New York, California Appellate Courts Uphold Appliance Gas Bans

This post has been updated.

Two federal appellate rulings issued days apart in New York and California upheld restrictions on gas-powered and other fossil-fuel appliances in new construction, dealing a setback for home builders, trade groups and labor organizations that challenged the laws.

The decisions also underscore a split among federal courts over whether federal law preempts state and local gas appliance bans, increasing the chances of Supreme Court review.

New York Case

The New York case involved challenges to two separate laws: Association of Contracting Plumbers of the City of New York v. City of New York and Mulhern Gas Co., Inc. v. Mosley, Nos. 25-977, 25-2041 (2d Cir. June 30, 2026), involved challenges to two separate New York laws.

New York City’s Local Law 154 limits the use of fuels that produce carbon emissions in new buildings. That means many new homes and buildings cannot use natural gas or heating oil for common appliances and systems such as space heating, water heating, cooking and clothes drying.

New York State’s law similarly requires state officials to adopt rules prohibiting fossil-fuel-burning appliances in new buildings. NAHB and the New York State Builders Association are named plaintiffs in the challenge to New York State’s gas ban.

The challengers argued that New York’s laws conflict with a federal law called the Energy Policy and Conservation Act (EPCA). EPCA sets national energy-efficiency standards for many household appliances. The challengers argued that EPCA’s preemption provision prohibits states and cities from adopting laws that effectively ban federally regulated appliances from new buildings.

Two lower federal courts rejected those arguments, and the challengers appealed to the Second Circuit.

The Second Circuit also rejected the challengers’ position. Judge Myrna Pérez, writing for the court, explained that EPCA blocks states from creating their own appliance-efficiency standards. In the court's view, New York's laws do not tell manufacturers how efficient an appliance must be or impose a competing energy-use standard. Instead, they regulate the type of energy that may be used in new construction.

In other words, the court distinguished between appliance-efficiency standards, which federal law governs, and rules determining whether fossil-fuel-powered appliances may be installed in new buildings. Because of that distinction, the court held that EPCA does not preempt New York’s laws.

New York State’s gas ban does not now immediately take effect. The parties agreed earlier in the litigation to stay the ban until the litigation is complete.

California Case

In a 2-1 decision, the Ninth U.S. Circuit Court of Appeals ruled that zero-emission standards adopted by the South Coast Air Quality Management District in 2024 for large water heaters, small boilers and process heaters do not violate the Clean Air Act. The ruling applies across much of Southern California, including Los Angeles, Orange, Riverside and San Bernardino counties.

NAHB and other industry groups challenged the pollution control rule, arguing that it conflicted with federal law.

“Nothing in the text, structure, or history of [the Energy Policy and Conservation Act] suggested that Congress intended to interfere with states’ ability to use these well-established methods to achieve compliance with federal air quality standards under the [Clean Air Act],” Circuit Judge Lucy Koh wrote for the majority.

In dissent, Circuit Judge Kenneth Lee said the air district rule was “strikingly similar” to Berkeley’s gas-line ban for new construction, which the Ninth Circuit struck down in 2023.

Judge Lee was referring to California Restaurant Association v. City of Berkeley, 89 F.4th 1094 (9th Cir. 2024), where the Ninth Circuit held that a similar Berkeley gas-hookup ban was blocked by EPCA. That ruling conflicts with this week’s New York and California appellate decisions.

Uncertainty for Builders

The New York and California rulings are significant for home builders. In states such as New York, California, Connecticut and Vermont, state and local governments may now have stronger legal support for gas appliance bans and building electrification requirements.

Builders operating in multiple states may continue to face varying rules, complicating compliance and limiting appliance choices for home buyers.

NAHB has long opposed state and local bans on gas-powered appliances because they reduce consumer choice and can increase construction costs. With the Second and Ninth Circuits now divided, the issue is a strong candidate for U.S. Supreme Court review.

NAHB has also been working closely with members of Congress to pass the Energy Choice Act, federal legislation that would preempt state and local bans on natural gas in homes.