On April 17, 2023, a panel of judges in the Ninth Circuit Court of Appeal held that the City of Berkeley’s regulation prohibiting the installation of natural gas piping within newly constructed buildings was preempted by the federal Energy Policy and Conservation Act (“EPCA”). The action was brought by the California Restaurant Association (“CRA”). The case is California Restaurant Association v. City of Berkeley, Case No. 4:19-cv-07668.
Berkeley passed the natural gas ordinance (the “Ordinance”) in July 2019, and it was set to go into effect on January 1, 2020. The Berkeley ordinance prohibited natural gas infrastructure in newly constructed buildings. The CRA sued Berkeley in November 2019, claiming that EPCA and state law preempted the Ordinance. The district court dismissed CRA’s preemption claim under Rule 12(b)(6) of the Rules of Civil Procedure.
A major preliminary issue for the Ninth Circuit panel to decide was whether CRA had standing to bring the claim at all. Berkeley argued that CRA did not have standing because it failed to establish that the Ordinance would imminently harm its members. Associational standing requires an organization to demonstrate that (1) at least one of its members has suffered an injury in fact that is concrete and particularized and actual or imminent (not hypothetical); (2) the injury is fairly traceable to the challenged action; and (3) it is likely that the injury will be redressed by a favorable decision. The panel held that CRA established associational standing because it established that restaurants rely on natural gas for preparing some foods, chefs are trained on natural gas stoves, and that one or more restaurants in the CRA would be opening or relocating a restaurant in a new Berkeley building subject to the requirements of the Ordinance. The panel held that these facts were sufficient to establish associational standing, but one of the three judges issued a concurring opinion expressing doubts that the CRA had established associational standing,.
Berkeley’s ordinance did not directly ban natural gas or natural gas appliances—instead the building code prohibited natural gas infrastructure (the piping) into new buildings, which would render the gas appliances useless. The district court found that the language of the ordinance circumvented federal preemption, because the EPCA was limited to covered appliances. However, the panel held that EPCA preemption encompassed building codes that regulated natural gas use by covered products, and that because the Ordinance prevented such appliances from using natural gas, it was preempted by the EPCA.
Natural gas legislation and federal preemption is likely to be an ongoing issue. Multiple cities have been contemplating or have already passed natural gas bans similar to Berkeley’s ordinance, while some states have passed legislation prohibiting local governments from restricting natural gas utility services.