In two blockbuster opinions last week, appeals courts upheld three state and local regulations against industry challenges. In Association of Contracting Plumbers v. City of New York, the Second Circuit Court of Appeals ruled that federal law does not block New York State and New York City laws requiring all-electric new construction. And in Rinnai America Corp. v. South Coast Air Quality Management District, the Ninth Circuit Court of Appeals found that a California air district’s rule requiring some appliances to eliminate nitric oxide and nitrogen dioxide (“NOx”) emissions was not preempted either.
These rulings are extremely significant, both because of the policies involved and because of what they mean for state and local authority. The laws upheld in these cases will protect New Yorkers and Southern Californians from the impacts of fossil-fuel use. They also help dispel the cloud of uncertainty created by the Ninth Circuit’s earlier case, California Restaurant Association v. Berkeley, which held that the federal Energy Policy and Conservation Act (“EPCA”) blocked a local ordinance prohibiting gas infrastructure in new buildings.
While many district courts have already rejected the argument that EPCA preempts regulations that keep appliances from operating, this is the first time that appeals courts have weighed in since Berkeley. The result is, so far, approval of the district courts and continued minimization of Berkeley.
Background
The federal Energy Policy and Conservation Act creates nationwide standards for appliance efficiency, among other things. EPCA also “preempts” state and local regulations, meaning that it prevents those regulations from affecting appliances covered by EPCA. Specifically, EPCA provides that “no State [or local] regulation concerning the energy efficiency, energy use, or water use of [a] covered product shall be effective with respect to such product,” with some exceptions.
In California Restaurant Association v. Berkeley, the Ninth Circuit interpreted this provision as preempting a law that prohibited gas infrastructure in new buildings. According to the Berkeley opinion, a regulation preventing an appliance from operating “concern[s] the…energy use” of that appliance. This meant that EPCA preempted the prohibition of gas pipes—and, potentially, a whole slew of other regulations that might block an EPCA-covered appliance.
Berkeley led to a torrent of industry litigation against state and local regulations: we are tracking a dozen live cases as of this writing. As we have reported previously, however, the cases decided so far have uniformly rejected these Berkeley-based challenges. These most recent cases are no different.
Rinnai
In Rinnai, the Ninth Circuit was presented with its first question on the scope of EPCA preemption since Berkeley. In a 2-1 decision, the panel declined to extend Berkeley, instead stressing that Berkeley’s scope was “very narrow.”
The plaintiffs in Rinnai challenged appliance emissions standards set by the South Coast Air Quality Management District (the “District”). Those standards prohibit the manufacture, sale, or installation of gas-fired water heaters, boilers, and process heaters that emit NOx. As the court noted, the District has been regulating appliance emissions since the 1970s in an effort to meet the federal Clean Air Act’s air-pollution standards. In fact, 35 other jurisdictions across the country restrict appliance NOx emissions for the same reason.
States that exceed the Clean Air Act’s pollution limits must take “all reasonably available [pollution] control measures as expeditiously as practicable.” The South Coast is in “extreme nonattainment” for all federal ozone (smog) standards and has the worst smog in the country. The District determined that it could not remedy this situation without a zero-NOx regulation.
Because the District’s rule is necessary to meet Clean Air Act requirements, the Ninth Circuit treated the case as a question of whether EPCA is meant to interfere with the Clean Air Act. The answer, it found, was no: EPCA does not mention emissions standards and nothing in the history of the statute suggests it was meant to restrict such regulations. The panel therefore determined that EPCA doesn’t preempt efforts to meet federal air-pollution standards.
The Ninth Circuit also needed to distinguish the case from Berkeley, because the Rinnai panel did not have the authority to overrule the Berkeley panel. To do so, the Rinnai panel noted that the District’s appliance emission regulations don’t regulate “energy use” because they do not bar natural gas (as the regulation did in Berkeley): they only regulate the output of the appliances in limiting NOx emissions, not the inputs in the form of natural gas. Furthermore, the Berkeley opinion specifically avoided addressing areas covered by another federal law, the Natural Gas Act, which the Rinnai panel took as a limitation on Berkeley’s applicability to federal regulatory systems generally. Ultimately, as the Ninth Circuit put it, EPCA does not regulate “any and all state laws and regulations that somehow affect a covered product.”
City of New York and Mulhern
The Second Circuit’s decision in Association of Contracting Plumbers v. City of New York—which also resolved Mulhern Gas Co. v. Mosley—marks the first appellate rejection of the broad reading of EPCA adopted by the Ninth Circuit in Berkeley. The court upheld both New York City’s Local Law 154, which requires most new buildings to be all-electric, and New York State’s parallel all-electric building code requirements, concluding that EPCA does not preempt either law.
Rather than treating EPCA as a sweeping protection for EPCA-covered appliances, the Second Circuit returned to the statute’s text and purpose. The court explained that because EPCA is an appliance efficiency statute, it preempts “energy conservation standards for covered appliances and a fairly limited realm of additional regulations,” not every law that affects whether an appliance is ultimately used.
On this basis, the Second Circuit rejected the central premise of Berkeley: that a law preventing consumers from using a gas appliance regulates the appliance’s “energy use.” Looking to EPCA’s statutory definitions, the court explained that “energy use” is a fixed technical characteristic determined through federally prescribed testing before an appliance reaches a consumer—not the amount of energy ultimately consumed in a building. Because the challenged laws regulate what fuels may be used in new buildings rather than prescribing appliance efficiency or energy use metrics, they fall outside EPCA’s preemptive scope.
The decision therefore restores broad flexibility for states and local governments to pursue a wide variety of building policies without EPCA serving as the sweeping preemption obstacle that industry plaintiffs have claimed.
Broader Meaning
For state and local policymakers, the practical significance of these two cases is difficult to overstate. By confining EPCA to its traditional domain of appliance efficiency regulation, City of New York clears the building policy space that Berkeley had cast into doubt, potentially opening a path to a variety of building-decarbonization measures in the Second Circuit. In the Ninth Circuit, Rinnai likewise provides potential pathways for health-protective regulation of fossil-fuel appliances: it clarifies that EPCA does not preempt state and local air-pollution regulations, at least when they are necessary to meet federal clean-air standards.
In the rest of the country, state and local regulators are also likely to benefit from these rulings. The Second and Ninth Circuits appear to agree that EPCA does not preempt appliance emissions regulations like the District’s rule in Rinnai. Beyond that, City of New York highlights a “growing consensus,” as the Second Circuit put it, that Berkeley was wrong and that EPCA preempts only efficiency standards. Even the Rinnai panel expressed doubts, with the majority emphasizing the limits on Berkeley’s scope and the dissenting judge acknowledging the possibility that Berkeley did not give enough weight to the “structure and context” of the statute. Courts outside the Second and Ninth Circuits do not need to follow either case, but may be swayed in favor of the City of New York interpretation by the weight of authority.
Some uncertainty still remains in these two cases. The appellants in these cases appear poised to ask the respective courts to review them “en banc,” that is, with a larger group of judges, or to ask the Supreme Court to step in. En banc review is more likely in Rinnai because the dissenting judge raised the potential of a conflict between that case and Berkeley. Supreme Court review is more likely in City of New York because there is now a “circuit split,” with the Second and Ninth Circuits interpreting the same federal statute in mutually exclusive ways. Neither of these outcomes are guaranteed. And, we still have several more appeals coming, in challenges to D.C.’s “net-zero-energy” law, the Building Decarbonization Law passed by Montgomery County, MD, and Maryland’s Building Energy Performance Standards.
For now, this is an unmitigated win for state and local health regulations. The regulations upheld in this case will save lives and ER visits. More broadly, these opinions preserve federalism and the ability of people to achieve health equity through their state and local governments.
Daniel Carpenter-Gold, Senior Staff Attorney
Jamie Long, Senior Staff Attorney
Ernesto Villaseñor, Jr., Senior Policy Analyst
July 10, 2026