Gandhi said that, “Honest disagreement is often a good sign of progress.” If that is the case, then the recent BIA v. Washington State Building Counsel decision from the Ninth Circuit Court of Appeals may signal some possible progress in the exhilarating debate of whether the Energy Policy and Conservation Act (ECPA) preempts state and local building code laws.
We’ve discussed these issues on OGBL previously here, but to quickly refresh your memory, back in 2008, the United States District Court for the District of New Mexico dealt with Albuquerque’s Energy Code, which implemented both prescriptive and performance paths aimed at increasing energy efficiency in buildings within its borders. In the January 2012 ruling, the New Mexico District Court found that the performance and prescriptive paths of the code could not be severed from each other, and as a result, “all provisions of the Code that dealt with HVAC are invalid and unenforceable,” as preempted by EPCA.
Recently, in BIA v. Washington State Building Council, the United States District Court for the Western District of Washington encountered similar facts, but came out with the opposite ruling. At issue was the Washington State Energy Code, which contained both prescriptive and performance paths aimed at increasing energy efficiency. The District Court held that the two paths could be severed, and thus EPCA did not preempt the entirety of the code.
On appeal, the Ninth Circuit affirmed the ruling – which some have labeled as the inception of a circuit split. The court there explained that both the Albuquerque and Washington codes had prescriptive and performance paths. Washington’s prescriptive path called for builders to use higher efficiency, less expensive products in their buildings, and the court found that this did not constitute a requirement, which EPCA would have preempted: “The Washington Building Code itself does not command, demand, or insist that builders select higher efficiency option. We thus must conclude that [it] satisfies subsection (B) [of EPCA] in that it does not require such options.”
In further explaining why the prescriptive path was not preempted, the court addressed the Albuquerque code head-on: “The state would effectively require higher efficiency products, in violation of subsection (B), if the code itself imposed a penalty for not using higher efficiency products. This is what a building code ordinance for the city of Albuquerque, New Mexico did.” In that situation, the penalty for not using certain products constituted the lack of a choice or, in other words, a requirement: “The Albuquerque ordinance thus effectively required use of higher efficiency product by imposing a penalty through the code itself.”
Addressing the performance path of the Washington code, the court explained that as long as the building credits were offered on a “one-for-one” basis –in proportion to energy savings, without favoring a particular product or method – the path would be upheld. And the court found that even though the Washington code’s credits did not offer a “one-for-one,” exactly proportionate energy equivalence, they were close enough: “Congress intended not mathematical perfection, but rather preventing the building code from discriminating between products and building methods.” Thus, the entirety of the Washington code was upheld as not preempted by EPCA.
When viewing the Washington and Albuquerque cases together, it might seem like the courts came to opposite rulings from the same facts. However, on some level, these two cases can be reconciled. In Albuquerque, a requirement, or its substantive equivalent, existed, but in Washington, no such pressure or consequence was impressed upon the builder. As we look forward at the body of case law that will inevitably grow out of these energy code preemption suits, then, we must look at the minutiae of the state code at issue: Does it force builders – explicitly or effectively – into using certain options, or does it actually give them the freedom to choose?
Thanks to our law clerk Alex Pierce for his research and contribution to this post.
