Goodcat, LLC v. David Cook, et al

Filing

Filed Nonprecedential Disposition PER CURIAM. AFFIRMED. Diane P. Wood, Chief Judge; Joel M. Flaum, Circuit Judge and Ilana Diamond Rovner, Circuit Judge. [6822415-1] [6822415] [16-3462]

Case: 16-3462

Document: 48
Filed: 03/01/2017
Pages: 3
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604

Submitted February 21, 2017
Decided March 1, 2017
Before
DIANE P. WOOD, Chief Judge
JOEL M. FLAUM, Circuit Judge
ILANA D. ROVNER, Circuit Judge
No. 16-3462
GOODCAT, LLC,
Plaintiff-Appellee,

Appeal from the United States District
Court for the Southern District of
Indiana, Indianapolis Division.

v.

No. 1:16-cv-01514-RLY-DML
DAVID COOK, et al.,
Defendants,

Richard L. Young,
Judge.

CLOUDTOWN, LLC, et al.,
Intervenor-Defendants-Appellants.
ORDER
Intervenor-Defendants Cloudtown, LLC; DB Vapes, LLC; DNM Ventures, LLC;
Licensed E-Liquid Manufacturing LLC; VapeINg, LLC; and Vapor Bank E-Liquid, LLC
(collectively, “Intervenor-Appellants”) appeal the district court’s decision to enjoin the
enforcement of certain provisions of Indiana Code § 7.1-7-1-1 et seq. (the “Act”). In light
of our decision in Legato Vapors, LLC v. Cook, — F.3d —, No. 16-3071, 2017 WL 393265
(7th Cir. Jan. 30, 2017), we dismiss the appeal as moot.

Case: 16-3462

Document: 48

Filed: 03/01/2017

Pages: 3

No. 16-3462

Page 2

Appellee GoodCat, LLC is a Florida-based manufacturer of e-liquids. 1 Before the
Act, GoodCat supplied nearly 200 of Indiana’s retail outlets with e-liquid products. In
2015, however, the Indiana legislature enacted the statute at issue, which in part required
e-liquid manufacturers to obtain a permit from the Indiana Alcohol and Tobacco
Commission by June 30, 2016, “before mixing, bottling, packaging, or selling e-liquid to
retailers or distributors in Indiana.” Ind. Code § 7.1-7-4-1(a). To secure a permit, in-state
and out-of-state manufacturers had to satisfy certain “security requirements.” Id. § 7.1-74-1(d)(1)–(3). After multiple failed attempts to obtain a permit, GoodCat brought suit,
alleging that the Act’s security requirements violated the dormant Commerce Clause in
Article I, Section 8 of the United States Constitution. Intervenor-Appellants, in-state and
out-of-state e-liquid manufacturers that had successfully secured permits, opposed
GoodCat’s challenge to the Act. The district court held in GoodCat’s favor and enjoined
enforcement of the Act’s security requirements as applied to out-of-state manufacturers.
Intervenor-Appellants appealed.
On January 30, 2017, while the appeal was pending, this Court decided Legato
Vapors. There, three different out-of-state e-liquid manufacturers had also alleged that the
Act’s security requirements “violate[d] the dormant Commerce Clause prohibition on
extraterritorial state regulation of commerce,” as applied to out-of-state manufacturers.
Legato Vapors, 2017 WL 393265, at *2. We agreed:
From the perspective of the dormant Commerce Clause, these are
extraordinary provisions … . As applied to out-of-state manufacturers, the
security provisions of the Indiana Act violate the Commerce Clause ….
They operate as extraterritorial legislation, governing the services and
commercial relationships between out-of-state manufacturers and their
employees and contractors.
Id. at *6–7. As a result, we ordered the district court to “declare the challenged provisions
unenforceable against out-of-state manufacturers.” Id. at *10.
Article III of the Constitution requires that federal courts decide only those
disputes that present “actual, ongoing cases or controversies.” Lewis v. Cont’l Bank Corp.,
494 U.S. 472, 477 (1990) (citation omitted). “In general a case becomes moot when the
issues presented are no longer live or the parties lack a legally cognizable interest in the
outcome.” Eichwedel v. Curry, 700 F.3d 275, 278 (7th Cir. 2012) (quoting Murphy v. Hunt,
455 U.S. 478, 481 (1982)). The mandate in Legato Vapors issued on February 21, 2017. See
1

E-liquids are nicotine-containing liquids used in vaping devices such as electronic cigarettes.

Case: 16-3462
No. 16-3462

Document: 48

Filed: 03/01/2017

Pages: 3
Page 3

Fed. R. App. P. 41 advisory committee’s note to 1998 amendments (a court of appeals’
judgment or order is final upon issuance of the mandate; “at that time the parties’
obligations become fixed”). Thus, Legato Vapors renders the current appeal moot. At oral
argument, Intervenor-Appellants acknowledged that “[t]he only way that this case isn’t
moot is if one of two things happens”: (1) Indiana seeks certiorari review from the
Supreme Court, and that review is granted; or (2) this Court exercises its Circuit Rule
40(e) review and overturns Legato Vapors. First, as noted above, an appellate judgment’s
finality hinges on the issuance of the mandate, not on potential Supreme Court review.
In any event, Indiana has not yet sought such review. Second, because we conclude there
is no reason to overrule Legato Vapors, circulation under Circuit Rule 40(e) is not required.

AFFIRMED.