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

Contributions to this post were made by Nadia Washlick, a Cozen O'Connor intern.

One of the most under-discussed and under-valued aspects of green building law is regulatory enforcement.  Most of the discussion among experts, myself included, tends to analyze new laws and new incentives as they develop.  Frequently, these new legislative and regulatory initiatives pay little attention to the implementation and enforcement requirements that are required for realizing the energy efficiency and environmental benefits the regulations were intended to foster. 

New York's Greener, Greater Buildings Plan compliments its sweeping new regulatory initiatives with recognition of and attention to code compliance and enforcement.

Released in 2007 and designed by Mayor Bloomberg, PlaNYC has brought together over twenty-five city agencies to collectively equip the city for one million more residents, bolster the economy, fight climate change, and enhance the quality of life for all city residents.  Most importantly, these agencies are working hard to enforce the regulatory changes necessary to achieve these goals. 

The City Counsel believes that focusing on buildings will help achieve most of these broad citywide goals as buildings account for almost 80% of greenhouse gas emissions, 94% of electricity use, and 85% of potable water consumption. In December of 2009, the City Council passed four laws known as The Greener, Greater Buildings Plan (GGBP). Collectively, these laws require energy efficiency upgrades and energy transparency in large existing buildings, including annual benchmarking, energy audits, retro-commissioning, lighting upgrades, and sub-metering of commercial tenant space.  The City Council believes that these laws will reduce GHG emissions by at least five percent citywide by 2030. In addition, GGBP will save New Yorkers more than $750 million per year in energy costs and create around 18,000 construction-related jobs, thus helping to bolster the economy. 

Needless to say, PlaNYC is attempting to transform the construction industry in New York City. This daunting task requires developing new regulatory procedures, defining new terms, and codifying these procedures. The New York City Green Codes Task Force, led by Urban Green Council, was established to develop new regulations, amend current laws, and provide new rules for enforcement. The task force consists of more than 200 experts in design and construction and has the duty of developing rules to enforce these new laws.  It has already developed over a hundred proposals to modify City codes and regulations that impact buildings or hinder green building practices, twenty-two of which have since been adopted.   Furthermore, the task force now requires progress inspections during the construction period, as well as energy analyses and drawings from engineers and architects before construction begins to prove the designs meet current energy code requirements. The task force aims to achieve 90% energy code compliance by 2017 through both stringent enforcement and energy code training for designers.

New York City was recently ranked number seven on a list of the nation’s top ten most “climate ready” cities. In coming years, the city’s ranking is likely to rise as PlaNYC comes into effect. With such rigorous enforcement, it is no wonder why PlaNYC has been deemed “the most comprehensive set of efficiency laws in the nation.” If successful, the plan will surely be a blueprint for other cities hoping to achieve climate readiness. 

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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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My good friend and savvy LEED litigation sleuth Steve Del Percio uncovered a case filed in New York that involves, among other things, an allegation of failure of the heating system to perform properly.  The luxury condominium building, at One and Two River Terrace in Manhattan was advertised as LEED Gold.  The Compalint alleges that an energy audit conducted by the plaintiffs revealed deviation of "49% over the USGC LEED and BPCA standards in the cumulative size of holes and cracks allowing infiltration of cold air." But this claim is about the performance of the heating system--failure to heat--not its energy performance.  The other claims in the case are similarly basic construction law claims--the failure of a railing to protect from falls and frosted glass windows where there were supposed to be clear glass, for example.

The case incorporates allegations regarding the green components of the project as support for its regular construction claims, not for failure to acheive green requirements.  In the five causes of action against the architects and the cause of action against the engineer, failure to construct a green building is nowhere to be found.  The causes of action against the developer do not include a cause of action for false advertising regarding the green components of the building.  In short, throwing in the energy audit information and noting that the building was LEED certified is the construction litigation equivalent of greenwashing. 

This is not to say that the case could not develop these claims through an amended complaint if more information is uncovered during discovery.  Indeed, with the press that the case is receiving--it got a mention in yesterday's Wall Street Journal--these areas might be developed further. 

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