Air conditioner manufacturers were dealt a setback in their attempt to derail a New York City law that holds them responsible for the safe disposal of potentially harmful refrigerants in residential appliances.

Southern District Judge Lorna Schofield denied the appliance-makers judgment on the pleadings in Association of Home Appliance Manufacturers v. The City of New York, 13 civ. 07888, ruling that the city was acting well within its police powers to deal with refuse within its borders in passing Local Law 69, which puts the onus on appliance-makers to recover refrigerants in old residential equipment that can damage the ozone.

The legislative history of the law, Schofield held, shows that “the safe disposal of refrigerants is an issue of particular concern in the city’s management of its waste, as their illegal venting—exacerbated by poaching—causes environmental damage.”

But the judge also found that Local Law 69 is preempted to the extent that it regulates chlorofluorocarbons (CFCs) that are specifically listed by state law, in this case New York Environmental Conservation Law §38-0107(3), such as cooling systems for walk in freezers. Still to be litigated are federal claims brought by the manufacturers.

Local Law 69, passed in 2013, is aimed at preventing the release into the atmosphere of hydrochlorofluorocarbons (HCFC), and other ozone-depleting substances.

Until 2000, when New York City signed a consent decree with the U.S. Environmental Protection Agency, the city vented into the atmosphere refrigerants from refrigerators, air conditioners, dehumidifiers and freezers that were discarded curbside as part of its recycling program.

After 2000, the city instructed residents to place their discarded appliances curbside before collection day, and city employees manning fleets of trucks would recover the refrigerants first, followed by the appliances, with the latter being handled by a recycling contractor.

In August 2013, then-Mayor Michael Bloomberg signed into law Local Law 69, which makes manufacturers responsible for recovering refrigerants, either by developing their own recovery programs or paying a fee to the city when the Department of Sanitation makes the collection.

The Association of Home Appliance Manufacturers, a trade group that produces 95 percent of the household appliances shipped for sale in the United States, sued in the Southern District, seeking a declaratory judgment against the city.

The association argued that the law exceeds New York City’s police powers as granted by New York State because ozone-depletion is a national and global problem.

But the city argued it was well within its police powers and noted that one reason the law was passed was because of the pervasive problem of curbside appliance poaching and with it an increased chance that the coolants will be released into the atmosphere.

Schofield said the city clearly had the better of the argument.

“Local Law 69 is plainly designed to improve the management of refrigerants as waste and address the consequences of their improper disposal in New York City, and therefore bears a reasonable relation to the promotion of the community’s health and welfare and the protection of the physical environment,” Schofield said.

The manufacturers also contended that the payments required of them are either an unauthorized tax or an impermissible fee imposed to reap a “fictional benefit” for New York City.

But the judge said there was a “direct and logical connection between the manufacturers and the refrigerants to be recovered” and so “the Court cannot find that Local Law 69 is unreasonable.”

“While it may be true, as Plaintiff argues, that the manufacturers have no ownership or control over the appliances being discarded or that they are not guilty of any wrongdoing, these assertions do not negate the close nexus between manufacturers who sell or distribute cooling appliances in New York City and the need to dispose safely of refrigerants in the same manufacturers’ appliances when they are discarded in New York City,” she said.

The judge did find for the manufacturers on preemption by §38-0107(3) of sections of Local Law 69, which affects aerosol spray cans, motor vehicle air conditioners, and “refrigerators used is retail stores, cold storage warehouse refrigeration systems, and air conditioners in large buildings.”

Nonetheless, she said, because of a severability provision in Local Law 69, the city may proceed with enforcement of the law’s requirements for residential cooling appliances.

Kevin Ainsworth, Dominic Picca and Charles Samuels of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo represent the manufacturers. Ainsworth said in an interview that the claims addressed were in a preliminary motion “and we are confident that after discovery the court will invalidate the law as a whole.”

Assistant Corporation Counsels Christopher King and Kathleen Schmid represent the City.

Schmid, of the Law Department’s environmental law division, issued a statement lauding the judge’s decision on Local Law 69.

“The law provides an innovative and progressive approach to ensuring that refrigerants are properly recovered from home appliances,” Schmid said. “If refrigerants are released into the atmosphere they can contribute to climate change and ozone layer depletion.”