BUILDING INDUSTRY ASSOCIATION OF WASHINGTON; Air America Inc.; BOA Construction Co.; Complete Design Inc.; Airefco Inc.; CVH Inc.; Entek Corp.; Family Home Investments Corp.; Sadler Construction Inc.; Tracy Construction Co. v. WASHINGTON STATE BUILDING CODE COUNCIL; NW Energy Coalition; Sierra Club; Washington Environmental Council; Natural Resources Defense Council
No. 11-35207
United States Court of Appeals, Ninth Circuit
June 25, 2012
683 F.3d 1144
Argued and Submitted Feb. 9, 2012.
Ann C. Essko, Assistant Attorney General, Olympia, WA, for Washington State Building Code Council.
H. Thomas Byron, III, United States Department of Justice, Washington, D.C., for amicus curiae United States of America.
OPINION
SCHROEDER, Circuit Judge:
The Energy Policy and Conservation Act of 1975 (“EPCA“),
This case is a challenge to the State of Washington‘s Building Code, see
To escape preemption, a state‘s building code must satisfy the seven conditions codified in
Plaintiffs’ challenge under
The evidence that is in the record supports the district court‘s conclusion that the state-assigned credit values satisfy the “one-for-one equivalent energy use” requirement of subsection (C). The district court admitted the State‘s expert testimony and documentation because the court found the State‘s computer models for assigning credit values used sound data and methodology, and that they were reliably applied. See Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). The district court properly held that Plaintiffs could not show that the Building Code violated subsection (C).
Plaintiffs do correctly note that even where the State gives two options the same credit, there may not be an exact match between the energy savings produced by each option. This is an inevitable result, however, when comparing methods that use different products to obtain an energy conservation goal. Some approximation is necessarily included in the concept of equivalence, as Congress and the district court have recognized. See, e.g., S.Rep. No. 100-6 at 10 (1987), 1987 U.S.C.C.A.N. 52, 61 (“The Committee recognizes that in some cases, exact equivalency is not possible.“).
We therefore hold that the Washington Building Code satisfies the conditions Congress established for enforcement of state and local building codes consistent with federal energy law and we affirm the judgment of the district court in favor of the State.
BACKGROUND
The Federal Regulatory Framework
Congress enacted EPCA as a comprehensive federal regime regulating energy and water conservation standards for certain consumer appliances. Congress gave DOE primary responsibility for promulgating regulations prescribing a “minimum level of energy efficiency or a maximum quantity of energy use” for the covered consumer products.
EPCA defines a “consumer product,” in relevant part, as “any article ... of a type—(A) which in operation consumes, or is designed to consume, energy or, with respect to showerheads, faucets, water closets, and urinals, water; and (B) which, to any significant extent, is distributed in commerce for personal use or consumption by individuals....”
As initially enacted in 1975, EPCA provided that federal energy efficiency stan-
(A) The code permits a builder to meet an energy consumption or conservation objective for a building by selecting items whose combined energy efficiencies meet the objective.
(B) The code does not require that the covered product have an energy efficiency exceeding the applicable energy conservation standard established in or prescribed under section 6295 of this title, except that the required efficiency may exceed such standard up to the level required by a regulation of that State for which the Secretary has issued a rule granting a waiver under subsection (d) of this section.
(C) The credit to the energy consumption or conservation objective allowed by the code for installing covered products having energy efficiencies exceeding such energy conservation standard established in or prescribed under section 6295 of this title or the efficiency level required in a State regulation referred to in subparagraph (B) is on a one-for-one equivalent energy use or equivalent cost basis.
(D) If the code uses one or more baseline building designs against which all submitted building designs are to be evaluated and such baseline building designs contain a covered product subject to an energy conservation standard established in or prescribed under section 6295 of this title, the baseline building designs are based on the efficiency level for such covered product which meets but does not exceed such standard or the efficiency level required by a regulation of that State for which the Secretary has issued a rule granting a waiver under subsection (d) of this section.
(E) If the code sets forth one or more optional combinations of items which meet the energy consumption or conservation objective, for every combination which includes a covered product the efficiency of which exceeds either standard or level referred to in subparagraph (D), there also shall be at least one combination which includes such covered product the efficiency of which does not exceed such standard or level by more than 5 percent, except that at least one combination shall include such covered product the efficiency of which meets but does not exceed such standard.
(F) The energy consumption or conservation objective is specified in terms of an estimated total consumption of energy (which may be calculated from energy loss- or gain-based codes) utilizing an equivalent amount of energy (which may be specified in units of energy or its equivalent cost).
(G) The estimated energy use of any covered product permitted or required in the code, or used in calculating the objective, is determined using the applicable test procedures prescribed under
section 6293 of this title, except that the State may permit the estimated energy use calculation to be adjusted to reflect the conditions of the areas where the code is being applied if such adjustment is based on the use of the applicable test procedures prescribed under section 6293 of this title or other technically accurate documented procedure.
Behind the 1987 preemption exemption lies Congressional recognition that state and local building codes have a major impact on energy consumption. Buildings, and the fixtures installed in them, make up a large proportion of energy and electricity use throughout the country. See 2010 Buildings Energy Data Book *1-2, 1-6 (DOE 2010), online at http://buildingsdatabook.eren.doe.gov/docs/DataBooks/2010_BEDB.pdf (nearly 40% of energy use, and over 70% of electricity use) (accessed June 18, 2012). Buildings and fixtures tend to have long lifespans, so choices made at the outset during construction are likely to have far-reaching future effects on energy consumption. It is for this reason that Congress, in EPCA, has permitted states some limited means of regulating these choices. Federal regulations promulgated under EPCA provide minimum standards for the energy efficiency of such fixtures, see
The Washington State Building Code
Washington‘s legislature has opted to use its regulatory police power to enact a statewide code for building construction to promote, inter alia, energy efficiency goals. The development of the code before us reveals the State‘s sensitivity to EPCA‘s conditions. The Washington legislature identified energy consumption patterns in new building construction as an area in which it could create incentives for energy efficiency, and enacted a regulatory regime that meets specific efficiency goals over the next two decades. The legislature explained that it enacted energy conservation mandates to balance “flexibility in building design” against “the broader goal of building zero fossil-fuel greenhouse gas emission homes and buildings by the year 2031.”
While the legislature has mandated the goals, it has delegated authority to Defendant-Appellee Washington State Building Code Council (“Council“), to promulgate and update the statewide building code.
The Council amended the Code effective in 2009 to implement a 15% reduction in new buildings’ energy consumption, compared to the 2006 baseline. The 2009 amendments, a precursor to those expected to take effect in 2013, are the subject of Plaintiffs’ challenge here.
In the 2009 Code, the Council offered builders three methods, termed “pathways,” for achieving the 15% reduction in energy consumption. Each such pathway to compliance is codified under one of three chapters of the Code. See
Chapter 9 assesses a certain credit value to each option available to builders who elect the Chapters 5 or 6 pathways. Chapter 9 contains a menu of options, “Table 9-1,” from which each builder can choose how best to secure its required one credit.
The Council‘s 2009 proposed changes that added Chapter 9 were controversial from the beginning. Industry groups offered criticism during the period leading up to the Council‘s adoption of the revisions, and objected to what they perceived as coercion. In a letter to the Council in November 2009, for example, the Air Conditioning, Heating, and Refrigeration Institute said that unless the Council supplemented Table 9-1 with additional options, Chapter 9 “could indirectly force homebuilders to install high efficiency HVAC and water heating equipment” in order to earn the required credit. Other criticisms focused on the cost to builders of complying with Chapter 9. After the Council adopted the changes, the state Joint Administrative Rules Review Committee faulted it for providing what it considered an inadequate cost-benefit analysis. See
This Litigation
Plaintiffs filed this action in May 2010 in the Western District of Washington. In their complaint, Plaintiffs alleged their businesses would be harmed if the 2009 revisions to the Building Code were allowed to go into effect, because the revisions would increase costs of installing appliances and thereby reduce demand for new home construction. Plaintiffs sought declaratory and injunctive relief on their claim that the Building Code was expressly preempted by EPCA, and they argued it did not satisfy the statutory conditions that provide a safe harbor from preemption under
Defendants and intervenors (collectively “Defendants“) then filed a joint motion for summary judgment, arguing that the Washington Building Code met all seven statutory conditions for exemption from preemption. The district court summarized the Defendants’ position with respect to each of the seven conditions as follows:
1) the Washington Code offers builders numerous options to meet the overall 15% reduction and the 8% energy efficiency requirement, 2) the Washington Code does not expressly or effectively require efficiency levels beyond the federal minimum standards, 3) the Washington Code assigns credits that are even-handed and not unfairly weighted, 4) the Code does not require the use of single baseline building design, 5) the Code offers an evenly balanced range of options, 6) energy savings goal of the Washington Code is measured in energy use, and 7) the Code uses federal test procedures to measure energy use.
Plaintiffs cross-moved for summary judgment, arguing that Chapter 9 failed to satisfy four of the seven statutory conditions. See
The district court disagreed with Plaintiffs and granted summary judgment to Defendants. All the parties agreed that Plaintiffs were challenging the enforceability of the Washington Building Code on the ground that it was preempted because it failed to satisfy the statutory conditions. There was no dispute that the Washington Building Code “concern[s] the energy efficiency or energy use of [EPCA] covered product[s]” and therefore must satisfy all seven conditions to avoid preemption.
Plaintiffs timely appeal.
DISCUSSION
This appeal solely concerns whether the Washington Building Code‘s provisions satisfy two of EPCA‘s statutory conditions
Subsection B
Plaintiffs argue that the Building Code‘s Chapter 9 does not satisfy EPCA subsection (B), which provides in relevant part that, to survive preemption, the Building Code cannot “require that the covered product have an energy efficiency exceeding the applicable energy conservation standard” established under federal law.
Plaintiffs acknowledge that Chapter 9 does not legally mandate use of higher efficiency covered products. Their contention is, rather, that the other options are so costly that builders are economically coerced and hence “required” to select the higher efficiency options. Defendants counter that an economic incentive is not a requirement. We agree that allowing less expensive, more efficient options does not require builders to use more efficient products within the meaning of the federal statute. This is apparent from an analysis of the language of EPCA, as well as the Supreme Court‘s interpretation of similar language in the preemption clause of another environmental statute.
Congress‘s use of the word “require” in the statutory text of
Plaintiffs nevertheless point to language in the legislative history, in particular House Report 100-11, stating that the provisions of
The state would effectively require higher efficiency products, in violation of subsection (B), if the code itself imposed a penalty for not using higher efficiency products. This is what a building code
Here, by contrast, the Washington Building Code itself imposes no additional costs on builders. The district court noted that there are “substantial differences” between the Washington Building Code and Albuquerque‘s ordinance. It correctly rejected the Plaintiffs’ argument concerning subsection (B), explaining that the Washington Building Code created no penalties, and did not require higher efficiency products as the “only way to comply with the code.” We hold the Washington Building Code complies with subsection (B) because it does not create any penalty or legal compulsion to use higher efficiency products.
This conclusion draws support from the Supreme Court‘s interpretation of another statutory preemption clause intended to prevent states from creating higher, or additional, requirements than those created by federal law. In Bates v. Dow Agrosciences, LLC, 544 U.S. 431, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005), the Supreme Court considered the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA“). FIFRA contained a preemption provision mandating that state law not “impose or continue in effect any requirements for labeling or packaging in addition to or different from those required under [FIFRA].”
The issue in Bates was whether that provision preempted state common law claims for strict liability, negligence, fraud, and breach of warranty. The Fifth Circuit had held that the state tort claims were preempted on the theory that a jury verdict in favor of the plaintiffs would create an incentive for the manufacturer to change its label in ways that were in addition to, or different from, those required under FIFRA. See Bates, 544 U.S. at 436, 125 S.Ct. 1788 (citing Dow Agrosciences LLC v. Bates, 332 F.3d 323 (5th Cir. 2003)). The Supreme Court reversed, rejecting the Circuit‘s conclusion that an incentive for change constituted a “requirement.” The Court said that an event like a jury verdict might induce a label change, but “[t]he Court of Appeals was ... quite wrong when it assumed that any event, such as a jury verdict, that might ‘induce’ a pesticide manufacturer to change its label should be viewed as a requirement.” Id. at 443, 125 S.Ct. 1788. The Court concluded that common law rules governing strict products liability, negligence, and fraud, may affect the choices that manufacturers make, but are not state requirements for labeling or packaging, and are thus not preempted. Id. at 444, 125 S.Ct. 1788. Even though verdicts on state tort claims might create economic incentives to reach the outcome otherwise forbidden, the Court explained, those incentives do not “require[] that manufacturers label or
Subsection C
Plaintiffs’ challenge to the Washington Building Code‘s compliance with
Plaintiffs argued to the district court that Chapter 9 does not satisfy subsection (C), because the state has assigned the same value to several options that do not reduce energy use by equivalent amounts. In support of their motion for summary judgment, Plaintiffs offered a declaration purporting to show that the state had assigned credit values that were incorrect or not equivalent. Ted Clifton, a builder affiliated with one of the Plaintiff corporations, submitted the declaration stating his conclusion that options in Chapter 9 would reduce energy consumption by amounts other than the amounts the state had assigned. Although the declaration was purportedly based on Clifton‘s experience as a builder, it did not describe how he reached his conclusions. He opined that the computer models the State used to estimate and assign credit values were “inconsisten[t],” used “rough approximations and rounding,” and were based on “flawed” assumptions.
Defendants, by contrast, offered evidence to show that the Council used computer models to assign credit values proportional to the equivalent amount by which each Chapter 9 option would reduce the building‘s energy use. The Council explained it used a model developed by Dave Baylon, an energy efficiency expert with an energy consulting firm, to estimate how a building‘s energy use will change when different components and products are installed. According to the State‘s declarations, that model, known as SEEM, has been used since 1982 by entities such as the Northwest Power and Conservation Council (“NWPCC“), and is described as “the industry standard.”
To explain the use of the model, Defendants provided the declaration of Tom Eckman, manager of conservation resources at NWPCC and chair of the Regional Technical Forum. He described the latter organization as having been “established by the NWPCC at the request of Congress to develop standardized methods for verifying conservation savings.” The State uses computer simulations, Eckman explained, because “it is not practical to build homes with every potential combination of energy efficiency measures being considered for code adoption in order to test their effect on energy use.” The SEEM model “simulat[es] the impact on energy use of each of the efficiency options under consideration across a range of home sizes and designs that are representative of those being constructed in Washington state.” According to Eckman, the SEEM model allows the Council to determine how installing different components and products in the new building will affect its energy use in many situations. It therefore also allows the State to isolate the energy-reducing effect of any given component, and assign a credit value to that component.
The district court, in rejecting Clifton‘s declaration, ruled correctly that Clif-
Defendants, on the other hand, offered expert declarations that explained the quantitative computer models used in assigning credit values. The district court considered the Defendants’ evidence after it found Eckman qualified to offer expert opinion regarding energy efficiency modeling. It also concluded that the data that went into the SEEM model was shown to be accurate. On the basis of the Eckman evidence, the district court found that the credit of each option is weighted “based on the energy use saved by each option on average.” This finding is supported by the expert declarations and is not clearly erroneous.
Plaintiffs are thus left to quibble over whether the credit values for Chapter 9‘s options are sufficiently proportional to the amount by which the State‘s numbers indicate they reduce energy use. Plaintiffs, for example, take issue with the Code‘s assigning the same credit value, one credit, to a geothermal heat pump (option 1b) and a system for ventilating and preventing leakage of climate-controlled air (option 4a). The State has estimated that, on average, the one-credit options in Chapter 9 reduce a building‘s energy use by eight percent. Option 1b reduces energy use by six percent, a figure below the average, and option 4a reduces energy use by about ten percent, a figure above the average. Plaintiffs appear to contend this is too much variation to satisfy the statute‘s requirement that credits be awarded on a “one-for-one” basis.
Any credit-based system that involves comparing different methods of reducing energy, however, may seem like comparing apples and oranges. Option 1b, geothermal heat pump, uses the ground to help heat or cool the house in different seasons. Option 4a, ventilator system, supplies an otherwise well-sealed house with fresh air, while avoiding using energy unnecessarily to maintain internal climate control. It is unsurprising that these methods do not produce identical results in energy savings.
Indeed, in EPCA, Congress recognized that some variation will be inevitable, for it speaks in terms of equivalencies. The statute in subsection (C) requires that the credits be awarded “one-for-one” where different options bring about savings in “equivalent energy use or equivalent cost.”
The district court correctly ruled that the credit values in Chapter 9 are closely proportional to the average reduction in equivalent energy use across a variety of climatic and other environmental situations. Certain installation options may result in greater energy savings than other options in certain climates or certain size buildings. In requiring that credits be awarded on a one-for-one equivalent energy use basis, Congress intended not mathematical perfection, but rather preventing the building code from discriminating between products and building methods. Chapter 9 of the 2009 Washington Building Code achieves this objective by awarding credits for average equivalent energy use for each option in different use situations. Chapter 9 of the Washington Building Code thus satisfies EPCA subsection (C).
CONCLUSION
The district court did not err in granting summary judgment to Defendants. The Washington Building Code satisfies the conditions Congress set forth in EPCA for exemption from federal preemption.
AFFIRMED.