Best Practices Construction Law : Construction Lawyer & Attorney : Matthew DeVries : Stites & Harbison Law Firm : Green Building & LEED Litigation

It is time for some new running shoes.  In the past month, I attended two major trade shows after speaking to the particular industry association.  First, I was humbled to speak to the Kentucky chapter of USGBC on the ASHRAE 189.1 standards and the International Green Construction Code, as well as some of the top legal risks in green construction.  Afterward, I walked for about three hours through the AIA-CSI Mardi Gras Trade Fair.  Next, I was humbled to speak at the AGC National Convention on social media business development tips and legal risks for contractors.  Afterward, I ran for about 6 hours through the miles-and-miles of exhibits at CONEXPO/CON-AGG. 

As I walked around these two trade shows, I made a few observations about the people, booths and information presented by the companies in attendance. 

• People love giveaways.  This may not seem like a big deal to you or your company after having shelled out thousands of dollars to attend and host a booth at one of these shows.  However, your booth will see a lot more traffic if you have some incentive, enticement or ... let's just say it ... an iPad to give away. 
• Eye contact is important.  Whether you are manning the booth for your company or you are walking the floor trying to decide where to stop, eye contact is the first meaningful connection that you will make.  I cannot tell you how many booths I strutted right past because the person sitting (...not standing...) behind the booth was either reading something, texting on their phone, or simply not paying attention.
• A smile invites a meaningful connection.  Again, no matter which side of the booth you are on, a smile can make all the difference in the world.  As a construction lawyer, I am not sure how much these vendors or suppliers want to chat with me.  In other words, I am not looking to purchase a new excavator or concrete product.  However, it is about making connections with people in the industry.  If I cannot help them, perhaps I can find someone who can help them.  

In the end, trade show connections are kind of like speed-dating.  You may be selling products, services or expertise.  You only have a short amount of time.  Give them a smile ... a genuine introduction ... and make a meaningful connection.

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Initially filed as a class action suit in October 2010 against the USGBC, Henry Gifford's lawsuit took a turn this week when he filed an amended complaint.  The original lawsuit alleged violations of the Sherman and Lanham Acts for “deceiving users” of the LEED rating system.  The lawsuit questioned whether "LEED buildings use less energy than conventionally-built buildings.”

Gifford's amended complaint ([pdf) focuses on claims of false advertising under the Lanham Act and state law, as well as a claim for deceptive trade practices under state law.  Again, it is no longer a class action, but instead alleges certain damage to Gifford and a few others as professionals in the industry.  The amended complaint states:

USGBC's false advertisements divert customers from Plaintiffs to professionals accredited by USGBC and/or its affiliates who provide advice about how to obtain LEED certification. Plaintiffs are losing customers because USGBC's false advertisements mislead the consumer into believing that obtaining LEED certification incorporates construction techniques that achieve energy-efficiency.

Should Owners and Contractors Worry about Gifford's Suit Against USGBC? At this point, the answer is a simple ...  No ...  While it is interesting to follow the legal commentary about the lawsuit, the claims are in their infancy stage.  The USGBC will be afforded an opportunity to challenge Gifford and his co-plaintiffs' standing to bring the law suit.  "Standing" is one of those Law School 101 principles that says a party must demonstrate to the court sufficient connection to and harm from the action challenged.  In other words, they must have a dog in the fight.

Whether you are an owner-developer or contractor working with a green project, the real lesson from the Gifford show is to address LEED certification and energy performance in your contracts.  As an owner, you may want the LEED certification from the USGBC and you may want your building to achieve a certain energy performance.  As a contractor, you cannot guarantee certification, but you may be obligated to construct the building with certain performance guarantees. 

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In what has been unofficially called LEED 2012, the U.S. Green Building Council (USGBC) opened the first public comment period from November 8, 2010 to January 14, 2011 for the next version of the LEED rating system.  Yes, that means the first public comment period closes this Friday.

According to the USGBC's LEED Rating Development page, the "next version of LEED will be an update and expansion of the technical content from LEED 2009. Your comments help to ensure that LEED continues to be at the vanguard of innovative design construction and operation of buildings and communities. It is expected to be released in late 2012."  A second public comment period is scheduled for July 1 through August 15, 2011.

I have not digested all of the new draft, but there are some noteworthy changes.  First, the LEED 2009 has 9 prerequisites and 49 credits, while the new draft has 15 prerequisites and 49 credits.  Second, there are now 10 different categories in the new draft, as opposed to 7 categories in the prior versions.  The three new categories, as well as some changes and additions to the existing categories, are explained in more detail below:

Image: suttonhoo

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It really is impossible to put your arms around the number of green building and energy performance policies and codes that are sprouting up all across the nation.  When a project involves private commercial development or public investment, one of the most discussed issues is whether the cost of obtaining LEED certification from the U.S. Green Building Council is worth the investment.  And so the cost versus certification debate continues ... and one county in Montana has found the middle ground.

Yesterday, commissioners of Missoula County, Montana approved a policy that encourages and promotes green building practices, as long as they save money in the long run.  According to chair of the Commission, “This is the closest thing we'll come to having an energy policy. If the feds won’t do it and take the lead, I’m just honored to be a part of this.”

The policy directs county offices and departments to “incorporate” or “support the use of” LEED methods and techniques when designing, remodeling and operating public facilities. Unlike other counties in the United States that have recently required a specific level of LEED certification, the Missoula County policy will require “the highest level achievable under LEED that’s cost-effective based on the long-terms cost and the limits of available funding.”

As state and local leaders are racing to develop and implement new building practices—whether they incorporate USGBC’s LEED, Energy Star, Green Globes, or some other rating system—I think the compromise by Missoula County is a step in the right direction.  Such a policy would allow the public or private developer to incorporate cost-effective criteria in its development plans, while at the same time would require that owners and developers adhere to sustainable building practices.

There remains one problem: consider the owner who seeks the highest level of LEED certification that is cost effective based upon its long-term costs and limits of available funding and it is determined that LEED certification would not be possible. What then? Have they complied with the local building policy or code?

Image: satosphere

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About a year ago, I wrote a post on the trending topic of LEED revocation or de-certification.  That issue has not gone away ... it actually has been brought to the front page of the news.  The hot topic, recently reported by Stephen, Chris and Doug (...sounds like three men in a tub...), involves the LEED certification received by Northland Pines High School in Eagle River, Wisconsin. 

When the story first began buzzing around the internet last year, I called Larry Spievogel, an independent engineering consultant, who was giving a presentation on "the actions of the designers that led to the first ever decertification of and plaque removal from a LEED Certified project.”  What I learned a year ago was just confirmed by fellow bloggers, as well as another friendly email from Larry.  Here is what Larry sent me:

• The Executive Summary
• December 23, 2008 appeal to USGBC
• Correspondence with USGBC
• January 5, 2010 report of Horizon Engineering Associates
• April 26, 2010 report of Taylor Engineering
• April 27, 2010 letter from USGBC
• North Pines' response to Horizon report
• North Pines' response to Taylor report
• North Pines' statement

I am not going to retell the facts or the procedural background to this dispute (...you can check out the three men in a tub for that ...).  However, since it worked so well for the Spearin Doctrine, here is my Tweet about the LEED certification challenge in less than 140 characters:

Green school built. LEED color gold. Cheddar-heads revolt. GBC-Gods review. LEED challenge tossed. What now? Green atty!

According to representatives for the School, the fundamental allegations in the appeal for the revocation of the LEED certification are that the building did not comply with the mandatory ASHRAE prerequisite standards.  Since these standards are prerequisites to any level of LEED certification, the School argues that even a single instance of non-compliance with the ASHRAE standards provide a sufficient basis to deny certification.

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As a follow-up to my post yesterday about the costs of LEED certification, I was not surprised to read the following lead line in a local newspaper in Cary, North Carolina:

"Cary wants to be green. Just not certifiable."

According to the article, the local town council voted to skip the green building certification process because of the high costs.  "If the economy was in a better situation, I'd consider it," said Councilman Don Frantz, who made the motion to skip the certification. "But I just can't see the justification on moving forward and spending extra money."

The Cary fire station is the perfect example of the dilemma faced by commercial developers and public owners seeking to embrace green construction.  For instance, the fire station will spend more than $100,000 on energy-saving features in the new construction.  However, it would cost the town approximately $41,500 in registration, certification and other costs to have the fire station become LEED certified, according to a town report.

At the heart of this debate is the recognition that, to some, the goal is energy and other savings over the life of the building, while, to others, the goal is focused on sustainability.  In other words, to the Town of Cary, the estimated cost savings of employing green standards is approximately $580,000 over the next five years.  Since cost savings was a driving factor, the $41,000 associated with the LEED certification process was a significant amount. 

Nonetheless, the Town had a number of proponents supporting certification.  According to Town Council members who supported the effort, "seeking LEED certification would ensure that high environmental standards would be met."

Given this background, why would an owner-developer want to seek LEED certification? Here are some initial thoughts on the issue: 

1. It makes good business sense.  The LEED certification, which includes a rigorous third-party commissioning process, can offer compelling proof to you, your clients, and the community at large that you've achieved your environmental goals and your building is performing as designed.
2. It is a good investment.  Not only do LEED certified building embody good business practices, the USGBC's seal of approval can be a great investment and result in increased property values.  A LEED-certified building can garner a greater premium than a non-LEED certified building for the simple fact that it is ... well ... LEED-certified.  One provision here: the building standards should, in fact, result in operational cost-savings and energy cost-savings. 
3. It provides good incentives. There are numerous state and local incentive programs that offer tax breaks, faster or cheaper permitting, and other incentive programs for seeking the LEED certification.  Whether it makes sense that lawmakers are basing these programs on USGBC's LEED programs or incorporating LEED requirements into local building codes are not the issues.  Here, the issue is that you can in many locations receive great incentives for doing so.

Question: What additional benefits can you identify for the Town of Cary to go through the LEED certification process?

Image: www.architex.ca

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I know its late on Friday afternoon.  The SEC men's basketball tourney is a few blocks away.  No one wants to talk about green building right now.  Most people around here only want to talk about BLUE!

But if I wait unil Monday, then I may forget to share this news and it might be too late! Four major organizations representing building safety professionals, energy and lighting engineers, green building practitioners, architects and technical standards developers have come together to establish the nation's first model green building code (pdf) designed to rapidly advance green building practices across the United States. The four groups are: the International Code Council (ICC), the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE), the U.S. Green Building Council (USGBC), and the Illuminating Engineering Society of North America (IES).

According to the announcement made yesterday, the groups are launching the International Green Construction Code (IGCC), which seeks to provide "the building industry with language that both broadens and strengthens building codes in a way that will accelerate the construction of high performance green buildings across the U.S."

The official launch date of the IGCC is March 15, 2010, when the groups will release the model language.  Of particular importantance to the release is the inclusion of Standard 189.1, which is described as follows:

Standard 189.1 is a set of technically rigorous requirements, which like the IGCC, covers criteria including water use efficiency, indoor environmental quality, energy efficiency, materials and resource use, and the building’s impact on its site and its community. Standard 189.1 was written by experts representing all areas of the building industry, who contributed tens of thousands of man hours. Developed in a little over three years, the standard underwent four public reviews in which some 2,500 comments were received.

It is great to witness the collaboration of these huge players in the green building industry.  But only a focused review of the new IGCC provisions and time will tell whether the stated goals will be met. Have a great weekend!

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There has been a lot of talk recently about measuring a green building's performance after construction has been completed.  Last week, I highlighted what the United States Green Building Council (USGBC) had to say about the issue.  On Monday, Mireya Navarro of the New York Times wrote a lengthy article about green buildings not living up to their performance expectations.

Almost immediately, green voices across the internet have shared their critiques and criticisms of Navarro's article.  For example, Preston Koener at Jetson Green comments: "Navarro's not breaking any new ground here, especially for those ensconced in the green building world; however, like the ingredients of a hot dog, the general population needs to understand what LEED is made of."  Koener continues his assessment by describing the LEED process and the distinctions between design, construction and operation.  An excellent read!

On the more critical side, Lloyd Alter at Tree Hugger cuts to the chase ... suggesting that the New York Times is "behind the times" and "distorts" the LEED energy performance issues.  According to Alter, the NYT article "stretches the point" by highlighting an older building designed and constructed under outdated LEED standards.

What do I think?  I think we need to look at another player in this scenario ... the Green Building Certification Institute (GBCI) ... which is the entity responsible for project certification and professional credentials.  On its website, GBCI summarizes the LEED 2009 Minimum Program Requirements (MPRs).  I previously reviewed the "revocation" language in the MPRs and the commentary from many of the industry players. But you should look at the actual language of MPR #6, which states that the building owner must commit to sharing whole-building energy and water usage data:

All certified projects must commit to sharing with USGBC and/or GBCI all available actual whole-project energy and water usage data for a period of at least 5 years. 

This period starts on the date that the LEED project begins typical physical    occupancy if certifying under New Construction, Core & Shell, Schools, or Commercial Interiors, or the date that the building is awarded certification if certifying under Existing Buildings: Operations & Maintenance. Sharing this data includes supplying information on a regular basis in a free, accessible, and secure online tool or, if necessary, taking any action to authorize the collection of information directly from service or utility providers. This commitment must carry forward if the building or space changes ownership or lessee.

GBCI still reports that the LEED 2009 Supplemental Guide is expected to published in summer 2009, which by my calendar has already passed. Has anyone seen a copy of this guide yet?

Now you may understand why there are so many divergent green voices out there: from Navarro to Koener to Alter.  First, there was a desire to design and construct a green building that achieved certain energy efficiency standards.  Then, there was trophy (i.e., certification) awarded to the building owner for excellence in the design and construction of such a sustainable project.  Now, there is a warning from the trophy giver that the "certification may be revoked" for "non-compliance" with any applicable standard.  However, that applicable standard (as it reads now) is merely a "commitment" from the owner to provide certain energy performance information.  That standard is not an actual achievement energy savings.  Let's hope the trophy giver can clarify the issue through its new Building Performance Initiative.

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When discussing the short and long term building performance of a green project, the issue generally comes down to the following question: Is there any identifiable or measurable gap between the predicted building performance (in the design and construction phases) and the actual bulding performance (during occupancy, operation and maintenance)?  This issue has been addressed in part by a number of my colleagues, including Stephen Del Percio ("Energy Performance in LEED Buildings: A History") and Chris Cheatham ("Real Life Example of the Energy Performance Gap").

Yesterday, I saw the following following press release: USGBC Tackles Building Performance Head On.  The USGBC announced the Building Performance Initiative, which is intended to assist LEED building owners and project teams to close the gap between predicted performance and actual performance.  The new initiative seeks to tackle building performance by the following:

1. Employ a comprehensive data collection effort from all buildings that have acheived LEED certification;
2. Implement an appropriate method to analyze the data collected; and
3. Provide feedback to building owners.

There will be four summits held across the country in September and October to preview the proposed data collection and data analysis methods.  "The local summits are a way to gather people's input for our vision and also for them to share their performance stories, successes and challenges," said USGBC LEED Senior Vice President, Scot Horst.

Although USGBC says that it is ready to rumble by tackling building performance head on, it will be interesting to see some of the ideas previewed in these summits.  Already, we have heard from numerous industry players about the proposed enforcement tactic of revocation.  One of the more significant unknowns is determining whether LEED certification (based upon design and construction) should be separate from building performance (based upon actual assessment). In other words, will USGBC have a multi-tier certification for design/construction and performance? Will USGBC have a conditional certification based upon predicted performance? Will USGBC extend the certification process to include building performance? The USGBC better be ready to rumble!

Photo: Wade

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Which is worse: (a) one lawyer in a room of one hundred architects; or (b) one architect in a room of one hundred lawyers? 

Two weeks ago I found myself in the first category (... although I'm sure that I was not the only shark in the room ...) at a local United States Green Building Council (USGBC) meeting that featured the "2009 Top Ten Green Projects" awarded by the American Institute of Architect (AIA) Committee on the Environment (COTE). In case you don't know, every year COTE highlights the top green projects based upon the measures of sustainable design.  According to COTE, "Sustainability envisions the enduring prosperity of all living things ... [and] ... [s]ustainable design seeks to create communities, buildings, and products that contribute to this vision."  The measures of sustainable design include, among others, design and innovation, land use & site ecology, materials & construction, and energy flows & energy future.

The "Top Ten" from 2009 may be old news to many of you.  However, it is worth mentioning here because of the AIA / USGBC comparison that was highlighted in the 2009 presentation:

As you can see, the COTE Top Ten Measures go a few steps beyond the LEED rating system.  According to the speakers a few weeks ago, Henry Siegel and Kim Shinn (both were judges on the 2009 Top Ten panel), the COTE measures include both quantitative and qualitative measures (or "intangibles").  In the presentation above, the measures highlighted in yellow on the left are those areas not fully addressed by USGBC's LEED rating system. 

(... DON'T JUMP THE GUN, USGBC!... I am not done yet...)  This presentation was based upon the LEED v 2.2 criteria ... and not LEED 2009, which now addresses some of those areas included in COTE's Top Ten Measures (i.e., regional credits, future energy performance).  For the green-building newbie, the Top Ten Green Projects is a good starting point for seeing various sustainable measures carried out in actual building projects ... with cool pictures, too!

[NOTE: The full presentation can be found on AIA-COTE's website ... about halfway down on the left.]

UPDATE (8-1-09): Thanks to Michael at www.buildinggreen.com, who pointed out that Henry Siegel is past chair of AIA COTE and is currently a committee member. He was not a judge on the panel this year.

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