Synopsis

Industry groups and a plumber labor union challenged a New York City ordinance, Local Law 154, that prohibits the burning of fuels with high greenhouse-gas emissions in new construction.¹

The plaintiffs allege that the ordinance is equivalent to a prohibition on the use of gas appliances in new buildings, and that such regulations are preempted by the federal Energy Policy and Conservation Act (EPCA). 

Why It Matters for Public Health 

Combustion of fossil fuels in buildings simultaneously contributes to air pollution and to climate change, which a group of over 200 health and medical journals call “a global health emergency.”  

Retrofitting existing buildings to reduce their emissions can be expensive, but designing buildings to avoid such emissions when they’re first constructed is far cheaper. Local Law 154’s approach—regulating the fuels used in a building at construction—therefore represents an important tactic for local governments to reduce both greenhouse-gas and other air pollution in a cost-efficient manner.

Background

EPCA establishes federal energy-efficiency standards for many consumer and industrial appliances, including key building appliances like furnaces and air-conditioners. It also preempts state and local regulations that “concern[]” the “energy efficiency” or “energy use” of appliances covered by EPCA, although there are many exceptions. This preemption is generally considered to prevent state and local governments from establishing their own efficiency regulations for EPCA-covered appliances. However, a recent Ninth Circuit decision in California Restaurant Association v. City of Berkeley held that EPCA went further than this general consideration, and, in addition, would preempt an ordinance that prohibited the installation of gas infrastructure in new construction. 

Local Law 154 is similar, but not identical, to the ordinance struck down by the Ninth Circuit. Among other differences, the New York City ordinance affects fuels based on the amount of carbon emissions they produce—barring the use of fuels that produce more than 25 kilograms of carbon dioxide per million British thermal units of energy—rather than specifically targeting natural gas as the Berkeley ordinance did. Local Law 154 also prohibits fuel combustion, not the installation of fuel infrastructure. Finally, because New York City is not within the Ninth Circuit’s jurisdiction, the district court is not required to follow the interpretation of EPCA used in California Restaurant Association.  

Despite these differences, the plaintiffs’ arguments are essentially the same as Ninth Circuit’s.² They argue that neither gas nor fuel-oil appliances can be used in new buildings under Local Law 154 because both fuels emit too much carbon dioxide. According to the plaintiffs, this means that the ordinance effectively reduces the energy consumption of such appliances to zero, and therefore that Local Law 154 “concern[s]” those appliances’ “energy use” and is preempted by EPCA.   

Proceedings

The plaintiffs filed their complaint on December 29, 2023. New York City moved to dismiss the case on March 1, 2024. In that motion, the defendant argues Local Law 154 does not regulate the energy use of any appliance and therefore cannot be preempted by EPCA. The city also argues that the plaintiffs misinterpret EPCA, and that the proper interpretation is the interpretation supported by eleven Ninth Circuit judges who disagreed with the three-judge panel ruling in California Restaurant Association.  

Also on March 1, WE ACT for Environmental Justice, a community-based organization, and the New York Geothermal Energy Organization (NY-GEO) moved to intervene to defend Local Law 154. Intervention would allow the two groups to participate as parties in the case and allow the judge to take into consideration the groups’ own arguments in support of dismissal, which they have already filed. The judge denied the motion on February 21, 2025, inviting the two organizations to file an amicus instead, which they did on February 26.

The Natural Resources Defense Council (NRDC) filed an amicus brief in support of New York City’s motion to dismiss the case on March 8, 2024 which was accepted by the judge in the case. 

Litigation Status (Closed)

On March 18, the court dismissed the case, finding that EPCA does not preempt Local Law 154 because Local Law 154 “does not draw any distinction between products based on their energy efficiency or energy use as manufactured. It instead regulates, indirectly, the type of fuel that a covered product may consume in certain settings, irrespective of that product’s energy efficiency or use.” In reaching this conclusion, the court specifically disagreed with the interpretation of “energy use” adopted by the Ninth Circuit in California Restaurant Association v. Berkeley, finding that the term “does not…expand EPCA’s scope to reach the actual use of covered products, nor does it grant consumers an absolute right to use such products.” 

The plaintiffs appealed the District Court’s ruling to the Second Circuit on April 17. Seven amicus briefs were submitted in support of Local Law 154, on behalf of: Public Health Law Center; WE ACT for Environmental Justice; NRDC; Sierra Club; NYU Law’s Guarini Center; National League of Cities and the New York Conference of Mayors, jointly; and a group of state and local governments (the District of Columbia, Colorado, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Vermont, Montgomery County, and the Village of Oak Park). The U.S. government filed an amicus brief in support of the plaintiffs. Oral argument on the case was held, in tandem with Mulhern Gas Co. v. Mosley and including argument from the U.S., on January 30, 2026. The oral argument can be heard here.

On June 30, the Second Circuit consolidated this case with Mulhern Gas Co. v. Mosley and ruled in favor of the City, finding that EPCA does not preempt regulations that prohibit the use of gas appliances. In doing so, the Second Circuit disagreed with the Ninth Circuit's decision in California Restaurant Association v. Berkeley.

On July 28, the appellants filed a petition for rehearing en banc, which was denied on August 26.

The plaintiffs now have 90 days to file a petition for certiorari to the Supreme Court.