Appellate Division (Mostly) Upholds New York City’s Local Law 97 but Remands for Further Consideration of New York State Climate Leadership and Community Protection Act Preemption Claim; City seeks to Appeal to the Court of Appeals

New York City’s Local Law 97 is a landmark local law, recognized across the state and country as an ambitious example of a local building decarbonization law. Local Law 97 limits greenhouse gas emissions from certain large buildings and imposes strict penalties for non-compliance. As we noted in previous alerts, a co-op of multifamily and commercial building owners challenged the law on various grounds, including: (1) that the law is preempted by the New York State Climate Leadership and Community Protection Act (“CLCPA”); (2) the penalties for violating the law are an invalid use or occupancy tax;[1] and (3) that the law deprives Plaintiffs of their due process rights because the civil penalties are excessive, the law would be retroactively applied, and the law is too vague and ambiguous to be enforced.

New York City’s Motion to Dismiss was granted in its entirety by the Supreme Court, New York County. On appeal, the Appellate Division, First Department upheld the Supreme Court’s dismissal of all claims except the first one – that Local Law 97 is preempted by the CLCPA. The Appellate Division held that the “first cause of action clearly invokes field preemption” and that “defendants failed to show that New York State’s CLCPA does not preempt New York City’s Local Law 97.” Glen Oaks Vill. Owners, Inc., et al., v. City of New York, App. Div. No. 2024-00134 (1st Dep’t 2024) (citing Albany Area Bldrs. Assn. v. Town of Guilderland, 74 N.Y.2d 372, 377 [1989])) (“Where the State has preempted the field, a local law regulating the same subject matter is deemed inconsistent with the state’s transcendent interest, whether or not the terms of the local law actually conflict with a state-wide statute.”)).

New York City had taken the position that CLCPA § 11, which states “[n]othing in this act shall relieve any person . . . of compliance with other applicable federal, state, or local laws ..., including state air and water quality requirements, and other requirements for protecting public health or the environment” is a savings clause for Local Law 97 because the latter “protect[s] public health or the environment.” Glen Oaks Vill. Owners, Inc., et al., App. Div. No. 2024-00134. However, the Appellate Division concluded, without much analysis, that in reading CLCPA § 11 together with section 10, which states “[n]othing in this act shall limit the existing authority of a state entity to adopt and implement greenhouse gas emissions reduction measures[,]” CLCPA § 11 applies to local laws “other” than “greenhouse gas emissions reduction measures.” Id.  

Local Law 97 is still in effect pending the ultimate outcome of this litigation, but this unfavorable result for New York City means that Local Law 97 now has an uncertain future at a very crucial time. Regulated building owners must meet Local Law 97’s emissions limits this year and comply with annual reporting requirements to the New York City Building Department by May 1, 2025. Failing to comply with the reporting requirements exposes owners to civil penalties.

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New York City moved for leave to appeal this decision to the Court of Appeals. In the meantime, the City may also seek legislative support through an amendment to the CLCPA confirming the right to enact local decarbonization efforts. The Appellate Division decision rested (largely without explanation) on a reading of CLCPA § 11’s reference to “other applicable . . . local laws” as referring to laws other than the state statute’s § 10 “greenhouse gas emissions reduction measures.” This alone was enough for a reversal. Local Law 97 represents the significant role local emissions reduction policies and laws can play in achieving statewide climate goals and is a leading example of this type of regulation across the country. If the Court of Appeals strikes it down, achievement of the State’s climate mandates under the CLCPA may be at risk. This decision is also leaving building owners in an uncertain posture at a time when the law’s strict requirements are finally going into effect after years of anticipation.

For more information, contact Daniel Spitzer (716.848.1420), Alicia Legland (518.433.2416), Carmine Castellano (646.218.7571), or any member of the Hodgson Russ Renewable Energy Practice.

[1]             The Plaintiffs did not appeal the dismissal of this cause of action by the Supreme Court, and as such, the Appellate Division did not consider it.  

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