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USGBC Sued Over False Advertising, Fraud

Henry Gifford, owner of Gifford Fuel Saving and a public critic of the U.S. Green Building Council’s (USGBC) LEED certification program, has filed a class action lawsuit against the organization and its founders on behalf of “consumers, taxpayers, building design and construction professionals,” reports Shari Shapiro, an attorney and LEED Accredited Professional, Green Building Law Blog.

The $100-million lawsuit alleges fraud, unfair competition, deceptive trade practices, and false advertising, among other things, reports TreeHugger.

Gifford alleges that USGBC has falsely claimed that its rating system makes buildings save energy, and that building owners have spent more money to have their buildings certified, and professionals have gained worthless professional credentials, says Shapiro. Click here (PDF) to read the complaint.

Gifford uses his critique of a 2008 study from New Buildings Institute (NBI) and USGBC that looks at the actual energy performance of buildings certified under LEED for New Construction and Major Renovations (LEED-NC) to support his allegations, reports Building Green. While the NBI study finds that LEED buildings are, on average, 25 percent to 30 percent more efficient than the national average, Gifford’s own published analysis concludes that LEED buildings are, on average, 29 percent less efficient, according to the article.

Shapiro doesn’t expect the suit to survive class certification for several reasons. For example, she says as “a general proposition, taxpayers do not have standing to sue,” and “there is a commonality problem and a causation problem for the class–did the USGBC’s false statements cause the same type of harm to the same type of plaintiff. Indeed, did the false statements cause any harm at all to these plaintiffs.”

Shapiro raises other questions including: Is the USGBC engaging in intentional, fraudulent actions? Or was it a good organization seeking to benefit the world by promoting more ecologically friendly building practices?

Shapiro also notes that Gifford is not a LEED AP and does not appear to own any property certified LEED so USGBC’s actions have not harmed him or his career.

Gifford told Building Green that he has lost out of business because “owners are fixated on earning LEED points,” adding “unless you’re a LEED AP you’re not going to get work.” He also says he can prove that the buildings he has worked on saves energy.

According to a recent green building study nearly 93 percent of design and construction professionals continue to endorse green building despite the recession, although support for LEED certification slipped again in 2009, widening the gap between support for green construction and LEED certification

23 thoughts on “USGBC Sued Over False Advertising, Fraud

  1. I find it interesting that Shapiro makes no statement about the accusations regarding false information promulgated by the defendant in the case, and focuses only on why it is not a suitable class action. I read the complaint, and as a design professional find it appalling that any study would compare mean to median values.

  2. The LEED system is not perfect, and LEED AP knows this, but considering the improvements that it has begun and the ability for criteria to be evaluated and improved over time, it is an excellent step. Is it any wonder that people who don’t build according to these standards are losing business?

  3. I think people need to realize that when projects pursuing LEED fail to achieve performance targets, it is not the rating system (or parent org) that fails or over promises – it is due to the team in some way – in design/decision making or execution. LEED is designed to be a measuring tool to see how well the team approached design NOT a design tool to determine the outcome. Most teams have misused LEED and had unreal expectations about what its supposed to do.
    …before LEED, no one even knew what the bldg performance was! LEED is opening the doors to finally see what our problems are, why most buildings are so poorly performaning and that we need wholesale change in the industry and its processes to make a difference. I would be more sympathetic to a class action suit against all the teams who design unecessarily toxic and environmentally harmful buildings. (but I am NOT advocating to sue the profession!)

  4. Completely agreee with Barbara. There was a lot of toxicity in building materials, still is but there is a new awareness. The beginings are always tough, there is a learning curve. “Green” suddenly got a new meaning and it’s thanks to USGBC.

  5. The USGBC and the LEED green washing has always been an industry joke. The only effective thing they have accomplished is putting renewable energy companies out of business. For many years geothermal HVAC companies where losing business because LEED offered the same points for it as a bike rack. The entire USGBC and LEED should be disposed of. Just a bunch of nonsense people are wasting money on. The money would be better spent on energy efficiency technology rather than a piece of useless paper. The LEED certification is considered a joke in the renewable energy business. Scam born from superb marketing, nothing more.

  6. Both sides of this argument have validity. The USGBC has done an excellent job of marketing green building while providing some good leadership in the area of promoting a third party verification system that rewards sustainable practices and creating an incentive (the “plaque on the wall”). Those who have more than a pedestrian knowledge of green building and an idea of truly sustainable design and building practices, know that the LEED system is highly flawed and really only scratches the surface of the sea change that must occur if we are going to meet the Architecture 2030 challenge and the lofty yet potentially necessary aspirations of having zero energy or living buildings. LEED AP status does not mean you know anything about saving energy….but like it or not, the USGBC has provided a widely accepted “brand”. I believe we will look back on this conversation and legal confrontation as the first step on an entire staircase. When we in the industry know that there are LEED buildings out there that use more energy than the buildings they replaced, we cannot be blind and follow like lemmings. The general public has been drawn in by this system and the plaques on the wall. The utility companies are not scared yet.

  7. Agreed: LEED is far from perfect. It’s important to note, though, that LEED is trying encourage a number of different, generally positive, behaviors at the same time. LEED is not just energy efficiency. It also deals with building locations, materials, indoor environmental quality and water use. One of the advantages of this voluntary, market-based approach is that companies can chose from among these areas when deciding which points to go for. What makes most sense for what they’re trying to achieve? LEED even forces tradeoffs among these such as where increasing outdoor air supply can lead to greater energy use. Yes, energy is important and the latest versions of LEED require a better level of energy efficiency than did previous versions. However, energy is not the totality of “green.”

  8. All good comments. The only point I’d add is that LEED is a measurement tool – not a design tool. In the hands of an experienced designer that understands local climate, passive solar design, and efficiency, LEED can stimulate questions that may make even better choices towards sustainability.

    In the hands of a business as usual mega-starchitect firm that boasts about stats like having the most LEED AP’s on staff, other such nonsense – LEED does little to assure good sustainable design with lower lifetime operating costs and footprint. It just becomes a game of cherry picking points.

    If the USGBC really wants to make a difference vs. make a dollar – They’d embrace and reward time tested systems like passive solar design which can make or break a building’s ability to ever be 2030 ready.

  9. I agree that LEED is both flawed and beneficial. As with any standard, the results lie in execution as much as design. I had to laugh at Gifford’s comment that only LEED-APS get work. I earn my living from my 25 years in energy efficiency. Even LEED commissioning work I do is strictly based on my expertise in energy, not my LEED credentials. In fact, I have just recouped the cost of my exam &training 2 years ago.

  10. Mike really hits the point, LEED is about the building as an entity, the people in it, the waste they produce, the energy required to maintain the people, the impact of the building on the local and greater environment etc. However, I also believe there are flaws and that when any one thing is cited as the ONLY thing, there is a problem. One can build a green building that meets or exceeds LEED Gold without paying the $40K to have a LEED certification. Money is where this becomes an issue.

  11. LEED is an international success. I agree with Barbara and Krystyna’s comments. LEED is a rating system, not a green guarantee. LEED doesn’t keep you from making your building sustainable. Its success is in promoting building green. Results may vary – its up to you, your team and your skill. Saying LEED is flawed is weak whining – do you blame the cookbook when your soup sucks?

    LEED’s results? Since 2000, over 35,350 projects registered, 6,602 projects certified, 155,000+ professionals have earned credentials – in only 10 years. We’re expecting 30,000+ people at Greenbuild 2010 here in Chicago next month. Get hip. That’s market transformation and leadership.

  12. As much as I support environmental standards and greater energy efficiency in our buildings, LEED is starting to seem like an obstacle to that end. Sustainable buildings should be THE NORM and not the celebratory exceptions they currently are.

    If we really want to achieve sustainability in our buildings, sustainable standards should be as much a part of codes as health and safety features are. After all,a clean indoor environment IS a health and safety issue.

    The marketplace needs to stop subsidizing wasteful buildings. The costs of permiting fees should be scaled to promote sustainability. Finance and insurance companies need to realize it is in their best economic interest (through risk reduction)to offer lower rates to sustainable buildings. Utilities should charge lower rates for buildings achieving lower comsuption per square foot.

    Rather than make sustainability a costly burden (worthy of silver, gold, or platinum) requiring effort to certify, it should be making cheap, wastefull, and polltuing buildings that require costly justification as to why an exemption should be granted.

    Although LEED deserves much credit for creating awareness, it seems to be going about achieving widespread sustainability the wrong way

  13. The USGBC has successfully taken “buildings” from being structures to being environments.
    The LEED system constructs buildings that are environmentally responsible.
    When I compare LEED to Conventional building construction I cannot help but think of the USGBC as the adults who have entered the room.

  14. Sadly, what I think everyone tends to overlook is the bigger picture in that sustainability is really about trying to preserve the earths resources(reducing water and energy consumption, looking at materials that are more eco friendly, etc) and protecting our environment (via chemicals in our indoor air, pollution to outside air and protecting the land from leaking chemicals, addressing wasteful constuction debris in landfills, etc) From what I understood LEED has always said they were a work in progress and will continue to evolve as they and the public become educated on what works and what doesn’t work. Regardless of whether you believe in any of this stuff, you cannot make an argument that it is ‘hurtful’ to try and reduce unnecessary waste. Mr. Gifford sounds like a disgruntled business owner who needs to blame someone or something for lack of business. They are still plenty of customers out there who do not believe in LEED certification but that just want a more energy efficient building.

  15. In building code terms, LEED is far too prescriptive and not performance oriented enough. Throw in “too complex for real customers” and too expensive, and what you have is nearly worthless.
    Here’s a solution I’ve been mulling:
    1. Let the building departments adopt the 2009 energy code as they wish. Then STOP any energy code changes forever. The technology is still changing too fast to attempt to follow it with prescriptive code “improvements”. Another reason for freezing the code is to prevent those pesky unintended consequences that aren’t even discovered for 20 years. (see Solar Driven Moisture in Brick Veneer at BuildingScience.com)
    2. Then let builders build as they see fit. Good ones will keep improving the sustainability of their product. (If you care enough to be reading this blog, you’re probably one of the good ones)
    3. Here’s where we replace prescriptive with performance: You can’t get any sort of LEEP (Leadership in Energy Efficiency Performance) rating PRIOR to building anything. To get a LEEP rating, the home must have a simple Web-based monitoring device installed for at least one year. The cost of this should only be $1000-$3000, it only needs a handful of measurements, some of which are already there, like kwh consumption, water consumption, gas consumption. Add two indoor temperature readings, hot water tank inlet and outlet, outdoor temperature north side of house and south side of house, major appliance electricity consumption, etc.
    This data can then be used to “normalize” the performance results. The square footage of the house is left out of the normalization calculations.
    4. The LEEP rating is in dollars, just like a yellow EPA EnergyGuide label for appliances. A true net zero energy house gets a LEEP rating of $0/yr. If you put on excess PV panels, and the utility pays you for your excess production, then your LEEP rating can be calculated to equal what the utility pays you for the year, and is negative, say -$200/yr.
    A 1000 sq. ft. home built to 2009 code minimum might get a rating of $800/yr. A 2000 sq. ft. home built to 2009 code minimum should perform a little better per sq. ft. than the 1000sq.ft. home, so it might get a rating of $1400/yr.
    This performance rating will always guide the builder in the right direction.
    5. The other non-energy efficiency related metrics can have their own rating, such as LEEPdurability, and LEEPwater. A near-zero maintenance house might have a LEEPdurability rating of $30 per year, while a house that needs painting and new light bulbs often would be rated at $300/yr. Again, the LEEPwater rating is in $/yr. Oh yeah, don’t forget LEEPembodiedenergy. That could be in kwh or $.
    The ratings are thus understandable, simple, standardized, and allow the builder his own solutions rather than any prescribed by LEED.
    Eventually these ratings will be meaningful to buyers, and that’s when the builders learn they must generate good ratings. That’s what I like, market forces in play instead of federal policy!
    Since this is so similar to the appliance rating program, the LEED officials must have studied the method, but I can’t figure out why they rejected it.

  16. How about a GREEN Piping System that not only offers LEED points, 1/2″ thru 14″, but is also cost effective Vs copper and steel and will not corrode or disintegrate. It is 100% recyclable.

  17. One thing that no one here has mentioned is that LEED is VOLUNTARY. It is not a code, or law or requirement. You can design a building that is better then LEED without having to certify it. The point is that LEED certifyed buildings tend to get Tax benefits, are worth more, spend less. It is used by the market as a benchmark and nothing more. It is not a code, so this law suit is pointless. If you don’t believe in it, you are not obligated to use it. You might not like LEED, but if you don’t inovate, and if you don’t adapt to your market, you will become obsolete and you will go out of business.

  18. I agree with most of the comments above and want to add that meeting an Owner’s expectations is a two-way effort including building performance requirements, which should not be a surprise to an Owner after the fact. I see many owners focused more on squeezing an inflated program into the fixed budget and getting the LEED logo than on the quality of what they are getting.

  19. Many of the comments attest to the success of the LEED system but also state that the system is flawed, and indeed this is true. I have received complaints from contractors (primarily mechanical trades)on the larger commercial and institutional projects that the LEED certified commissioning personnel are not familiar with the operations of HVAC equipment and systems and have no idea how to commission a system at start-up. If a design professional decides to become LEED certified, it immediately becomes apparent that anyone who can memorize such items as ASHRAE code section numbers or credit quantities can pass the exam regardless of their knowledge of architecture, engineering or construction. Also, in order to receive LEED certification, one must demonstrate several years experience practicing under the supervision of a LEED “professional”….how does a practicing architect or engineer obtain this experience? The regulations must be changed to include and evaluate experience in the construction industry.

  20. It took the early Christian Church centuries before it convinced itself that it was too big and important to tolerate constructive criticism. LEED did all this in less than ten years! I’m not a architect – an outside observer – and I’m appreciative of what LEED has accomplished. But I’m dismayed that it doesn’t appreciate and adopt Henry Gifford’s observations and contribution to improving the field.

  21. It a process of flipping a coin in the air to see what side it falls on.
    Whether one side LEED purposes is to encourage energy efficiency building standards but on the other side neglect to see the real numbers those who within the renewable energy side strongly recognize that after any energy efficiency building measure are implemented an complete over-site on utilities rates increases and energy cost negates at some point over the life cycle of the building designs inefficiencies .
    Case example a builders implements energy efficiency standard to promote or sell new building designs within the market with an expected outcome performances in energy usages reductions but when the utilities companies request up to 30% to 60% utilities rate increase compounded each year in some cases over just 5 years can have major significant impact upon any property owner bottom-line and because these analysis are over looked in most cases the finally investment in addressing future impacts of electric rates increase in advances rises serious questions for which only renewable technologies investment should be directed to address these concerns.

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