The U.S. Court of Appeals for the Second Circuit on June 30, 2026, upheld New York City's and New York State's gas appliance bans, rejecting a challenge from plumbing contractors, home builders and fuel suppliers who argued federal law preempts local governments from dictating which energy source new buildings can use for space heating and hot water. Two days earlier, a divided panel of the Ninth Circuit handed a similar defeat to home builders challenging a Southern California air district's zero-emission equipment rule, leaving HVAC contractors and equipment suppliers to navigate a widening legal split over how far cities and states can go in restricting fossil-fuel-burning furnaces, boilers and water heaters in new construction.
Second Circuit's Reasoning on New York's Gas Appliance Bans
The New York case, consolidated as Association of Contracting Plumbers of the City of New York v. City of New York and Mulhern Gas Co., Inc. v. Mosley, challenged two separate laws. New York City's Local Law 154 bars the use of carbon-emitting fuels in most new buildings, meaning new construction generally cannot use natural gas or heating oil for space heating, water heating, cooking or clothes drying. New York State's companion law similarly directs state officials to adopt rules prohibiting fossil-fuel-burning appliances in new buildings; the National Association of Home Builders and the New York State Builders Association are named plaintiffs in that challenge. The plaintiffs argued the Energy Policy and Conservation Act, which sets national efficiency standards for household appliances, preempts both laws. Writing for the panel, Judge Myrna Perez rejected that argument, drawing a distinction between appliance-efficiency standards, which EPCA governs, and rules about which type of energy a new building may use, which the court said fall outside EPCA's preemption clause. New York State's ban has not taken effect; the parties agreed earlier in the litigation to stay it until the case is fully resolved.
HVAC and Fuel Industry Reaction to the Gas Appliance Bans Ruling
Stephen Kaminski, president and CEO of the National Propane Gas Association, called the outcome disappointing. "I'm deeply disappointed with this decision," Kaminski said in a statement. "Consumers across New York deserve access to clean, reliable and affordable energy, along with the freedom to choose the energy source that best meets the needs of their families." The Association of Contracting Plumbers of the City of New York, whose members install and service the furnaces, boilers and water heaters directly affected by Local Law 154, was a lead plaintiff in the case, underscoring how directly the ruling touches the mechanical trades rather than just builders. The National Association of Home Builders, which has opposed local gas-appliance restrictions on the grounds that they narrow consumer choice and raise construction costs, said it will keep pressing Congress to pass the Energy Choice Act, federal legislation that would preempt state and local bans on natural gas appliances in homes.
The ruling creates a direct split with the Ninth Circuit's 2023 decision in California Restaurant Association v. City of Berkeley, which struck down a similar municipal gas-hookup ban after finding it was preempted by EPCA. With the Second and Ninth Circuits now on opposite sides of the preemption question, trade groups say the issue is a strong candidate for U.S. Supreme Court review, though no petition has yet been filed in the New York case.
In the California case decided two days earlier, a 2-1 Ninth Circuit panel upheld zero-emission-equipment standards the South Coast Air Quality Management District adopted in 2024 for large water heaters, small boilers and process heaters, rejecting arguments that the rule conflicted with the Clean Air Act. The rule applies across Los Angeles, Orange, Riverside and San Bernardino counties. Circuit Judge Lucy Koh wrote for the majority that nothing in EPCA suggested Congress intended to interfere with states' ability to use equipment rules to meet federal air-quality standards; in dissent, Circuit Judge Kenneth Lee said the rule was "strikingly similar" to the Berkeley ordinance the same court had already struck down.
Taken together, the two rulings give state and local governments in jurisdictions such as New York, California, Connecticut and Vermont firmer legal footing to restrict gas-fired HVAC and water-heating equipment in new construction, even as the underlying legal question remains unsettled nationally. Contractors and equipment suppliers operating across state lines say the split leaves them managing an increasingly uneven patchwork of installation rules while the litigation works its way toward a possible Supreme Court review.
