2010 Green Building Litigation In Review

 Since the green building movement gained traction in the mid-part of this decade, real estate and construction lawyers have been warning building owners, contractors and other design professionals that green buildings were ripe for lawsuits. Until 2010, the wave of lawsuits that was predicted did not materialize. However, perhaps because of the lingering effects of the sour economy as well as a critical mass of green buildings finally coming on line, 2010 was the year that the green building litigation floodgates finally opened.
 So what were the most interesting green building lawsuits?

 I. Decision-

 Air Conditioning, Heating and Refrigeration Institute v. City of Albuquerque, No. 8-633 (D.N.M. 9/30/10) – In this case, the plaintiff trade organizations challenged proposed revisions to the local energy code on grounds that it was pre-empted by the federal National Appliance Energy Conservation Act of 1987 (NAECA). The plaintiffs argued they would be damaged for among reasons because they had equipment inventory that they could not use and that compliant products were not easily available. The court issued a permanent injunction for the prescriptive portions of the code.

 II. Complaints:

 Pre-emption Litigation
 Building Industry Association of Washington v Washington State Building Council (W.D.Wash.)- This case is similar to Albuquerque case. The plaintiff trade associations challenge the state energy code on grounds that it was pre-empted by federal Energy Policy and Conservation Act of 1975 (NPCA), NAECA and Energy Policy Act of 1992.

 PACE Litigation

 Town of Babylon v Federal Housing Finance Authority, et al, (E.D.N.Y. 10/26/10); State of California v Federal Housing Finance Authority, No. C10-03084 (N.D.CA.); NRDC v Federal Housing Finance Authority, 10-cv-7647 (S.D.N.Y. 10/5/10)- These are the leading complaints that have filed against the FHA for instructing Fannie Mae and Freddie Mac not to buy mortgages with PACE liens on the grounds that these energy efficiency liens were akin to tax liens that would be superior to mortgages. The plaintiffs allege the FHA action was arbitrary and capricious since it did not engage in rulemaking for this change, and also violated NEPA for failing to first perform an EIS.
LEED Heretic-

Gifford v USGBC, No. 10-cv-7747 (S.D.N.Y. 10/8/10) - This is the class action lawsuit filed against the USGBC that stirred the green blogosphere last month. The plaintiff alleges that USGBC engaged in Deceptive Advertising, Unfair Trade Practices and other unlawful conduct for promoting misleading claims about energy efficiency of LEED-certified buildings. Even if the complaint has merits over the relative energy efficiency of LEED-certified buildings, personally naming some of the founders of USGBC along with including a RICO count was simply over-the-top.

BUYER’S REMORSE COMPLAINTS-

 This final category involves complaints where plaintiffs are alleging failing to comply with green building standards among other claims to avoid having to close on condo units that have lost significant value since the plaintiffs signed their purchase agreement.

 Barber v West Chelsea Development Partners LLC, No. 1G104645 (NY Sup. Ct.  4/8/20)-Plaintiff seeks rescission based on breach of contract and fraud for failing to attain LEED certification and comply with state energy code.

 Guidumal and Keeley v Site 16/17 Development LLC et al, No. 1010598 (NY Sup. Ct. 5/6/10) - Plaintiff alleges breach of contract, misrepresentation for heating system with 49% deviation from LEED. The complaint also includes professional malpractice claims against the architect.