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Michigan Court Of Appeals Upholds Preliminary Injunction Against Emergency Rules Banning Flavored Vaping Products

 

On May 21st, 2020, a three-judge panel of the Michigan Court of Appeals upheld a preliminary injunction against Governor Whitmer’s public emergency rules that ban the sale of flavored vaping products in the state.  Originally passed in September 2019, the governor hoped that the ban would prevent young people from being lured into an addictive habit but the appellate court found that she was exceeding her authority.

How is an “emergency rule” even legal?  Isn’t it the Michigan Legislature’s job to pass new laws?

MCL 24.248(1) provides “[i]f an agency finds that preservation of the public health, safety or welfare requires promulgation of an emergency rule… and states in the rule the agency’s reasons for that finding, and the governor concurs in the finding of emergency, the agency may dispense with all or part of the procedures [for a public hearing and offering a person an opportunity to present data, views, questions and arguments] and file in the secretary of state the copies prescribed by law and endorsed as an emergency rule….  The emergency rule is effective on filing and remain in effect until a date fixed in the rule or 6 months after the date of its filing, whichever is earlier.  The rule may be extended once for not more than 6 months by the filing of a governor’s certificate of the need for the extension with the office of the secretary of state before expiration of the emergency rule….”

What constitutes an “emergency”?  This is a highly subjective determination but both the state agency and the governor are afforded significant latitude under the law to make that decision.  An “emergency rule” is good for six months and the governor can unilaterally extend that deadline another six months after that (for a total of one year).  Beyond the one-year mark, the Michigan Legislature would have to pass a bill codifying that emergency rule as a law.

On September 18, 2019, the Michigan Department of Health and Human Services (“DHHS”) promulgated emergency rules to regulate the sale of e-cigarettes to attack the “vaping crisis among youth.”  Specifically, they found that the advertising and promotional materials of vaping companies appeal to youth and encourage the use of these nicotine products.  The emergency rules targeted “flavored nicotine vapor products” and banned the sale, offer for sale, gifting, transport, distribution and advertising of these items for six months.  The governor agreed with the emergency findings and used her authority to extend the ban an additional six months after the original expiration date on March 18, 2020.

Marc Slis, the owner and operator of 906 Vapor LLC, and A Clean Cigarette Corporation (ACC), a Michigan retailer, both filed suit in the Michigan Court of Claims against the state government for a preliminary injunction to prevent DHHS from enforcing the emergency rules.  Both plaintiffs asserted that the emergency rules are overbroad and the ban only prevents adults from purchasing flavored nicotine vapor products since the sale to minors was already illegal.  Furthermore, the ban is economically devastating to these businesses that depend on the sale of these products and will likely drive them into severe financial losses and bankruptcy.  The judge held a full evidentiary hearing and heard from the business owners and various expert witnesses in medicine and technology.  At its conclusion, the Court of Claims found that the plaintiffs met their burden of proof and granted the preliminary injunction.  As a result, Michigan was temporarily prevented from enforcing its emergency rules regarding flavored nicotine vapor products.  DHHS and the governor promptly filed application to the Michigan Court of Appeals.

In a consolidated appeal, Slis and 906 Vapor v Governor and A Clean Cigarette Corp v Governor, __ Mich App __; __ NW2d __ (2020)(Docket No. 351211), the Michigan Court of Appeals reviewed the four factors required in this state to acquire a preliminary injunction:

  • FACTOR 1: Whether Plaintiff Will Suffer Irreparable Harm If Not Granted – The Court of Appeals agreed that the plaintiffs provided ample testimony that the ban on flavored nicotine vapor products was devastating to their businesses and causing irreparable harm. There was significant lost income to owners and employees, lost inventory from products expiring during the ban, and the likelihood that these businesses will now have to file for bankruptcy protection due to money owed to suppliers and producers.
  • FACTOR 2: Whether Plaintiff Is Likely To Prevail On Merits – The plaintiffs argued, in part, that the emergency rules are invalid because no true emergency exists. After all, the sale of all vaping products to minors is already illegal, whether flavored or not.  The Court of Appeals agreed with the defendants that they are entitled to due deference under the law in determining what an emergency is.  However, this does not “equate to subservience or complete capitulation and allow a reviewing court… to abdicate entirely its role in determining the emergency rule.”  In this case, the Court of Appeals determined that the defendants did not produce enough evidence to show that “an emergency situation existed where such a period of delay would make any relevant difference in preserving the public’s health, welfare or safety.” There was no good reason presented that DHHS agency rules could have been passed through normal procedures (e.g. notice and public hearings) instead of sudden emergency proclamations.  As a result, there was a likelihood that plaintiffs are likely to succeed on the merits regarding their shared request that the emergency rules be declared invalid.
  • FACTOR 3: Does Harm To Plaintiff Absent An Injunction Outweigh Harm To Defendant – The defendants argued that a preliminary injunction enjoining the emergency rules harms them by preventing the “carrying out of their constitutional and statutory duties to protect and preserve the health, safety and welfare of the people of this state.” However, the Court of Appeals determined that the injunction did not prevent DHHS from promulgating rules under different procedures and the Legislature already criminalized the sale or distribution of vaping products to minors.  Therefore, the state government cannot carry its burden that they would be harmed more than the plaintiffs absent an injunction.
  • FACTOR 4: Whether Public Interest Will Be Harmed If Granted – The Court of Claims determined that the “public interest” factor did not favor one side over the other. “On one hand, the Court of Claims explained, an unknown number of minors would likely start using flavored nicotine vapor products. On the other hand, if the emergency rules were enforced, there was evidence that adult users of flavored vapor products would return to using combustible tobacco products, which the Court of Claims characterized as ‘more harmful’ than vapor products.”  The Court of Appeals found that there was no mistake in this factor being neutral to all parties and that all factors still favored the issuance of a preliminary injunction.

The preliminary injunction was upheld by the Court of Appeals and the State of Michigan is prohibited from enforcing its emergency rules for the time being.  The defendants have the option to appeal this decision further to the Michigan Supreme Court.  Remember, this is merely a “preliminary injunction”. The plaintiff’s lawsuit in the Court of Claims is still active as they pursue a permanent injunction.  The parties are still entitled to a full trial in this matter and that there is still the possibility that the defendants can prevail and the entire case be thrown out.  The battle is far from over.

Also noteworthy, Judge Mark Boonstra issued a 13-page concurring opinion severely criticizing the governor’s emergency order and included mention of the governor’s handling of the current COVID-19 crisis at the same time.  He expressed his “growing concern about governmental overreach” and that he was writing this opinion because “we as Americans need a wake-up call.”  In rebuking the state governor’s use and abuse of her executive authority and further undermining the Legislature’s role, Judge Boonstra concluded with the following:

  • “The trial court in this case issued a preliminary injunction enjoining the enforcement of the emergency rules. Like the majority, I question some of the trial court’s rationale. But, like the majority, I also conclude that defendants have overstepped their authority in this case. Preliminary injunctions should not be granted lightly. But neither should liberty be taken from us lightly. As the adage goes, ‘give them an inch and they’ll take a mile.’ Amidst the COVID-19 pandemic, that adage has new meaning. It even applies to vaping. For these additional reasons, I concur.”

If you or a loved one have questions or need legal representation, then do not hesitate to contact the experienced attorneys at Kershaw, Vititoe & Jedinak PLC for assistance today.

 

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