This blog will continue the discussion on the EPCA specific to two past, unpublished EPCA cases that predate the litigation against the City of Berkeley. The first is a building performance regulation that applied to both existing and new construction in which the City of Albuquerque was enjoined from implementing its code because of EPCA preemption. Second, the State of Washington successfully defended a facial constitutional challenge against its adopted statutory building performance standard for new construction. Both cases evaluated a pre-trial record under the EPCA preemption language of 42 U.S.C. § 6297 that sought injunctions against the adopted building code of each jurisdiction. The different outcomes of these cases can be explained by the type of building energy standard adopted, the then existing case law used to analyze the record by the court, and changes to preemption case law that informed the Berkeley decision.

This blog will then look at how a change in express preemption precedent was essential to the City of Berkeley 9^th Circuit opinion and has spurred similar lawsuits against the City of New York and New York State under the same narrative and causes of action as the litigation against the City of Denver and State of Colorado. Discussions of this broader view of preemption will be the focus of a future blog.

You can access the Berkeley Decision blog, EPCA Blog # 1 on the lawsuit against the City of Denver and State of Colorado, and EPCA Blog #2 on the building performance standards adopted by the City of Denver and State of Colorado.

42 U.S.C. § 6297 (f)(3) Application to New Construction-Only State Regulations: Comparing the Washington State Building Code Council Case to the City of Albuquerque Case

Over the decades since the 1987 amendment to the EPCA that enacted the language on state regulation preemption (See National Appliance Energy Conservation Act of 1987, Public Law No. 100-12), there has been limited litigation against local and state governments using 42 U.S.C. § 6297, generally because state and local governments have not acted in ways that bring forth EPCA challenges until more recent attempts to decrease energy use and GHG emissions in buildings. Also relevant to these more recent attempts is a 2016 U.S. Supreme Court decision (Puerto Rico v. Franklin Cal Tax-Free Tr., 579 U.S. 115 (2016)) that changed the treatment and, arguably, muddied the water of express preemption analysis by limiting or eliminating the doctrine of “presumption against preemption” and replacing it with a plain meaning of statute analysis to determine Congressional preemptive intent. The presumption against preemption 9^th Circuit case law pre-dating Franklin was the basis for the State of Washington’s successful defense of its statutory building performance standard in 2011. The Berkeley 9^th Circuit decision use of the Franklin precedent changed this analysis for local government action, broadening the reach of EPCA preemption and arguably making it consistent with how the New Mexico District Court reached its EPCA preemption conclusion in 2008 in the City of Albuquerque case. However, there is an open question, particularly in the 9^th Circuit, as to when the presumption against preemption applies to a state legislative act or a local act given that the 1987 amendment to the EPCA ­– both in its language and the Congressional committee records –preserved then existing local and state government authority to adopt new construction standards.

The Federal District Court in the City of Albuquerque Case Used a Plain Language Express Preemption Analysis Similar to the 9^th Circuit Berkeley Decision

Let’s begin the discussion in chronological order.

In 2008, a federal district court judge granted the plaintiff’s motion of preliminary injunction finding that the City of Albuquerque’s adopted 2008 Energy Conservation Code Volume I (applicable to commercial and multi-family new construction, additions, and alterations of existing buildings as well as replacement of HVAC equipment), Volume II (applicable to one and two family detached dwelling and town houses that were new construction or additions, alterations, or renovations of existing buildings as well as some HVAC replacements), and a High Performance Building standard (sets prescriptive standards or requires use of Volume I or II for new construction or alterations that exceeds 50% of building area) were preempted. In each application of the energy efficiency requirements, the court found the pre-trial record adequate to support a facial constitutional challenge determination of EPCA express preemption under 42 U.S.C. § 6297 (f)(3) primarily because all three requirements set energy efficiency standards for covered products in excess of federal standards. (See Air Conditioning, Heating and Refrigeration Institute, et al., v. City of Albuquerque (Civ. No. 08-633 MV/RLP (October 3, 2008)). 

This case was brought by a trade association of the HVAC industry in addition to local suppliers of covered products under the EPCA, which suggests that the EPCA can be used by a broad range of plaintiffs including trade associations, suppliers, manufacturers, and organizations and individuals in the trades that. Some of the same types of plaintiffs are pursuing EPCA preemption actions against the City of New York and State of New York presently. Because the plaintiffs in the City of Albuquerque case were seeking a preliminary injunction, the court analyzed whether these plaintiffs were irreparably injured, whether an injunction preserving the status quo balances the hardships of plaintiffs and defendant, whether an injunction is not adverse to the public interest, and whether plaintiffs can succeed on the merits. We will focus on the analysis of success on the merits. 

The court reviewed the standards of each requirement. For Volume I, the court reviewed the three compliance pathways that applied: 1) Leadership in Energy and Environmental Desing (LEED) silver certification; 2) 30% efficiency improvement above a baseline building using ASHRAE 90.1; or 3) a prescriptive option (limited to small retail and office buildings). For Volume II, the court reviewed five compliance pathways: 1) LEED silver certification; 2)  30% energy reduction below a baseline building using the 2006 International Energy Conservation Code (“IECC”); 3) Build Green New Mexico; 4) use of HVAC and water heating products that exceed federal standards to meet a performance standard above a standard reference design; and 5) a prescriptive option. For the High Performance Building Ordinance, the court reviewed two compliance pathways: 1) prescriptive standards for covered products; and 2) alternative performance standard that adopt the pathways found in Volume I or Volume 2.

The federal judge in this case found that the analysis under 42 U.S.C. § 6297 must address express Congressional preemption based on the language and intent of Congress. This is a similar analysis to that used by the 9^th Circuit in the Berkeley decision under Franklin. The court found § 6297 to be a general rule of preemption with “concerning” suggesting an intent of expansive preemption except where otherwise stated. The court relied on two legislative reports in the legislative record applicable to the 1987 adoption of the preemption language in the EPCA used to challenge the Albuquerque code. The reports are Senate Report No. 100-6 (January 30, 1987) specific to S.83 (100^th Congress, 1987-1988) that became the 1987 amendment to the EPCA and House Report No. 100-11 (March 3, 1987) specific to H.R. 87 (100^th Congress, 1987-1988). S.83 was passed by Congress in lieu of H.R. 87. Both bills as written included identical language for 42 U.S.C. § 6297 making these Congressional reports the primary source of legislative intent around preemption. This is the same Congressional record used in the 9^th Circuit Berkeley decision and the State of Washington case.

What is interesting in this analysis is how closely the 9^th Circuit Berkeley decision follows a similar analysis to the City of Albuquerque case using the 2016 U.S. Supreme Court Franklin precedent. The City of Albuquerque decision did not address the presumption against preemption just as the 9^th Circuit Berkeley decision also did not. Only in one of the concurrences by Circuit Judge O’Scannlain does the 9^th Circuit Berkeley decision seek to address the issue of the presumption against preemption and the muddied case law created by pre- and post-Franklin cases with a plea for clearer guidance from the U.S. Supreme Court.

The 9^th Circuit Berkeley opinion also did not address other U.S. Supreme Court precedent around facial constitutional challenges under express preemption of state legislative acts that formed part of the legal analysis in the Washington State Case discussed below because neither the City of Albuquerque nor the City of Berkeley are states, and the allegations were not argued as a facial constitutional challenge by either plaintiffs or defendant. More specifically, the 9^th Circuit Berkeley decision did not address Sprint Telephony PCS, L.P. v. County of San Diego, 543 F.3d 571, 579 (9th Cir.2008) (citing United States v. Salerno, 481 U.S. 739, 107 S.Ct. 2095, 95 L.Ed.2d 697 (1987)) precedent for presumption against preemption, that also applies to local action, when it relied on Franklin. Additionally, both courts reached a similar opinion: the EPCA preempted mandates where compliance required a covered appliance to exceed the federal standard for energy use or energy efficiency, be it a ban on natural gas plumbing or a building performance standard.

This begs the question as to whether there is a distinction between local and state action under the EPCA when accounting for past appellate case law, that was not addressed or overruled as it relates to the EPCA, in post-Franklin cases. This issue is broad across all federal appellate court circuits because  Franklin does not appear to overrule Salerno; 2) there is no circuit level opinion about how to analyzed this case law in the 1^st, 2^nd, and 10^th Circuits, and 3) there is a clearer issue in the 9^th Circuit that remains unaddressed as to whether the Salerno precedent used by the 9^th Circuit in the Spring Telephony PCS, L.P. remains applicable to analysis of EPCA express preemption of facial challenges to state legislative acts and local actions, particularly for a new construction building performance regulation that written to follow 42 U.S.C. § 6297(f)(3).

The Federal Court in the State of Washington Case used a Facial Challenge Analysis That Allowed a Broader Defense to Preemption Based on the Language of the EPCA

In 2010, the State of Washington successfully defended its State Energy Code against an EPCA preemption challenge that alleged violation of four of the seven requirements in 42 U.S.C. § 6297 (f)(3) that allows a state or local government to adopt regulations concerning energy efficiency, energy use, and water use of covered products in new construction. The State of Washington successfully argued in pre-trial motions that there was no arguable issue of law with regard to whether its regulation met the seven-part test with the case being dismissed by summary judgment. This defeated a facial constitutional attack of its state building code for new construction based on the express language of the EPCA using a pre-Franklin analysis. The unpublished case is Building Industry Association of Washington, et al. v. Washington State Building Code Council, W.D. Washington, United States District Court, Case No. 3:10-CV-05373-RJB, February 8, 2011. The facial challenge analysis used in this case allowed the State of Washington to argue that it need “merely to identify a possible set” of conditions not in conflict with federal law. The State of Washington was able to show how its law and building code met the requirements expressly stated in 42 U.S.C. § 6297 (f)(3) under a possible set of conditions not in in conflict with the EPCA.

What is important to keep in mind in this federal court order is that it was an unpublished and did not reach trial nor develop a factual record beyond that needed for the pre-trial summary judgment motion that analyzed a facial attack using express preemption. Unpublished cases are also not citable, binding, or persuasive.

It is also an expression of a 9^th Circuit interpretation of a U.S. Supreme Court decision that addressed the burden of proving facial constitutional challenge of a state legislative act that the court found applicable in this case. This reasoning was specific to the pleadings of the complaint forming the cause of actions filed against the State of Washington that allowed the State of Washington to characterize the EPCA cause of action as a facial constitutional challenge using existing 9^th Circuit precedent of Sprint Telephony PCS, L.P. v. County of San Diego, 543 F.3d 571, 579 (9^th Cir. 2008) citing United States v. Salerno, 481 U.S. 739 (1987). For these reasons, there are distinctions, and caution should be used when relying on this court’s analysis for a pre-trial motion. The most important distinction being that 9^th Circuit Berkeley decision was based on more recent U.S. Supreme Court precedent that did not exist at the time of the Washington State case and that was not used by the lower federal Northern District Court analysis in its ruling on the pre-trial motion to dismiss that was appealed and overturned by the 9^th Circuit using the plain language analysis of the 2016 Franklin decision

Within this context, there is important information about how a federal court could look at a express preemption challenge to a state or local regulation under the EPCA for new construction building performance standards as well as conservation standards and efficiency requirements for existing buildings. The 9^th Circuit Berkeley decision granted a broad view of preemption under the EPCA using the Franklin precedent. It is this broader view of preemption that was used to challenge Berkeley’s ordinance, and it is the same view of preemption that is being used to challenge the City of Denver, State of Colorado, City of New York, and State of New York actions on energy use in and emissions from buildings. 

This suggests that plaintiffs alleging EPCA preemption should avoid pleadings and filing motions based on facial constitutional challenges to state and local action and instead rely on the express preemption plain language of the EPCA. Defendants can argue that the EPCA preemption pleadings and pre-trial motions for injunctions are facial constitutional challenges that are protected under existing the Salerno appellate presumption against preemption precedent if a possible set of conditions exist that do not conflict with the EPCA. Defendants will use the same argument to defend against a post-Franklin plain language express preemption lawsuit but without the benefit of showing the possibility of a set of conditions that do not conflict with the EPCA except for where the plain language of the EPCA allows such a showing. The outcome likely will depend on how the district court and any subsequent circuit court panel views the fact of each case, the allegations in the pleadings, language and legal theory used in any motions, and what appellate case law the court finds applicable.

Conclusion: There is Now More Risk of Express Preemption Litigation under the EPCA

There is more risk to adopting performance standards through a state statute, particularly in the 9^th Circuit, than in the past. The Franklin precedent also puts all local action at higher risk where there may be EPCA preemption. The state and local actions of the last 35 years reflect internalized lessons of how to enact new construction building performance standards, energy efficiency, and conservation standards that avoid EPCA preemption. Where state or local action appears to violate the EPCA’s plain language around express preemption, there should be an expectation of litigation. Due care should be taken to review these lesson and practices in an era of increased EPCA preemption litigation under the Franklin precedent.

The next blog in this series will look at how this broader use of express preemption analysis under the EPCA will impact the use of building performance standards in California and across the United States.