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June 26, 2006: U.S. Supreme Court Denies ARI Appeal of Title 20 Decision

June 26, 2006
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ARLINGTON, Va. - The U.S. Supreme Court has denied a request by the Air-Conditioning and Refrigeration Institute (ARI) to hear its appeal of the 9th Circuit Court of Appeals' decision that the California Energy Commission's (CEC's) Title 20 regulations were not preempted by the federal Energy Policy Conservation Act (EPCA). In denying review of the case, a lower court's injunction against the CEC's enforcement of its energy efficiency regulations, which regulate information reporting and product labeling for appliances, will be lifted.

At issue in the case is whether states have the right to require U.S. manufacturers to meet state-specific rules in addition to federal requirements. In 2002, ARI and three other industry trade associations brought suit against the CEC to have its 2002 revised Appliance Efficiency Regulations (California Code of Regulations, Title 20, Sections 1601 through 1608), declared invalid and preempted by EPCA, which regulates information reporting and product labeling requirements for appliances.

"With the 9th Circuit's decision not being overturned, manufacturers that do not comply with the CEC's Title 20 requirements cannot sell or install their products in California even though the products comply with all federal requirements," said Stephen Yurek, ARI's general counsel.

In 2003, the federal district court in Sacramento ruled in favor of U.S. appliance manufacturers and placed an injunction against CEC's enforcement of its regulations for EPCA-covered products. The CEC appealed to the U.S. Court of Appeals for the Ninth Circuit in San Francisco and won a 2-1 split decision in June 2005, reversing the lower court's verdict. ARI and the other associations then petitioned the U.S. Supreme Court to review of the Court of Appeals decision. The trade groups argued that the court made legal errors in interpreting federal preemption law and the federal preemption provisions in EPCA, which established a framework by which federal energy efficiency standards, enacted in a timely manner and in accordance with specific guidelines, would preempt competing standards enacted by states, regions, or localities.

In November 2005, the Supreme Court invited the U.S. Solicitor General to present the views of the federal government on the federal preemption issues raised by this case. On May 17, the Office of the U.S. Solicitor General submitted a legal brief to the U.S. Supreme Court recommending that the Court decline to review the June 2005 decision of the U.S. Court of Appeals for the Ninth Circuit that upheld CEC regulations as not preempted by federal law.

"The purpose of EPCA was to ensure that U.S. manufacturers could operate in a stable, predictable environment, working toward compliance with one federal standard, rather than a patchwork of state or regional standards," said Yurek. "Unfortunately, the U.S. Supreme Court's decision not to hear our case allows other states to follow California's lead by setting their own conflicting appliance efficiency regulations, which will eventually hurt U.S. manufacturers and drive jobs overseas."

Publication date: 06/26/2006

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