Late last week, I had the opportunity to speak with Norah Hart, counsel for Henry Gifford in his class action suit against the USGBC in the Southern District of New York, which has elicited some very strong reactions throughout the green building community. According to Ms. Hart, USGBC has retained outside counsel to defend it in the action, and is currently working with Mr. Gifford (through Ms. Hart’s office) to understand Mr. Gifford’s intentions in filing the suit. Here’s, specifically, what Ms. Hart told me she has communicated to USGBC through its attorneys:
USGBC has said that its goal is ‘market transformation’ and indeed they have achieved remarkable results and are in the fortunate position to be able to truly effect change. We believe that the disclosure of utility bills – which some districts are already requiring – is the fastest way to bring an energy efficiency premium into the market. Markets are most efficient when accurate information is available. If buyers can see the past energy use bills of a property, they can weigh its energy efficiency into the price they will pay. If developers and planning officials see the actual energy bills of existing buildings in their region, they can choose design and construction techniques that are proven to work, and inevitably, will begin to adopt practices that save fuel and money. The disclosure of actual energy use bills will transform the market.
According to Ms. Hart, the plaintiffs are also currently “formulating a list of the injunctive measures [they] want to see, namely, that actual energy bills for all [LEED-certified buildings] are available, databased in an accessible, meaningful way, so information is available with which honest assessment can be done.”
It’s interesting that the parties seem to be – at least on the surface – engaged in these discussions at such an early stage in the litigation. However, the negotiations raise a number of questions, particularly with respect to the building performance data that Ms. Hart hopes to obtain. First, as Larry Spielvogel has pointed out, that raw data is not particularly useful without other pertinent information about each building (such as its occupancy levels, user types, etc.). Second, much building performance data is highly proprietary; as attorney Brian Anderson noted in an email to me, what would be the implications for that raw data becoming public knowledge? “Can USGBC really force building tenants and owners to give information if they have not signed off on such disclosures in their leases?” Anderson asks.
Independent from this latest development, I have also been getting quite a few inquiries over the past few weeks about next legal steps in the action and, assuming something isn’t worked out between the parties in the interim, here’s a rough outline of how the action could move forward:
- The Federal Rules of Civil Procedure require a party to respond to a complaint within twenty (20) days, unless the time to respond is extended by mutual consent of the parties’ attorneys (which it has been here for USGBC, according to Ms. Hart).
- Unless the parties are able to reach some sort of resolution, I expect that USGBC will move to dismiss the complaint under Rule 12 of the Federal Rules of Civil Procedure (which permit a party to make such a motion in lieu of answering on a number of bases);
- Finally, my guess is that such a motion would not be successful (at least with respect to all of the causes of action in the complaint). At that point, the parties could go back to the negotiation table, or the plaintiffs could move to certify the class under Rule 23(a). In deciding that type of motion (which USGBC would oppose), a court is permitted to order limited discovery, which might (or might not) create a pressure point encouraging settlement. It’s also important to note that the timeframe during which these procedural mechanisms will play out are significant (months, if not years), so this is a story that we will likely be tracking for some time.