On June 30, 2026, the US Court of Appeals for the Second Circuit upheld two challenged laws, rejecting arguments that New York City Local Law 154 and New York State’s amended Energy Law, which effectively prohibit the installation of natural gas-powered appliances in most new buildings, are preempted by the federal Energy Policy and Conservation Act (EPCA). The 3–0 decision affirms separate rulings issued by the US District Courts for the Southern and Northern Districts of New York, but splits from the majority opinion issued in the Ninth Circuit in 2024 and sets up a likely appeal to the Supreme Court.
The challenged New York City and New York State laws were enacted in support of the state’s zero-emission targets required by the Climate Leadership and Community Protection Act (CLCPA) and in response to a large body of research warning that gas stoves, kerosene space heaters, and other fossil-fuel-burning appliances emit carbon dioxide and methane into the atmosphere. Both New York City and the state adopted laws that modify local building code requirements by prohibiting the installation of fossil-fuel appliances and infrastructure in new construction. Implementation of the state’s law was stayed while appeals were heard by the Second Circuit. The stay will be lifted on October 28, 2026, unless a timely petition for certiorari is filed with the Supreme Court, in which case the stay will remain in place. New York City’s law, however, was effective January 1, 2024.
In its holding, the Second Circuit ruled that the challenged laws are not preempted by the federal EPCA and explained that EPCA’s purpose is to reduce energy demand and consumption through conservation measures and is responsible for setting energy standards for certain appliances. The Second Circuit reasoned that that the challenged laws “do not impose standards of their own” and govern only the type of energy an appliance consumes, not the amount of energy itself.
The Second Circuit acknowledged the “reluctant” creation of a circuit split, as its holding is contrary to the majority opinion in California Restaurant Association v. City of Berkleyi and spent a significant portion of its decision explaining why it reached a contrary holding. In California Restaurant, the Ninth Circuit held that a local law passed by the City of Berkeley that prohibited the installation of natural gas piping in new buildings was preempted by the EPCA. Other jurisdictions appear to be following suit; the Fourth Circuit Court of Appeals and the District of Columbia Circuit Court of Appeals are considering challenges to similar laws banning the installation of fossil-fuel appliances and equipment in new construction,ii and the US Department of Justice is also targeting the adoption of similar local laws.iii
The challengers will now need to decide whether to seek hearing en banc before the Second Circuit or seek certiorari. The grant of certiorari is a subject to the Supreme Court’s full discretion and is rarely granted, limited to only those cases with “compelling reasons.” Here, the split among circuits and the subject matter may increase the odds that the Supreme Court elects to hear the case.
This holding and any future appeal will impact new building construction across New York State. Barclay Damon will continue to monitor these lawsuits and keep clients updated on any relevant developments.
If you have any questions regarding the content of this alert, please contact Yvonne Hennessey, Environmental Practice Area chair, at yhennessey@barclaydamon.com; Gabrielle Figueroa, special counsel, at gfigueroa@barclaydamon.com; Matthew Gino, associate, at mgino@barclaydamon.com; or another member of the firm’s Environmental Practice Area.
Sophie Nye, summer associate (not admitted to the practice of law), contributed significantly to the preparation of this alert.
i89 F.4th 1094 (9th Cir. 2024).
iiSee National Association of Home Builders of the United States et al. v. Montgomery County, Maryland, No. 26-1449, and National Association of Home Builders of the United States et al. v. District of Columbia, No. 26-7050.
iiiSee United States of America v. Township of Morris et al, District of New Jersey, No. 2:26-cv-3412.