It’s been a wild ride recently for the green building legal community; in the past week we’ve witnessed the country’s first reported green condominium litigation and another challenge in federal court to a state-level green building program. Now (over the weekend), the Northland Pines appellants have announced that they dispute USGBC’s denial of their challenge to the LEED Gold certification of the Northland Pines High School, publicly released the documents on which USGBC’s decision was based, and are calling on the green building industry to review the materials and draw their own conclusions about the merits of USGBC’s decision.

After a preliminary review over the past few days of the materials which the appellants sent to me (and many others across the industry), what strikes me as most interesting is the opening paragraph to the Executive Summary prepared by Taylor Engineering, one of the independent consultants which USGBC engaged to evaluate the challenge, in response to the appellants’ allegations. Taylor states that “there were several violations of Standard 62.1 and Standard 90.1 requirements in the design as originally documented. As such, the original design did not meet IEQ Prerequisite 1 and EA Prerequisite 2 of LEED NC version 2.1.”

Taylor also notes that revisions were made to the school’s energy model on December 10, 2009 – well after the energy models on which the disputed prerequisites were submitted to USGBC for consideration. As the appellants point out in their response to Taylor, “the independent consultant indicates that the original model at the time of the USGBC application . . . is not correct. Making revisions to the energy model 4.5 years after the design should not and cannot be the basis for compliance with this prerequisite.”

These details – though technical – require that the green building industry – including policymakers – review the challenge and supporting documents released by the appellants with scrutiny. However, if the project did, in fact, fail to satisfy these prerequisites, but was certified anyway, and the USGBC’s decision essentially stands behind ex post facto revisions to the energy model, the appellants’ contentions throughout the challenge and response documents that the LEED certification process itself is flawed become all the more compelling.

I am sure that there will be much more to say about all of these materials moving forward but, to get you started with your review, here’s the public statement which the appellants prepared as an introduction to the package of documents which they have released for review and comment:

Appellants’ Statement – June 5, 2010

What is all the ruckus about Northland Pines?

In 2004, the voters of Vilas County, Wisconsin voted to approve the sale of $28,535,000 worth of bonds to finance a new high school for the Northland Pines District.

The appellants in this case all served on the Building Committee for the new school and each brought specific talents and experience in the design and construction of large buildings. Each was dedicated to the proposition of creating the most efficient structure possible.

The design team and school board discouraged any outside input and set forth to design and construct the school as they saw fit. As the design developed, the appellants questioned whether the facility would indeed meet the prerequisites for LEED Certification and were told that it would despite what appeared to be glaring shortfalls with respect to those requiremetns. The appellants retained the service of two highly regarded consulting engineers to review the plans. Both of them determined that the facility as deisgned would not qualify for LEED Certification.

In December 2008, the appellants filed an appeal with the USGBC challenging the award of the Gold Certification given to Northland Pines. Some 16 months later, the appellants were notified that the USGBC had looked into the matter and found everything to be fine. They based this on reports from two or more consulting engineers who said that the building did not meet the prerequisites but concluded that “pretty close” is close enough. When the appellants’ engineers asked for the backup data to the USGBC reports, they were told that they were pretty busy and would address that request when they have time. Time has passed and the requested materials have not been forthcoming. Why?

On behalf of the taxpayers of Vilas County who would like to know with certainty whether they got what they paid for or not, we ask the engineering community to look at this file and tell us, did we miss something here? How can it be all right to certify a building that doesn’t fully comply with the rules set forth by the body that is doing the certifications?

We would love to hear what you think. We are only in search of the truth which ultimately will be what is best for Northland Pines.

(An interesting procedural sidenote is whether the appellants could have appealed USGBC’s denial of their challenge rather than distributing the complaint . Under the Certification Challenge Policy, GBCI’s Board of Directors serves as the appeals body, and the appeal must be requested within twenty-five (25) business days of the underlying decision (meaning the appellants would have had until June 2 to file their request based on an April 27 decision from USGBC). However, at least with respect to this challenge, you will recall that USGBC General Counsel Susan Dorn explained in a email message that the Northland Pines proceeding was reviewed by USGBC as a legacy project under the rules which applied when USGBC – and not GBCI – was handling LEED certifications, and that future challenges would be reviewed under the GBCI policy.)

In any event, the full set of documents is available from Larry Spielvogel (spielvogel@comcast.net) or Mark Lentz (mlentz@lentzengineering.com) upon request and includes an original copy of the appeal which was submitted to USGBC in December of 2008, as well as the appellants’ reactions to each of the conclusions as reached by USGBC’s consultants and other supporting documentation.

A copy of the Executive Summary of the appellants’ response to the denial of their challenge (which was prepared by Spielvogel and Lentz) is available for download here.

First, here’s the language from Mr. Carson’s article which appears to have generated the controversy:

“As reported by the Villas County News-Review, a group of Wisconsin residents filed a 125-page complaint with the USGBC challenging the award of the LEED Gold certification to Northland Pines, which is generally credited as the first certified LEED Gold high school. The challenge was based on a little discussed provision in LEED 2009, which reserves the USGBC’s ability to revoke certification a project that fails to meet the program’s ‘Minimum Program Requirements,’ which include requirements for minimum occupancy rates, site boundaries, and information-sharing about the project’s energy and water usage for five years after certification. It was reported that the USGBC sent independent examiners to Wisconsin to conduct on-site tests at Northland Pines to determine the project’s qualifications for LEED, and that a final determination on the school’s eligibility for LEED would be decided in early 2010.”

Note the bold language (my emphasis) which is not correct; the challenge is not based on any provision in LEED 2009’s Minimum Program Requirements. Rather, the Northland Pines High School was certified under LEED Version 2.1; unlike LEED Version 2.0, the former version required projects for the first time to satisfy every prerequisite of each credit category in order to earn certification. (Previously, under Version 2.0, projects could still earn certification even if they did not satisfy the prerequisite for each individual credit category). The appellants’ specific allegations relate to the project design’s alleged failure to satisfy certain Energy & Atmosphere prerequisites, which, if accurate, would be grounds for USGBC/GBCI to revoke the school’s Gold certification. In early February, a USGBC spokesperson responded to Mr. Carson’s article with some very general clarifications in an insert in Engineering News-Record (which stated, among other items, that Mr. Carson’s piece contained “several inaccuracies, causing unnecessary anxiety in the marketplace”).

In the Multifamily Executive article, which dates from last month, USGBC’s Scot Horst further responded to Mr. Carson’s article as follows:

“‘The idea that there is this new thing call decertification is inaccurate,’ says Scot Horst, USGBC’s senior vice president for LEED. ‘The way LEED works is we have a rating system; you send us information about your project, and we certify to that. But let’s say that there was someone out there who lied about the prerequisite information or unintentionally provided inaccurate information. We have always had a policy to go back and say this wasn’t what it was represented to be. That is nothing new.’”  (emphasis added).

As far as decertification is concerned, USGBC and GBCI have clearly reserved the right to revoke certification from projects that fail to satisfy the Minimum Program Requirements. While that may not be any different from what the organization has been doing all along (hence the question mark in the title to this article), the introduction to the LEED 2009 MPR Supplemental Guidance document (Version 1.0, November 2009) clearly states on page 3 that “[i]f it becomes known that a LEED project is or was in violation of an MPR, certification may be revoked, or the certification process may be halted. These situations will be handled on a case by case basis according to GBCI’s challenge policy.”  However, it appears that the confusion over “decertification” stems from a conflation of a LEED project owner’s failure to report performance data with LEED buildings that actually perform poorly. Consider these remarks from Multifamily Executive:

“The fear of decertification likely stems from one of the Minimum Program Requirements (MPRs) of LEED 2009. The MPRs, which apply only to projects seeking certification under LEED 2009, list the basic characteristics that a project must possess to be eligible for certification under the LEED 2009 rating systems. Requirement No. 6 states that “all certified projects must commit to sharing with USGBC and/or GBCI [Green Building Certification Institute] all available actual whole-project energy and water usage data for a period of at least five years.”

But the information collected under MPR6 is for research purposes only and won’t be used to penalize project teams with buildings that do not perform as well as intended, according to the LEED 2009 Supplemental Guidance document published in November 2009.

‘MPR6 specifically is an exercise to improve the future iterations of LEED rather than to strip the certification from prior program participants and all information remains confidential,’ says USGBC communications manager Ashley Katz. ‘LEED certification is granted based on a building’s design and construction at the time certification is sought. LEED certification does not evaluate the ongoing operation or maintenance of a building—there are too many factors that have to do with how the building is operated.’”  (emphasis added).

I think it’s also worth repeating here that there is absolutely no connection between the Northland Pines proceeding and the Minimum Program Requirements that generated the initial buzz about decertification last summer. (However, it is important to note that the Northland Pines certification challenge appears to be taking place under the GBCI Certification Challenge Policy, which did not exist at the time the high school earned LEED Gold. The general lack of transparency about this process is troubling, but I am willing to give USGBC/GBCI the benefit of the doubt until we get a decision on the challenge before passing final judgment.  For example, will the organizations make certification challenge materials available to the public for third party review? If not, what about down the line in jurisdictions where public money is funding LEED projects whose certifications may be challenged? If for no other reason, the Northland Pines proceeding is critical for practitioners to keep an eye on from a procedural, legal perspective, as it appears USGBC and GBCI have not previously confronted such a serious challenge.)

Also, note that the LEED 2009 MPR Supplemental Guidance document states on page 27 with respect to MPR No. 6 that “this MPR does not intend to penalize project teams with buildings that do not perform as well as intended or create insurmountable technical or legal barriers to registering a LEED project.” (emphasis added).

With respect to this latter point, you will recall that MPR No. 6’s requirements to share whole-building performance data “must carry forward if the building or space changes ownership or lessee.” Page 27 of the Supplemental Guidance document (under “Specific Allowed Exceptions”) notes that

“[t]o own a LEED certified project is to participate in the ongoing evolution of the green building movement. In that spirit, and in keeping with the intent of this MPR, the owner’s commitment to provide whole-building energy and usage data is expected to carry forward to the next owner if all or part of a LEED certified project is sold, re-assigned, or otherwise transferred. However, it is recognized that this may not always be possible, and GBCI will respect the realities of situations in which reasonable efforts to maintain the commitment are not successful. In this situation, the initial building owner will no longer be required to provide the data or access to the data.”

So, although the concept of USGBC/GBCI policing their buildings for MPR enforcement will remain an issue, and practitioners will still need to understand and translate MPR requirements into contract documents and leases, some of the initial concerns about LEED 2009 decertification raised both here at GRELJ and elsewhere may turn out to be unwarranted.

Finally, here’s what Horst had to say in Multifamily Executive about Northland Pines:

So what’s the deal with the LEED Gold-certified Northland Pines High School in Wisconsin referenced in the Business Journal as potentially facing decertification? “We are reviewing the project to make sure that what was represented in the [LEED] documentation was accurate,” Horst says. “That is consistent with what a good certification program would do.” He declined to comment on who brought the project to the USGBC’s attention for review.

As far as the current status of the Northland Pines proceeding goes, I am told that the complaint (which was filed in late 2008, according to USGBC as quoted in ENR) is still being evaluated by USGBC, GBCI, and their technical consultants.

As always, we’ll continue to update you on this critical story.

In terms of the procedures which both the residents and USGBC/GBCI are obligated to follow in addressing the complaint, the GBCI’s Certification Challenge Policy is important to review. It states, in pertinent part, that “GBCI may revoke previously granted LEED certification or take other action regarding LEED certification such as determine to reduce points or category of LEED certification previously granted, if GBCI determines that credits/prerequisites for LEED certification were granted based on erroneous documentation or falsely submitted documentation. Persons concerned with possible inaccurately granted LEED certification are encouraged to contact the GBCI, provided, however, that GBCI reserves the right to institute an investigation and review of such possible errors or inaccuracy or veracity of documentation without third party complaint.” In the full version of its article (which is not available online), the Vilas County News-Review reports a USGBC official as stating that USGBC “gets challenges from time to time on certification designation” but that the Northland Pines challenge is “off the wall.”

Independent from the technical merits of the complaint – which I am curious to review – the article raises many critical legal questions. First, if the allegations are indeed true, will GBCI exercise its ability to decertify the building? If it does, will the party or parties alleged to be responsible face legal action for those failures? Will the complaint – and any written record created pursuant to the requirements of the Certification Challenge Policy – result in precedent that GBCI will follow in any subsequent decertification proceedings? If so, could Northland Pines become the next Shaw Development, cited as the seminal case for LEED decertification and subsequent green building litigation? If other decertification proceedings take place in jurisdictions where legislation is tied to formal LEED certification, how will state and local governments penalize projects that are decertified (if at all)? Finally, to what extent – if any – will USGBC make decertification materials available to the public for peer review? The Northland Pines proceedings may not answer any of these questions, but because it is the first time a decertification proceeding has been reported publicly, we will be keeping a close eye on what transpires in connection with GBCI’s review of the complaint, a copy of which I am attempting to obtain.

• Citizens Challenge Green Certification of Pines School (VCNR)