California Restaurant Association v. City of Berkeley

Background

The California Restaurant Association (CRA), a nonprofit association whose members include restaurant owners and chefs, challenged Berkeley Ordinance No. 7,672-N.S. The ordinance prohibits natural-gas infrastructure—defined as fuel-gas piping extending from the gas meter into a building or property—in newly constructed buildings in Berkeley. It applies to qualifying applications submitted on or after January 1, 2020, and includes exceptions for physical infeasibility and when natural-gas use serves the public interest.

CRA asserted four causes of action: federal preemption under the Energy Policy and Conservation Act (EPCA), and three claims that California law invalidated or overrode the ordinance. Berkeley moved to dismiss under Federal Rules of Civil Procedure 12(b)(1), for lack of subject-matter jurisdiction, and 12(b)(6), for failure to state a legally sufficient claim.

Jurisdictional Issues

The court denied the motion to dismiss on standing grounds. It held that CRA’s amended allegations—that at least one member would operate a new restaurant in a new Berkeley building using natural-gas appliances but for the ordinance—were sufficient at the pleading stage. The court also denied the motion on ripeness grounds, concluding that CRA’s facial challenge presented a sufficiently definite legal issue and did not require a developed factual record.

EPCA Claim

The court dismissed CRA’s EPCA preemption claim with prejudice. It explained that EPCA preempts state or local regulations concerning the energy use or energy efficiency of covered products, subject to statutory exceptions. The court concluded that Berkeley’s ordinance did not directly regulate the energy use or efficiency standards of covered appliances. Instead, it prohibited natural-gas infrastructure in new buildings. The court held that the ordinance’s indirect effect on the availability of gas appliances was insufficient to bring it within EPCA’s preemption provision. The court also concluded that federal law did not require local governments to extend or maintain natural-gas connections.

California-Law Claims

Because the EPCA claim was the only federal claim, the court declined to exercise supplemental jurisdiction—the court’s authority to hear related state-law claims—in the absence of a remaining federal claim. The motion to dismiss was granted as to the California-law claims, and those claims were dismissed without prejudice.

Disposition

The court ordered that Berkeley’s motion to dismiss the first amended complaint was granted in part and denied in part. The first cause of action was dismissed with prejudice; the remaining California-law preemption claims were dismissed without prejudice. The clerk was directed to issue a form judgment and close the matter.