Natural Gas Bans, Bans on Bans, and the Ninth Circuit with Gary Toman

The Ninth Circuit Court of Appeals recently struck down Berkeley, California's ban on natural gas infrastructure in new buildings. The court ruled unanimously that the ban violates federal law. This subject is important as we will likely see more natural gas bans in the future and the Berkeley case has set a precedent for how similar cases may be treated. 

The case was brought by the California Restaurant Association, the National Restaurant Association, and the American Gas Association. The plaintiffs argued that Berkeley's ban was preempted by the Energy Policy and Conservation Act (EPCA), which gives the federal government exclusive authority to regulate energy efficiency standards for appliances. The Ninth Circuit agreed with the plaintiffs, finding that Berkeley's ban was "a direct regulation of energy efficiency standards for appliances." Now, New York has implemented a natural gas ban starting in 2026. 

Listen to my interview with Gary Toman, Partner at Weinberg, Wheeler, Hudgins, Gunn & Dial LLC, as we discuss this seminal case and the impact of the court’s ruling on consumers and businesses across the country. 

Gary  has extensive experience representing corporations, banks and professionals in complex litigation and arbitration matters and business disputes. Gary has substantial experience defending corporations in a wide variety of class actions.  Gary received his J.D. from Harvard Law School. 

I hope you enjoy the episode. If so, give us a rating!

This podcast is the audio companion to the Journal on Emerging Issues in Litigation. The Journal is a collaborative project between HB Litigation Conferences and the vLex Fastcase legal research family, which includes Full Court Press, Law Street Media, and Docket Alarm.

If you have comments, ideas, or wish to participate, please drop me a note at Editor@LitigationConferences.com.

Tom Hagy
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Transcript

Tom Hagy: 0:05

Welcome to the Emerging Litigation Podcast, a co-production of HB Litigation and critical legal content, custom content for law firms and litigation service providers, and the newly formed VLAC's Fast Case, your World of Legal Intelligence and our friends at LawStreetMedia. I'm your host, tom Hagee, litigation Content Producer and enthusiast and an average bongo player. Contact me if you have an idea for an episode. In addition to often being polite, I'm always looking for new twists on the law, whether it's a new regulation, legislation or an important new opinion, or it could be a development in the world that will test existing law or anything you're dying to share with other litigators, organizations or individuals. And, if you like what you hear, give us a rating. That always helps. And now here's today's episode, speaking with natural gas versus using electric ranges. See what I did there. I made you think I was talking about one thing. And Many chefs prefer gas because it's easier to control temperatures.

Tom Hagy: 1:37

Others say electric has an edge when it comes to things like baking. Amateur backyard barbecue chefs are split. Some prefer the neatness and ease of a gas webber that's not a plug. Others insist on various forms of charcoal. And you'll never hear people advocating electric grills, although they are handy, you know if you have to cook on the fire escape of your apartment or something. This is also something George Forman advocates not the apartment thing, but the electric grill. We all know that he's famous. The phrase now we're cooking with gas was not only part of an ad campaign to promote the use of natural gas, but became a common phrase for doing something the right way. Like you know, I'm really good at this podcast, so now I'm really cooking with gas. It's a pretty effective slogan. When you think about it. That's the kind of slogan you want, almost as widely known as breakfast, the most important meal of the day Also an ad slogan and also not terribly true. The Los Angeles Times it's a fine newspaper recently wrote about the price of natural gas, how an increase that was being considered would impact 25 million Californians. There's a lot of Californians Also on the rise, an interest in research, like a Stanford study on gas stoves, reiterating the health and climate risks of a whole panoply of home gas-powered appliances water heaters, furnaces, clothes dryers and, of course, the gas stove.

Tom Hagy: 3:06

Natural gas, as you know, is a fossil fuel. A lot of people don't like that, just like oil that's refined into gasoline and is mostly methane. I think. Well, no, gasoline's not. You followed me. I think we all know that's combustible. Nothing gas. That is that's kind of the point. It's a controlled combustion, like controlled explosions in your car's engine, not your electric car.

Tom Hagy: 3:32

I'm not going to digress and talk about how some of the greatest pleasures in life come from controlling decay or calamity, like wine and cheese, which, for I said those are just that's controlled rot, isn't it? Or downhill skiing, which is just controlled falling. Or the United States Senate, and isn't that what fossil fuels are? To begin with, the decomposition of organic matter I think I read that, probably on Wikipedia, and I think I've made my point, which was obvious. You didn't need me for any of this. As I said, I wasn't going to digress, but you know I did bring myself back to the subject.

Tom Hagy: 4:06

The LA Times also cited stats from the Census Bureau that about 15% of natural gas the nation uses goes into our houses. Census Bureau's recent numbers are these 61 million water heaters, 58 million furnaces, 20 million clothes dryers and about 40 million home stoves. The US Energy Information Administration reported that in 2020, 61% of US households used natural gas for at least one energy end use, and again, space heating, water heating, cooking, or those are the most common. It's also used for clothes drying, of course, outdoor grilling, as I mentioned, and heating pools and everyone's favorite hot tubs, all told. The paper wrote the greenhouse gases that these stoves can all expel amounts to as much as that expelled by half a million cars worth. That's a lot of cars worth Go to a school with a guy named Carsworth.

Tom Hagy: 5:02

The EPA agrees the climate stakes are high. Residential and commercial emissions make up 13% of total US emissions. That was in 2019. About 80% of those emissions came from the combustion of natural gas, the fuel that heats homes, powers restaurants, cooking stoves and emits planet warming gases like methane and carbon dioxide in the process. People say gas stoves are a threat to human health and have a larger climate impact than previously known.

Tom Hagy: 5:34

The study says the city of Berkeley, california, had banned gas hookups for new buildings, citing these health and safety concerns, but the California Restaurant Association, the National Restaurant Association and the American Gas Association sued to overturn the ban. They argued it was preempted by the Energy Policy and Conservation Act, which gives the federal government exclusive authority to regulate energy efficiency standards for appliances. The Ninth Circuit agreed with the plaintiffs, finding the Berkeley's ban was quote a direct regulation of energy efficiency standards for appliances. Now New York has implemented a natural gas ban starting in 2026. Other progressive cities and states are also trying to enact bans, while some states have or are proposing bans on such bans ahead of anyone trying to inflict gas bans on a cooking public. This largely and please remain seated divides along party lines, you know, because it's America. So how did the Ninth Circuit justify the reversal? Who's most impacted by this decision? How will this precedent setting case influence similar decisions in other states?

Tom Hagy: 6:48

According to my interview with Gary Toman, a partner at Weinberg, wheeler, hudgens, gunn and Dial, as we discuss this seminal case and the impact of the court's ruling on consumers and businesses across the country, gary Toman has extensive experience representing corporations, banks and professionals in complex litigation and arbitration matters and business disputes. He has a substantial experience defending corporations and a wide variety of class actions. He received his JD from Harvard Law School. And now here's my interview with Gary Toman. I hope you enjoy it. So, gary Toman, thank you very much for talking with me about this today. Well, it sure is a pleasure to join you. So let's set the stage for our listeners. Talk about what led to the Berkeley natural gas ban, what was behind it and who challenged it?

Gary Toman: 7:41

I think that the city of Berkeley was responding to some people in the I would guess call it the green movement that were concerned that not enough was being done to advance the restrictions on gas use in other contexts. But, and so the idea would be can you just do a complete ban going forward on the use of natural gas and new construction? So that is, I think, the impetus for the Berkeley ban, and the California Restaurant Association, acting on behalf of its members, had some concern, because cooking in particular, uses natural gas in a way that other forms of energy really quite aren't so effective, and so it, I believe, created interest in the restaurant community, and so we were hired to investigate and ultimately challenge the ordinance.

Tom Hagy: 9:17

Well, so back up, what's what is wrong with natural gas? Yeah, allegedly.

Gary Toman: 9:24

We can have a long discussion about what they contend in the green movement and city Berkeley. I think it really is the overall fossil fuel thing. That was really the impetus. I think now, as you get decisions like the Ninth Circuit in this case and we'll discuss that specifically I think that there is more sophistication in the arguments and they're trying to expand the arguments into other contexts internal pollution, other fire safety, that kind of thing. But the truth is natural gas has been proven to be a very reliable source of energy for a number of household appliances as well as commercial uses and my client are just one aspect of it the ones in use at restaurants.

Tom Hagy: 10:41

Anybody I know who cooks prefers it. So let's talk about the Ninth Circuit. You mentioned that they reversed the district court ruling which the district court upheld the ban in new buildings and now the Ninth Circuit reversed. What was their reasoning?

Gary Toman: 10:59

To start, the district court did reject a number of the procedural challenges, but ultimately ruled that the challenges to our financial lawsuit standing rightness, that kind of thing. But the district court did not accept our arguments regarding preemption. Our theory was, and which the Ninth Circuit did agree with, is that the ban was preempted by something called the Energy Policy and Conservation Act. It's a federal statute that first was enacted in the 70s but ultimately has been amended several times, and its preemptive section was modified into what it is today, which we, on looking at this issue, thought was a pretty simple and clear express preemption. And I can explain. The district court, though, said well, all that is preempted is if you directly regulate covered appliances. The statute deals with energy use as well as energy conservation in certain appliances. I think its goal was to provide for both a clear rules for manufacturers to follow across the country, not want patchwork regulation. Also, there was a view that there needed to be increased efficiency conservation. There was concern about use generally, I think, as well as uniformity across the country.

Gary Toman: 13:33

The operative statutory language that preempts prohibits regulation concerning energy use by covered appliances. That's the magic language and its state or local regulation. That's what we contended was directly in play, because they are in this ordinance saying you can't use it at all. That's the most fundamental regulation of use you can make. That was our argument. And the ninth certainty the use of gas, in particular in restaurants, is so important because it gives you such greater control, and it also is absolutely necessary for certain kinds of ethnic food. It just is a unique situation. As a result, personally, I insist on having a gas thing Absolutely critical, because my cremation was about to turn into scrambled eggs. It would have been scrambled eggs. I had a walk and it rolled around on the top of the thing.

Tom Hagy: 15:49

Have you seen similar action taken in other contexts? What is the impact of overturning this ban? What might it have in general for consumers and businesses?

Gary Toman: 15:59

It definitely has an effect where other governmental entities are trying to do this same sort of direct regulation of the availability of gas and hence gas appliances. There have been a number elsewhere, in California, the state of Washington, the state of New York and some other places. I would tell you that direct regulation where you say it is not allowed to have gas and new construction is just going to run afoul of this in our opinion, and certainly in the opinion of the Ninth Circuit. I think what you're going to see is efforts to add what I would say generally is going to be pretext, but add other issues in an effort to take it away from the idea of a ban and more to invoke traditional types of justifications for regulation. Let me give you an example.

Gary Toman: 17:26

This ruling does not stop in any way, shape or form regulation of whether you can use a portable gas grill or gas heater indoors. That is a safety issue. You see what I'm saying. Where you can have an unvented gas grill, an exterior gas grill or these portable heaters that throw off lots of carbon monoxide, those can be regulated. We're not talking about that. The Ninth Circuit's ruling does not affect that. But if you read the city of Berkeley particularly. They have filed a petition for re-hearing in bank. The United States, quite frankly, has filed an amicus brief, and they have taken position that this is going to ban all kinds of well-accepted forms of regulation like fire safety, health safety. It doesn't do that, but I would say, though, if you use those ideas as a mere pretext, it will be effective. So I think the Ninth Circuit decided the case in front of it. It did it correctly, but other cases that approach these issues in a different way may be subject to a different analysis. I can't speculate.

Tom Hagy: 19:09

The Ninth Circuit is a big circuit and it's just going to have impact on similar cases going forward. And you mentioned that. What about cases involving bands of other substances?

Gary Toman: 19:22

For example, in the state of Washington there was a ban and an action was filed and in light of the Ninth Circuit opinion the state of Washington has put a moratorium, I understand, on their statute for further study. But so that is one direct effect inside the Ninth Circuit, but it definitely has the potential to have effect elsewhere. I think the analysis is compelling but it's only binding in the states of the Ninth Circuit.

Tom Hagy: 20:04

So New York has implemented natural bascan it's a bascan, Gary. New York has implemented its natural gas ban, which was supposed to start in 2026. Do you think this will have any influence? I guess that's up to court decor, right?

Gary Toman: 20:23

I think that the New York statute was drafted to deal a little bit with what we had done. I think there's an exception for restaurants, so that is interesting. But I think there's a broader point here and I believe that the statute, the federal statute, does preempt what New York did, despite the fact that they tried to do some exceptions to ameliorate the issue from a litigation standpoint perhaps, but I think the net effect is the same. I mean, if it stops me from having my gas range, if I build a new house, that's a problem. And that's really the core of what the statute goes to is manufacturers and consumers of covered products and saying no, you cannot directly regulate that. And then further, I think the Ninth Circuit makes a clear point that you can't do indirectly that is, banning the source of it, so you can't use it at all. That is prohibited as well. You can't do by indirection what you can't do directly.

Tom Hagy: 21:59

Fun is that you've mentioned it a couple of times, where you said New York tried to take, or they tried to work around or take out the problem that the Ninth Circuit had, kind of, and then we were asking what is the complete reversal of the ban? Is that the only answer? I guess what I'm trying to ask you to get to is what is the middle ground for this?

Gary Toman: 22:23

other than an outright ban.

Gary Toman: 22:26

Well, yeah, that's really a legislative issue at first. I mean, obviously, then there's the question of how the judicial review of it would be, but is there regulation that would work? That's an interesting question. We, frankly, have not looked at that directly and so I don't really have an opinion at this stage, but I do think that there are. You know well. I guess the question is what exactly is your goal? Is your goal to reduce the amount of natural gas used, to transition toward greater use of electricity? Yeah, well, I think that you could work with manufacturers to see what more efficient uses can be, and there may be some forms of local how do I want to say? Lobbying or whatever. That would be good when you start getting into mandating things. You cannot mandate that in California, a gas appliance going forward has to use half as much gas. That is direct. That is clearly. I think even the city of Berkeley would agree you can't do that, so that doesn't work.

Gary Toman: 24:10

But I think there are ways of encouraging and perhaps not by local legislation but by other aspects where you would encourage the development of effective forms of whatever it is cooking or heating or drying that are appealing to the consumer but use less.

Gary Toman: 24:36

Obviously, someday we may have effective fusion reactions and in that case we can all get on the bandwagon of zero emissions and all that and we will have all the energy we need. And I know I heard on the radio this week that there were significant developments in creating a net positive energy production in an experimental fusion situation which leads some experts to say that within 50 years we actually may be able to have a commercially viable fusion deal if that survives regulation. But I mean that's the answer to me. There are ways of getting away from fossil fuels. Possibly that would be effective and cost wise as well as production wise.

Tom Hagy: 25:31

But we're not there now. I'm thinking of just installing a giant magnifying glass and cooking with the sun. You know what I mean. There you go, there you go.

Gary Toman: 25:41

It has to be a really good magnifying glass that I could turn the heat down so I don't have scrambled eggs, that's right.

Tom Hagy: 25:49

All right, I'll work on that adjustment for you. Old Gary Toman, thank you very much for speaking with me about this today. I enjoyed it.

Gary Toman: 25:55

I enjoyed it. Thank you so much.

Tom Hagy: 25:59

That concludes this episode of the Emerging Litigation Podcast, the co-production of HB Litigation, critical legal content, vlex, fast Case and our friends at LostG Media. I'm Tom Hage, your host, which would explain why I'm talking. Please feel free to reach out to me if you have ideas for a future episode and don't hesitate to share this with clients, colleagues, friends, animals you may have left at home, teenagers you irresponsibly left unsupervised, and certain classifications of fruits and vegetables, and if you feel so moved, please give us a rating. Those always help. Thank you for listening.