Earlier this month, the United States District Court for the Southern District of New York issued an order that dismisses a case challenging a local gas ban enacted in the state.
In December 2021, New York City enacted Local Law 154, which generally prohibits the use of natural gas and other heating fuels in newly constructed buildings. A group of trade associations and a union whose members work on the installation and servicing of fuel gas systems (the "Plaintiffs") sued the city, arguing that the law is preempted by the federal Energy Policy Conservation Act (EPCA). EPCA, the same law that authorizes the U.S. Department of Energy (DOE) to set efficiency standards for appliances, contains a preemption provision that prohibits any state or local laws that concern the energy use of the appliances regulated by DOE. Plaintiffs argued that NYC's gas ban was one such prohibited law, as DOE regulates many appliances that use natural gas and other heating fuels.
This line of argument is similar to that underpinning the successful challenge of the Berkely, California gas ban ordinance, which ultimately played out in the U.S. Court of Appeals for the 9th Circuit. However, in this case, the district court found that the city's law does not "relate to" and therefore does not "concern" "energy use" within the meaning of EPCA. This meant that it could not be preempted by the federal statute, according to the court.
The orders in each federal circuit are binding only on their own circuit but persuasive in other circuits, which is why the NY federal court did not have to follow the precedent set in California. If the Plaintiffs choose to appeal this decision and the U.S. Court of Appeals for the 2nd Circuit upholds the decision of the lower court, it would create a "circuit split" - meaning federal appellate courts have reached differing opinions on the same issue of law. While not necessary or guaranteed, resolving circuit splits is a role played by the U.S. Supreme Court. Alternatively, if appealed, the 2nd Circuit could also overturn the holding in the lower court, as was the case for the Berkeley case.
For those interested, a copy of the order is available here.
APGA will continue to keep members up to date on this and related lawsuits, as they can impact consumer choice, including the access Americans have to the energy and appliances best fit for their homes and businesses.
For questions on this article, please contact Renée Lani of APGA staff by phone at 202-464-0836 or by email at rlani@apga.org.