Late last month, in a 20-page opinion written by Judge Mary M. Schroeder, the Ninth Circuit Court of Appeals upheld the Western District of Washington’s decision in BIAW et al. v. Washington State Building Code Council, a case which we’ve written about quite frequently here at GRELJ since it was originally filed in May of 2010. The Ninth Circuit’s opinion is available for download here.
As you may recall, District Court Judge Robert Bryan agreed with Washington State that the federal Energy Policy and Conservation Act’s (“EPCA”) building code exception applied to disputed energy efficiency amendments in the state’s building code, and thereby allowed the amendments to take effect. (As we’ve noted previously, the building code exception is set forth within EPCA at 42 U.S.C § 6297(f) and allows state and local governments to set energy efficiency targets for new residential construction which can be reached with equipment or products whose efficiencies exceed federal standards, provided the enabling legislation also includes other means to achieve the targets with products that do not exceed the federal standards. This was the central issue on appeal to the Ninth Circuit.)
After walking through the case history and providing an overview of EPCA and the building code exception, the court first focused on the plaintiffs’ argument that the Washington code failed to satisfy the building code exception’s requirement that – in order to survive a preemption challenge – a state- or local-level code cannot “require” that a covered product have an energy efficiency standard that is higher than what is required by federal law. The court rejected the plaintiffs’ argument that the Washington code’s other compliance options are “so costly that builders are economically coerced and hence ‘required’ to select the higher efficiency options.” The court reasoned that “[t]he state would effectively require higher efficiency products [only] if the code itself imposed a penalty for not using higher efficiency products.”
Interestingly, the court identified the energy efficiency code that was at issue in the AHRI et al. v. City of Albuquerque litigation in connection with this line of reasoning. There, as you’ll also likely recall, the federal District Court for the District of New Mexico overturned the City of Albuquerque’s energy efficiency code after a similar preemption challenge by similar industry trade groups, partly on the basis that – with respect to the prescriptive compliance paths in the code – the ordinance “had created a situation in which the builder had no choice” and was forced “to install additional products that compensate for not using a higher efficiency product. . . . The Albuquerque ordinance thus effectively required use of higher efficiency products by imposing a penalty through the code itself.”
The Ninth Circuit also disposed of the plaintiffs’ argument related to subsection (c) of the building code exception within EPCA. It held that although Washington’s code must give credits in proportion to energy use savings without favoring particular products or methods, “Congress intended not mathematical perfection, but rather preventing the building code from discriminating between products and building methods. [The Washington code] achieves this objective by awarding credits for average equivalent energy use for each option in different situations.”
So what does the decision mean for green building policy generally? First, it’s important to note what the court pointed out at the very outset of its opinion: BIAW “is the first case at the appellate level to consider EPCA’s preemption-exemption provision.” But coupled now with the AHRI decisions from Judge Vazquez, and Judge Bryan’s opinion at the District Court level, there is a growing body of law related to what many commentators have described as the “convoluted” EPCA building code exception. As more state and local governments attempt to craft energy efficiency codes, more challenges could ensue. And if that happens, this body of law will continue to grow.
But perhaps most importantly these types of lawsuits will shed increased light on EPCA’s requirements and spur legislators to consider the preemption implications of proposed legislation as it relates to energy efficiency at the state and local levels. Indeed, in her very first opinion in AHRI, Judge Vazquez wrote that “the drafters of the [Albuquerque] code were unaware of the long-standing federal statutes governing the energy efficiency of certain HVAC and water heating products and expressly preempting state regulation of these products when the code was drafted and, as a result, the code, as enacted, infringes on an area preempted by federal law.”
More suits could also encourage Congress to revisit the building code exception and perhaps clarify the seven-part test to give better guidance to both courts and policymakers seeking to implement state- and local-level energy efficiency codes. While the purpose of federal preemption is clear and logical – avoiding patchwork legislation and thereby increasing costs of doing business – a murky area of law and legislation in this important area as it relates to green building and energy efficiency policy is not in anyone’s best interests.