TRY IT RISK-FREE »

USGBC, LEED Targeted by Class-Action Suit

 

Henry Gifford, whose lawyer filed a class-action lawsuit against USGBC, has been an outspoken LEED critic since 2008.

The U.S. Green Building Council (USGBC) and its founders have been named as defendants in a class action lawsuit filed in federal court. Filed on behalf of mechanical systems designer Henry Gifford, owner of Gifford Fuel Saving, the lawsuit was stamped on October 8, 2010 at the U.S. District Court for the Southern District of New York. Among other allegations, the suit argues that USGBC is fraudulently misleading consumers and fraudulently misrepresenting energy performance of buildings certified under its LEED rating systems, and that LEED is harming the environment by leading consumers away from using proven energy-saving strategies.

Alleged fraud and deceptive practices

The suit alleges that USGBC’s claim that it verifies efficient design and construction is “false and intended to mislead the consumer and monopolize the market for energy-efficient building design.” To support this allegation Gifford relies heavily on his critique of a 2008 study from New Buildings Institute (NBI) and USGBC that is, to date, the most comprehensive look at the actual energy performance of buildings certified under LEED for New Construction and Major Renovations (LEED-NC). While the NBI study makes the case that LEED buildings are, on average, 25%–30% more efficient than the national average, Gifford published his own analysis in 2008 concluding that LEED buildings are, on average, 29% less efficient. A subsequent analysis of the NBI data by National Research Council Canada supported NBI’s findings, if not its methods. (Commentary questioning the respective statistical approaches of both the original study and Gifford’s analysis appears in this BuildingGreen.com blog post by Nadav Malin, president of EBN’s publisher BuildingGreen.)

Using that study and USGBC’s promotion of it, the suit alleges fraud under the Sherman Anti-Trust Act, among other statutes. Gifford’s suit demands that USGBC cease deceptive practices and pay $100 million in compensation to victims, in addition to legal fees. Under the Lanham Act, the suit repeats the same concerns in alleging deceptive marketing and unfair competition. Other allegations include deceptive business practices and false advertising under New York State law, as well as wire fraud and unjust enrichment.

Class-action suit

By having his lawyer, Norah Hart of Treuhaft and Zakarin, file a class-action lawsuit, Gifford is not only claiming that he has been harmed by USGBC, but that he is one of a class of plaintiffs that have been harmed. According to the suit, those plaintiffs include owners who paid for LEED certification on false premises, professionals like Gifford whose livelihoods have allegedly been harmed by LEED, and taxpayers whose money has subsidized LEED buildings.

The class action approach may be technically difficult to pursue in this case, says lawyer Shari Shapiro in an article on her green building law blog. Among other things, Shapiro notes that in a class action suit it is relevant whether, among other things, “the plaintiffs are enough alike so that their claims can be adjudicated together” and “whether the lead plaintiffs adequately represent members of the class.” Given the variety of plaintiffs Gifford is trying to represent, that may be hard, she says.

Shapiro, assuming that Gifford has benefited from the green building wave, even questions whether Gifford has even been harmed, as he would have to be to take part in the lawsuit. However, Gifford told EBN that there’s no question about that. “Nobody hires me to fix their buildings,” he said. Though not an engineer, Gifford is respected in energy efficiency circles for his technical knowledge. He told EBN that he has lost out because owners are fixated on earning LEED points, and he doesn’t participate: “Unless you’re a LEED AP you're not going to get work.” That’s unfair, he claims, because while USGBC says that its product saves energy, it doesn’t. Gifford says that his services actually save energy, and he’s prepared to prove it by sharing energy bills from buildings he has worked on.

Whether many other building professionals feel the way Gifford does, and whether they’re willing to go on the record, will be one aspect of this case to watch. Gifford indicated that the response so far has been mixed. As he told EBN, “Everybody has the same response: thank you, thank you… let me know how it goes.”

Was there fraud?

If the case does move ahead, Stephen Del Percio, a lawyer and author of the blog GreenRealEstateLaw.com, told EBN that it will be challenging to litigate. “You can’t prove fraud just by circumstantial evidence,” he said. Even if the NBI study is false, that may not be enough. “You have to intend to mislead people,” he said. Gifford told EBN that he doesn’t have evidence that anyone at USGBC tried to mislead the public, but if the suit proceeds the discovery process could, in theory, turn up emails or other communications that support Gifford’s case.

USGBC performance initatives

Gifford’s complaints focus on the 2008 study and how USGBC publicized it, but they don’t appear to account for other aspects of LEED. Gifford focuses on buildings certified under LEED for New Construction (LEED-NC), but the scope of LEED-NC and other LEED rating systems is clearly distinct. LEED for Existing Buildings, launched in 2004, looks at actual building performance, and in 2006, USGBC announced that buildings certified under LEED-NC would have the option of being enrolled at no charge in LEED for Existing Buildings. In 2007 USGBC launched LEED for Homes. While that system focuses on design and construction of new homes, it requires on-site verification including blower-door testing during construction, helping ensure that construction practices follow the design intent.

Although this final piece may be too late for Gifford and the contentions of his lawsuit, in 2009 USGBC began requiring reporting of energy and water data for new buildings certified under the newer LEED 2009, and it set up infrastructure to invite sharing of information from all LEED-certified buildings (see “USGBC Expands Data Collection from LEED Buildings,” EBN Aug. 2010).

Through this effort, the Building Performance Partnership, USGBC hopes to offer special help to LEED-certified buildings that are not living up to expected performance, according to Brendan Owens, P.E., vice president for LEED technical development at USGBC. Although USGBC has generally played down the possibility because it doesn’t want to discourage participation in LEED, and energy reporting, CEO Rick Fedrizzi has suggested that non-performing buildings may lose LEED certification in one form or another.

Despite these efforts, Gifford complained to EBN that “the green label gives the designer, the developer, the contractor and the owner the right to hold a press conference staying that their building is energy-efficient, while the LEED system guarantees anonymity” when it comes to reporting actual energy use.

Why sue?

Asked by EBN why he was motivated to go to court, Gifford said, “I’m afraid that in a few years somebody really evil will publicize the fact that green buildings don't save energy and argue that the only solution [to resource constraints] is more guns to shoot at the people who have oil underneath their sand.” In other words, he says he's hoping to make the green building movement more honest so that it’s not embarrassed down the road.

USGBC told EBN that it was reviewing the litigation and would respond in due course. In addition to USGBC, other named defendants are David Gottfried, a USGBC founder; Rob Watson, who helped start LEED in the 1990s while working for the Natural Resources Defense Council; and Rick Fedrizzi, a co-founder and currently CEO. Responding to EBN’s request for comment, Watson said, “I can’t comment on ongoing litigation except to say that USGBC is examining the complaint. USGBC has confidence in LEED and in our role in stimulating positive market change.”

Michael Italiano, the only key USGBC founder not named as a defendant, told EBN that while he hadn’t reviewed the case, “To me it sounds frivolous and it doesn’t have much chance.” He noted, “LEED doesn't guarantee anything, and I think LEED gives people the tools to understand that.” Owners who want to verify performance can enroll in LEED for Existing Buildings, monitor their energy bills, and take other actions, he noted. A lawyer and currently CEO of Market Transformation to Sustainability, a nonprofit behind green standards, Italiano said that lawsuits targeting standards that have allegedly constrained trade typically focus on lack of a bona fide consensus process of standard-setting. In the case of LEED, he said, a broad array of stakeholders has been involved in writing and reviewing LEED standards.

Russell Perry, FAIA, of SmithGroup, agreed that if anyone thinks LEED for New Construction guarantees higher energy performance, they have the wrong idea. “LEED-NC is saying that a building has been designed to meet a certain standard, but there are many variables that go into the actual performance, only one of which is design.” Perry also noted that LEED includes a broad array of topics, only one of which is energy. Referring to climate change and other environmental and health issues, Perry added, “I don’t think that this kind of distraction helps us move the ball down the field.”

October 14, 2010

DISCUSSIONS

Reader-contributed comments related to USGBC, LEED Targeted by Class-Action Suit - BuildingGreen.com. Comments are listed with newest at the top.

Our tormentors are our saviors

Posted by Gahl Spanier Sorkin on Oct 16, 2010, 03:08 PM  
Mr. Gifford's suit asks a very important question, which LEED has raised since its initiation: What are we willing to do to save energy? And more, what we are absolutely not willing to do. The popularity of LEED shows that the system offers a more effective path to energy efficiency than other systems available in the US and around the world. Yet LEED does include other features of excellence that do not directly relate to energy savings. In fact, some of them increase energy use. This means that LEED buildings are probably more energy efficient than a plain comparison shows, because they reach those energy saving while providing better ventilation and use of daylight. The last version of LEED has improved on the measurement of energy performance and increased its weight in the overall scoring. Perhaps energy should receive more weight; perhaps tighter definitions of quality to be achieved in LEED buildings should be established. I would only say to Gifford that this discussion is not going to be effective in court. The question is a scientific and social one: How do we create a better built environment and reduce dependence on fossil fuels? Law professionals may not know to answer this question, which is more fitted as the subject of a green building conference.

Incremental change isn't perfect -- and neither are we

Posted by Julie Gabrielli on Oct 15, 2010, 04:19 PM  
Having been with LEED from the beginning, I have my share of frustrations w/ it. But that's mostly from various blinkered applications of LEED on the part of clients, design professionals, and contractors. We are all learning this stuff together. If LEED was any more stringent than it is, even more building owners would just ignore it altogether. I'm impressed by the tightrope walk made by USGBC and all the steering committees over the years. Do I wish all buildings met a 50% (or greater) energy reduction standard? Sure! We all know the technology and the know-how exist. That's not the challenge. The challenge is the tremendous power of the status quo.

I am proud at the strides made in green and energy efficient building over the last 10 years. Remember that we are only just beginning. Rather than duking it out in courts of law, why not be a positive force for change instead?

Grandstanding has no place in the enormous work we have ahead of us.

Lawsuit Reflects Misunderstanding of LEED (or blatant self-promotion)

Posted by Scott Lewis on Oct 15, 2010, 02:47 PM  
To sue the USGBC because LEED buildings don't always save energy is like suing an apple tree because it doesn't deliver oranges. LEED rewards energy savings, along with dozens of other optional strategies like reducing toxics or saving water. Even in newest versions of LEED, which *do* require energy savings, the amount of weight given to the required energy savings versus all the rest of the available credits means you can have a LEED Gold building without a lot of energy savings. The fact that energy saving may help you get higher ratings does not imply they are required to get you there, as the lawsuit implies.

Sustainability is organic and comprehensive, not limited only to energy. It looks at material choices, stormwater, transportation - dozens of considerations. This lawsuit appears to be either a bald attempt to publicize the plaintiff's business, or simply a misguided use of resources by someone who doesn't understand LEED.

For more details on the so-called "gap" between LEED certification and energy performance, see my recent article at http://sustainableindustries.com/articles/2010/09/bridging-gap.


Really?

Posted by Heather Marquard on Oct 14, 2010, 06:22 PM  
While I am willing to admit (as I think is anyone who has LEED knowledge) that LEED is not perfect, I can hardly imagine a more ridiculous lawsuit. Monopolies? Put your effort in against a cable or local phone company (and I think Build It Green would object to being so blatantly dismissed as a non-competitor). Deceptive marketing? Try that claim instead on almost any fast food that advertises.

The timing of this is questionable given the upcoming election season and the annual Greenbuild conference, and honestly I can't believe this is anything more than a media stunt to get Mr. Gifford some more speaking gigs with some well-bankrolled nay-sayers.

His lack of knowledge about LEED plays right into his mistaken claims of fault. Hopefully others see that, too.

Gifford becomes the Lord Monckton of Green Building

Posted by Lloyd Alter on Oct 14, 2010, 05:19 PM  
By suing, Gifford just gave anti-greens a whole lot of ammunition. Gifford has made a good living, getting invited to lecture to professional groups like the Ontario Association of Architects, where I saw him. Now he has turned into the Lord Monckton of green building and will never eat lunch in that town again. He is hurting himself and green building in general. I think he's nuts.

Motovation for the lawsuit. . .

Posted by Patrick LaCorte on Oct 14, 2010, 03:02 PM  
ā€œIā€™m afraid that in a few years somebody really evil will publicize the fact that green buildings don't save energy and argue that the only solution [to resource constraints] is more guns to shoot at the people who have oil underneath their sand.ā€

This all does sound very frivious - but that quote almost sounds legitimate - not that far-fetched - think Karl Rove & Dick Cheney. . . .
Log in to add comments - Help with comments

RELATED ARTICLES

BuildingGreen.com: What's Happening - November 2012
EBN: What's Happening - December 2007
EBN: Feature - December 2006
EBN: What's Happening - December 2004

RELATED CATEGORIES

GREEN TOPICS


IMAGE CREDITS:
1. Photo: energysavingscience.com