Standards & Legislation

Court Adopts Regional Standards Schedule

Delay Means Lawsuit Could Stretch to Fall of 2014 and Beyond

January 20, 2014

Those involved in the ongoing regional standards lawsuit may get a chance to argue their case in court — but likely not until this summer.

The U.S. Court of Appeals for the D.C. Circuit adopted the briefing schedule on Dec. 9, three months after a briefing schedule was jointly submitted by the U.S. Department of Energy (DOE); the American Public Gas Association (APGA); Air Conditioning Contractors of America (ACCA); the Air-Conditioning, Heating, and Refrigeration Institute (AHRI); Heating, Air-conditioning, and Refrigeration Distributors International (HARDI); and other parties involved in the regional standards lawsuit.

And while industry leaders are pleased the lawsuit is progressing, they are disappointed the court has taken so long to adopt the schedule it had requested nearly four months prior. That delay, they agree, has cost the industry precious time.

Slow Progress

Those involved in the lawsuit now have until mid-April to brief the court on three issues — the settlement agreement between the APGA and DOE, HARDI’s motion to continue the case, and the merits of the lawsuit itself. The court’s delay in ordering the briefing schedule, however, has negatively impacted the timeline of the lawsuit, said David Calabrese, AHRI’s general counsel and senior vice president, public policy.

“Due to the delay in the court issuing this order, the last brief in the case won’t be due until April 15, 2014,” Calabrese said. “At the same time, the court has indicated that it will schedule an oral hearing for the case, likely to occur this summer. From a practical standpoint, this means that the case will not likely be resolved until late fall of 2014, at the earliest.”

Charlie McCrudden, senior vice president of government relations at ACCA, said ACCA is “pleased the court’s Dec. 9 order accepted the briefing schedule and that now the case can move forward. ACCA is hopeful the oral argument will occur as soon as possible after the final briefs are filed in mid-April.”

But, McCrudden said he is also concerned about the timeline of the lawsuit as well as the numerous possible outcomes, all of which would affect the industry in some way, and all of which make it harder for the industry to plan ahead while the lawsuit is ongoing.

“A lot of us are concerned that the Jan. 1, 2015, compliance date for regional standards on air conditioners is going to come before this case is settled. Those central air conditioner standards are potentially in play the way this case is going,” he said. “Should the court rule in favor of the HARDI motion and we go to trial, the court could rule on those central a/c standards and toss them out. Another outcome is that the court could uphold everything, which would put the furnace rules back in place and in effect six months later. Everything is in play — every possible outcome.”

Ticking Time Bomb

If the case does run up to the Jan. 1, 2015, implementation date for central air conditioner and heat pump standards, the HVAC industry would again be in the same precarious situation it was in just months before, when the court ruled favorably — and at the last possible moment — on AHRI’s emergency motion to stay the May 1, 2013, compliance date for the implementation of regional furnace standards. The May 1 ruling legally prevented the DOE from applying or enforcing the regional energy-efficiency standards for nonweatherized natural gas furnaces until six months after the lawsuit is resolved, if the furnace standards are upheld.

To prevent the air conditioner and heat pump standards from going into effect before the case is resolved, Calabrese said AHRI is again prepared to take action. “We’re likely to file a motion to stay the implementation date of the air conditioner standards,” he said. “We’ll have to think about that.”

Jon Melchi, director of government affairs at HARDI, said his organization — which has filed a motion to substitute as the petitioner in the lawsuit in hopes of vacating the regional standards for central air conditioners and heat pumps — would not only support a motion to stay the Jan. 1, 2015, implementation deadline, but has declared it a top priority.

“We want to get this resolved as quickly as possible, but it’s more important to get it done right than to get it done quickly,” Melchi said.

Continued Uncertainty

The problem, as it has been, is that the up-in-the-air, anything-could-happen status of the regional standards case is creating a great deal of uncertainty for the industry — especially for manufacturers and distributors.

“It’s all about planning,” Calabrese said. “At this point, [our members] don’t know if the air conditioner standards will be in effect on Jan. 1, 2015. They have to make decisions about those products, and at this point, they just don’t know. It’s hard. Because of the way it’s gone, it’s truly a mystery what’s going on behind the scenes. We just don’t know. We don’t know what the situation is.”

Melchi said HARDI distributors may have to deal with stranded inventory and other issues as the case continues. Not being able to predict what will happen next, and when, is extremely frustrating for our members, he said.

“We don’t think it is ideal, and we would hope for expedience, but the court operates on its own schedule,” Melchi said. “We’re patiently waiting for the court, and we’ll see how it plays out. Obviously, there are other things that can pop up, such as settlement talks. You just never know.”

McCrudden said contractors will likely remain largely unaffected, for now. But, it may not always be that way. “Right now, there’s no enforcement action, since there’s no regional standard for furnaces on the books and no enforcement plan in place for central air conditioners,” he said. “There really is no liability or responsibility on contractors — but there will be.”

To view a timeline of events in the regional standards case, including links to The NEWS’ thorough coverage of the ongoing lawsuit, visit http://bit.ly/RegionalStandards.

Publication date: 1/20/2014 

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