Air Cond. and Refrig. v. Energy Resources Conserv.

Decision Date03 June 2005
Docket NumberNo. 03-16621.,03-16621.
Citation410 F.3d 492
PartiesAIR CONDITIONING AND REFRIGERATION INSTITUTE; Gas Appliance Manufacturers Association; Association of Home Appliance Manufacturers; National Electrical Manufacturers Association, Plaintiffs-Appellees, v. ENERGY RESOURCES CONSERVATION AND DEVELOPMENT COMMISSION; William J. Keese, Chairman; Robert Pernell, Commissioner; Aurthur H. Rosenfeld, Commissioner; James D. Boyd, Commissioner; John L. Geesman, Commissioner, Defendants-Appellants.
CourtU.S. Court of Appeals — Ninth Circuit

William M. Chamberlain, Jonathan Blees, Monica Schwebs, Paul A. Kramer, Jr., William W. Westerfield III, Sacramento, CA, for the appellants.

John A. Hodges, Bruce L. McDonald, Dineen Pashoukos Wasylik, Peter J. Riehm, Wiley Rein & Fielding LLP, Washington, D.C., for the appellees.

Appeal from the United States District Court for the Eastern District of California; William B. Shubb, Chief Judge, Presiding. D.C. No. CV-02-02437-WBS/PAN.

Before: B. FLETCHER, NOONAN, and THOMAS, Circuit Judges.

AMENDED OPINION

THOMAS, Circuit Judge.

This case presents the question of whether federal law preempts California's appliance regulations requiring appliance manufacturers to submit data about their appliances to California's Energy Resources Conservation and Development Commission ("Commission"), mark their appliances with basic information such as brand name and energy performance, and be subjected to related compliance and enforcement rules. We conclude that federal law does not preempt California's regulations. We therefore reverse the district court's decision finding the regulations preempted and permanently enjoining the Commission from enforcing these regulations, vacate the injunction, and remand.

I

California boasts an extensive and laudable appliance efficiency program. As part of California's program, the Commission has, since 1977, required manufacturers to submit data to it. The data collected by the Commission pursuant to section 1606 of Title 20 of the California Code of Regulations is maintained in an electronic database, which contains information on over 135,000 appliance models. The Commission's database provided the foundation of information for the Environmental Protection Agency's Energy Star program and is used frequently by consumers, energy consultants, contractors, researchers, utility program managers, manufacturers, and other governmental agencies. As part of California's appliance program, the Commission also requires manufacturers to put basic information—such as the manufacturer's brand name and the appliance's size and energy performance—on their appliances. Cal.Code Regs. tit. 20, § 1607(b)-(d)(2). The Commission enforces the data submittal and marking requirements it places on manufacturers under section 1608. Cal.Code Regs. tit. 20, § 1608.

Plaintiffs-Appellees, four major trade organizations representing appliance manufacturers nationwide ("Trade Associations"), claim that these California regulations are preempted by the Energy Policy and Conservation Act, Pub. Law No. 94-163, 89 Stat. 871 (1975) ("EPCA"), specifically by 42 U.S.C. §§ 6297(a) and 6316(a)-(b). After these regulations were adopted but before they went into effect, Trade Associations filed suit for declaratory and injunctive relief in the United States District Court for the Eastern District of California. The district court held that the California regulations are preempted. The court, first preliminarily and then permanently, enjoined the Commission from enforcing the regulations. The Commission timely appealed.

We review the district court's decision regarding preemption de novo, Chamber of Commerce v. Lockyer, 364 F.3d 1154, 1160 (9th Cir.2004), and the district court's grant of permanent injunction for abuse of discretion, Ting v. AT & T, 319 F.3d 1126, 1134-35 (9th Cir.2003).

II

Preemption can occur in one of three ways: express pre-emption by statute, occupation of the field, or conflict between state and federal regulation. English v. General Elec. Co., 496 U.S. 72, 78-79, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990). All parties agree that this case presents a question of express preemption. Thus, this case boils down to the interpretation of the statutory provision that allegedly preempts state law. Medtronic, Inc. v. Lohr, 518 U.S. 470, 484, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996); Cipollone v. Liggett Group, Inc., 505 U.S. 504, 517, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992).

To determine whether California's regulations are pre-empted by EPCA, we are instructed to first "`identify the domain expressly pre-empted' by that language." Medtronic, 518 U.S. at 484, 116 S.Ct. 2240 (quoting Cipollone, 505 U.S. at 517, 112 S.Ct. 2608). "Since pre-emption claims turn on Congress's intent, we begin as we do in any exercise of statutory construction with the text of the provision in question, and move on, as need be, to the structure and purpose of the Act in which it occurs." New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 655, 115 S.Ct 1671, 131 L.Ed.2d 695 (1995) (internal citations omitted).

Our interpretation of the federal statute is informed by two presumptions about the nature of preemption. Medtronic, 518 U.S. at 485, 116 S.Ct. 2240. First, we address claims of preemption with the starting presumption that Congress did not intend to supplant state law. Id. Where, as is the case here, the State regulates in an area where there is no history of significant federal presence, United States v. Locke, 529 U.S. 89, 108, 120 S.Ct. 1135, 146 L.Ed.2d 69 (2000),1 we assume that the "historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Id. (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947)). This presumption against preemption leads us to the principle that express preemption statutory provisions should be given a narrow interpretation. Id.; Cipollone, 505 U.S. at 518, 112 S.Ct. 2608.

Second, our analysis of the scope of the statute's preemption is guided by the Supreme Court's oft-stated comment that "the purpose of Congress is the ultimate touchstone in every pre-emption case." Medtronic, 518 U.S. at 485, 116 S.Ct. 2240 (internal quotations marks omitted). "As a result, any understanding of the scope of a pre-emption statute must rest primarily on `a fair understanding of congressional purpose.'" Id. at 485-86, 116 S.Ct. 2240 (quoting Cipollone, 505 U.S. at 530, n. 27, 112 S.Ct. 2608) (emphasis omitted).

Also relevant to our interpretation of the scope of the statute's preemption are the "structure and purpose of the statute as a whole, as revealed not only in the text, but through [our] reasoned understanding of the way in which Congress intended the statute and its surrounding regulatory scheme to affect business, consumers, and the law." Id. at 486, 116 S.Ct. 2240 (internal citation and quotation marks omitted).

III

Thus, we turn to the language of the express preemption provision at issue. 42 U.S.C. § 62972 provides, in relevant part:

(a) Preemption of testing and labeling requirements

(1) Effective on March 17, 1987, this part supersedes any State regulation insofar as such State regulation provides at any time for the disclosure of information with respect to any measure of energy consumption or water use of any covered product if—

(A) such State regulation requires testing or the use of any measure of energy consumption, water use, or energy descriptor in any manner other than that provided under section 62933 of this title; or

(B) such State regulation requires disclosure of information with respect to the energy use, energy efficiency, or water use of any covered product other than information required under section 62944 of this title.

42 U.S.C. § 6297.

A. Data Submittal Regulations

The first California regulation that 42 U.S.C. § 6297(a) arguably preempts is Cal.Code Regs. tit. 20, § 1606, which requires appliance manufacturers to submit specified information to the Commission for each appliance for sale or sold in California. Such information includes the name of the manufacturer, the brand name, the model number, and data produced during tests the manufacturer is required to perform under Cal.Code Regs. tit. 20, § 1604. See Cal.Code Regs. tit. 20, §§ 1606(a), Table U.

To determine whether 42 U.S.C. § 6297(a) preempts the data submittal requirements of Cal.Code Regs. tit. 20, § 1606, we look to the text of § 6297(a). Section 6297(a) preempts any state regulation that provides "at any time for the disclosure of information with respect to any measure of energy consumption or water use of any covered product if ... such State regulation requires disclosure of information with respect to the energy use, energy efficiency, or water use of any covered product other than information required under section 6294." The district court found the text of § 6297(a), in particular the meaning of the phrase "disclosure of information," ambiguous, and so do we.

Beginning with the presumption that Congress did not intend to supplant state law, we must narrowly interpret § 6297(a) in general, and the phrase "disclosure of information" in particular. See Medtronic, 518 U.S. at 485, 116 S.Ct. 2240. A narrow interpretation is consistent with our direction to find preemption when preemption is the "clear and manifest purpose of Congress." Id. The narrow interpretation the Commission advances is supported by the statutory text and is consistent with Congress's purpose. Applying a narrow interpretation of § 6297(a), we hold that it does not preempt the data submittal requirements contained in Cal.Code Regs. tit. 20, § 1606.

The rules of statutory construction support the narrow interpretation of "disclosure of...

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