District Court Pulls the Plug on California Restaurant Association Challenge to City’s Ban on Natural Gas Infrastructure in New Construction

August/September 2021

Environmental, Energy & Climate Change Law and Regulation Reporter, Volume 1, Number 11

On July 6, 2021, the City of Berkeley’s ordinance banning natural gas infrastructure on new construction (Ordinance) survived a federal court challenge by the California Restaurant Association (CRA).  While the Court held that the CRA had standing to pursue its claim, and that the case was ripe for adjudication, it ultimately granted the City’s motion to dismiss all causes of action.  The Court held that the Ordinance was not preempted by the Federal Energy Policy and Conservation Act (EPCA) and that CRA’s claims of state law preemption are appropriately decided by California state courts in the absence of any federal causes of action.  In so holding, the Court left the kitchen door open for a state court challenge.

Background

In July 2019, the City of Berkeley passed an ordinance prohibiting natural gas infrastructure in newly constructed buildings that effectively prohibited the use of gas appliances. The Ordinance provided an exception if (1) “it is not physically feasible to construct the building without Natural Gas Infrastructure” and (2) when natural gas “serves the public interest.”  CRA, an association of members, some of whom sought to open or relocate a restaurant in Berkeley, filed a facial challenge to the Ordinance, i.e., challenging the Ordinance itself rather than applying it to a specific set of facts, alleging that it is preempted by EPCA.  It also alleged that the Ordinance was preempted by California law as a void and unenforceable exercise of police power, in conflict with California’s Building Standards Code and the Energy Code.  In response, the City filed a motion to dismiss the complaint on the grounds that (1) CRA lacked standing under federal rule of procedure 12(b)(1); (2) EPCA did not preempt the Ordinance; (3) California state law did not preempt the Ordinance; and (4) if the EPCA claim were dismissed, the federal court should not exercise jurisdiction over the state law claims.

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