Home » Case Summaries » 2005 » Air Conditioning and Refrigeration Institute v. Energy Resources Conservation and Development Commission


Air Conditioning and Refrigeration Institute v. Energy Resources Conservation and Development Commission



The Air Conditioning and Refrigeration Institute, joined by several other appliance manufacturing associations (collectively Appliance Associations), brought suit alleging that regulations adopted by California’s Energy Resources Conservation and Development Commission (Commission) were preempted by the federal Energy Policy and Conservation Act (EPCA).[1] The Ninth Circuit, reversing the district court, held that the Commission’s regulations were not preempted by the EPCA.

The regulations at issue required appliance manufacturers to submit information about their appliances to the Commission and to mark those appliances with energy performance data.[2] In addition to the substantive regulations, there were also procedural regulations requiring compliance with marking and disclosure requirements.[3] Appliance Associations argued that the California regulations were superseded by the EPCA which expressly preempts:

any State regulation insofar as such State regulation provides at any time for the disclosure of information with respect to any measure of energy consumption or water use of any covered product if . . . such State regulation requires testing or the use of any measure of energy consumption, water use, or energy descriptor in any manner other than that provided under [this title]; or . . . such State regulation requires disclosure of information with respect to the energy use, energy efficiency, or water use of any covered product other than information required under [this title.][4]

The district court held that the Commission’s regulations were preempted by the EPCA and therefore enjoined enforcement of the regulations.

The Ninth Circuit reviewed the preemption decision de novo and the district court’s injunction under an abuse of discretion standard. The Ninth Circuit first noted that only express preemption was at issue. The court then stated that it would use a two step process to determine express preemption. First, the court would look to the text of the EPCA to “identify the domain expressly pre-empted by that language.”[5] Second, it would probe congressional intent using the text itself, as well as the structure and purpose of the Act and legislative history. The Ninth Circuit began its preemption analysis with two fundamental presumptions: “That Congress did not intend to supplant state law,” and that preemptive provisions should be narrowly construed.[6] The court then went on to address the Appliance Associations’ arguments, beginning with whether the data submittal regulations were preempted.

The Commission’s data submittal regulations required appliance manufacturers to provide the Commission with the name of the manufacturer, the brand name and model number, as well as energy testing statistics for every appliance sold in California.[7] The Ninth Circuit compared the required information with the clause in the EPCA that expressly preempted state regulations that require “disclosure of information” related to energy use and efficiency.[8] The court then noted that the phrase, “disclosure of information” was used twice in the preemption clause and referred both times to disclosure to consumers at the point of sale.

The court pointed out that “disclosure of information” was not used in the EPCA to refer to requirements that manufacturers submit data to the Department of Energy (DOE), but “instead, Congress used the phrase ‘submit information or reports.'”[9] Finally, the Ninth Circuit stated that Congress, remembering the oil embargo of the early 1970s, intended through the EPCA to inform consumers of the energy efficiency of their appliances. Indeed, according to the court, the legislative history and subsequent amendments to the Act were concerned only with disparate state procedures for testing and labeling. Thus, the Ninth Circuit held that, based on the structure of the act and its legislative history, Congress only intended to preempt state disclosure to consumers, not disclosure to state agencies.

The Ninth Circuit next addressed Appliance Associations’ argument that federal law preempted the appliance-marking regulations adopted by the Commission.[10] Those regulations required appliances to be marked with the manufacturer’s name, the brand name, model number, and date of manufacture.[11] The court held that the EPCA only preempted provisions that provide “for the disclosure of information with respect to any measure of energy consumption or water use.”[12] The EPCA defined energy consumption to include energy use, energy efficiency, or “other measure of energy consumption.”[13] The Commission’s regulation did not require manufacturers to mark appliances with energy use or energy efficiency information, so the court focused on the remaining undefined phrase: “other measure of energy consumption.”[14] Using the canon of statutory construction ejusdem generis–meaning that an item in a list will be interpreted to be of the same type or class as the other items listed–the court held that “other measure of energy consumption” did not encompass the requirements of the Commission’s regulation because it would have broadened the terms preceding the phrase.[15]

The court next focused on the phrase “with respect to” to determine if that expanded the scope of preemption of state marking requirements.[16] The court noted that the relationship between what the Commission’s regulations required–such as labeling appliances with the brand name–and “measures of energy consumption” was “indirect, remote, and tenuous.”[17] Therefore, the court concluded that the marking requirements were not preempted by the EPCA.

The court also held that the section of the State’s regulations requiring compliance with federal marking requirements was not preempted by EPCA. Because the regulations required nothing more than compliance with federal rules, the court held that it was not “other than information required” under federal law.[18] The court noted that identical state requirements are not preempted because those regulations “merely provide[] another reason for manufacturers to comply with existing identical requirements under federal law.”[19]

Appliance Associations also objected to the Commission’s marking regulation that required marking of commercial and industrial equipment. The court noted that the preemption provision of EPCA,[20] the latest amendment to EPCA, gave DOE the power to preempt inconsistent state regulations. Specifically, preemption exists where the “[s]tate regulation requires disclosure of information . . . other than information required” under federal law.[21] The court held that because DOE had not established federal regulations, state regulations were not “other than required” under federal law. Thus, DOE’s inaction did not preempt the state regulation.

Finally, Appliance Associations argued that California’s procedural regulations for enforcing the State’s marking and information gathering regulations must be preempted because they unlawfully enforce federal requirements. The court noted that the substantive provisions could not be enforced without the procedural provisions. Thus, because the substantive provisions were not preempted, the procedural provisions must stand as well. In conclusion, the Ninth Circuit upheld the submission, marking, and procedural regulations and vacated the district court’s injunction against enforcement of those regulations.

In dissent, Judge Noonan took issue with the majority’s holding limiting “disclosure of information” to consumers. He suggested that disclosure is a broad term which necessarily encompasses the information submitted to the Commission. Moreover, he suggested that the phrase “other than information required under federal law” must apply to any state requirements in the absence of federal requirements. He argued that because DOE did not promulgate any requirements, requirements adopted by the Commission are necessarily “other than” the federal regulations.

[1] Energy Policy and Conservation Act of 1975, Pub. L. No. 94-163, 89 Stat. 871 (codified as amended in scattered sections of 42 U.S.C.).

[2] Cal. Code Regs. tit. 20, § 1607(b)-(d)(2) (2005).

[3] Id.

[4] 42 U.S.C. § 6297 (2000).

[5] Air Conditioning & Refrigeration Inst. v. Energy Res. Conservation & Dev. Comm’n (ACRI), 397 F.3d 755, 758 (9th Cir. 2005) (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 484) (1996) (internal quotations omitted).

[6] ACRI, 397 F.3d at 759 (Lohr, 518 U.S. at 485).

[7] Cal. Code Regs. tit. 20, § 1606 (2005).

[8] 42 U.S.C. § 6297(a)(1) (2000).

[9] ACRI, 397 F.3d at 760 (quoting 42 U.S.C. § 6296(d) (2000)).

[10] Cal Code Regs. tit. 20, § 1607(b)-(d)(2) (2005).

[11] Id.

[12] 42 U.S.C. § 6927(a)(1) (2000).

[13] Id. § 6291(8).

[14] ACRI, 397 F.3d at 764.

[15] Id.

[16] Id. at 764-65.

[17] Id. at 765 (quoting Californians For Safe & Competitive Dump Truck Transp. v. Mendonca 152 F.3d 1184, 1189 (9th Cir. 1998)) (internal quotations omitted).

[18] 42 U.S.C. § 6297(a)(1) (2000).

[19] ACRI, 397 F.3d at 765 (quoting Lohr, 518 U.S. at 495) (internal quotations omitted).

[20] Energy Policy and Conservation Act, 42 U.S.C. § 6316(a)-(b) (2000).

[21] Id. § 6297(a)(1)(b).

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