In the world of building-electrification litigation, when it rains, it pours. March 2026 has precipitated three new court rulings, all of which upheld the regulations under review: Maryland’s Building Energy Performance Standards (BEPS), Montgomery County, MD’s Comprehensive Building Decarbonization bill and D.C.’s Clean Buildings Act. The three decisions share a lot in common, and point to a growing consensus against the extreme position on how federal law blocks state and local electrification policy taken by a Ninth Circuit panel and pushed by industry groups in litigation across the country (Read our previous commentary: 1/3/24 - Gloom Not Doom: The Latest in the Berkeley Decarbonization Case).
Three laws, two approaches to building regulation
But first, a quick look at the legislation under review: Both the Montgomery County and the D.C. laws mandate building-code amendments to require the use of high-efficiency electric appliances in most new construction. Both laws leave the specifics to be worked out in the code amendments themselves, which are due this year (and in D.C.’s case, provisional requirements will take effect automatically if the new code amendments are late).
Because the actual code amendments have not been passed yet, we don’t know all the details of these regulations. But we have a few specifics: Montgomery County’s electrification requirements will apply only to completely new construction, with “no remnants of any prior structure or physical connection to existing structures.” D.C.’s, by contrast, will also apply to large projects on existing buildings. Both laws have exceptions for backup power, and Montgomery County has additional exemptions, including restaurant kitchens, hospitals, and farms. D.C. will also require buildings to meet certain energy-efficiency thresholds and obtain roughly all of their energy from renewable sources.
Maryland’s BEPS, meanwhile, are different: rather than regulating the type of energy in new buildings, the BEPS limit & the emissions of existing buildings. Specifically, the BEPS set net greenhouse-gas emissions targets for certain large buildings in the state. These targets decline over time, until they reach zero in 2040. Buildings that do not meet their targets can comply by paying an “alternative compliance fee,” which starts at $230 (in 2020 dollars) for each ton of carbon dioxide or its equivalent, and increases annually. The BEPS serve as a sort of counterpart to regulations like the D.C. or Montgomery County regulations on new construction: those codes will encourage new buildings to start out at a high level of performance and low level of pollution, while the BEPS encourage upgrades to existing buildings.
How we got here
The D.C. and Montgomery County laws were both challenged on the same day, by the same law firm, and on behalf of a similar set of plaintiffs: trade groups, labor organizations, and a local utility. The legal theory was also the same, relying on the federal Energy Policy and Conservation Act (EPCA). EPCA regulates the energy efficiency of many appliances at the national level. It also “preempts” many state and local regulations—that is, it prevents those non-federal regulations from having legal effect. Specifically, EPCA preempts regulations that “concern[]” the “energy efficiency” or “energy use” of a product that is covered by federal efficiency regulations.
All three cases all turn on the meaning of the phrase “concerning…energy use.” The industry groups argue that “energy use” includes the use of a particular type of energy in a particular place; on this reading, prohibiting the use of fossil fuels in new buildings would “concern[]…energy use” because it reduces the energy use of fossil fuels to zero. The governments argue that “energy use” is a technical term referring to the amount of energy that an appliance will typically take to accomplish a task, and that blocking an appliance from being installed in a building—as in the D.C. and Montgomery County laws—or regulating building-level emissions—as in the Maryland BEPS—does not affect its “energy use” for EPCA purposes.
These arguments are mirrored in many other cases across the country. Most notably, a three-judge panel of the Ninth Circuit Court of Appeals adopted the industry position in California Restaurant Association v. City of Berkeley, striking down a local prohibition on gas piping in new buildings. An effort to have the Ninth Circuit rehear the case failed, but resulted in a dissenting opinion, written by Judge Michelle Friedland and supported by eleven judges, that laid out the position that “energy use” should be treated as a technical term that refers to one aspect of energy conservation. The two courts to rule on the issue prior to this latest wave—the Northern and Southern Districts of New York—have also adopted Judge Friedland’s position.
The decisions
The D.C. and Montgomery County opinions likewise agree with Judge Friedland’s reading of EPCA, explicitly rejecting the industry’s arguments and the Ninth Circuit panel opinion. In National Association of Home Builders v. Montgomery County, Judge Paula Xinis of the District of Maryland dispatches with the plaintiffs’ interpretation of EPCA quite efficiently. She notes that “Congress intended EPCA to preempt state energy efficiency standards, testing procedures, and consumer labeling requirements,” and that Montgomery County’s law addresses none of those things. Judge Xinis also points out that EPCA requires appliances to be tested for their “energy use” prior to distribution, and that this would be impossible if “energy use” depended on whether an appliance could be installed in a particular location. Ultimately, Judge Xinis concludes that a “technical subject” like energy efficiency points to the use of the “specialized meaning” of phrases like “energy use,” not the dictionary definition on which the plaintiffs relied.
District of D.C. Judge Ana Reyes takes a very similar position in National Association of Home Builders v. District of Columbia. Judge Reyes spends more time investigating the history of EPCA, starting with its origins in the energy crisis of the 1970s and running through to the application of the law for manufacturers today. She then looks at the question from a commonsense perspective: “Consider a hypothetical federal law,” Judge Reyes writes, that “sets a national tortilla chips-to-salsa ratio of 2 grams for every 3 grams, and preempts states from regulating that ratio. No one would say that because Congress set a chips-to-salsa ratio, it intended to ensure that every restaurant has a right to sell chips and salsa. And a state regulation prohibiting French restaurants from serving chips and salsa would not be preempted because it would operate in an entirely different regulatory space, preserving French cuisine—one that happens also to affect chips and salsa availability.”
The opinion upholding Maryland’s BEPS, Maryland Building Industry Association v. McIlwain, approaches the question slightly differently. Rather than explicitly addressing the definition of “energy use,” District of Maryland Judge Deborah Boardman focuses on the fact that the BEPS do not actually require any changes to building appliances: a building owner can reduce emissions by making their building more efficient in other ways, and at the end of the day can always pay an alternative compliance fee to make up for any difference between the building’s emissions and its target. Because of this, Judge Boardman finds, the BEPS don’t regulate the “energy use” or “energy efficiency” of appliances, however those terms may be defined.
What’s next?
The Ninth Circuit panel’s opinion in Berkeley was a shock to the numerous state and local governments trying to protect their constituents’ health and wallets from out-of-date fossil-fuel appliances. Essentially every court decision since then has pushed back the other way, however. The March 2026 decisions, combined with the decisions from the Northern and Southern Districts of New York (and a decision from the Central District of California limiting the scope of Berkeley), indicate that the district courts are not going along with the Ninth Circuit’s aggressive approach to EPCA preemption.
This is great news for proponents of high-efficiency, modern appliances. But there is still a long road ahead. The two New York cases and the California cases have been appealed to the Second and Ninth Circuits, respectively, and the plaintiffs in these latest cases may appeal, as well. Judge Boardman, who upheld the Maryland BEPS, is still reviewing a differently-structured BEPS that Montgomery County is using. Ultimately, these dispute have the potential to go all the way to the Supreme Court, particularly if a clear split in interpretation emerges from the appeals courts. In the meantime, local regulators will continue to perfect their chips to salsa ratio.
Daniel Carpenter-Gold, Senior Staff Attorney
April 1, 2026