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.

• The stimulus package contained numerous green building-related provisions, including significant funds for state and local governments to implement energy efficiency codes. However, most of these funds have yet to be distributed, so it will be interesting to track legislative implementation during the course of 2010. Some municipalities are beginning to look more closely at the logistics of  implementing third-party-driven legislation, including in our own backyard here in New York. This will be a critical and ongoing issue to monitor.

• USGBC acknowledged the legal risks implicit with building green, but its white paper on the subject dubbed them “old wine in new bottles.” We reviewed the white paper here at GRELJ and concluded that it seemed “to be an effort to sweep many of the thornier legal issues that may indeed ferment into ‘new wine’ under the rug.” My reasons for disagreeing with the paper’s conclusions stemmed (and continue to stem) from the pace of regulatory activity, the lack of input from the insurance industry on green building risks, the uncertainty over the prevailing standard of care for design professionals practicing in the green building space, and the questionable body of green building performance data.

• Critiques of LEED building performance moved into the mainstream; USGBC mobilized in response. The ongoing debate about the energy performance was picked up on in media outlets that included the New York Times after Henry Gifford and USGBC’s Brendan Owens debated the merits of LEED at the NESEA forum last March. LEED Version 3.0 was released with the obligation for owners and landlords to report data on building performance to USGBC, though many of you wondered what USGBC would actually do with that data upon its compilation. USGBC’s Building Performance Initiative, which was launched in advance of Greenbuild in Phoenix, is ongoing; we’re likely to start seeing results and further studies and critiques of LEED building performance throughout 2010.

• The National Institute of Building Sciences convened a Task Group to review various third-party building performance rating systems, which identified associated risk and policy problems for the A/E/C community to contemplate. The Task Group’s recommendations to NIBS’ Board of Directors included the development of various white papers analyzing risk and policy issues in greater detail; we emphasized the import of this effort in the context of NIBS’ political backing and the scope of the report’s conclusions.

• The potential for decertification of LEED Version 3.0 projects that (1) fail to report building performance data or (2) provide a legal mechanism for the reporting requirement to carry forward after a sale or sublease caused a firestorm of blogosphere commentary. Interestingly, though, the first publicly reported decertification proceeding- the Northland Pines High School complaint, which USGBC is currently reviewing – received comparably little attention.

In my opinion, these last two items were clearly the most important green building legal stories of 2009. Although the Northland Pines proceeding is not the full-blown green building litigation that many have predicted, it implicates all of the legal issues associated with decertification that were discussed last year. It is also the type of scenario out of which green building litigation could arise in the event USGBC/GBCI revokes the school’s LEED Gold status. For all of these reasons, and regardless of the outcome, the Northland Pines proceeding will be the first major green building legal story of 2010, particularly because we are (publicly) witnessing USGBC/GBCI follow the procedures of its Certification Challenge Policy for the first time.

If there are any other noteworthy issues we missed, please feel free to note them in the comments below. Happy New Year, everyone!

For those of you reading this article in a reader or by email, we recently gave GRELJ a makeover and encourage you to visit the site in your browser. Hopefully the new design is easier to read and better organized. One new feature is threaded comments, which allow you to reply specifically to a given comment in each thread. I look forward to any feedback on our new look.

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)

As you may know, among other provisions, the San Francisco green building ordinance requires commercial and residential projects greater than 25,000 square feet, or taller than 75 feet, to earn a LEED Certified rating from USGBC. The requirement for commercial projects increased this year to Silver and, in 2012, to Gold. Residential projects must earn a Silver rating beginning in 2010. Notwithstanding these phased requirements, in the Chronicle piece, the San Francisco Department of the Environment’s private sector green building coordinator Richard Chien states that “[w]e need to reconvene the task force that recommended the legislation and makes some revisions way before 2012. With the changes coming along [to LEED] we could be out of date and we need to address that.”

Interestingly, the San Francisco ordinance (No. 180-08 of September 4, 2008, codified at Chapter 13C of the local building code) states that “[w]herever specific LEED prerequisites or credits are cited, such references are to LEED-NC Version 2.2. More recent LEED . . . versions may be used, provided the credits and points achieved are as or more stringent than LEED-NC Version 2.2.” In other words, because the LEED 2009 MPRs are not referenced specifically, it’s not entirely clear whether they are included within the purview of the ordinance, particularly with respect to mid-sized commercial buildings which are only required to comply with certain LEED credits.

The introduction to the article is therefore inaccurate; San Francisco is not reconsidering whether to restructure its green building ordinance around something besides LEED based on perceived LEED building performance failures. Rather, it is evaluating if, as presently drafted, and based on the recent amendments to LEED in the form of LEED 2009, its ordinance will still (1) obligate covered projects to comply with the new MPRs and share performance data; and (2) whether the ordinance should be revised to expedite that requirement. This is precisely the type of scenario that has been suggested both here at GRELJ and elsewhere with respect to the potential consequences for state and local governments that incorporate LEED into legislation by reference. Notwithstanding its performance-related issues, LEED itself continues to be a moving target and policymakers must guide themselves accordingly when considering the merits of this type of legislative activity.

I also think the Chronicle article is noteworthy because it suggests- once again- an overarching perception that simply collecting an increased volume of building performance metrics will solve the LEED performance gap. For example, consider the following quote from architect Jennifer Devlin of San Francisco-based firm EHDD: “LEED has done an exceptional job of raising awareness. And the U.S Green Building Council recognizes that tracking energy use is vital to the sustainable building movement.” LEED has unquestionably raised public awareness about the environmental impact of the built environment and put building performance on the front page of major media outlets such as the New York Times and the Chronicle. But, as USGBC’s Building Performance Initiative and other efforts ramp up this fall, I think it is critical to keep in mind Larry Spielvogel’s thoughts from our last article here at GRELJ that the question of improving building performance is highly complex and clearly one that cannot be solved by simply compiling a longer spreadsheet.

• Green Building Standard Seen as Flawed (SFC)

However, I think it’s important to look at the specific language that provides for decertification in LEED 2009, which reads (in part) as follows: “certification may be revoked from any LEED project upon gaining knowledge of non-compliance with any applicable MPR.” (emphasis added). The way I read this language, USGBC/GBCI is not obligated to revoke certification upon learning of non-compliance, but it is not restricted from receiving information regarding non-compliance from any third party. The question then becomes what, if any, obligations USGBC/GBCI may have to use that information and pursue a decertification proceeding, either conferred elsewhere in the LEED rating system itself or otherwise imposed by law. I don’t know the answer to that question, but perhaps Ujjval or others could chime in below in the comments. I think this is an absolutely critical point to dissect.

Also of import in the ENR article with respect to the MPR requiring access to building performance data (which has been the MPR driving much of the risk discussion here at GRELJ and elswhere), Duane Morris construction attorney Ed Gentilcore emphasizes that “[w]hat was once an initial project-performance milestone now has ongoing tail responsibilities that could create extended obligations for the owner itself and possibly, in turn, design and construction teams.” In addition, Scot Horst told ENR in the same article that the organization is “still developing the best and easiest ways to help owners do this. This is a new requirement and there is a lot to work out over time.” He declined to tell ENR when any addenda to the MPRs might be released.

I think it’s clear that the contract challenges and corresponding risks associated with the new LEED 2009 MPRs are just begin to emerge, particularly if USGBC and GBCI release a second addenda to a document that was just released a few months ago.

• Building Rating System Requirement Raises Concerns (ENR)