A three-judge panel of the Ninth U.S. Circuit Court of Appeals this week questioned attorneys on competing federal statutes during oral argument in the California Apartment Association’s challenge to a South Coast Air Quality Management District rule targeting gas appliances in multifamily housing.

The case centers on Rule 1146.2, adopted by the Air Quality Management District in 2024, which requires covered appliances to meet a “zero-NOx” emissions standard. Because no commercially available gas-fired appliances subject to the rule can meet that requirement, the rule effectively bars their use and forces a transition to electric alternatives in buildings throughout Los Angeles, Orange, Riverside and San Bernardino counties.

CAA and a broad coalition of housing, business, labor and manufacturing organizations argue that the rule is unlawful because it is preempted by the federal Energy Policy and Conservation Act, which prohibits state and local governments from regulating the energy use of appliances already subject to federal standards. A federal district court upheld the rule last year, and CAA appealed that decision to the Ninth Circuit.

Oral argument was held Thursday in Pasadena and offered insight into how the panel is weighing the competing legal frameworks at issue — federal appliance preemption on one hand and the air district’s obligations under the federal Clean Air Act on the other.

Judge Lucy Koh was the most active questioner during CAA’s presentation, repeatedly pressing counsel on the Air Quality Management District’s argument that it cannot meet Clean Air Act air-quality mandates without adopting the zero-NOx standard. Her questions suggested skepticism toward CAA’s position that federal preemption applies even when a local agency asserts the rule is necessary to achieve federally required pollution reductions.

By contrast, Judge Kenneth Lee focused much of his questioning on the Air Quality Management District’s defense of the rule, probing why the Ninth Circuit’s 2024 decision in California Restaurant Association v. City of Berkeley should not control the outcome here. That case struck down Berkeley’s natural gas piping ban, holding that federal law preempts local measures that effectively eliminate the use of federally regulated gas appliances. Judge Lee asked district counsel to explain how that reasoning could be limited to Berkeley’s ordinance, given the breadth of the court’s analysis.

The third member of the panel, Judge Ana de Alba, asked no questions and maintained an impassive demeanor throughout the argument. Observers often view such judges as potential swing votes, though the absence of questions provides little insight into their thinking.

The panel did not indicate when it would issue a decision, which could come at any time in the coming months.

Members who wish to watch the oral argument can view the archived hearing online.