Last year several individuals, including a green building consultant, an architect, and an engineer, sued the U.S. Green Building Council
(USGBC) in federal court in New York, alleging that the organization
made false or misleading statements in connection with its Leadership in Energy and Environmental Design (LEED) certification system for green buildings.
Specifically, Henry Gifford and the other plaintiffs accused the
USGBC of making false statements regarding the energy and money-saving
aspects of LEED certification in a 2008 press release, which says the
results of a 2008 study:
indicate that new buildings certified under the [USGBC's]
LEED certification system are, on average, performing 25-30% better
than non-LEED certified buildings in terms of energy use
The plaintiffs brought a federal false advertising claim under the
Lanham Act and state claims under the New York Deceptive Trade Practices
Act.
Both the federal and state claims were based on the premise that the
plaintiffs were harmed by the allegedly misleading statement
because it diverted customers from the plaintiffs' business to
LEED-accredited professionals.
The court disagreed and last month dismissed the suit.
In a 9-page Order (Gifford-USGBC_Order), Judge
Leonard B. Sand held that the plaintiffs lacked standing to sue the
USGBC for the alleged false advertising because they could
not demonstrate that their businesses were damaged by the statements at
issue.
To show standing for a claim of false advertising under the Lanham
Act in the Second Circuit (which includes New York federal courts), a
plaintiff must (1) be a competitor of the defendant, or (2) show a
reasonable interest to be protected against the alleged false
advertising and that the interest is likely to be damaged by the alleged
false advertising.
The court held that the plaintiffs are not competitors of the USGBC
because plaintiffs provide advice on the design and construction of
energy efficient buildings while the USGBC reviews and rates designs
created by others.
As to the reasonable interest prong, the court held the plaintiffs
had failed to establish a causal nexus between the USGBC's alleged
false statement and clients of the plaintiffs supposedly lost to
LEED-accredited professionals:
With the exception of Gifford, each Plaintiff designs and
consults on specific elements of individual buildings, including
heating and cooling systems, moisture and mold remediation, and
architectural design. Plaintiffs do not allege that LEED certified
buildings do not require such services or that those services must be
provided by a LEED-accredited professional in order to attain
certification. Because there is no requirement that a builder hire
LEED-accredited professionals at any level, let alone every level, to
attain LEED certification, it is not plausible that each customer who
opts for LEED certification is a customer lost to Plaintiffs.
While the plaintiffs here took on a certifiying organization
directly, most greenwashing cases are brought against manufacturers and
sellers of products for alleged false or misleading acts or statements
made in connection with their own products.
This decision should keep it that way, at least for organizations
that certify green skills and services, because it makes establishing
the requisite standing to get into court very difficult for putative
challengers.
For green skills certifiers the universe of direct competitors is
rather small, and non-competing plaintiffs are likely to have a hard
time showing causal links between false or misleading statements and
damage to their businesses.
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