E-Cigarettes will be Prohibited in Future LEED Buildings

On July 1st the U.S. Green Building Council released a change to LEED classifying electronic cigarettes as a form of tobacco smoking for the purposes of the smoking prohibitions of the LEED Environmental Quality Prerequisite 2, Environmental Tobacco Smoke (ETS) Control, which is also applicable to LEED v4. 

Project teams must follow rating system addenda posted before their project’s registration date. Addenda are often substantive changes to LEED content including corrections, interpretations and alternative compliance paths that may substantively change the way a given requirement is achieved or meant to be achieved. Addenda are accessible in the addenda database.

Addenda are often released as LEED Interpretations which “are official answers to technical inquiries about implementing LEED on a project.” They are most easily accessed in the credit library by selecting the "Interpretations” tab within each credit.

“LEED Interpretations are not an avenue for making significant changes or new requirements to the LEED rating system. LEED Interpretations are also not the intended path for fixing errors in the LEED rating systems and reference guides.”

In this instance, the inquiry was “Are electronic cigarettes (e-cigarettes) covered under the Environmental Tobacco Smoke Control prerequisite?” The LEED Interpretation,

Yes, electronic cigarettes are considered a form of smoking for the purposes of both the interior and exterior smoking provisions of the LEED Prerequisite Environmental Tobacco Smoke Control. As recommended in the December 2013 report [1] prepared for the World Health Organization, “e-cigarettes should be prohibited anywhere where the use of conventional cigarettes is prohibited”. The indoor air quality impacts from electronic cigarettes are not fully characterized, but there is sufficient evidence that electronic cigarettes produce emissions in fine aerosol form that can expose building occupants. For example, according to the report, “several chemicals that have been found in e-cigarette aerosol and e-liquid are on California’s official list of known human carcinogens or reproductive toxicants, including nicotine, acetaldehyde, formaldehyde, nickel, lead, toluene(1)”. [1] Background Paper on E-cigarettes (Electronic Nicotine Delivery Systems); Grana, R.; Benowitz, N.; Glantz, SA; December 2013; University of California.

Much is being said about the relative wisdom of this LEED Interpretation, but the most significant ‘take away’ is, given that a project team could not have reasonably anticipated such an addendum, and that addenda, issued without advance notice or prior alert, are binding when issued; it is key that all addenda be reviewed as they are released quarterly. 

Earlier this year, I wrote in this blog, Marijuana Smoking is Allowed in LEED Buildings. The conclusion in that blog post was that the LEED prerequisite was for “tobacco smoke”. But e-cigarettes also do not involve “tobacco” or “smoke”? E-cigarettes deliver a nicotine containing vapor (an aerosol, but not smoke) to users by heating a solution typically made up of propylene glycol. E-cigarettes do not burn or smolder the way conventional cigarettes do. 

Worthy of discussion is the lack of public comment for addenda, and in this instance that USGBC identifies as the rationale for this change in LEED, a single much criticized “scientific review” funded by the WHO Tobacco Free Initiative with support from the University of California Tobacco Related Disease Research Program; neither an unbiased forum. Moreover, one of the authors, Neal Benowitz is a consultant to pharmaceutical companies that market smoking cessation medications and has been an expert witness in litigation against tobacco. The other authors apparently work for that Tobacco Related Disease Research Program; making none of them neutral or detached. Read the study yourself and draw your own conclusions about the need to make this change to LEED outside of the 3 year public update process.

The larger issue is that the LEED rating systems change quarterly. While “LEED Interpretations are not an avenue for making significant changes or new requirements ..” it is clear that LEED Interpretations can be material and all involved with LEED projects should review addenda as they are released quarterly.

LEED v4 has a New and Improved Registration Contract

USGBC proudly boasts that LEED v4 has 80% fewer forms when compared to LEED 2009. Not only are there fewer fields to document with the removal of low value content, but the user experience is further improved including by removing multiple required signatures.

The earlier “LEED Project Registration Agreement” and “LEED Project Certification Agreement” have both been replaced in v4 with a new single Certification Agreement, accessed at the time of project registration through LEED Online after inputting the project details.   

Simply stated, the Certification Agreement is “the” contract that governs certification of a project under the LEED program. The contract is with the Green Building Certification Institute, which “administers the Program and confers precertifcation and LEED Certification under license from the U.S. Green Building Council.” There is now one Agreement applicable across all rating systems, including new construction, the Volume Program, Campus Projects and soon to be v4 Homes.  

This is not an attempt to summarize that 14 page almost 8,000 word Agreement (readers of this blog can read the contract at the link above); all participating with LEED should read the online contract carefully and have it reviewed by counsel. This article simply highlights some of the important improvements from the earlier forms (which forms will continue to be used in LEED 2009 and earlier version projects as they are registered and certified).

The new Agreement expends much verbiage on who is the “Owner” beginning in the first paragraph and introduces the new Confirmation of Primary Owner’s Authority form. It also highlights the need for projects, where the owner is not completing the LEED registration process itself to continue to utilize the existing Confirmation of Agent’s Authority form.

The most significant change is that under prior agreements disputes were resolved through litigation in federal court where this Agreement contains a provision requiring the parties seek to resolve all disputes “through open and good faith discussions in the first instance” and if not resolved, “by mediation, administered by the American Arbitration Association (“AAA”) under its Mediation Rules” and if settlement is not then reached, by binding arbitration administered by the AAA.

Another material change, also within the context of dispute resolution, is that for the first time, the prevailing party is entitled to “all costs and expenses of any Arbitration, including reasonable attorneys’ fees and expenses.” These changes in dispute resolution serve to level the playing field in favor of project owners.

While not likely of great import to most, some may be troubled that, “GBCI reserves the right to increase the Fees by no more than twenty seven percent (27%) per calendar year.” An owner may elect to pay all fees in advance and not risk a future increase.    

An owner may at its sole election opt out of pursuing LEED certification and “may terminate this Agreement in whole or in part at anytime.”

The final contract provision eliminates the need to upload hard copy signatures when it provides that selecting the button marked “I AGREE” is your signature.

There is no doubt this Agreement is new and improved from the perspective of a project owner, but be aware, it continues to reflect the unequal bargaining power of the parties and is heavily weighted to protect USGBC and GBCI (including requiring owners to broadly indemnify USGBC).

That observed, as a sustainability and green building attorney my personal favorite new provision is the very first sentence that includes the warning, “YOU REPRESENT THAT YOU HAVE CONSULTED WITH AN ATTORNEY ABOUT YOUR RIGHTS AND OBLIGATIONS HEREUNDER”. You may give me a call at any time. 

LEED Reaches 3 Billion Certified Square Feet

The U.S. Green Building Council is about to announce that there are more than 3 Billion square feet of LEED certified commercial and institutional building.

Three Billion! That is a three followed by nine zeros or three thousand millions.

In a sense of scale, the Earth is only 4.67 Billion years old. The distance to the moon and back is less than 3 Billion feet (actually 2.66 Billion feet at apogee). It is very hard to comprehend how many 3 Billion is. The word Billion may not be as unfathomable as it once was, but 3 Billion square feet of LEED building is nothing less than a market transformation of real estate. 

USGBC does acknowledge that 10.5 Billion square feet of construction space is “participating in LEED” and admittedly that number does add another zero.

It was publicly reported that “more than 2.8 Billion square feet” of building space was certified as of January 1, 2014. Then the organization released that 2.9 Billion square feet had been LEED certified, buried in a February 18, 2014 press release. And senior staff at USGBC have at least twice in public comments during the last week hinted that 3 Billion was approaching.    

Many folks are aware that USGBC reports each and every day, more than 1.6 million square feet of space is certified using LEED.

Based solely upon the publicly available information it is clear USGBC is within hours of announcing that there are now more than 3 Billion square feet of LEED certified building (not including residential construction). That milestone is significant because LEED has transformed the way we construct buildings and holds the promise of green building mitigating the negative impacts that human activity has on the planet

Platitudes aside, what does that 3 Billion look like? USGBC tells us that as of February 1, 2014, LEED for New Construction & Major Renovations, the first rating system launched in 2000 has more than 19,000 buildings registered and nearly 10,000 certified. But today LEED is much more than new construction ..

LEED for Existing Buildings: Operations & Maintenance launched in 2004 has more than 6,500 registered buildings and nearly 2,700 have been certified. Significantly, the square footage of certified existing buildings has surpassed certified new construction on a cumulative basis. Last year the existing building rating system accounted for approximately 48% of total square footage certified.

LEED for Core & Shell launched in 2006 has more than 4,800 registered buildings and more than 1,450 have been certified.

LEED for Schools launched in 2007 has more than 1,400 registered buildings and more than 640 have been certified. But that number does not take into account projects with K-12 or Higher Education designated as the “space type” (e.g., LEED New Construction or others) which adds nearly 4,000 registered and more than 3,300 certified.

LEED for Retail: New Construction launched in 2010 has more than 550 registered buildings and more than 375 have been certified.

LEED for Healthcare launched in 2011 has more than 200 registered buildings and 2 have been certified. But that number does not take into account projects with healthcare designated as the “space type” which adds nearly 1,460 registered and more than 600 certified.

LEED for Commercial Interiors launched in 2004 has more than 4,100 registered projects and nearly 3,900 have been certified.

LEED for Retail: Commercial Interiors launched in 2010 has nearly 600 registered projects and nearly 300 have been certified.

The use of LEED internationally continues to grow rapidly. At the beginning of 2014, approximately 42% of all square footage pursuing LEED certification existed outside the U.S.

There is much to celebrate. LEED is now a global movement. But the impact of green building is still very small. For those who believe green building is the ideal means of mitigating the negative impacts that human activity has on the planet, it is time to work on the more than 7 Billion square feet registered but not yet certified.

Photo Credit. Members of City of Sunderland College's Human Rights Group displaying the number of people in the world who subsist on less than 2 dollars a day.

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20,000th LEED Project Is Certified

Earlier this month, while few people were watching, the 20,000th LEED commercial project was certified! Wow.

In the event you missed the huge happening on December 4th, it is a LEED 2009 Commercial Interior Certified project in Knoxville, Tennessee. This green tenant improvement portends enormous business opportunities associated with the U.S. Green Building Council and the existing built environment. 

The sustainable build out is the 32,308 square feet corporate offices of Green Mountain Coffee Roasters, Inc.

Green Mountain Coffee Roasters is a publicly traded brand of coffee that produces organic, fair trade, and specialty gourmet coffees. This is the 7th LEED certified project associated with the company.  

It scored 47 of 110 possible points placing it in the top 86% of projects in this rating system version. So, it really is very green. The project earned 8 points in credit WEc1 for a 35% reduction in indoor potable water use. It scored 2 points on credit EAc1.1 for a 20% reduction in lighting power density. And it secured 2 points on credit MRc4 for 10% recycled content on building materials.

That this milestone project is located within Tennessee is apropos. Not only is it within the United States, a big deal with the internationalization of LEED, but Tennessee is not Washington DC, with the most LEED projects per capita and it might not be the location one would guess for a LEED project. That said, “The Volunteer State” has 212 LEED certified projects encompassing 26.09 million certified square feet.

Also incredibly positive is that this office is the 4,932rd LEED for Commercial Interiors 2009 project.

USGBC describes LEED for Commercial Interiors as “the green benchmark for the tenant improvement market.”

LEED for Commercial Interiors gives tenants who do not always have control over whole building operations, the power to make sustainable choices. Making these choices during tenant improvements and interior renovations can dramatically affect the indoor environment.

This rating system was developed specifically for tenants in commercial and institutional buildings who lease their space or don’t occupy the entire building.

LEED for Commercial Interiors projects are ideally suited to be located with LEED for Core & Shell buildings and are also regularly located within LEED for Existing Buildings.

And while this is project is a noteworthy milestone, the “bigger deal” may be that there are more than 36,000 other commercial and industrial projects currently in the LEED pipeline creating huge business opportunities.  

You can learn more about the 20,000th project at GBIG.  

Green Building (Including LEED-Centric) Laws Spread Over Seas

Mandatory green building laws are spreading internationally from the Philippines to India.

With more than 11 billion square feet across 175,000 projects being LEED certified worldwide, it should not be surprising that most of those new green building laws are LEED centric. At year end 2012, more than 40% of all square footage pursuing LEED certification existed outside the U.S. and when 2013 ends the international use of LEED will have grown tremendously. 

The international growth of LEED presents huge business opportunities when today there are LEED projects in 142 countries and USGBC member companies in 86 countries, from Brunei to Israel and from Mauritius to Mongolia.

Last week, in the Philippines, the Department of Justice authorized the Department of Public Works and Highways to move forward adopting a green building regulation in the National Building Code of the Philippines. In a 9 page legal opinion made public last Wednesday, Justice Secretary Leila De Lima determined the Department has the authority to expand the scope of the existing Building Code to include “eco-friendly” green building regulation “to respond to the needs of changing times.” Additionally, beyond amending the Building Code, the opinion said the Department could also, under “the doctrine of necessary implications” craft a separate code to be known as the Green Building Code to hasten the adoption of mandatory green building regulation.

Appreciate that the opinion sought the Department of Justice’s advice on whether the code would be legally binding or “simply provide for guidelines to professionals concerned on the proper performance of their works.” And the opinion responds that by its express language compliance with the new green building regulation could be made mandatory or directory.

The draft Philippine green building measure would make mandatory that new building meet LEED certifiable minimums for energy and water use.

Last week in India, in Andhra Pradesh, the 4th largest state, an energy efficiency and green building code was signed by the Chief Minister of the Law Department in advance of public notification that is the next step in code adoption.

And while not as far along, the Indian state of Tamil Nadu also announced last week that it had formed a steering committee to adopt a mandatory green building code. Both LEED and the Indian Green Building Council have been successful in advancing the already 1.65 billion square feet of green building in India, but given the great hue and cry to get energy under control, mandatory green building codes at the state level are expected to begin to appear in early 2014.

Mandatory green building laws, including those in the Philippines and India (as well as in the U.S.), requiring that government construction be green and even private sector construction be green, are controversial and fly in the face on the tenets of green building including perverting LEED, which exists as a "voluntary" third party green building rating system, by misapplying LEED as a mandatory code. 

Greenbuild 2013 Was Simply More Of The Same And That Made Attendees Very Happy

I took a hiatus from posting to this blog while attending the U.S. Green Building Council’s Greenbuild Conference and Expo so that my situational awareness of Greenbuild would not be clouded by the fog of war. Now with the passage of a few days, let me respond to all who have asked, “How was Greenbuild this year?”

First and foremost I can report that after 12 annual conferences, Greenbuild is thriving.  

Greenbuild 2013 in Philadelphia was a far cry from the first USGBC “Green Building Conference” (yes, pre Greenbuild) held in conjunction with the National Institute of Standards in Gaithersburg, Maryland in 1994 which had 450 people in attendance. This year dwarfed the first Greenbuild in 2002 when 4,189 people gathered in Austin. While I have not seen actual attendance numbers, this year did not eclipse Boston in 2008 when more than 28,224 attended, but remains the largest green building gathering each year.

This year was a birthday party celebrating the 20th anniversary of the USGBC. And the atmosphere was incredibly upbeat and party-like.

Reflecting the internationalization of LEED, there were an impressive number of countries represented. I registered in line behind a woman in a full burqa. And I had a great conversation with a government official from Israel.

There were a very high percentage of “first time” Greenbuild attendees, many who flocked to more than 100 educational session opportunities.

The more than 800 exhibitors were almost more than one could visit, but admittedly there was little innovative new product. What may have been the most interesting on the expo floor was not only the usual FSC versus SFI wood wars, but that this year there was an asphalt pavement booth with scientific studies challenging the concrete vendors.

As LEED v4 launched at Greenbuild, the talk of the conference was the materials credits. Bar none, building materials disclosures was the single most discussed subject among attendees. 122 beta projects are already using LEED v4 and 2 projects have been certified, including an EB project, 1800 K Street in Washington DC.

However, the biggest take away was that after 15 years of LEED, the green building rating system is still flourishing. And after 12 years of Greenbuilds, the conference is thriving.  2013 was simply more of the same and that made attendees very happy!      

The one thing that was missing was a Legal Forum. I appreciate that I have a bias in this area, but the involvement of attorneys needs to be encouraged for the green building industrial complex to continue to grow and mature.

It is clear Greenbuild 2014 in New Orleans, including a Legal Forum will be “the” target rich environment for green building people next year. And there will also be international Greenbuild shows in Italy in October 2014 and in Brazil in August 2014.  

There is still time to submit a project to be LEED certified before year end

With construction projects facing deadlines to be eligible for tax credits, drop dead dates to meet contractual obligations and otherwise needing to obtain LEED certification by December 31st, submission deadlines to the Green Building Certification Institute are fast approaching.

Appreciate that last week (i.e., the week that ended November 2nd) 48 projects comprising 8,833,676 square feet achieved LEED certification in the U.S. (not including Homes or the several ‘confidential’ projects that were certified). 

There is obviously not any one homogenous building type seeking LEED certification. The projects certified last week ranged from a 4,579 square foot LEED-NC Retail Silver Chick-fil-A in San Jose to a 1,401,298 square foot LEED NC Gold National Nuclear Security Administration plant in Kansas City, and a 224,865 square foot LEED EB:OM Gold office building at 1800 K Street in Washington, DC. 

With that diverse and heavy workload in mind, the U.S. Green Building Council has announced deadlines for project certifications that owners want awarded before the end of 2013.

With respect to deadlines to submit for review and achieve certification before December 31, 2013: USGBC advises a “standard final review” with application and payment submitted by November 13th at 9:00 a.m. will have a target return date of approximately December 20th.  A “construction final review” has the same schedule with application and payment submitted by November 13th at 9:00 a.m. will have a target return date of approximately December 20th.

For those requiring certainty and an “expedited” review timetable: Note there is a surcharge in the LEED Registration and Certification Fees for an expedited review. Also, the availability of expedited review timelines is based on GBCI capacity, so if an owner is contemplating a year end certification, inform GBCI as soon as possible. USGBC advised an “expedited standard preliminary review” with application and payment submitted by November 13th at 9:00 a.m. will have a guaranteed return date of November 27th. An “expedited standard final review” with application and payment submitted by December 6th at 9:00 a.m. will have a guaranteed return date of December 20th. 

An “expedited construction preliminary review” has that same schedule with application and payment submitted by November 13th at 9:00 a.m. will have a guaranteed return date of November 27th. An “expedited construction final review” with application and payment submitted by December 6th at 9:00 a.m. will have a guaranteed return date of December 20th. 

These timelines also assume that no appeal review is necessary. Appeal reviews typically take 20 business days, and expedited appeal reviews are on a 10 business day schedule.  

The deadline is next week to submit a project to be LEED certified before year end (without the time and expense of an expedited review).

I will be presenting at the USGBC’s  Greenbuild International Conference and Expo in Philadelphia, including a session on Friday, November 22nd at 8:00 a.m.  Register today for “G09: Marketing Green Building: A Competitive Advantage Without Greenwash”. If you are going to be at Greenbuild drop me an email and we will connect in Philadelphia .. 

USGBC Responds To Appeals From Vote Approving LEED v4

Last week in this blog reported that appeals have been taken from the vote to adopt LEED v4 in a post titled, “If a tree falls in the forest and no one has heard that the approval of LEED v4 has been appealed.” (Scroll below.)

That blog posted ended, “Look for the USGBC response on this blog.” And the USGBC has responded,

As part of the LEED development process, any party may submit an appeal to USGBC. Following the overwhelmingly positive vote for LEED v4 by our membership, we did receive appeals that we are currently responding to through USGBC’s Executive Committee and its Board of Directors.  Our appeals process is outlined in the LEED Foundations document. We are working closely with the appellants to evolve an action plan that all parties are comfortable with. The appeals process has always been an important part of our efforts to be open, transparent and consensus-based and is an important part of the LEED development process.  Coupled with our public comment process, these appeals help us review our process from all angles, and evolve it so that we can continue to develop the best possible global green building rating system available.

USGBC September 14, 2013.

Last week, this blog described that “at least 2 appeals have been taken” and copies of 2 notices of appeal were linked to that post. One of those appeals asked USGBC to “strike the FSC certified wood credit in each place it occurs” in LEED v4. The other challenged the LEED v4 MRc4 Materials Disclosure & Optimization “Building product disclosure and optimization – materials ingredients” credit.

It was not possible to confirm other appeals at that time. However, it is now clear that 5 appeals have been taken from the approval of LEED v4, several of those have multiple appellants.

In accordance with the Foundations of LEED procedures, USGBC has responded to all the appellants and once they hear back from them, we expect to be able to provide you more information.

And while there has never been an appeal of a LEED rating system before, some perspective may be appropriate. As USGBC noted in its statement, “any party with a direct and material interest” may appeal. That means any one of 30,000 individual USGBC chapter members, any of 12,777 national member companies, or any of 183,600 member employees, could have noted an appeal; not to mention the 187,000 LEED professionals. USGBC is huge and it should surprise no one there is disagreement among members and competitiveness within the organization. 

Allaying uncertainties and concerns over potential implications for the broader green building community, USGBC has also made clear, “USGBC is on target to release LEED v4 at our annual Greenbuild conference and expo in November.”   

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A Green Building Game of Thrones

"Winter is coming."  

This is the common refrain in the popular book, Game of Thrones, in which kings vie to take over lands.  As I thought about the green building policy mess of 2012, I couldn't help but draw comparisons to Game of Thrones. 

This was supposed to be the year of the USGBC's new green building rating system, LEED 2012.  But somewhere along the way, the plan went awry and the USGBC had to retreat. 

In assessing the battlefield, I have concluded that the USGBC overextended itself, choosing to fight a two front war without the necessary resources. This is a common tactical mistake and one that has proven costly for the USGBC. Just how costly is yet to be seen. 

The Assault on Chemicals of Concern

Before being pulled, the proposed LEED 2012 rating system went through a lengthy, unexpected vetting process, culminating in a fourth draft.  One particular section of the fourth draft set the green building world on fire: 

New credit for avoidance of chemicals of concern – this credit encourages LEED project teams to specify materials that do not contain chemicals that are known to negatively impact human health (specifically in regards to cancer and reproductive toxicity).

New credit for Environmental Product Declarations - The new EPD credit encourages product manufacturers to engage in disclosure activities that provide specifiers with consistent and complete information about their products enabling specifiers to make more informed decisions.

The negative reaction to this credit was fast and furious. 

The timing of these lobbying efforts coincided with the GSA's release of a preliminary report  indicating that the Green Globes rating system was better suited for new federal construction.  While the report was not tied to the issue of chemicals in LEED 2012, it provided an opportunity for anti-LEED lobbying to push for a new federal green building rating system. 

With a pending final report from GSA this winter, and massive lobbying efforts against LEED at the federal level, don't be surprised if other rating systems are adopted by federal agencies going forward. 

The Wood Siege

The USGBC has also been stuck in a long standing siege with the wood industry. 

On the one side, you have two allies -- the USGBC and the Forest Stewardship Council (FSC).  The USGBC long ago selected FSC wood as the anointed certification for wood products.  On the other side is the non-FSC timber industry -- those wood providers that can't attain FSC certification.  This side prefers the Sustainable Forestry Initiative (SFI) certification.

In July 2011, it appeared the USGBC was willing to negotiate with SFI.  In a LEED Pilot Credit, the USGBC recognized SFI as one of four wood certifications.  

Then the USGBC shifted its tactics.  In the last version of LEED 2012 that was released this past year, the USGBC declared that "(n)ew wood products must be certified by the Forest Stewardship Council or better." 

The "Wood Wars" has left the USGBC bloodied.  In 2011, Congress passed a Department of Defense Reauthorization bill that effectively banned LEED Gold or Platinum certification.  One Senator indicated the LEED ban was in response to the USGBC's failure to adopt non-FSC wood certification. 

USGBC Retreats on LEED 2012

As the two battles on chemicals and wood have raged, the unthinkable happened: the USGBC had to retreat on its latest proposed version of its rating system, LEED 2012, before putting it up for a vote.  I had been tweeting for a number of weeks that things were looking grim for LEED 2012.  If you want to follow the drama, I highly recommend perusing the commentary at the LEED User forum.  

It's hard not to draw a correlation between the chemical industry's negative reaction to LEED 2012 and the USGBC's decision to pull it back.  USGBC CEO Rick Fedrizzi addressed this issue in an open letter to USGBC members:  "To be clear… this change is 100% in response to helping our stakeholders fully understand and embrace this next big step."  

Who Will Win the War?  

This winter, many decisions will be made that will determine the fate of the USGBC for years to come.

  • Will the next proposed version of the LEED rating system include similar Chemicals of Concern and FSC-only credits? 
  • What will be the GSA's final recommendations regarding green building rating systems? 
  • How will the presidential and congressional elections impact green building policy? 

I hope everyone is ready for a long, interesting winter. 

Breaking: Lawsuit Against USGBC Dismissed

The United States District Court for the Southern District of New York has dismissed Henry Gifford's lawsuit (PDF) against the US Green Building Council.

Gifford originally filed a class action lawsuit for $100 million dollars based on the alleged false advertising by the USGBC.  The lawsuit was later amended to only cover four plaintiffs but the allegations remained the same -- the USGBC was falsely claiming that LEED certified buildings were energy efficient. 

When Gifford filed his amended lawsuit, I questioned how he would prove he was harmed by the alleged false advertising.  It turns out that this was one of the lawsuit's fatal flaws.  

A plaintiff that brings a lawsuit must show standing in order to prove that the right person is bringing the lawsuit.  Since Gifford's allegations of false advertising fell under the Latham Act, he had to satisfy two tests to show standing: 

(1) The Strong Categorical Test

"The strong categorical test provides that 'the plaintiff must be a competitor of the defendant and allege a competitive injury.'"  The court held that Gifford, a building energy efficient consultant, and the USGBC, which certifies buildings, were not competitors because Gifford does not certify buidings.  

(2) The Reasonable Commercial Interest Test

Under the reasonable commercial interest approach, a plaintiff must demonstrate "both likely injury and a causal nexus to the false advertising." Perosnally, I always believed this test would be Gifford's downfall.  In holding that Gifford failed this test, the court explained that owners could hire any consultant they wanted for a LEED building.  Furthermore, the court posited that even if Gifford could show one owner that would only hire a LEED Accredited Professional consultant, it could not be proven that the owner's decision was based on the alleged false advertising.  

In short, the court deemed the lawsuit too speculative.  I think the court got it right.

What say you? 

Will the Gifford v. USGBC Class Action Lawsuit Be Certified?

I knew there was a reason I saved my law school text books.  

When I first heard of the class action lawsuit filed by Henry Gifford against the USGBC, my initial thought was "how in the world will he get a class certified?"  The initial hurdle for any class action lawsuit is to get one or more classes certified.  When a plaintiff, in this case Gifford, files a class action lawsuit, he is essentially asserting that there are a number of additional plaintiffs with similar complaints that should be included in the lawsuit and that he should be able to represent the additional plaintiffs. 

The plaintiffs goal is to convince the judge that a class or classes of people should be certified in the lawsuit.  Once certified, a class action lawsuit is much scarier for the defendant because financial liability scenarios go up drastically.  

Gifford is attempting to certify four separate classes:

1. All persons who paid for LEED certification in reliance on alleged deceptive marketing related to energy performance in LEED buildings.  

2. "All persons who design energy-efficient buildings and whose livelihoods are injured by USGBC's monopolization of the market through fraudulent and intentionally misleading representations in the marketing and promotion of the LEED product line. . ."

3.  All taxpayers whose city and state tax dollars are spent on the costs of LEED certification in publicly-commissioned buildings.

4.  Trades injured by USGBC's alleged deceptive trade practices because the trades lose money and time in having to comply with LEED certification even though the buildings are allegedly not saving energy.

Thankfully, I saved my Pleading and Procedure text book, which illuminates the four requirements of class certification.  I am by no means a class action lawyer but we can have fun speculating together as to whether any of Gifford's classes can be certified.  Here are the four requirements of class certification:  

Numerosity

"Rule 23(a)(1) requires that the class be so numerous that joinder of all members as individual named parties be 'impracticable.'"

Commonality

"Rule 23(a)(2) requires that there be questions of law or fact common to the class."

Typicality

"Rule 23(a)(3) requires that the claims or defenses of the named ('representative') party or parties be typical of those of the class as a whole."

Fair and adequate protection of the interests of the class

"Rule 23(a)(4) requires that the named party or parties provide fair and adequate protection of the interests of the class as a whole." 

Now its time for a pop quiz.  For this pop quiz, we are going to focus on Gifford's second proposed class:  "All persons who design energy-efficient buildings and whose livelihoods are injured by USGBC's monopolization of the market through fraudulent and intentionally misleading representations in the marketing and promotion of the LEED product line. . ."

1.  Do you think Gifford's class is numerous and all parties can not be included as regular plaintiffs?

2.  Are there questions of law or fact that are common to Gifford's class? 

3.  Are Gifford's claims typical of the class as a whole?

4.  Will Gifford provide fair and adequate protection for the interests of the class? 

Photo credit: Doctr

Breaking: USGBC Moves Quickly To Revise Challenge Policy

The law moves at glacial speeds.  The USGBC does not. 

On June 21, 2010, I wrote a blog post titled "Green Building Challenge Policy Requires Fixes."  My post detailed problems with the LEED certification challenge policy, as published in the LEED Certification Policy Manual.  You may recall that I wrote on, and on, and on about the challenge policy, resulting in a grand total of nine posts on the subject.  I don't want you to have to go back and read all nine posts so I have combined them into one white paper titled "LEED Certification Challenges and the Northland Pines High School Incident" (pdf) that you can download now. 

The biggest problem with the previous LEED challenge policy was that literally anyone could challenge any LEED project at any time based on any LEED point

On September 17, 2010, the Green Building Certification Institute (GBCI) published a revised LEED Certification Policy Manual (pdf), as discovered by my good friend Tim Hughes.  The Policy Manual significantly revised the challenge policy, which now reads in part: 

9.3 Basis for an Initiation of a Certification Challenge: GBCI reserves the right to institute investigations and review documentation for any reason or for no reason at all. In addition, GBCI encourages third parties who wish to make a complaint, or bring to light information affecting the grant of LEED certification to do so in the following manner. Parties seeking to submit a complaint or report information affecting the grant of LEED certification must have specific personal knowledge of an event or condition that would prevent a project from satisfying a particular credit, prerequisite, or MPR. Complainants must indicate the credit, prerequisite, or MPR that is affected. Further, such persons must indicate to the fullest extent possible, in the form of a written statement, details of such event or condition including the following: i) the alleged offending conduct or condition; ii) the persons involved; iii) other persons who may have knowledge of the facts and circumstances concerning the allegation, including contact information for such persons; and iv) the identity of the person presenting the complaint including such person’s full name, address, email, and telephone number. Complaints must be submitted to GBCI within two (2) years of the award of LEED certification for a project. GBCI cannot guarantee anonymity to persons submitting complaints. If GBCI determines that the complaint is frivolous or irrelevant to the credits, prerequisites and MPRs required for LEED certification, no further action will be taken.

Under this new policy anyone with specific personal knowledge can challenge any LEED project within two years of LEED certification based on any LEED point

It took the USGBC less than three months to revise the LEED Certification Policy Manual and challenge process.  That is incredible and the USGBC should be commended for quickly moving on this issue. 

Download a copy of the white paper "LEED Certification Challenges and the Northland Pines High School Incident."

GSA Pushes For Reforms to Green Bulding Certification

General Services AdministrationThe green building industry has been besieged the last few years with stories about buildings not performing as anticipated.  It appears the federal government has taken notice, and is pushing reforms to green building certification, based on comments by one high-ranking General Services Administration official:  

“'One of the things that I tease the USGBC about is that they really need to re-brand from ‘Leadership in Energy and Environmental Design’ to ‘Leadership in Energy and Environmental Performance,’ and they are picking up on that,' Kampschroer said. 'The GSA is as well, with the idea of continually improving the maintenance of existing buildings.'”

I was surprised to read this comment from a high-profile GSA official.  The GSA relies on the Leadership in Energy and Environmental Design (LEED) rating system to demonstrate that its new construction is green.  Now the GSA is apparently pushing the USGBC to reform its LEED rating system to account for building performance.  

In the article, the Vice President of Autodesk took it a step further and suggested that the federal government needs to completely overhaul the procurement system to ensure improved building energy performance:

"In order to demand more energy-efficient government buildings, he said, federal officials must change their procurement model from the typical system of outlining what they want built, setting an estimated price and awarding a contract to the lowest bidder.

'You have to blow that to smithereens,' said Bernstein, who believes federal officials must start setting broader energy-efficiency guidelines and rethink their incentive structure. 'The government should say, ‘I want this schedule, this LEED rating, this operational efficiency and these design-quality standards,’ and all the profit is a measure of achieving those things.'"

I have no doubt that the USGBC will be revising the LEED rating system in the next few years to include re-certification for new buildings based on energy performance.  The government has been dabbling with performance contracting - contractors that get paid based on reducing energy bills - for some time.   But would the federal government blow up the existing procurement process and require actual energy performance as part of new construction contracts? 

I wouldn't put it past the GSA.  

Fly Ash: Green Building Material, Hazardous Waste?

My first legal case involved "fly ash."  I had no idea what fly ash was so I looked it up in the dictionary.  Fly ash is a "coal-combustion by-product" (CCB) that is often used in concrete as a replacement for portland cement.  When used in massive concrete structures, like dam construction, fly ash can result in a significant cost savings.  

Despite all of my work with fly ash, I had never read or heard anyone mention that fly ash could be the "new asbestos."  That was, until I read an ENR article titled "Fly Ash Looms as the 'New Asbestos":

"Concrete groups are on tenterhooks, waiting for the U.S. Environmental Protection Agency to publish a proposed rule that aims to designate fly ash and other coal-combustion by-products as hazardous waste. The concrete sector is concerned even about the ramifications of a 'hybrid' rule that would allow beneficial uses of CCBs to continue."

But what does fly ash have to do with green building?  According to the Portland Cement Association, fly ash can be used in green buildings to achieve an innovation point:
"[T]he USGBC has issued a credit interpretation that allows for an innovation credit if 40% less cement is used than in typical construction, or if 40% of the cement in concrete is replaced with slag cement, fly ash, or both."
A ruling that fly ash is a hazardous waste could reduce the amount of the material used in future construction.  Additionally, handling of existing structures that contain fly ash will become more complicated and costly.  

What do you think?  
 
Related Links

 

3 Reasons Why Your Green Building Regulation is a Problem

On Wednesday, I posited that codifying the LEED rating system, or any other third party green building rating system, is not a viable option for an entire state.  

Why?  Here are three primary considerations:  

1.  There are troubling antitrust issues associated with the LEED rating system.  These antitrust issues are significantly exacerbated by the incorporation of LEED into regulations or building codes.

2.  The LEED rating system was never intended to be codified.  In fact, the LEED rating system is meant to apply to only 25 percent of new construction starts

3.  I believe the USGBC has recognized the problems associated with codification of the LEED rating system.  In response, the USGBC, along with other groups, is quickly pushing along publication of ASHRAE 189.1P, which codifies many of the elements of the LEED rating system.  This is just a hunch, but I anticipate that the USGBC will start urging jurisdictions to adopt ASHRAE 189.1P instead of the LEED rating system.

Can you think of any other reasons?    

Related Links:
 
 
 

Photo: ilaria gallo

Green Building Groups Oppose Green Building Regulations

These are strange times for the green building industry.  Last week, California prepared to vote on new green building codes that would improve energy efficiency, water use and waste reduction in the construction industry.  Normally you would anticipate that environmental groups and green builders would applaud these measures, right?

Not quite.  

"[P]arts of the state's new code, which would take effect in January 2011, would amount to 'a setback for California's leadership on green building,' according to a Dec. 22 letter from six groups. They included the Sierra Club, the Natural Resources Defense Council and Global Green, along with two nonprofit certification groups, the Green Building Council and Berkeley-based Build It Green. 

The groups largely applaud the code's mandatory rules as a baseline minimum standard.  But they take issue with its two-tier labeling system for stricter voluntary measures, CalGreen, saying it would be open to conflicting interpretations and be unenforceable by local building inspectors.

'The tiers cause confusion in the marketplace and the potential for builders to label their buildings green without substantiating their claims,' said Elizabeth Echols, director of the Green Building Council's Northern California chapter. Many local officials who would be responsible for verifying builder claims do not have the technical expertise that LEED and other third-party verifiers provide, she added."

I am puzzled by these groups attempts to thwart passage of the California green building code.  Pushing for the LEED rating system, or any other third party green building rating system, to be codified for an entire state is not a viable option.  Next post I will give you three reasons to consider. 

What do you think about the environmental groups' attempts to block the California green building code?  

Related Links: 
 

Photo:  mars discovery district

Corps of Engineers Translating LEED for International Projects

[Please join us on January 20 for the next Green Professionals Happy Hour.  See details in the attached flyer.]

Many federal agencies are applying the LEED rating system to buildings in the United States, but one agencies unique use of the system recently caught my attention.  The Army Corps of Engineers is attempting to modify the LEED rating system for international application: 

"Translating the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Silver certification into a standard for all international construction—which the U.S. Army Corps of Engineers has pledged to do—may be impossible.

Creating high-performance facilities is not the issue, but holding to a LEED rating is problematic. “LEED is a very U.S.-based standard, and trying to take that and apply it overseas is difficult. But the Army mandate is ‘do it,’” says Jeanette Fiess, who represented the Corps’ LEED Sustainability Directorate of Expertise at a November 'LEED Awareness' workshop for Corps staffers in Oberammergau, Germany. The directorate, a virtual entity with experts in many Corps districts, is trying to figure out how to comply."
When I recently told someone about the Army's mandate to the Corps of Engineers, the immediate response from the individual was that other countries have LEED rating systems that can be used.  Apparently, though, applying different LEED rating systems depending on the country is too confusing: 
"Part of the problem is many countries in which the Corps builds have their own versions of LEED, and they don’t line up well enough in philosophy or detail to map from one to another. The Japanese have the Comprehensive Assessment System for Built Environment Efficiency (CASBEE), South Korea has its mandatory Green Building Certification Program, and Germany has the DGNB, or Deutsche Gesellschaft für nachhaltiges Bauen e.V, from the German Sustainable Building Council."

What do you think of the Corps of Engineers’ attempts to modify the USGBC’s LEED rating system for other countries?

Related Links:

Building To LEED-Silver May Not Survive First Encounter (ENR)

Green Building Regulations To Face Increased Scrutiny

A coalition of forest product companies ("the Coalition") has filed a complaint with the Federal Trade Commission (FTC) regarding, in part, the United States Green Building Council’s preference for Federal Stewardship Council-certified (FSC) wood products. The Coalition has asked the FTC Bureau of Competition to provide guidance to the USGBC and other rating systems regarding the endorsement of product certifications.

If the FTC decides to provide such guidance, the USGBC’s LEED rating system will obviously be affected.  I am particularly interested in the implications of FTC action for green building regulations that have incorporated the LEED rating system.

In its complaint, the Coalition takes a shot across the bow aimed at federal agencies that have adopted the LEED rating system:

“The favoritism shown FSC-certified products by USGBC is inconsistent with the American National Standards Institutes's (“ANSI”) due process requirements and OMB Circular No. A-119, which establishes the principles that voluntary, private sector standards must meet if federal agencies wish to use them, including openness, balance, due process, an appeals process, and consensus.”

In short, the Coalition is arguing that federal agencies are improperly requiring LEED certification for the design and construction of federal buildings. This allegation is not a new one.  Most green building regulations that require LEED certification also permit “an equivalent” certification in order to avoid antitrust issues like the ones raised by the Coalition’s complaint.

But many federal agencies exclusively require LEED certification for federal projects. The most obvious example is the General Services Administration, which builds and maintains a large percentage of federal buildings.  The GSA's website describes its LEED mandate:

“As a means of evaluating and measuring our green building achievements, all GSA new construction projects and substantial renovations must achieve Silver certification through the Leadership in Energy and Environmental Design (LEED®) Green Building Rating System of the U.S. Green Building Council.”

If the FTC were to find that the USGBC’s preference for FSC-certified wood products constitutes anti-competitive behavior, hundreds of green building regulations across the country and in Washington D.C. will have to be re-written.

The implications of the FTC action on the complaint are staggering.

What other implications do you see?

Related Links:

Photo:  Eighty734

USGBC Accused of Anti-competitive Practices

We may be settling into 2010, but one unresolved legal development in 2009 could have a broad impact on the future of the green building industry. On October 20, 2009, the Coalition for Fair Forest Certification ("the Coalition") filed a complaint with the Federal Trade Commission (pdf), alleging anti-competitive behavior by the Forest Stewardship Council (FSC) and the United States Green Building Council (USGBC):

"[T]he Coalition asks that the FTC investigate through the Bureau of Consumer Protection the deceptive and unfair trade practices arising out of FSC’s forest certification standards; investigate through the Bureau of Competition concerns about anticompetitive activities and monopolization arising out of USGBC’s LEED rating system and preference for FSC-certified products; and provide guidance to standard-setting organizations concerning behavioral standards for compliance with antitrust law."

My law firm represents many of the forest product companies involved in this complaint (another law firm submitted the letter), so I will not be discussing the allegations made against the FSC. Nor will I debate the merits of one wood certification versus another. But I will continue to keep you updated on the status of this complaint and I will be discussing allegations made against the USGBC and the potential impact of these allegations on green building regulations.

First, some background on the connection between USGBC, LEED and FSC:

"Under the LEED system, points can be awarded in five categories: sustainable sites, water efficiency, energy & atmosphere, materials & resources, indoor environmental quality, and innovation & design process. Credit 7 under the materials & resources category addresses the issue of certified wood, with the intent of encouraging environmentally responsible forest management. The requirements for the credit are:

'Use a minimum of 50% (based on cost) of wood-based materials and products, certified in accordance with the Forest Stewardship Council’s Principles and Criteria, for wood building components including, but not limited to, structural framing and general dimensional framing, flooring, finishes, furnishings, and non-rented temporary construction applications such as bracing, concrete form work and pedestrian barriers.'"

According to the Coalition’s complaint, forest product companies that do not supply FSC-certified wood can not contribute to LEED materials & resources Credit 7: "[T]he three standards most widely adopted by forest owners in the U.S. and Canada - SFI, the Canadian Standards Association ("CSA") Sustainable Forest Management Standard, and the American Tree Farm System - receive no points under LEED, creating a substantial disadvantage for American-sourced wood products."

Among other actions, the Coalition has asked the FTC's Bureau of Competition to investigate the USGBC’s preference for FSC-certified wood:

"The Coalition also believes that the exclusionary actions of USGBC and its exclusive endorsement of FSC-certified products . . . warrants investigation by the Bureau of Competition concerning issues of possible monopolization, attempt to monopolize and conspiracy to monopolize the fast-growing certification marketplace. In examining the issue, the Coalition invites the FTC to use USGBC as a case in point to provide specific guidance to USGBC and other standard setting organizations."

It’s this last sentence that has really caught my attention.  

How do you think the FTC should respond to the Coalition's complaint?

Related Links:

Photo:  Travelin' Librarian

The Most Important Green Building Legal Story of the Year

[Today we are highlighting the what is, in my opinion, the most important green building legal story of 2009

With the launch of LEED v. 3.0, the United States Green Building Council (USGBC) announced it would revoke certification of projects that failed to meet minimum requirements.  The possibility of LEED de-certification creates new liability issues for all parties involved in any green building project and emphasizes the growing emphasis on building operations. 

This post resulted in a firestorm of comments (31) that are more interesting than the original post.  Thanks to everyone for contributing to the informative conversation.]

 

This Post is Really Important and Is Not for the Faint of Heart

Disclaimer:  If you are sensitive to or frightened by new risks and liabilities in the green building industry, please skip this post.

On Monday, I highlighted the USGBC's decision to create requirements to ensure a building's performance matches modeled energy savings.  I finished the post by asking, what happens to projects that do not comply? 

Okay, brace yourself

NOTE: CERTIFICATION MAY BE REVOKED FROM ANY LEED PROJECT UPON GAINING KNOWLEDGE OF NON-COMPLIANCE WITH ANY APPLICABLE MPR.  IF SUCH A CIRCUMSTANCE OCCURS, REGISTRATION AND/OR CERTIFICATION FEES WILL NOT BE REFUNDED. 

It is time to introduce a new word into your green building vocabulary:  de-certification. 

Every time I start thinking about the implications from de-certification, my head starts spinning and I have to sit down. 

It just happened again. 

I have definitely not uncovered all of the potential issues, but here are three that immediately jump to mind:

1.  De-certification makes regulations tied to LEED certification very difficult to enforce.  What does a jurisdiction do if a project is de-certified?

2.  Insurers and sureties are going to be extremely concerned about coverage issues after design and construction work is complete.  Could an architect or contractor remain on the hook for potential de-certification long after a project has been completed? 

3.  For you owners out there, the commitment to provide energy data must carry forward if a building or space changes ownership or lessee.  How in the world do you write this into a contract? 

The room is starting to spin again.  Please elaborate on any additional risks and liabilities implicated by de-certification in the comments.

Photo:  Kevin (iapetus)

Cities Will Soon Regulate Energy Use

The future of green building regulations usually starts in big cities. Cities like San Francisco, Washington, D.C. and New York City were some of the first to incorporate green building certification into regulations and building codes. The next frontier in green building regulations will be energy performance and New York City seems to be at the forefront. The New York Times recently reported this anecdote about future New York City green building policy:

The New York City Council is drafting a law that will dispatch auditors to measure large buildings’ energy use, with potential fines for landlords who fail to retrofit their systems.

There are other examples of regulations focused on energy efficiency:

The United States Green Building Council is also modifying its LEED rating system to reduce actual energy usage. With the launch of LEED 2009, the USGBC now requires the reporting of energy data. As we reported in September, Scot Horst, USGBC executive, has stated that the LEED certification will eventually require buildings to achieve a specified level of energy performance.

The eyes of the green building industry are focused on energy efficiency. You should be too.

Related Links:

In Washington, DC, Energy Star Benchmarking Law Arrives (CoStar Group)

The Future of LEED: Re-certification (GBLU)

So Who Left the Lights On? The System Knows (NYT)

Super Star Green Label Proposed (GBLU)

How Far Should the GSA Go With Green Building Certification?

If you have been reading Green Building Law Update for any length of time, you have read about the $4.5 billion that was given to the General Services Administration through the American Recovery and Reinvestment Act.  The GSA has announced plans to use the $4.5 billion to create high performance, green government buildings. 
 
The GSA currently requires that all new projects achieve LEED Silver certification.  Is it possible that the GSA is going to push for even higher green building certification levels?  We will soon find out according to a column by Bill Gormley in the Washington Business Journal: 

The government is expected soon to issue new directives on green procurement.  Michelle Moore, the new federal environmental executive, is pushing hard for green standards – particularly for third-party certifications to help provide some kind of proof that green actually means something to vendors and government buyers. 

Are we at the stage where the GSA should require LEED Gold, or even LEED Platinum on all new construction?

Government Moves to Define "Green" Contracting

(WBJ) (subscription req.)


GSA - Sustainable Design Program

(GSA)


GSA Building Underperforms

(GBLU)


GSA's Green Stimulus Projects

(GBLU)

Green Building Issues I Am Thinking About

Tomorrow I will be in Nashville, Tennessee to talk to the Middle Tennessee Chapter of the United States Green Building Council (USGBC) about green building law.  It is great news that the green building industry and the people who are involved in green building projects on a daily basis are so interested in green building law. 

As most lawyers who have written or discussed green building law probably understand, I am going to be walking a fine line.  On the one hand, the industry is growing and people are incredibly protective of the certification systems, like LEED.  On the other hand, the industry and its rating systems are not perfect and are likely to contribute to problems and disputes. 

Thankfully, I don't have to discuss the merits of the green building rating systems.  Instead, I will be discussing some of the legal implications, risks and liabilities that may arise from green building certification.  Here are some highlights:

  • Green building certification guarantees are risky.  I will discuss Shaw Development v. Southern Builders and then highlight the LEED guarantee being provided by ACE. 
  • Owners, architects and contractors should confirm that compliance with green building regulations is possible.  I will use the Washington D.C. Green Building Act and the Vancouver green roof ordinance as examples.
  • Green building risks are the real hidden risks.  I am particularly excited to discuss this topic because there is some breaking news on this front.  Check back on Wednesday for more on that story.

Notice I never once blame the green building rating systems.  The parties, projects and contracts that rely on the green building rating systems create the risk.  Sometime next week I will put up my presentation and you can see what I mean. 



Until then, what do you think?  What future green building risks are you focused on? 

Happy Labor Day

I hope everyone is having a great Labor Day.  No new post today.  Instead, I would suggest you read or re-read the New York Times article about LEED and energy performance. 

The article is one of my most important to come out on green building in awhile.  As I said on Friday, the most interesting part is the USGBC's suggestion that re-certification will be required in the future. 

What do you think? 

The Future of LEED: Re-certification

I found a YouTube video of a green roof being set on fire that I planned to post today.  You know another topic would have to be very important to pre-empt a green roof fire video. 

Such a topic has revealed itself. 

On Wednesday, we started talking about the New York Times LEED energy performance article.  Many who understand the LEED rating system know that there has been some problems with LEED buildings not performing as anticipated in terms of energy consumption.  What interests me most is what the USGBC plans to do to resolve these problems going forward.  Scot Horst, USGBC senior vice president, revealed some important plans in the article: 

Mr. Horst, the LEED executive, said that LEED may eventually move toward the E.P.A.’s Energy Star model, which attests to energy efficiency only for the year the label was given, similar to restaurant ratings.

“Ultimately, where we want to be is, once you’re performing at a certain level, you continue to be recertified,” Mr. Horst said.
 

For regular readers of Green Building Law Update, the concept of re-certification may sound familiar.  Here's what I had to say on the topic back in July:

 

I guess it is prediction time.  At the very least, the next version of LEED will require more post-construction, post-substantial completion strategies for certification. 

Or the USGBC could simply merge two rating systems: LEED for New Construction with LEED for Existing Buildings Operations and Maintenance (LEED EBOM).  With LEED 2009, the two rating systems are already on the same point scale.  And one of the ways to comply with Minimum Project Requirements is to achieve LEED EBOM certification every two years. 
 

I wish I had simply had the guts to say the USGBC will require LEED re-certification for future projects.  Because it is going to happen. 

Links

Some Buildings Not Living Up to Green Label (NYT)

Could LEED NC and LEED EBOM Join Forces? (GBLU)

Photo: suttonhoo

New York Times, USGBC Address LEED Performance Gap

You may have recently read the New York Times article about the gap between LEED building designs and actual energy performance.  If not, I would recommend reading the article.  You may have also noticed a reference to "construction lawyers": 

"Already, some construction lawyers have said that owners might face additional risk of lawsuits if buildings are found to under-perform."

In May 2009, I spoke with Ms. Navarro about legal issues that could arise from under-performing green buildings.  I told her that under-performing green buildings might result in unhappy owners when energy performance promises were not met.  Even worse, owners might interpret a green building energy performance design as a promise and be disappointed when actual performance does not match.  Finally, I pointed Ms. Navarro to Malcolm Lewis of CTG Energetics, who actually corrects energy performance gaps that occur in new buildings. 

A lot has happened since my conversation with Ms. Navarro.  The USGBC has taken big steps to address the energy performance gap, which the article covers.  Remember when we discussed the USGBC's new requirement for reporting of energy data from LEED buildings?  Remember how the USGBC threatened to de-certify buildings that do not report energy savings?  These actions mean the USGBC is addressing the energy performance gap head on. 

Want more proof of how seriously the USGBC is taking this issue?  This is from a June 2009 press release from the USGBC:

The U.S. Green Building Council announced this week that Christopher Pyke, Ph. D. has been appointed Research Director. Dr. Pyke joins USGBC from CTG Energetics in Irvine, Calif., where he was National Director of Climate Change Services.   He brings a strong background of leadership in green building research to USGBC, underscoring its commitment to raising the bar on research related to green building science and technology, including the performance of LEED-certified buildings. This research will be vital to the ongoing development of the LEED green building certification program.

CTG Energetics is one of the leading building energy performance companies.  In hiring Dr. Pyke, the USGBC is investing significant resources into researching energy performance. 

Of course, this is all old news.  Friday we will discuss new information revealed by the USGBC's Scot Horst that has enormous ramifications for LEED.

Photo:  Geoff Livingston

Links: 

Some Buildings Not Living Up to Green Label (NYT)

Malcolm Lewis (CTG)

How I Learned to Stop Worrying and Love LEED De-Certificaiton (GBLU)

This Post is Really Important and Is Not For the Faint of Heart (GBLU)

Real Life Example of the Energy Performance Gap

[Sometimes I get great emails from readers and we discuss a green building topic or blog post.  Then I sit on the topic for a while, waiting for the right time to share with the Green Building Law Update readers.  Now seems like the right time to share an email I received from a reader.  

I received this great email from a reader who manages the operations and maintenance of a LEED Gold Certified building.  What follows is his response to my question "how are the green building efforts going?"
]
 

At its best the going is very slow. At its worst... we're kind of afraid to go.
 
I'm meeting with the building HVAC technician once a week to try & review our LEED report and the 2.1 spec. We have a request in to our boss for information/documentation from the architectural firm that got us certified (M&V plan, etc.). We may or may not be deemed worthy of actually talking to the firm. I'm also putting in a request to purchase the ASHRAE books we seem to need (55, 90.1, etc.).
 
Right now I'm kind of frustrated with two aspects of this whole thing:
1) the lack of resources for anyone inheriting these buildings
2) the lack of clarity regarding who owns what.
 
The HVAC tech & I are pretty sure we're only verifying we got the building that was sold to us, but we have NO idea exactly how much of this we have to verify, how exactly to verify it, and how much we'll suffer for calling out anything wrong. State mentality FTL, I know, but blue-collars are that way due to experience.

There's the geek part of me that wants to set aside a portion of the Web to try and do something about this. But where do I start? My understanding of the problem is so small I can't even focus on that little nugget I "need to fix".
 
There's also part of me that really doesn't care. Chasing unfocused spec with no real understanding of who owns what or who is responsible for what is not something I want to focus my time on.
 
To using a coding analogy (which I'm not even qualified to use)... Right now all I see is a lot of coding framework for very little functional code. I'm not even sure I want to continue coding in this language.
 
I'd rather focus on playing guitar for a weekend band. :p

[This is a perfect example of the green building performance gap.  The building may be designed with the most state-of-the-art, energy saving strategies, but no one bothers explaining the operations and maintenance to the operations and maintenance crew.  You may recall that the performance gap is what led to USGBC authorizing LEED de-certification.  Green building education provided to operations and maintenance staff could go a long way to closing the performance gap.]

Photo:  Jim at Sonicchiken

Could LEED NC and LEED EBOM Join Forces?

With the recent announcement that LEED certified projects will have to report energy performance data, the USGBC has signaled its intent to take on under performing green buildings.  LEED 2009 requires the reporting of energy performance data, but does not include actual energy performance requirements.  I have no doubt that the USGBC will require some minimum levels of actual performance in the next version of LEED. 

Just look at the USGBC's recent press release (PDF): 

USGBC will be able to use the performance information collected to inform future versions of LEED. 

“Building performance will guide LEED’s evolution. This data will show us what strategies work – and which don’t -- so we can evolve the credits and prerequisites informed by lessons learned,” said Brendan Owens, USGBC’s vice president of LEED technical development.  

I guess it is prediction time.  At the very least, the next version of LEED will require more post-construction, post-substantial completion strategies for certification

Or the USGBC could simply merge two rating systems: LEED for New Construction with LEED for Existing Buildings Operations and Maintenance (LEED EBOM).  With LEED 2009, the two rating systems are already on the same point scale.  And one of the ways to comply with Minimum Project Requirements is to achieve LEED EBOM certification every two years. 

What opportunities and pitfalls does this approach present?

How I Learned to Stop Worrying and Love LEED De-Certification

Love might be too strong of a word but you get the point.  The idea of LEED de-certification has touched off a firestorm of comments, some in support and others in objection.  I think a follow up post is warranted. 

First, I want to clarify one important piece of information as I noticed some were heading down the wrong path.  The LEED 2009 Minimum Project Requirements (MPR) require, among other things, that projects report energy performance data.  If projects do not report energy data, then LEED certification may be revoked (i.e. de-certification).  The USGBC has not stated that LEED certification will be revoked for poor energy performance itself.  Go take a look at the USGBC's MPR webpage if you get a moment.

Furthermore, the USGBC's decision to require energy reporting and threaten LEED de-certification makes sense.  Why?

The number of people complaining about LEED certified projects that were not reporting energy performance reductions was growing everyday.  Ever heard of Henry Gifford?  He actually engaged in an open debate with the USGBC in March 2009 about the merits of LEED certification.  This was not good press.  This was  not a good development for the USGBC.  

In response, the USGBC took a dramatic step to fix the problem.  The USGBC has taken what I think is only the first step to ensure improved energy performance.  Additionally, the USGBC used the only "stick" (i.e. enforcement mechanism) it had available:  LEED de-certification. 

On Wednesday, there was a great piece in ENR regarding the LEED energy reporting and de-certification.  Both an American Institute of Architects representative and a Building Owners and Managers Association representative came out in favor of the reporting requirements.  Of course, there was some criticism in the ENR article regarding LEED de-certification: 

The “bottom line” is, these conditions “may end up doing more harm than good for the future vitality” of LEED, says attorney Edward B. Gentilcore, a partner of Duane Morris LLP, Pittsburgh. “This would be a significant loss in light of the accomplishments to date,” he adds.

Mr. Gentilcore is a fellow construction attorney.  Us attorneys are going to be worried about any new requirement that creates additional risk and liability.  That is why we are here.  We are here to worry about your risks and liability.

The moral of the story?  As LEED 2009 changes are implemented, your contracts need to change as well.  Let us do the worrying for you.

Photo:  JonBen

This Post is Really Important and Is Not for the Faint of Heart

Disclaimer:  If you are sensitive to or frightened by new risks and liabilities in the green building industry, please skip this post.

On Monday, I highlighted the USGBC's decision to create requirements to ensure a building's performance matches modeled energy savings.  I finished the post by asking, what happens to projects that do not comply? 

Okay, brace yourself

NOTE: CERTIFICATION MAY BE REVOKED FROM ANY LEED PROJECT UPON GAINING KNOWLEDGE OF NON-COMPLIANCE WITH ANY APPLICABLE MPR.  IF SUCH A CIRCUMSTANCE OCCURS, REGISTRATION AND/OR CERTIFICATION FEES WILL NOT BE REFUNDED. 

It is time to introduce a new word into your green building vocabulary:  de-certification. 

Everytime I start thinking about the implications from de-certification, my head starts spinning and I have to sit down. 

It just happened again. 

I have definitely not uncovered all of the potential issues, but here are three that immediately jump to mind:

1.  De-certification makes regulations tied to LEED certification very difficult to enforce.  What does a jurisdiction do if a project is de-certified?

2.  Insurers and sureties are going to be extremely concerned about coverage issues after design and construction work is complete.  Could an architect or contractor remain on the hook for potential de-certification long after a project has been completed? 

3.  For you owners out there, the commitment to provide energy data must carry forward if a building or space changes ownership or lessee.  How in the world do you write this into a contract? 

The room is starting to spin again.  Please elaborate on any additional risks and liabilities implicated by de-certification in the comments.

Photo:  Kevin (iapetus)

Update:  Also check out Stephen Del Percio's detailed analysis of the Minimum Project Requirements

USGBC Addresses Performance Gap

I'm impressed.  In one fell swoop, the USGBC has stepped up to the plate to address the primary criticisms of the LEED rating system.   

Kudos to Scot Horst and the USGBC for acknowledging an issue that has bothered many users of the LEED rating system: 

“Today there is all too often a disconnect, or performance gap, between the energy modeling done during the design phase and what actually happens during daily operation after the building is constructed,” said Scot Horst, Senior Vice President of LEED, U.S. Green Building Council.  “We’re convinced that ongoing monitoring and reporting of data is the single best way to drive higher building performance because it will bring to light external issues such as occupant behavior or unanticipated building usage patterns, all key factors that influence performance.”

In order to address the performance gap, projects seeking LEED certification must agree to comply with one of the following ongoing requirements:

1. The building is recertified on a two-year cycle using LEED for Existing Buildings: Operations & Maintenance.

2. The building provides energy and water usage data on an ongoing basis annually.

3. The building owner signs a release that authorizes USGBC to access the building’s energy and water usage data directly from the building’s utility provider.

There are serious liability and risk issues implicated by this decision, but I am going to ignore those for now.

Instead, I would like to recognize the USGBC for transparently addressing the primary critique of the LEED rating system.  

What will happen to projects that don't comply with an ongoing requirement?

Why Do Non-Public CIRs Mean LEEDigation?

If there was a LEEDigation doomsday clock, I would move it up about 5 minutes towards midnight based on the following decision by the USGBC.* 

Real Life LEED recently reported that the USGBC has decreed that, starting June 26, 2009, Credit Interpretation Requests (CIRs) will no longer be applicable to all projects: 

"Effective June 26, 2009, credit interpretation requests (CIRs) submitted by any registered project will no longer be vetted by USGBC or its LEED Technical Advisory Groups. As a result, CIR rulings will now be applicable only to the project that submitted them. For LEED version 2 projects, rulings on CIRs submitted prior to June 26, 2009, will be honored until they are retired by USGBC or incorporated into general USGBC-issued project guidance, such as through errata or addenda."

All you non-practitioners out there may be wondering what the heck a CIR is and why this matters.  The best way for me to explain a CIR is to compare it to case law. 

When you are talking to a client that is thinking about a lawsuit, one step you may undertake is reading up on case law.  You read case law to find a factually analogous situation to determine if your client has a good chance of winning. 

CIRs function the same way as case law.  To achieve LEED certification, a project must achieve a certain number of credits.  But the requirements for each credit are often open to interpretation.  To resolve this uncertainty, a technical advisory board evaluates each CIR to determine whether or not a credit should be granted.  Historically, USGBC has published these credit  interpretations to inform other builders and designers in future projects.  The first comment after the Real Life LEED post really hits at the importance of CIRs:

Wonder why they decided to do this, public CIRs help project teams immensely. They give good information on how the USGBC look at and interpret credits so that we could submit proper documentation or know what is and isn't acceptable strategies to meet the credits. I don't think LEED is in the stage where it is clear enough to not be interpreted several different ways.

You probably already see why LEEDigation is more likely without public CIRs.  Without public CIRs, architects, engineers and contractors are going to have more trouble interpreting credits and determining strategies that will successfully achieve a LEED credit.  As a result, the likelihood that projects will fail to achieve LEED certification increases dramatically.  As we've discussed, failure to achieve promised LEED certification leads toLEEDigation.

On Monday, we will look at why the USGBC had to do away with public CIRs.

But what do you think about this change? 

*To be clear, the USGBC had to make this business decision.  My post on Monday will go into more detail as to why this decision was necessary.

Two Days Until GreenBuild!

As you may know, this week is the United States Green Building Council’s national event, GreenBuild, in Boston: 

USGBC's Greenbuild conference and expo is an unparalleled opportunity to connect with other green building peers, industry experts, and influential leaders as they share insights on the green building movement and its diverse specialties.

This year’s theme is "Revolutionary Green: Innovations for Global Sustainability” and Archbishop Desmond Tutu will be the keynote speaker.  I am very excited to attend, and, in particular, hear about green building regulatory schemes.  I wonder if others will argue that LEED certification should not be mandated through government regulations? 

If you are going to be at GreenBuild and you would like to meet up, please send me an email (chris@greenbuildinglawupdate.com) or leave a comment below.  It would be great to meet some of my readers!

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Come hear construction, design and surety experts speak about emerging green building litigation and risks:

Green Building:  Opportunity or Legal Quagmire? 
 

USGBC Supports Proposed Green Code

Here at Green Building Law Update, we remain troubled by the disbanding of the proposed ASHRAE 189.1 green building code committee, but we have to point out one bright spot. 

As you may recall, last week we  discussed the merits of the “Proposed Standard 189: Standard for the Design of High-Performance Green Buildings Except Low-Rise Residential Buildings" and the disbanding of a committee that was to create the code, apparently due to pressures from industry groups.   After the committe was dissolved,  the USGBC voiced strong support for the green buiding code: 

Brendan Owens, vice president for LEED Technical Development at USGBC, told EBN that it was “very surprised at this action taken by ASHRAE,” adding that USGBC is trying to learn more about ASHRAE’s reasons.
 
“We want to make sure that this is the best path forward,” Owens said. Acknowledging the uncertainty about Standard 189, Owens noted that a minimum green building standard that can be incorporated into codes is “so fundamental to everything USGBC is about, we are very committed to making sure it happens.”
In previous posts, we have discussed the problems with governments requiring LEED certification through regulation.  Apparently, the USGBC also recognizes these problems.  By strongly supporting the proposed green building code, the USGBC seems to recognize that governments should be mandating green building strategies through construction codes.  

Do you think governments should require green building certification or compliance with green building codes?  Or both? 
 
Related Links: 

 

Southern Builders v. Shaw Development: The Most Important Part!

This week at GBLU, we are focusing on the Shaw Development v. Southern Builders case, the first significant example of green building litigation.  On Monday, GBLU explained the importance of the case and reviewed the basic facts.  Today GBLU will review the most important part of the case, the contract between the parties and accompanying green building responsibilities.  

Why is the contract the most important part of this case?  The contract is the primary means for dictating a contractor’s green building obligations.  Shaw Development and Southern Builders relied on an AIA A101-1997 Standard Form of Agreement Between Owner and Contractor as their general contract, which did not include green building requirements.  Additional requirements were incorporated through a Project Manual that made specific reference to green building certification:  

Project is designed to comply with a Silver Certification Level according to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Rating System, as specified in Division I Section “LEED Requirements.” 

Shaw Development’s AIA contract and incorporated Project Manual lack clarity in articulating Southern Builders’ responsibility for constructing a LEED Silver certified project.  While the Project Manual does state that the project was designed to comply with LEED Silver certification, it does not assign the contractor responsibility to construct the project according to LEED Silver certification.  Instead, as stated in A101-1997, the contractor is responsible for building according to the designs and specifications.  Thus, the contractor could be liable if it failed to build according to plans and specifications, which resulted in a failure to achieve LEED certification. 

Owners and contractors are well served to clearly describe the contractor’s responsibilities related to the construction of a green building project.  If your green building contract looks anything like the contract from Southern Builders v. Shaw Development, you should think about revising it. 

Related Links

 

Congress Drills Down Green Building Regulation

You may remember that in previous posts, GBLU warned that September was going to be a big month for green building regulations in Washington D.C. It was anticipated that the D.C. City Council would vote on new green building codes on September 16 but the codes were tabled to allow for more feedback from affected parties. But there was still significant green building regulations voted on yesterday in D.C.

Late Monday night, H.R. 6899, the Comprehensive American Energy Security and Consumer Protection Act, was passed by the House of Representatives by a vote of 236-189. The big story will be that an energy bill was passed that permits more oil drilling off U.S. Coasts. But as expected, the legislation also included green building mandates. 

 

Among these mandates is Title IV – Greater Energy Efficiency in Building Codes. This section requires the Secretary to update the national model building energy codes and standards at least every three years to achieve specific overall energy savings, compared to the 2006 IECC for residential building and ASHRAE Standard 90.1-2004From prior discussions, you may remember ASHRAE 90.1-2004 is the energy standard used by the USGBC’s LEED rating system

 

But GBI’s Green Globes rating system also found its way into the legislation. Under Title VI – Green Resources for Energy Efficient Neighborhoods, the legislation described requirements for both residential and non-residential projects seeking HUD assistance. Among these requirements, to qualify for HUD assistance projects can comply with one of numerous green building standards:

 

1)      The national Green Communities criteria checklist

2)      The gold certification level for the LEED for New Construction rating system, the LEED for Homes rating system, or the LEED for Core and Shell rating system

3)      GBI’s Green Globes assessment and rating system; or

4)      The National Green Building Standard

 

It seems peculiar that this legislation would require LEED gold certification but not include a similar requirement for Green Globes. Like the LEED rating system, Green Globes awards “globes” for each level of certification. The equivalent of LEED gold certification would be achieving three globes through Green Globes. 

 

Word on Capitol Hill is that the Senate is likely to adopt a different version of energy legislation so it is unclear whether green building mandates will be included in the Senate’s version.   

Guarding Your Green Building Investment

While GBLU has written extensively about green building bonds, a reader recently pointed out that green building insurance should not be overlooked.  

When you talk about green building insurance programs, you have to start with Fireman's Fund.  Back in October 2006, Fireman’s Fund had the foresight to launch three products for commercial green buildings, just ahead of the green building curve.  Below is a summary of three of the insurance programs offered by Fireman’s Fund as part of its “Green-Gard” insurance suite.  

•    Green-Gard Certified – If you have a loss on your green-certified property, Fireman’s Fund will pay to rebuild and replace to recognized green specifications.  This includes coverage for vegetated roofs, alternative power systems and alternative water systems.  

•    Green-Gard Upgrade - This coverage is specifically designed for those who have not yet made green upgrades, or have not attained green certification from the U. S. Green Building Council (USGBC). If you have a total loss, Fireman’s Fund will pay to rebuild your structure, from top to bottom, as a green-certified building.

•    Green-Gard Commissioning - For any loss that exceeds $10,000, Fireman’s Fund will pay for a professional commissioning engineer to oversee your building’s repairs and inspect new or repaired systems.

One interesting component of the Green-Gard Certified program is that if green building certification requirements have changed since the owner built or upgraded, the additional cost of meeting the new specification is covered.  GBLU has often wondered what will happen when LEED v. 3 is released in 2009 and cities have regulations on the books requiring compliance with previous LEED rating systems.  Fireman’s Fund has already accounted for this development.  

So what other green building insurance programs are out there? 

A Midsummer Night's Green

On August 7, I had the pleasure of attending the USGBC National Captial Region's annual event, a Midsummer Night's Green.  This year, the event was held in the stunning World Bank Atrium.  Tyler Coffey of Sigal Construction did a great job choosing the venue and organizing the event. 

Bisnow on Business has a good summary of the award winners from the event:

Winners assembled on stage: Nationals Park won for best large project; PN Hoffman's Alta condo for best medium project; a yoga studio in Clark County, Va., for best small project; Tower Companies for member firm of the year in the client category (ie, the ones who decide about green goals) and SmithGroup in the consultant category (the ones who implement); the Pentagon library renovation for best federal project; the Chesapeake Bay Foundation headquarters in Annapolis for best legacy; and consultant Paul Tseng for individual member of the year.

Whenever I attend events like these, I am reminded just how long some people have been involved with green building.  It was quite an impressive crew.