REPORT

Minimize Risk - Maximize Performance
February 2011

Industry Survey Reports 

 *A/E Law Firm Survey*

 Detailed survey of 20 A/E Law Firms across the United States providing regional and national perspectives on legal developments, claims and root causes driven by economic conditions with loss prevention recommendations and other insights from these legal experts.
  

A/E Law Firm Survey Report Link

*A/E Survey Report*
Insightful survey report of A/E firms and how economic conditions are impacting business opportunities and affecting business decisions today.  

A/E Firms Survey Report Link

*A/E Insurance Carriers
Survey Report"
Survey of 17 insurance carriers specializing in A/E Professional Liability (PL) insurance identifies current economic risk factors
, services offerings, claim trends and recommendations for reducing liability exposures.   

PL Insurance Carrier Report Link

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Our objective is improve performance and profitability through industry and risk analysis and developing costs effective solutions for design and building professionals. 


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Timothy J. Corbett, BSRM, MSM, LEED GA
President
tcorbett@smartrisk.biz

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T: 626-665-8150

LEED Lawsuit Amended

Introduction

The $100 million dollar lawsuit filed in October 2010 against the U.S. Green Building Council (USGBC) and it’s Leadership in Environmental and Engineering Design (LEED) rating system has been amended. Filed February 7th, 2011, the amended lawsuit focuses on USGBC’s alleged false advertising that LEED guarantees energy savings. The lawsuit is also no longer a class-action lawsuit and the plaintiffs are four design and construction professionals on behalf of other industry professionals.

 

Amended Claim

The amended claim states professionals; “are losing customers because USGBC's false advertisements has mislead the consumer into believing that obtaining LEED certification incorporates construction techniques that achieve energy-efficiency.” Instead of a class of plaintiffs harmed by LEED, Gifford the original plaintiff, a mechanical engineering consultant brought on three other professionals to the complaint; an architect and two engineers. One of the newly added plaintiffs, Andrew Äsk, P.E., a Florida-based engineering consultant was asked how he has been harmed by USGBC. “It is becoming more common for institutional owners to be listing LEED credentials as a requirement to do work for them,” he said. “Since I don't subscribe to USGBC I am shut out of most projects.”

Lawsuit’s Center

At the center of the lawsuit is Gifford’s assessment of a 2008 study from New Buildings Institute (NBI) and USGBC of the energy performance of buildings certified under LEED for New Construction and Major Renovations (LEED-NC). The NBI study states that “LEED buildings are on average, 25%–30% more efficient” than the national average. Gifford’s 2008 analysis concluded that “LEED buildings are on average, 29% less efficient”. The suit goes on to say; “USGBS’s own study data on the subject indicates on average, LEED buildings use 41% more energy than non-LEED buildings” and continues to say “LEED does not verify certified buildings are designed and built in a manner that leads to energy savings.”

The original lawsuit claims “USGBC fraudulently used false advertising by intentionally omitting material information”, i.e., the fact the “NBI study sample was comprised of just 22% of LEED certified buildings, not all LEED certified buildings” and “USGBC knowingly selected a skewed sample”.

Using the NBI study and USGBC’s promotion of it, the suit alleges fraud under the Lanham Act, Unfair Competition. This act was conceived to prevent deceptive, false, misleading marketing practices in the connection with goods and services used in commerce. These activities are liable in a civil action for damages. The second cause of action is under Deceptive Trade Practices, New York State General Business Law related to deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any services.

 

Plaintiffs Request

Gifford and the other design and construction plaintiffs request a permanent injunction ordering USGBC to “immediately cease the dissemination of any advertising, marketing, or promotional statements, weather made expressly or by implication that...":

 

  1. LEED buildings are performing 24-30% better than non-LEED certified buildings.
  2. LEED buildings use less energy than non-LEED buildings.
  3. LEED certification is proof, or verification in any way, that a building has been built according to plans.
  4. Cease in any way misrepresenting or exaggerating the benefits of LEED.

 

A request to award the plaintiff’s damages pursuant to statutory law of New York relate to:

 

  1. USGBC profit derived from unlawful conduct.
  2. Plaintiffs damages sustained by USGBC’s unlawful acts, to be in trebled in accordance with the law.
  3. Other requests related to attorneys fees, costs and expenses. 

 

The deadline for USGBC’s legal response is April 7th.

 

 

 
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