Follow the money on gas lawsuit

By Matt Vespa Special to CalMatters

Afederal appeals court recently dealt a destabilizing blow to local governments across the West by ruling that a first-inthe-nation policy from Berkeley to phase out methane gas hookups in new buildings was preempted by federal law.

California has led the nation on policies to upgrade homes and buildings with clean energy appliances, rather than continuing to use fossil fuels like gas for heating and cooking. Berkeley’s original policy kickstarted a national movement for healthier housing, and in less than four years, it gained incredible traction.These solutions are vital for local and state governments. Not only is pollution from buildings one of the largest sources of climate emissions in our communities, but this pollution carries significant public health risks. A recent study found close to 13% of childhood asthma in the U.S. can be attributed to gas stove use. In California, it’s more than 20%.

The recent ruling from 9th U.S. Circuit Court of Appeals rests on a broad interpretation of federal law preemption, which could become a significant barrier to local and state authority to upgrade housing regulations and fight climate change.

Thankfully, its immediate impact is limited. There are many viable pathways to ensuring new homes are built to run on clean energy and this ruling just impacts one. The decision, made by three Republican-appointed judges on the 9th Circuit, will also likely be appealed to the full 9th Circuit.

Hopefully sound legal analysis will prevail. Time will tell just how damaging the court’s interpretation of federal preemption is, but it’s fair to say it impedes California’s efforts to end its reliance on polluting gas and the wishes of Californians who overwhelmingly support action on climate change. And on the same day that the 9th Circuit issued their decision, it became clear that SoCalGas may have had a hand in this setback.

While the California Restaurant Association, or CRA, has served as the face of this suit, it turns out that the gas industry played a key role. Public filings showed that when CRA filed its lawsuit, SoCalGas, the nation’s largest gas utility, began to pay millions in legal fees to Reichman Jorgensen, the same firm representing CRA.

While SoCalGas had previously denied the work was related, last week SoCalGas was forced by the California Public Utilities Commission to admit that it funneled more than $1 million of customer money to pay for legal services by Reichman Jorgensen that included work on federal preemption of local laws to limit gas, the very issue at the heart of the CRA litigation. This was at the same time SoCalGas ramped up its donations to the CRA’s philanthropic arm, the California Restaurant Foundation, from $24,000 in 2019 to more than half a million in 2021.