A U.S. District Court judge dismissed a lawsuit alleging that the U.S. Green Building Council violated the false advertising provision of the Lanham Act because the plaintiffs – a building professional, an architect, and an engineer – were not competitors and lacked standing to bring the suit without a demonstration of a damaged commercial interest.
The suit was originally filed by Henry Gifford, a self-proclaimed “energy efficiency maven” and mechanical systems designer, who claimed that the Council, which governs LEED certification, made false claims that the rating system saves energy in buildings.
The Council moved to dismiss, arguing that Gifford – and the other plaintiffs who joined the suit – could not establish standing.
Analyzing two possible means of standing under the Lanham Act – the “strong categorical” and the “reasonable commercial interest” tests – the court agreed. Although neither test requires that the litigants be direct competitors, the court said the Second Circuit has “frequently stressed the importance of competition between litigants” in Lanham Act suits. Accordingly, U.S. District Judge Leonard Sand concluded that:
“Plaintiffs cannot establish standing under either test. Plaintiffs plainly do not compete with [the Council] in the certification of ‘green’ buildings or the accreditation of professionals. Rather, they purport to compete with [the Council] in what they call the ‘market for energy efficient building expertise.’ This broad label does little to obviate the clear difference between the two ‘products.’ . . . While some of plaintiffs’ competitors in their individual fields may be LEED certified, plaintiffs and [the Council] ‘operate in different arenas.’
The court further said that the plaintiffs’ allegation that LEED has subsumed their professional roles was “entirely speculative.”
“Because there is no requirement that a builder hire LEED-accredited professionals at any level, let alone at every level, to attain LEED certification, it is not plausible that each customer who opts for LEED certification is a customer lost to plaintiffs,” the court said.
To read the dismissal order in Gifford v. U.S. Green Building Council, click here.
Why it matters: The suit received a great deal of publicity when originally filed, as it represented a challenge to the burgeoning green construction movement and dominance of the LEED certification system. By dismissing their Lanham Act claims with prejudice, the court’s decision was a sharp rebuke to the plaintiffs.