Green Building Law Blog : Green Building Lawyer & Attorney : Shari Shapiro: Calliope Communications, LLC

NOTE: The opinions expressed in this post are entirely those of the author, and do not represent the position of the USGBC or the Delaware Valley Green Building Council.

Yesterday, I discussed the fact that Henry Gifford filed an Amended Complaint in his suit against the USGBC for fraudulently claiming that LEED buildings save energy.  The post, as well as the Amended Complaint are available here. I also noted that Mr. Gifford and the other plaintiffs probably do not have standing to bring the suit because they were not harmed by the allegedly fraudulent advertising of the LEED system. 

Mr. Gifford alleges that the people and entities that have been and will be harmed include:

USGBC's misrepresentations have and will continue to deceive consumers and voters, taxpayers, developers, municipalities, and legislators at the local, state and federal levels.

Amended Complaint at Paragraph 57.

This brings up critical questions about the legitimacy of Mr. Gifford's claims:

If developers were really experiencing energy performance vastly out of proportion to their expectations, wouldn't there be suits by developers against their design professionals and/or the USGBC? 

If the Federal government, with one of the largest portfolios of LEED buildings, were really disappointed by their performance, wouldn't they stop using the system? 

If design professionals were spending money to obtain worthless credentials, then wouldn't architects (whose profession is down something like 50%) be lining up to demand their money back? 

If the problems that Gifford alleges are so fundamental, why is it that Henry Gifford and a few other plaintiffs who have rejected the LEED paradigm seem to be the only ones suing? 

The concept of abstract “rightness” does not play a very large role in the American judicial system.  With few exceptions, only a person harmed can bring suit to right the wrong done to him or her. So, even if you or I see something terribly “wrong” happening, if we are not harmed by it, we have no standing to bring suit. 

For example, a man stops by a street hustler and plays a shell game.  You are standing on the corner.  You see the street hustler take his money and bilk him.  The man sees it too, but shrugs his shoulders and walks away.  You cannot sue to get the guy’s money back—only he can (or press charges, etc). 

If there are no victims of the USGBC's "fraud", then Mr. Gifford's is really just a gadfly who is calling attention to himself by suing the USGBC.  If there is fraud, then we should see a rash of suits by plaintiffs who have actually been harmed--consumers and voters, taxpayers, developers, municipalities, and legislators at the local, state and federal levels.

NOTE: The opinions expressed in this post are entirely those of the author, and do not represent the position of the USGBC or the Delaware Valley Green Building Council.

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NOTE: The opinions expressed in this post are entirely those of the author, and do not represent the position of the USGBC or the Delaware Valley Green Building Council.

In October 2010, Henry Gifford filed a lawsuit against the United States Green Building Council alleging, essentially, that the USGBC had fraudulently represented the performance of LEED buildings, and doctored study results to support their claim that LEED buildings performed more efficiently than standard construction. Yesterday, Henry Gifford filed an amended complaint (you can download the amended complaint here). 

The original suit was filed as a class action, and included claims against the USGBC for illegal monopolization and false advertising.  I posted that these issues would probably not pass legal muster.  The class action could not be certified (see my post here) and the suit did not establish that the USGBC was a monopoly (see my post here).

 There are several changes to the new complaint:

1. It has been boiled down to essentially a False Advertising and Consumer Fraud Act case under Federal and New York State law.
2. It is not a class action.
3. The monopolization claim has been eliminated.
4. Several new plaintiffs have been added, including an architect, an engineer, and a "speciali[ist] in moisture barrier design and mold remediation."

The essential claims as alleged in the factual section of the Amended Complaint are that the USGBC has misrepresented the energy efficiency of LEED buildings, and that the LEED certification is not a verification of the actual energy performance of the building. 

From a legal perspective, I believe that the Amended Complaint is still riddled with a fatal flaw--the plaintiffs probably do not have standing. 

In alleging a violation of the Lanham Act, the Federal act prohibiting false advertising, the Amended Complaint states:

USGBC's misrepresentations have an will continue to deceive consumers, voters, taxpayers, developers, municipalities and legislators at the local, state and federal levels.

However, fraud requires "reasonable reliance" on the false statements. The difficulty here is that, although more plaintiffs have been added, they are still not plaintiffs that were "duped" by the USGBC's representations.  The claims alleged by Gifford are really claims rightfully brought by people who have been harmed by spending too much on LEED buildings, or LEED accreditation.  In essence, Gifford has not eliminated the standing problem that doomed his class action. 

The Amended Complaint is also rife with hyperbole, which diminishes its credibility.  For example, with respect to a study on the performance of LEED buildings:

The self-selection bias is so obvious, it's about as reliable as using breathalyzer tests of drivers who volunteer to be tested as a gauge of how many people drink and drive.

See Amended Complaint at Paragraph 32(b).

Despite the fact that Gifford's lawsuit is probably flawed by reason of lack of standing, as revised the Amended Complaint may be enough to survive a Motion to Dismiss.  In that case, discovery will proceed, which will open the internal communications of the USGBC to public scrutiny. 

As with the kerfuffle over the emails among scientists studying global warming, this may muddy the waters and slow the progress of green building, even if the claims against the USGBC are eventually proven to be unfounded.   

NOTE: The opinions expressed in this post are entirely those of the author, and do not represent the position of the USGBC or the Delaware Valley Green Building Council.

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