Industry Groups Launch Legal Challenge to Albuquerque Green Building Codes

In New Mexico, a group of industry trade organizations are challenging the implementation of new city-level energy efficiency codes on the basis that they are preempted by similar regulations at the federal level.

Albuquerque, New Mexico’s Energy Conservation Codes were signed into law back in January, but their implementation was delayed until July 1 after industry groups voiced concerns during the spring that the Codes were, among other things, preempted by federal law. The Codes purported to raise the standards on the installation of HVAC equipment for all new and retrofit commercial and residential projects to a Seasonal Energy Efficiency Ratio (“SEER”) of 15 (for air conditioning) and an annual fuel utilization efficiency (“AFUE”) of 90 percent (for heating).

The suit, which was filed in U.S. District Court for the District of New Mexico by the Air Conditioning, Heating and Refrigeration Institute, the Air Conditioning Contractors of America, the Heating, Air Conditioning, and Refrigeration Distributors International, and 11 HVAC product distributors and contractors, alleges that because current U.S. Department of Energy minimum standards for energy efficiency for the same equipment that the Albuquerque Codes seek to regulate are lower (13 SEER and 78 AFUE), the city must obtain a waiver of preemption from the federal government in order to enforce the stricter local codes. The plaintiffs and other industry groups had worked with local officials since the legislation was signed back in January to hammer out a compromise, but once a July 1 deadline passed, the groups filed suit.

The essence of the plaintiffs’ preemption argument is that because the federal government has already acted to regulate the same type of equipment, an implied preemption exists whereby the federal regulation is meant to occupy the regulatory scheme with respect to energy efficiency for HVAC equipment. Plaintiffs claim that the Codes would increase the cost of construction due to higher installation costs and lead to illegal installation of cheaper equipment from unlicensed contractors. The head of Albuquerque’s legal department, Bob White, is currently reviewing the lawsuit and says that the city “has disagreements with [the plaintiffs'] analysis.” In the interim, the city has delayed the implementation of the Codes until October 1.

There is an incredible amount of case law in relation to preemption doctrine, and it’s likely that both sides in the lawsuit will find plenty of judicial fodder with which to buttress their respective positions. The more important point here is that a local green building regulation is being challenged under an established- and frequently litigated- doctrine after legislators and industry representatives could not agree on a way to craft language acceptable to both sides.

What’s troubling for green building legislation generally is that the lawsuit sets the precedent for local legislation to be challenged more extensively once regulatory activity at the federal level increases. As fellow blogger Shari Shapiro notes in a piece at Greener Buildings, “the compromises needed to pass a national bill may result in lower [energy efficiency or other green building] standards than might have resulted from a patchwork of local regulations.”

Once the new administration is installed next January, and Washington likely begins to take a more active stance towards climate change, the Albuquerque experience demands that legislators at the federal, state, and local levels consider all of the permutations of their efforts. The alternative is litigation and its attendant delays in legislative implementation; an outcome that no proponent of sustainable initiatives should be willing to accept.

I’m working to secure a copy of the complaint in the action; please email me if you’d be interested in reviewing it as well.

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