Rinnai America Corp., Restaurant Law Center, et al. v. South Coast Air Quality Management District

Issue

Whether the South Coast Air Quality Management District’s rule imposing a zero-NOx standard on certain categories of natural gas appliances, creating a de facto ban on gas appliances, run afoul of the federal Energy Policy and Conservation Act (EPCA).

December 5, 2024 and December 17, 2024

The Restaurant Law Center and a number of other private companies and trade associations filed a Complaint on December 4, 2024, and an Amended Complaint on December 17, 2024, arguing that prohibiting the end use of natural gas is at odds with the needs of individuals and businesses in the covered District for reliable, resilient, and affordable energy. Banning gas-fired appliances is fundamentally inconsistent with the public interest and consumer choice, will exacerbate California’s problem of housing affordability, and will shift energy demand onto already overburdened electric grids. In addition, Plaintiffs argue that the District cannot do indirectly, by banning combustion emissions, what it cannot do directly, by banning gas appliances.

April 14, 2025

On April 14, 2025, the Restaurant Law Center, jointly with the other Plaintiffs, filed a Motion for Summary Judgment highlighting that the federal Energy Policy and Conservation Act (“EPCA”) expressly preempts state and local “regulations” from banning gas appliances. The Ninth Circuit previuosly held that EPCA preempted Berkeley, California’s ordinance banning gas piping because it effectively prohibited covered appliances from using gas as an energy source. Plaintiffs argue that the Ninth Circuit’s decision controls the outcome of this case. The fact that the challenged rule prohibits gas appliances that produce NOx emissions, as opposed to banning gas appliances outright, does not allow it to escape EPCA preemption. “States and localities can’t skirt the text of broad preemption provisions by doing indirectly what Congress says they can’t do directly.”

July 18, 2025

The district court judge granted SCAQMD’s Cross-Motion for Summary Judging by holding that federal law does not preempt the Rule at issue because the Rule addresses the pollution appliances emit and not their energy use. In the judge’s view, the Rule does not implicate any of the issues the EPCA was intended to address, as it does not create an inconsistent state efficiency standard, require that consumers use appliances with a higher efficiency standard, or force manufacturers to meet standards different than those set by the federal Department of Energy.

August 8, 2025

Plaintiffs appeal to the United States Court of Appeals for the Ninth Circuit from the judgment entered on July 18, 2025.

August 27, 2025

Plaintiffs filed for an injunction pending appeal in order to maintain the status quo while the Ninth Circuit considers the serious legal question this case presents. Without interim relief, the first set of zero-NOx limits in the South Coast Air Quality Management District’s Rule 1146.2 will take effect January 1, 2026, before the Ninth Circuit is likely to be able to resolve Plaintiffs’ appeal.