Amended Complaint Filed in Gifford v. USGBC
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:
- It has been boiled down to essentially a False Advertising and Consumer Fraud Act case under Federal and New York State law.
- It is not a class action.
- The monopolization claim has been eliminated.
- 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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