Little Arm Inc. v. Adams
| Decision Date | 31 March 2014 |
| Docket Number | No. 1:13–cv–00862–RLY–DML.,1:13–cv–00862–RLY–DML. |
| Parties | LITTLE ARM INC. d/b/a B & B Distributions, Bohemian Groove LLC, MELX2 Enterprises Inc., and IDK Anything LLC, Plaintiffs, v. Prosecutors: ADAMS, Allen, Bartholomew, Benton, Blackford, Boone, Brown, Carroll, Cass, Clark, Clay, Clinton, Crawford, Daviess, Dearborn, Decatur, Dekalb, Delaware, Dubois, Elkhart, Fayette, Floyd, Fountain, Franklin, Fulton, Gibson, Grant, Greene, Hamilton, Hancock, Harrison, Hendricks, Henry, Howard, Huntington, Jackson, Jasper, Jay, Jefferson, Jennings, Johnson, Knox, Kosciusko, Lagrange, Lake, La Porte, Lawrence, Madison, Marion, Marshall, Martin, Miami, Monroe, Montgomery, Morgan, Newton, Noble, Ohio, Orange, Owen, Parke, Perry, Pike, Porter, Posey, Pulaski, Putnam, Randolph, Ripley, Rush, St. Joseph, Scott, Shelby, Spencer, Starke, Steuben, Sullivan, Switzerland, Tippecanoe, Tipton, Union, Vanderburgh, Vermillion, Vigo, Wabash, Warren, Warrick, Washington, Wayne, Wells, White, Whitley Counties, Defendants. |
| Court | U.S. District Court — Southern District of Indiana |
Mark W. Rutherford, Stephen R. Donham, Thrasher Bushmann Griffith & Voelkel PC, Indianapolis, IN, for Plaintiffs.
David A. Arthur, Office of the Attorney General, Indianapolis, IN, for Defendants.
ENTRY ON DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS
Plaintiffs, Little Arm Inc. d/b/a B & B Distributions (“Little Arm”), Bohemian Groove LLC (“Bohemian”), MELX2 Enterprises Inc. (“MELX2”), and IDK Anything LLC (“IDK”), bring this action against all Prosecuting Attorneys in Indiana (“Defendants”) seeking injunctive and declaratory relief as to Indiana Code 35–48–4–10.5, which makes it illegal to possess, distribute, or manufacture any “synthetic drug lookalike substance,” as defined in Indiana Code § 35–31.5–2–321.5. Plaintiffs allege that the Statute violates due process and the equal protection clause under the U.S. Constitution and the Indiana Constitution and is thus unconstitutional. Defendants have moved to dismiss Plaintiffs' state claims for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. Defendants also move for judgment on the pleadings on Plaintiffs' federal claims pursuant to Rule 12(c) of the Federal Rule of Civil Procedure.1 For the reasons set forth below, the court GRANTS the motion to dismiss and GRANTS IN PART and DENIES IN PART the motion for judgment on the pleadings.
Plaintiffs are for-profit companies in Indiana that sell, among other things, aromatherapy
products throughout Indiana. (Compl. ¶¶ 16–23). Little Arm is located in Fort Wayne; Bohemian is located in Huntington; MELX2 is located in Bloomington; and IDK is located in Carmel. (Id. ). Defendants are prosecutors who are elected officials whose responsibilities include investigating and prosecuting criminal offenses (including those created by the Statute) within the various counties in the State of Indiana. (Id. at ¶ 24)
Plaintiffs challenge the constitutionality of Indiana Code 35–48–4–10.5 (“Statute”), effective May 7, 2013, which criminalizes the possession, distribution, and manufacture of synthetic drugs and synthetic drug lookalike substances (“Lookalike Substances”). (Compl. ¶¶ 1, 28). Plaintiffs allege that Defendants have targeted their legal business with the Statute. (Id. at ¶ 25).
The Statute provides various civil and criminal penalties for involvement with a synthetic drug or Lookalike Substance. For example, penalties for possession of a synthetic drug or Lookalike Substance may range from a Class B infraction to a Class D felony. Ind.Code 35–48–4–11.5. And the penalties for dealing these substances range from a Class A infraction to a Class C felony. Ind.Code 35–48–4–10.5. Additionally, if a retail merchant has (1) violated this statute by selling or offering to sell these substances in the normal course of business, and (2) the violation resulted in a criminal conviction, then the court “shall recommend the suspension of the registered retail merchant certificate for the place of business for one (1) year.” Ind.Code 35–48–4–10.5(d). If the violation resulted instead in an infraction, the court may suspend the retail merchant's certificate for six months. Id.
The Indiana Code defines “synthetic drug” as a substance containing one or more of a multitude of specific chemical compounds, including an analog of the compound. Ind.Code § 35–31.5–2–321 (amended May 7, 2013). An “analog” is defined as a “new or novel chemical entity, independent of synthetic route or natural origin, having substantially the same: (1) carbon backbone structure; and (2) pharmacological mechanism of action; as a compound specifically defined as a synthetic drug ....” Ind.Code § 35–31.5–2–16.5. Moreover, a compound may be determined to be a synthetic drug under an emergency provision. Ind.Code § 35–31.5–2–321(13). This entails the Indiana Board of Pharmacy adopting an emergency rule to declare that a substance is a synthetic drug. Ind.Code § 25–26–13–4.1.
The Indiana Code defines a Lookalike Substance as one (1) or more of the following:
Ind.Code Ann. § 35–31.5–2–321.5. The factors listed in the Statute which may be considered in determining whether a substance is a Lookalike Substance include:
Id. The definition excludes, however, the following: (1) food and food ingredients, (2) alcohol, (3) a legend drug (as defined in Indiana Code 16–18–2–199 ), (4) tobacco, or (5) a dietary supplement (as defined in Indiana Code 6–2.5–1–16 ). Id.
Plaintiffs allege that prior to the Statute's enactment, law enforcement targeted Plaintiffs' customers and vendors in an attempt to dissuade them from conducting business with Plaintiffs. (Compl. ¶ 39). Also, law enforcement searched and seized products from Little Arm on December 20, 2012; Bohemian on May 29, 2012, and September 18, 2012; and MELX2 on January 17, 2013. (Id. at ¶ 40). These searches and seizures were all related to the aromatherapy
products sold by the respective stores. (Id. ).
After the Statute's enactment, Indiana State Excise Police (“Excise”) seized from a non-party a product manufactured by Little Arm, claiming it to be a Lookalike Substance. (Id. at ¶ 41). Excise also threatened adverse action against another business if it chose to sell aromatherapy
or air freshener products sold by the Plaintiffs. (Id. at ¶ 42).
In addition, the Indiana Department of Revenue website contains a flyer entitled “Legal Notice: Illegal Drugs, Marketed as ‘Spice,’ ‘Incense,’ ‘Potpourri,’ ‘Plant Food,’ and ‘Bath Salts' ” (“Flyer”). (Id. at ¶ 51, Ex. F).2 The Flyer could be accessed on the website page for “New and Small Business Education Center”; specifically, under the link which states, “If you are operating a convenience store or plan to sell bath salts, spice or synthetic drugs, click here.” (Id., Ex. G). The Flyer is endorsed by the Indiana State Police, Indiana Attorney General, Indiana State Department of Health, Indiana Board of Pharmacy, and the Indiana Sheriffs' Association. (Id., Ex. F). The Flyer summarizes the various penalties and remedies for manufacturing, distributing, or possessing synthetic drugs. (Id. ). The bottom of the Flyer states in bold, capital letters, “RELIANCE ON PACKAGING REPRESENTATIONS, SUPPLIER REPRESENTATIONS, AND LAB REPORTS SHALL BE DONE AT YOUR OWN RISK.” (Id. ). The Flyer does not, however, mention Lookalike Substances.
Due to the above State actions, Plaintiffs allege that they have suffered a significant loss of revenue and goodwill in their respective communities and will continue to suffer such losses if Defendants continue to target Plaintiffs' lawful business activities. (Id. at ¶ 43).
Indiana law enforcement maintains that Plaintiffs' products contain Lookalike Substances, but Plaintiffs have made several efforts to comply with federal and Indiana law. (Id. at ¶ 44). For example, Plaintiffs' aromatherapy
products are in packaging which conspicuously warns that the products are not intended for human consumption and also provides instructions for proper usage. (Id. at ¶ 45). In addition, Plaintiffs had reputable laboratories test their proposed aromatherapy products to ensure they complied with federal and Indiana law. (Id. at ¶ 47). Such testing, however, is no longer sufficient to determine if the contents of the products fall into the definition for a Lookalike Substance. (Id. at ¶ 48). In fact, the laboratory that previously tested Plaintiffs' products now refuses to...
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