LOUISVILLE, Ky. (WDRB) – A local business has won a major victory in a lawsuit against the state of Indiana.

The Seventh U.S. Circuit Court of appeals ruled Monday in favor of a local vaping device and liquid manufacturer. The company suing Indiana was Legato Vapors, which has storefronts in both Kentucky and Indiana in the form of Derb E Cigs.

“It bothered us at first,” owner Troy LeBlanc said. “We really didn't understand the full effect of it.”

 LeBlanc credits Louisville attorney Gregory Troutman with guiding them through the process of the lawsuit.

In 2015, Indiana enacted the Vapor Pen and E-Liquid Act, which sought to regulate how the vaping and e-cigarette industry manufactured and distributed products.

“The law was going to be more of a prohibition,” LeBlanc said. “There are estimates of over 180 manufacturers closing.”

The court ruled that the law imposed excessive regulations on out-of-state companies.

LeBlanc says the biggest issue centered on the law’s requirements for security. He said, and the court agreed, that the rules were too restrictive and limited qualified firms to only one: Mulhaupt’s Inc. in Lafayette, Indiana. 

The firm only approved six companies to produce.

“There's thousands around the world that were unable to sell there," LeBlanc said. "It was down to just six."

LeBlanc says since the law was enacted, he lost $300,000 in business.

“The margins are not very high,” LeBlanc said.  “So when you take that, you have to increase your retail price.”

The Court of Appeals wrote that the law “looks very much like a legislative grant of a monopoly to one favored in-state company in the security business.”

The FBI is now looking into whether any foul play was involved in the creation of the law.

LeBlanc says the state has two weeks to appeal. 

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