By Edward B. Gentilcore, Esq., Guest Contributor 

Over the approximately last 10 years or so, there has been an explosion in the green building market. Fueled by efforts of the U.S. Green Building Council (“USGBC”) and its Leadership in Energy and Environmental Design rating system (“LEED”), the expansion and implementation of green building practices have proliferated. Notwithstanding competing products and rating programs, including those of the Green Building Initiative and other organizations with an expressed agenda of promoting energy efficiency and environmental impact reduction, the USGBC’s rating program has been a leader in the area. This success can be attributed to not only its stated objectives, but also a multimillion dollar media juggernaut that has been supporting LEED as well as other green building programs across the nation, if not the world.

LEED Becoming Law

However, there is one other aspect of the green building movement that has caused the green building efforts of many organizations and particularly the USGBC along with its LEED program to make significant and substantial inroads into the present building landscape and marketplace. Through various efforts and initiatives, the LEED rating program has found itself being adopted with the force and power of law in approximately 22 states and numerous major municipalities numbering well into the 70s, including the state of Maryland and the cities of Seattle and Boston, among others.

A full complement of the programs that have resulted in the adoption of LEED as a part of the state and/or local law can be found at the USGBC website, www.usgbc.org. If that were not enough of a support line to the USGBC and its LEED program, the federal government itself has placed its bargaining and buying power behind green construction utilizing the LEED rating system. For a considerable period of time quickly approaching a decade, the U.S. General Services Administration (“GSA”) has sought to support green building efforts at the federal level. Initially, the GSA had indicated that it would only lease or pursue projects that were designed and constructed so as to achieve the USGBC LEED silver rating. This is the second of the four LEED certification levels available from the USGBC (Certified, Silver, Gold and Platinum). Most recently, the GSA indicated that it would be increasing its green design requirements by now requiring that gold certification be the minimum standard for GSA owned and occupied spaces. While there have been reports that the LEED gold designation is already enjoyed by many GSA facilities, now there will still be additional efforts necessary in order for many buildings to meet future GSA ownership and leasing criteria.

LEED Implications for Contractors and Design Professionals 

Certainly with incentives of this sort becoming mandatory it now appears that the USGBC’s LEED program will be around for some time to direct and control the site selection, the design and construction, not to mention the maintenance and operation of building structures. What this means for design professionals and contractors remains far less certain. With these requirements becoming adopted with the force of law in many jurisdictions, and with the federal government requiring LEED compliance for many of its projects, some critics have noted that this constitutes a delegation of governmental enforcement responsibility into the hands of a nonprofit, nongovernmental organization, the USGBC, which, in 2008 reported revenues well in excess of $60 million. Adding fuel to that criticism are efforts by the International Code Council (“ICC”) to pursue and adopt an international green construction code which in several significant respects incorporates credit requirements grounded in the LEED rating program.

Another consideration that must be kept in mind by the design and construction community is that at some level, some party will be asked to bear the responsibility for the achievement of the desired rating and, possibly the ultimate performance of the building itself. A number of suits have been recently filed relating to this area where developers have been accused of overrepresentation of the performance and recognition status of the buildings at issue.

Even more intriguing, however, are a number of other suits which are making their way through the courts. Two such suits, in New Mexico and Washington State, question whether local green and energy efficiency requirements are preempted by federal law. It is still uncertain as to where these suits end up. Also unclear is the future of a case filed in the United States District Court for the Southern District of New York involving a class action against the USGBC and a number of its high level officials contending that the USGBC, its officers and the LEED rating system have themselves overrepresented what these buildings labeled with LEED certification ultimately consume in energy. Among the allegations are charges of misrepresentation, false advertising, monopolization and even conspiracy. The plaintiff in that action has charged the USGBC and its LEED rating program with the most serious of allegations including that a study commissioned by the USGBC to validate claims of energy performance of the buildings obtaining its rating system was prepared in such a fashion so as to manipulate the results and suggest building performance of these LEED structures are far superior to their non-green counterparts. Regardless of the ultimate outcome of that suit, strong visceral reactions have already emanated from the design, construction and legal community regarding the suit’s vitality, its credibility and its ultimate chances for success. Still, if this case advances to the discovery stage, these representations about the LEED program will be subjected to probing scrutiny.

In the meantime, what remains even more interesting as a question is whether suits such as those filed in New Mexico, Washington and New York now will cause state and local code officials to pause and reflect on whether or not the LEED rating system should be endorsed with the power of law by being adopted as a part of the regulatory structure of that government institution. In the event that the expansion of LEED into building codes continues at its present pace, designers and contractors will find themselves in an environment where they must become conversant in LEED and its requirements as well as the risks and responsibilities associated with failure of performance to those “consensus” standards. If the design and construction community remains silent and less diligent regarding the adoption of LEED into these various building requirements, they may face a situation where they will be forced to comply with a rating system that is now and may continue to be under siege in a battle over its very basic foundation and integrity.

About the Author

Edward B. Gentilcore is a partner in the Pittsburgh office of Duane Morris LLP, and serves as vice chair of Duane Morris’ construction group. He practices in the areas of construction law and complex commercial litigation with a considerable emphasis on construction litigation, construction contracts, green building and mechanics’ lien matters. He is a LEED-AP under the U.S. Green Building Council’s Green Building Rating System. 

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