Florida Green Building Law

Dismissal of Gifford V. USGBC (S.D.N.Y)

greenbuildingsubcommittee — Tue, 30 Aug 2011 19:31:09 +0000

On August 15, 2011, the U.S. District Court for the Southern District of New York dismissed with prejudice the federal law claims brought against the U.S. Green Building Council by Henry Gifford and others. The court ruled that the plaintiffs did not have standing to sue under federal law. “Plaintiffs plainly do not compete with USGBC in the certification of ‘green’ buildings or the accreditation of professionals….Likewise, plaintiffs do not adequately allege a reasonable commercial interest that is likely to be damaged by USGBC’s alleged false statements.” The court added, “[b]ecause there is no requirement that a builder hire LEED-accredited professionals to attain LEED certification, it is not plausible that each customer who opts for LEED certification is a customer lost to Plaintiffs.”

The court also ruled that Mr. Gifford was not able to show that the alleged false advertising claim by the USGBC had made an impact on the marketplace. “Whatever the merits of Plaintiffs’ claim that the conclusion of the study was false,” any claims to that effect were “too speculative.”

The court, however, said the plaintiffs still could bring false advertising and deceptive trade practices claims under New York state law.

See the attached link to the 8/15/11 Memorandum & Order.

Submitted by Jeffrey S. Wertman of Berger, Singerman

Energy Aligned Lease

greenbuildingsubcommittee — Thu, 07 Jul 2011 15:44:28 +0000

The City of New York Mayor’s Office of Long-Term Planning and Sustainability recently completed its Model Energy Aligned Lease and announced its use in a transaction at the 7 World Trade Center Building. I think the innovative approach with the Energy Aligned Lease Language is a good step forward for trying to manage the “split incentive.” However, when I read the press release and the lease language, it struck me that success of the approach still depends on the building performing substantially as modeled since there is no actual performance verification. While the 80% pass thru provides some hedge, it appears that a Tenant with a short-term lease could find itself on the short end of the stick if actual energy savings falls significantly short of expectations. Not that such ever happens in the real world….

Taking the example in the Model Energy Aligned Lease Language itself in section 1(b)(i), assume that the $2,000,000 in Landlord’s capital improvements is “projected” to result in $500,000 in energy savings, which can then be passed through to Tenant at $400,000 per year for 5 years at the 80% rate. Let’s then assume the base energy cost without the capital improvements was $1,500,000 a year (e.g., the improvements are “projected” to result in a 33% energy reduction – a notable outcome).

What happens if energy consumption is only actually reduced by 10% for whatever reason, rather than the anticipated 33%?

Tenant’s Outlay:

Energy cost ($1,500,000 x 90%) $1,350,000

Capital Ex pass thru based on “anticipated” savings $ 400,000

Total Annual Outlay for 5 years $1,750,000

Total Annual year 6 + $1,350,000

Now I am just a lawyer and not a finance guy so someone please correct me if I am wrong, but query whether this is a good outcome for a Tenant with a 5-10 year lease who would have otherwise paid $1,500,000 a year without the capital improvements being made. For example, at the end of year 7, Tenant would have paid $11,450,000 under the Energy Aligned Lease under this scenario, but would have paid only $10,500,000 without the energy improvements. If I am not wrong, then the point is that with the Energy Aligned Lease approach, much still depends on actual building performance aligning fairly closely with projected or modeled performance (or having a very long-term lease over which to recoup the shortfall). From what I understand from the building performance experts, the alignment between modeled and actual performance is no sure thing and some buildings are performing far worse than anticipated.

Perhaps the Model Energy Aligned Lease Language should be backstopped somehow by a provision that allows reconciliation if actual energy use is significantly greater than that projected? The plaNYC document “Model Energy Aligned Lease: Detailing language to help solve the split incentive problem” provides that “Moreover, using projected savings avoids having to monitor actual savings, which can be prohibitively expensive.” Again, as merely an attorney, I would let others opine on whether it would in fact be “prohibitively expensive” to establish a baseline and monitor actual energy savings.

In sum, kudos for the forward thinking by the folks in NY in developing this model language. However, as with all model language, careful evaluation should be conducted to fully understand the implications to you or your party in interest based on the specific facts before dropping the Model Energy Aligned Language into a lease.

Submitted by Paul D’Arelli of Berger Singerman

UPDATE ON GIFFORD V. USGBC (S.D.N.Y)

greenbuildingsubcommittee — Thu, 07 Jul 2011 15:35:42 +0000

Henry Gifford filed his opposition to the U.S. Green Building Council’s motion to dismiss Gifford’s amended complaint on May 2, 2011. Gifford’s argues, among other things, that (1) direct competition is not a requirement for Lanham Act standing; (2) as competitors in a niche market, plaintiffs are especially likely to be harmed by the USGBC’s claims; and (3) causation, a question of fact, will be proved in discovery.

It is expected to take several months for the court to rule on the USGBC’s motion to dismiss.

Gifford’s Memorandum of Law in Opposition to Defendant’s Motion to Dismiss can be viewed at: http://bit.ly/kywGsD

Submitted by Jeffrey S. Wertman of Berger Singerman

New Guide Available: Negotiating Leases in the Era of Green Building

greenbuildingsubcommittee — Thu, 07 Jul 2011 13:46:43 +0000

This informative 42-page guide written by Paul D’Arelli provides a “plain English” presentation of issues and concepts that must be considered by landlords, tenants and their representatives in this new era of sustainability where traditional leasing is intersecting with green building pursuits and requirements.

Rather than attempt to move the industry toward some new model of green leasing – a difficult proposition given the variation in local leasing customs – this guide provides an issue-focused approach that can be used as a basis for informed negotiation geared toward accommodating the needs of the parties regardless of local lease preference. The style is conversational guide as opposed to a legal treatise, making it an easy read about an increasingly complicated subject. It’s available at the link below.

www.greenleasingguide.com

Submitted by Peyton White Lumpkin, Esq., LEED AP
The Lumpkin Law Firm P.A.

UPDATE ON GIFFORD V. USGBC (S.D.N.Y)

greenbuildingsubcommittee — Tue, 07 Jun 2011 19:13:01 +0000

It is expected to take several months for the court to rule on the USGBC’s motion to dismiss.

Gifford’s Memorandum of Law in Opposition to Defendant’s Motion to Dismiss can be viewed at: http://bit.ly/kywGsD

Submitted by Jeffrey S. Wertman

Berger Singerman

My Building Ate the Smog!

greenbuildingsubcommittee — Tue, 31 May 2011 20:43:49 +0000

According to an article in the May 13, 2011, issue of USA Today, Alcoa is now selling building panels that have a titanium dioxide coating that reacts to nitrogen oxide in the air when exposed to sunlight, reducing it to a harmless power that is washed off by rain. Nitrogen oxide is the smog-causing compound emitted by vehicles

Alcoa claims that a 10,000 sq. ft. area of the panels will have the same cleansing power as 80 trees

Alcoa did not invent the technology; it has been used with concrete in Holland on streets.

The USA Today report also mentions other products that attack pollution, such as a light bulbs and ceiling tiles.

See the USA Today article at http://usat.ly/m6ehk1 for the details.

Submitted by Howard Allen Cohen, B.C.S.
Atkinson, Diner, Stone, Mankuta and Ploucha, P.A
Fort Lauderdale
hac@atkinson-diner.com

Greening the Law –Live Presentation or Webcast

greenbuildingsubcommittee — Wed, 16 Mar 2011 13:31:23 +0000

The Florida Bar Continuing Legal Education Committee
And Real Property, Probate and Trust Law Section presents

Greening the Law (1197R)

Live Presentation or Webcast
Friday,May 6, 2011
8:25 a.m. – 5:10 p.m. Eastern Standard Time
Tampa Airport Marriott – Tampa, FL
Credit Hours: 9.5 with 1 hour of ETHICS

To register click the link below:

http://www.floridabar.org/FBWEB/CLEReg.nsf/zLocations2/ESMH-8DYNB8?OpenDocument

Submitted by Peyton White Lumpkin

The Lumpkin Law Firm P.A.

The Battle Over Wood Certification Standards

greenbuildingsubcommittee — Tue, 08 Mar 2011 16:22:51 +0000

On October 20, 2009, the Coalition for Fair Forest Certification (the “Coalition”) filed a complaint with the Federal Trade Commission (“FTC”) alleging anti-competitive behavior by the Forest Stewardship Council (“FSC”) and the United States Green Building Council (“USGBC”).

The Coalition has requested that FTC investigate, through the Bureau of Consumer Protection, the alleged 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 the alleged preference for FSC-certified products; and provide guidance to standard-setting organizations concerning behavioral standards for compliance with antitrust law.

The heart of the Coalition’s trade complaint is the allegation that FSC and the USGBC “operate in tandem to disadvantage wood products certified by SFI and other certification systems.”
FSC-certified products remain the only forest products eligible for credits under LEED.

These complaints are set against the backdrop of the USGBC’s proposed changes to its certified wood credit. USGBC has conducted its first public comment period regarding opening the wood certification process to other standards. Under the newly proposed credit language, wood certification systems would be evaluated for eligibility to earn points towards LEED certification against this measurable benchmark that includes: Governance; Technical/Standards Substance;
Accreditation and Auditing; and Chain of Custody and Labeling.

For more information, please see the links below:

USGBC Accused of Anti-competitive Practices:

http://www.greenbuildinglawupdate.com/2010/01/articles/codes-and-regulations/usgbc-accused-of-anticompetitive-practices/

Feud Continues Between Wood Certifiers:

http://green.blogs.nytimes.com/2009/10/26/eco-friendly-wood-certifiers-continue-feud/

LEED Accused of ‘Conspiracy to Monopolize’:

http://thetyee.ca/News/2010/03/18/ConspiracyToMonopolize/

My Wood is Greener than Your Wood: Certification Battles Continue:

http://feeds.lexblog.com/~r/VirginiaRealEstateLandUseConstructionLaw/~3/RrCzOCwqtSc/

LEED Credit Revisions for Certified Wood:

http://www.usgbc.org/DisplayPage.aspx?CMSPageID=1866

Submitted by Jeffrey S. Wertman of Berger Singerman

(JWertman@bergersingerman.com)

Update on $100 Million Class Action Lawsuit against USGBC

greenbuildingsubcommittee — Tue, 22 Feb 2011 13:44:56 +0000

Gifford Files Amended Complaint in Gifford v. USGBC: See

http://www.greenrealestatelaw.com/2011/02/class-action-no-more-gifford-led-plaintiffs-file-amended-complaint-against-usgbc/

http://www.greenbuildinglawblog.com/

Submitted by Jeffrey S. Wertman of Berger Singerman (JWertman@bergersingerman.com)

Latest Green Building Litigation Update

greenbuildingsubcommittee — Tue, 22 Feb 2011 13:39:50 +0000

A Syracuse, New York shopping center developer has failed to meet green-technology requirements for its $228 million in tax-exempt, 30-year green bonds used to help finance the first phase of its expansion of a mall into an entertainment and tourism center to be called ”Destiny USA.” The stage is now set for a host of lawsuits.

See the following links for more information:

http://www.syracuse.com/news/index.ssf/2011/02/faded_green_promises_could_cos.html

http://www.greenbuildinglawupdate.com/2011/02/articles/legal-developments/unprecedented-green-building-dispute-could-cost-developer-millions/

http://www.greenbuildinglawblog.com/2011/02/articles/litigation/taken-for-a-ride-on-the-carousel-failed-green-project-sets-stage-for-suits/

Submitted by Jeffrey S. Wertman of Berger Singerman (JWertman@bergersingerman.com)