No, a HiLo should never be towed in the UP position. It has nothing to do with state laws, just the construction of the HiLo itself. It will be further damaged if towed with the top raised.
It would help to know why it is "stuck" in the UP position. That would be something you would want to fix and you'd like to know what the problem is before you buy it.
Hi-Lo 1707T - Tire Minder TPMS on Tow Vehicle and Trailer, 300W Solar Battery Charger, Equal-i-zer WDH, Progressive Dynamics Converter, Fan-Tastic Fan
2014 F150 Platinum 4x4 3.5L EcoBoost SCrew