On October 8, 2010, Henry Gifford and Gifford Fuel Saving, Inc., filed a complaint against the U.S. Green Building Council ("USGBC") in the U.S. District Court for the Southern District of New York, Case No. 10-cv-7747. The class action challenges USGBC's promotion of its LEED (Leadership in Energy and Environmental Design) standards.
USGBC is a non-profit organization established "To transform the way buildings and communities are designed, built and operated, enabling an environmentally and socially responsible, healthy, and prosperous environment that improves the quality of life." LEED is an internationally-recognized green building certification system created and implemented by USGBC. According to USGBC, LEED provides third-party verification that a building or community was designed and built using strategies aimed at improving energy savings, water efficiency, CO2 emissions reduction, indoor environmental quality, and stewardship of resources. USGBC has created LEED standards for new construction, major renovations, existing buildings, commercial interiors, schools, homes, and neighborhood development, among other areas.
The proposed class action lawsuit alleges monopolization through fraud under the Sherman Anti-Trust Act, 15 U.S.C. § 2, unfair competition under the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), deceptive trade practices, false advertising, wire fraud, and unjust enrichment. The proposed class of plaintiffs includes: (1) people who paid for LEED certification for property they own, (2) people who design energy-efficient buildings, (3) taxpayers whose city and state tax dollars are spent on the costs of LEED certification in publicly-commissioned buildings, and (4) workers who lost money and time by complying with LEED specifications. Essentially, the lawsuit alleges that USGBC's promotion of its LEED standards is misleading and fraudulent because, Gifford claims, buildings constructed to meet the LEED standards are not, in fact, energy efficient. Because money and resources are spent to achieve LEED certification, the various groups of class members have allegedly been injured, and Gifford is seeking to enjoy USGBC's practices and obtain damages for those injuries.
The lawsuit faces serious legal hurdles to class certification, including the diverse interests represented in the various groups proposed to be in the class. Nevertheless, the lawsuit is significant in that it touches on a fast-growing aspect of the building sector. According to recent reports, green construction currently accounts for nearly one-third of new construction in the U.S. – up from only two percent in 2005. Additionally, many cities and states are promoting and even requiring LEED certification on significant new construction projects. Accordingly, the outcome of this lawsuit will surely be tracked by both the private and public sector.
USGBC has not yet filed a response to the complaint. Click here for a copy of the complaint and visit www.usgbc.org for more information about USGBC's LEED standards.