Albuquerque Lawsuit Threatens Green Building Codes

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The Energy Conservation Code of Albuquerque, New Mexico, enacted in January 2008 with the unanimous support of its city council, seeks to increase energy-efficiency requirements for multifamily and commercial buildings by 30%. The code requires more insulation in single-family houses, outlaws electric water heaters, and imposes high efficiency standards for heating and cooling equipment. The City’s new High Performance Buildings Ordinance covers similar ground.

A group of heating, ventilating, and air-conditioning (HVAC) contractors and distributors sought negotiations with the city to revise portions of the code. In response, the city delayed implementation of the code until July 1, 2008. The negotiations failed, however, and the group, supported by the national Air-conditioning, Heating, and Refrigeration Institute (AHRI), filed suit; this may be the first such legal action against a green building program in the U.S.

“Those of us who know the marketplace—the equipment manufacturers, dealers, and installers—have discovered that when minimum standards are raised beyond the point at which they are economically justifiable, it results in more repairs and fewer replacements of older, less efficient equipment, therefore saving no energy,” AHRI president Stephen Yurek said. The group’s main agrument against the code, however, was that its requirements for HVAC equipment are illegal because they violate Article VI of the U.S. Constitution, which gives supremacy to federal law over state or local law.

The federal Energy Policy and Conservation Act (EPCA), passed in 1975 and amended several times since, sets efficiency standards for HVAC equipment and includes a preemption clause. It states that it is intended to put an end to “a growing patchwork of differing State regulations which increasingly complicate [manufacturers’] product design and marketing plans.”

Albuquerque’s standards exceed those established by EPCA and so are preempted, the plaintiffs claimed. The City argued that the multiple performance-based options for compliance offered in the code, including compliance with the LEED Rating Sytem, Build Green New Mexico, or ASHRAE 90.1, sidestep preemption. Chief District Court judge Martha Vazquez did not agree and found the plaintiffs’ argument to have enough merit to support a preliminary injunction. Vazquez opined that since a builder who uses products that meet but do not exceed federal standards must make other gains in overall efficiency, the builder is effectively penalized for using federally acceptable equipment, which, she said, violates EPCA.

Shari Shapiro, co-chair of an American Bar Association subcommittee on land use and environmental law and a member of the Delaware Valley Green Building Council, has been following the case and sees little hope for the City to win it. “If they litigate this, they’re out of their gourds,” she told EBN. She sees the case as a warning. “Cities are going to have to look harder at their drafting. There are going to be a lot more challenges to these laws.”

The U.S. Green Building Council’s directory of advocacy and public policy, Jason Hartke, says that USGBC has been watching the case, but that, “We don’t believe this is going to preclude the leadership policies [such as requirements or incentives to build to standards such as LEED] we’re seeing, in all their variety.” He expressed hope that the Obama administration will provide support for green building policies that might bolster local initiatives.

Albuquerque’s attorneys expect to be litigating for the next several months, hoping to sway the judge against issuing a permanent injunction, and laying the groundwork for an appeal. DuBois says the City may also seek a change in federal law to put the preemption issue to rest for good.

Any state or local regulation of the efficiency of equipment regulated by EPCA is vulnerable to challenge on the basis of preemption. Many cities limit themselves entirely to performance-based approaches—for example, requiring buildings to meet a LEED or Energy Star standard for overall energy use that doesn’t mandate any particular path to meeting it—and are not obviously preempted. But, if other courts agree with Vazquez that those approaches implicitly regulate equipment efficiency more stringently than do federal regulations, even this strategy could also come under fire.

In their brief, Albuquerque’s lawyers appear to recognize these repercussions, asking, “May Plaintiffs halt the green building movement in Albuquerque and, by extension, in cities throughout the United States? If Plaintiffs can enjoin a building code that allows a builder to choose between LEED certification or other paths, then surely other codes that simply require LEED certification cannot survive.”

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November 24, 2008