California Restaurant Association v. City of Berkeley

The Ninth Circuit Court of Appeals denied a petition for rehearing en banc of its ruling that the federal Energy Policy and Conservation Act expressly preempts the City of Berkeley’s 2019 ordinance prohibiting installation of natural gas piping in newly constructed buildings. The Ninth Circuit also amended its opinion, including to state that its ruling “has nothing to say about a State or local government regulation of a utility’s distribution of natural gas to premises where covered products might be used.” Eight judges joined in a written dissent from the denial of rehearing en banc, and an additional three judges agreed with the dissent. Judge Friedland, who authored the dissent, wrote that she felt compelled to dissent “to urge any future court that interprets the Energy Policy and Conservation Act not to repeat the panel opinion’s mistakes.” The dissent characterized the panel opinion as “entirely misinterpreting a narrow preemption provision about appliance standards” by attributing “colloquial meanings” to key statutory terms “instead of the technical meanings required by established canons of statutory interpretation.” The dissent stated: “Climate change is one of the most pressing problems facing society today, and we should not stifle local government attempts at solutions based on a clear misinterpretation of an inapplicable statute.”

The City of Berkeley sought rehearing en banc of the Ninth Circuit Court of Appeals decision holding that federal law preempted the City’s prohibition on natural gas infrastructure in new buildings. Berkeley argued that the decision misinterpreted a “modest provision” of the federal Energy Policy and Conservation Act (EPCA) as “enacting a preemptive juggernaut.” Berkeley contended that the expansive interpretation could not be reconciled with EPCA and statutory construction precedents. The City also argued that the decision would case “multiple and far-reaching harms.”

Reversing a district court’s decision, the Ninth Circuit Court of Appeals held that the Energy Policy and Conservation Act (EPCA) expressly preempts the City of Berkeley’s 2019 ordinance banning the installation of natural gas piping in newly constructed buildings. EPCA’s preemption provision provides that after a federal energy conservation standard becomes effective for a “covered product,” “no State regulation concerning the energy efficiency, energy use, or water use of such covered product shall be effective with respect to such product.” A “covered product” includes consumer products such as kitchen ovens. The Ninth Circuit concluded that Berkeley’s ordinance was a “regulation concerning the … energy use” of a covered product because the plain text and structure of EPCA’s preemption provision “encompasses building codes that regulate natural gas use by covered products,” including by eliminating the use of natural gas. The Ninth Circuit disagreed with the district court’s interpretation of EPCA preemption as limited to facial regulations of consumer products, finding that “EPCA preemption extends to regulations that address the products themselves and the on-site infrastructure for their use of natural gas.” The Ninth Circuit also rejected Berkeley’s argument that the plaintiff—the California Restaurant Association—lacked standing because it did not establish an imminent harm to its members. There were two concurring opinions. The first suggested a need for further guidance on the question of whether the presumption against preemption applies to express preemption provisions like the one in EPCA. The second concurrence expressed “reservations” about the plaintiff’s standing since the complaint did not identify an individual member injured by the ordinance; it also explained why the judge believed that the Berkeley ordinance “cuts to the heart” of what EPCA preemption was intended to prevent: “state and local manipulation of building codes for new construction to regulate the natural gas consumption of covered products when gas service is otherwise available to premises where such products are used.” Sabin Center Senior Fellow Amy Turner published a <a href ="https://blogs.law.columbia.edu/climatechange/2023/04/18/ninth-circuit-holds-berkeleys-gas-ban-preempted-by-u-s-energy-policy-conservation-act/">Climate Law Blog post</a> about the Ninth Circuit’s decision and its implications for other local laws.