under the statute. Among the required qualifications, a security firm hired by an e-

liquid manufacturer must have employed no later than July 1, 2015, a single employee who held

two disparate certifications issued by standard-setting organizations.18 Moreover, as conceded

by Respondents, an e-liquid manufacturer may only hire a single security firm to meet the

statute’s requirements; in other words, the security firm cannot subcontract with another firm to

satisfy the certification standards or provide services. Pet’r Memo. Supp. at App. 4, Stip. at ¶ 37.

17 Given that Respondents have failed to show that closed system e-liquids are regulated by thefederal government, the instant case is distinguishable from various decisions cited byRespondents for support. See, e.g., Little Arm, Inc. v. Prosecutors: Adams, 13 F. Supp. 3d at913 (“The Legislature may have thought those products were being regulated by other means anddid not find it necessary to include them in the Statute’s purview.”)

18 Those are an Architectural Hardware Consultant (“AHC”) certification, issued by the Door andHardware Institute, and a Rolling Steel Fire Door Technician (“RSFDT”) certification, grantedby the International Door Association. Pet’r Memo. Supp. at App. 2, IC 7.1-7-4-1(d)(3)(A).


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For example, Respondents have stipulated that the security firm must provide the required

remote security monitoring and remote video surveillance services, as well as provide and repair

the high security key system. That single security firm cannot subcontract the work to another

firm. Id. at ¶¶ 38-39. The upshot of all this was that, as demonstrated by Petitioners and

Intervenor-Petitioner using AHC and RSFDT certification holder lists, no security firm in the

country qualified under the statute. Id. at App. 8, BPS Decl. at ¶¶ 26-35, 58, 75. There was no

company that had a single employee holding both certificates that also met the statute’s other

qualification standards for security firms. And given the July 1, 2015 deadline for a security

company to qualify, no security company would ever be able to meet the standards. This would

have totally shut down the open system e-liquid market in Indiana.

Apparently in response to our opening brief and the undisputed evidence submitted in

support, the General Assembly rammed through just before adjournment an amendment to the

security requirements which, unfortunately, does almost nothing to ameliorate the problem. The

amendment simply allows the single security firm hired by an e-liquid manufacturer to rely on

more than one employee to collectively meet both certification requirements as of July 1, 2015.19

But based on undisputed evidenced submitted by Petitioners and Intervenor-Petitioner, there is

only one security company in the United States, which happens to be located in Indiana, that

might meet even this certification requirement. Ex. 4, BPS Decl. at ¶¶ 4-9.20 Thus, even

19 See Ex. 1, HEA 1386, P.L. 214-2016 at ¶ 33. The July 1, 2015 date was not amended. SeePet’r Memo. Supp. at App. 1, IC 7.1-7-2-22.

20 The security company is Mulhaupt’s Inc., which has locations in Lafayette and Indianapolis.See www.mulhaupts.com. Evidence was submitted by ATC purportedly showing thatMulhaupt’s has several employees who, collectively, meet the certification requirements. Whilethat evidence has yet to be verified, assuming it is accurate, it appears that Mulhaupt’s satisfiedthis requirement by acquiring another company – Overhead Door of Lafayette – who hademployees holding the RSFDT certification (Mulhaupt’s already had an AHC holder). We willassume for purposes of this brief that the acquisition occurred before the certification deadline of


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assuming that this one security company satisfies all of the other qualification criteria set forth in

the statute (e.g., at least one year commercial experience in a broad range of services, such as

video surveillance, off-site security monitoring, and specified door and lock systems (Pet’r

Memo. Supp. at App. 2, IC 7.1-7-4-1(d)(3)(B)), the open system e-liquid market in Indiana, after

the application filing deadline of June 30, 2016, will be only a fraction of today’s.

This holds true for two reasons. First, it is undisputed in this case that security companies

must be no more than a two-hour travel distance from a client so that they can repair any security

monitoring equipment that is not working. Pet’r Memo. Supp. at App. 8, BPS Decl. at ¶ 36.

This is critically important because, as Respondents concede, the security equipment, including

the high security key system, must operate 24/7 and, if it malfunctions, the manufacturer is

immediately out of compliance and subject to an enforcement action and penalties. Pet’r Memo.

Supp. at App. 4, Stip. at ¶ 34; see also id. at App. 8, BPS Decl. at ¶ 37 (noting that any delay in

repair increases the risk of a security attack). The two-hour limit also guards against potential

liability to third parties (e.g., consumers, distributors, and retailers) who are injured due to

tampering when the key system is not working. See generally id. at App. 8, BPS Decl. at ¶ 37.

Thus, quick access to the single security company retained under the statute is imperative.

Second, as there is only one firm in the country that might be able to meet the statute’s

security criteria, it will only have the capacity to serve a limited number of e-liquid

manufacturers. Indeed, that company is much smaller than the country’s largest security firms,

like ADT (which do not qualify under the statute), and will have to pick and choose the

July 1, 2015. To determine whether there are any other companies with RSFDT certificationholders that may have merged with companies having AHC certification holders, BPS reviewedSecretary of State records from across the country, as well as other business news sources.Based on that research, Mulhaupt’s is the only firm that might qualify under the statute.


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manufacturers with whom it is willing to do business.21 And in light of the geographical

limitations described above, that company will only be able to service equipment within a two-

hour travel radius from its locations, thus limiting its range to Indiana and potentially any e-

liquid manufacturers operating just over the border in neighboring States. That security

company, as a matter of law, will not be able to subcontract that work out. Pet’r Memo. Supp. at

App. 4, Stip. at ¶ 39 (stating that only the qualifying security company can repair the high

security key system).

Taken together, these two factors will conspire to substantially curtail the open system e-

liquid market in Indiana, as only a few manufacturers, at most, will be able to secure the services

of the lone security company and do business within the State. Indeed, the undisputed evidence

is telling. It is uncontested in this case that at least 90% of all branded e-liquid sold in Indiana

comes from 164 out-of-state companies, leaving only 13 Indiana companies that manufacture

either branded or private label e-liquids. Pet’r Memo. Supp. at App. 5, Hong Decl. at ¶¶ 246-48.

As there are about 190 brands marketed in the State, it is easy to see how the Indiana statute will

severely limit competition and, more importantly, the variety and amount of available e-liquids.22

As already noted, the one security company that might be able to provide some services will not,

as a matter of law, be able to work with the vast majority, if any, of the out-of-state

manufacturers (numbering over 150) due to geographical and statutory limitations, thus leaving a

market dominated by unregulated closed systems. And as the Indiana statute prevents the ATC

21 As a practical matter, the ATC has indicated that the filing deadline for manufacturerapplications is really April 30, 2016, as the agency will need 60 days to review them by the drop-dead date for approval of June 30, 2016. Pet’r Memo. Supp. at App. 4, Stip. at ¶ 14.

22 Reducing e-liquid availability, particularly flavor variety, also works against public healthinterests. Consumers repeatedly indicate in surveys that a wide choice in flavors is key to makinga successful transition from smoking to vaping. Pet’r Memo. Supp. at App. 3, Farsalinos Decl. at¶¶ 34-43; id. at App. 5, Hong Decl. at ¶¶93-101, 158-59, 190; id. at 7, Woessner Decl. at ¶¶ 9-24.


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from accepting any applications after June 30, 2016 (or really April 30, 2016), new companies

will not be able to enter the market to fill the void (even assuming the one security company

could take on additional work). Accordingly, Respondents’ claim that the General Assembly

was simply addressing the more significant portion of the e-liquid market, while not a basis for

regulation itself, is clearly contradicted by the facts.

Because Respondents have not established any rational basis for distinguishing between

open and closed system e-liquids, and in particular that their respective manufacturing processes

somehow lead to different risk profiles, the Indiana statute is brought back under the “filled

milk” cases which hold that there is an equal protection violation where a regulatory divide is

drawn between otherwise identical products.

III. Respondents Fail To Identify Grounds Under The Indiana Constitution For OnlyRegulating E-Liquids Manufactured For Open Systems

For the same reasons, Respondents have also failed to offer a rational basis for upholding

the e-liquid statute under the Indiana Constitution. As acknowledged by Respondents, a Court

will ask, in part, whether the “differing treatment accorded by the legislation is reasonably

related to the differences between unequally treated classes.” Resp’t Memo. Supp. at 34

(citations omitted); see also Collins v. Day, 644 N.E.2d 72, 78-79 (Ind. 1994) (stating that there

“must be inherent differences in [the] situation related to the subject-matter of the legislation

which require, necessitate, or make expedient different or exclusive legislation with respect to

the members of the class”). Respondents have argued that one can rationally distinguish

between open and closed system e-liquids because only the latter is regulated under federal law

or that it is produced under safer conditions. Id. at 33-35 (noting that Respondents are relying on

the same arguments as those presented in defense of the federal Equal Protection claim). Again,

these purported, inherent distinctions have no basis in fact. See also Paul Stieler Enter., Inc. v.


31

City of Evansville, 2 N.E.3d 1269, 1277-78 (Ind. 2014) (noting that piecemeal legislation was not

justified where there were no inherent differences between riverboat casinos and restaurant

establishments for purposes of banning smoking in only the latter). Thus, the Indiana statute also

violates notions of equal protection under the State’s constitution.23

IV. Respondents Fail To Cite A Rational Basis For Regulating Open System E-LiquidAs A Tobacco Product Under Indiana Tobacco Laws

Petitioners and Intervenor-Petitioner challenged, under both the federal and State

constitutions, the Indiana statute’s classification of e-liquids under its definition of “tobacco

product.” At the time our lawsuits were initiated, HEA 1432 defined “Tobacco product” for

purposes of requiring e-liquid retailers to obtain a sales certificate under IC 7.1-1-3-18.5, to

mean “a product that (1) contains tobacco, including e-liquid (as defined by IC 7.1-7-2-10) that

contains tobacco…” Pet’r Memo. Supp. at App. 1, HEA 1432, § 8(b); see also id. at 45. We

challenged that definition as constitutionally infirm for two reasons: (i) e-liquids do not contain

any tobacco, and although many e-liquids contain nicotine extracted from the tobacco plant, that

substance is chemically and materially distinct from tobacco itself and is thus not tobacco; and

(ii) not all e-liquids contain nicotine. Id. at 46. The General Assembly, however, recently

amended this definition to read as follows: “Tobacco product”, for purposes of IC 7.1-1-3-18.5,

means a product that: (1) contains tobacco, including e-liquid (as defined by IC 7.1-7-2-10) that

contains nicotine…” Ex. 10, HEA 1035 at § 2.

23 Accordingly, the opinion cited by Respondents for support, State v. Price, 724 N.E.2d 670(Ind. Ct. App. 2000), is inapposite. Petitioner in that case claimed that an Indiana law making itunlawful to drive a car without wearing a seatbelt violated notions of equal protection becausethe law did not also apply to trucks, tractors, or recreational vehicles.” Id. at 675. The Courtrejected this argument, noting, in part, that “trucks and recreational vehicles provide significantlymore structural protection in collisions than the passenger motor vehicles mentioned in thestatute,” and thus there was a rational basis to draw the legislative distinction. Id. at 675.Respondents, however, have not identified any inherent differences between closed and opensystem e-liquids that justify unequal treatment under the Indiana Constitution.


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To the extent that this new definition limits the regulation of e-liquids sold by retailers in

Indiana to those products that contain nicotine, then our second concern has been addressed (i.e.,

retailers may sell zero nicotine e-liquids without a tobacco sales certificate). However, the first

concern remains. The plain language of the amended definition still requires e-liquids subject to

the sales certificate requirement to “contain tobacco” and goes on to equate nicotine with

tobacco. But the uncontroverted evidence in this case is that e-liquids do not contain tobacco

and that nicotine is most definitely not a form of tobacco either. See Pet’r Memo. Supp. at 46

(citing Dr. Farsalinos declaration explaining how nicotine is a heavily processed chemical that is

purified of any remnants of tobacco plant, and noting that nicotine can also be synthetically

produced in the lab or extracted from other non-tobacco plants).

Respondents argue that the General Assembly may have been attempting to mirror

FDA’s broad definition of “tobacco product” under the FDCA, which the FDA has applied to

open and closed system e-liquids in the proposed “Deeming Rule.” Resp’t Memo. Supp. at 37

(also citing to testimony before the General Assembly by a witness claiming that FDA will

eventually regulate e-liquids like tobacco). That definition defines as a “tobacco product” any

“product made or derived from tobacco that is intended for human consumption.” 21 U.S.C. §

321(rr)(1) (emphasis added). But even a cursory review of Indiana’s and FDA’s definitions

reveal that they are not the same. FDA’s definition never mentions “nicotine” and, in

recognizing that nicotine is not tobacco, captures nicotine-based products by using the phrase

“derived from tobacco.” In fact, the TCA defines the term “nicotine” without any mention of

tobacco to mean “the chemical substance named 3-(1-Methyl-2-pyrrolidinyl) pyridine or

C[10]H[14]N[2], including any salt or complex of nicotine.” 21 U.S.C. § 387(12). The Indiana

statute, however, clearly assumes that tobacco and nicotine are one and the same, and thus


33

regulates e-liquids like tobacco, an irrational approach that is wholly unsupported by the facts.24

See also Ex. 11, People v. Thomas, 2016 N.Y. Slip. Op. 26033 (City of New York Crim. Ct.)

(Feb. 5, 2016) (holding that because “[a]n electronic cigarette neither burns nor contains

tobacco” it does not fall under the definition of “smoking” for purposes of a city ordinance,

which means the “burning of a lighted cigar, cigarette, pipe or any other matter or substance

which contains tobacco.”) (emphasis added).

V. Respondents Fail To Cite A Rational Basis For Only Regulating Retailers Who SellE-Liquid Used In Open Systems

Respondents also rely primarily on their argument that closed system e-liquids made by

tobacco companies are regulated by the federal government to justify the Indiana statute’s

requirement that only retailers of open system liquids must obtain a sales certificate. Resp’t

Memo. Supp. at 38-39. We have already demonstrated why this assumption is incorrect.

Moreover, Respondents maintain that regulating only open system retailers is rational because a

legislator could have believed that “all, if not almost all” closed system retailers either sell

tobacco products or open systems that require a sales certificate (i.e., closed system retailers will,

as a practical matter, have to secure a sales certificate to cover other products). Id. at 39-40.

The undisputed facts in this case prove otherwise. As we have demonstrated, brick-and-

mortar vape shops are the largest source of open system e-liquids, but these establishments

“generally do not sell tobacco products” and “are generally vape only.” Pet’r Memo. Supp. at

App. 5, Hong Decl. at ¶¶ 135, 146. And the statistics bear this out. Vape shops represent

almost 50% of the market spend by consumers for open system products. Id. at ¶¶ 203-206. In

24 Of course, even if Indiana’s definition is interpreted as coextensive with the FDA definition,the statute still fails, for the reasons already discussed above, based on notions of equalprotection under the federal and State constitutions to the extent that it draws an impermissibledistinction between two otherwise identical products and only regulates one (open systems).


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fact, mass channels that also sell tobacco and closed system products only represent about 27%

of the market. Id. As a result, the General Assembly could not have rationally assumed that

sales certificates issued to open system retailers would have also covered virtually all of those

retailers selling closed system products. Finally, even for retailers dealing in open systems, as

well as closed systems and/or tobacco products, they would not be subject to any ATC

enforcement action for a violation of the terms and conditions of the sales certificate (see I.C.

7.1-3-18.5-5, -9) with regard to closed systems. Just because an open system retailer obtains a

sales certificate does not mean its closed system products are regulated.

CONCLUSION

Based on the foregoing, as well as Petitioners’ and Intervenor-Petitioner’s opening brief,

this Court should declare the challenged provisions of the Indiana statute unconstitutional and

permanently enjoin their enforcement.

Dated: April 13, 2016

Respectfully submitted,

/s/ J. Gregory Troutman_____________________

J. GREGORY TROUTMANTROUTMAN LAW OFFICE, PLLC.312 South Fourth Street, Suite 700Louisville, Kentucky 40202(502) [email protected] for Petitioners

/s/ Robert D. Epstein_________________________

ROBERT D. EPSTEINEPSTEIN COHEN SEIF & PORTER, LLP50 S. Meridian St., Suite 505Indianapolis, IN 46204(317) [email protected]

Eric P. Gotting ([email protected])Manesh K. Rath ([email protected])Azim Chowdhury ([email protected])KELLER AND HECKMAN LLP1001 G Street, N.W., Suite 500 WestWashington, D.C. 20001(202) 434-4100Co-Counsel for Intervenor-Petitioner


mailto:[email protected]



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CERTIFICATE OF SERVICE

I hereby certify that on April 13, 2016, the foregoing document was electronically filedwith the Clerk of the Court using CM/ECF. I also certify that the foregoing document is beingserved this day on all counsel of record identified on the below Service List, either viatransmission of Notices of Electronic Filing generated by CM/ECF or in some other authorizedmanner for those counsel or parties who are not authorized to receive electronically Notices ofElectronic Filing.

/s/ J. Gregory Troutman_______________


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