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Builders, contractors and tenants all want to be part of projects that are energy efficient. Owners find that green buildings are good investments because occupants would pay more to work or live in them. Design professionals and law firms tout their credentials in lending a green guiding hand to those who need advice.

But lawyers familiar with green construction say the good feeling is fading.

"I think that over the next five or ten years you'll see an exponential growth in litigation," said Donald Murano, a St. Louis plaintiffs' lawyer who serves on a risk management task force with the Green Building Initiative, a nonprofit organization in Portland, Ore.

Ten years ago, the U.S. Green Building Council launched a voluntary program called Leadership in Energy and Environmental Design (LEED), which sought to encourage green building practices by creating a LEED designation. Owners and builders could apply for LEED certification at various levels (Certified, Silver, Gold and Platinum) and achieve points by adhering to specific practices.

As the number of LEED projects proliferates, the result is an increasing number of green-construction lawsuits.

Lawyers say that building owners expect a green stamp of approval to translate into good public relations, higher rents and tax breaks. So when contractors or design professionals fail to deliver, owners are looking for payback.

According to risk-management lawyer Frank Musica, green-related claims against architects and engineers are escalating.

Musica works at Victor O. Schinnerer & Co., Inc., of Chevy Chase, Md., the largest underwriter of professional liability insurance in the country.

"What we've seen so far is that usually it's not a claim specific to green design; it's part of an overall claim," he said. "When a developer has a problem with a project, he's going to claim a number of things – and often one of those things is, 'You told me I'd get a certification and I'm not getting it.'"

Most of the claims Musica has seen are against architects.

"[M]any architects who otherwise would have standard kinds of operating procedures and risk-management processes built into their designs just kind of forget about that stuff when they're talking green," he said.

One suit was filed against an architect by a LEED Silver building owner after a tenant demanded a rent rebate, claiming the promised healthier air quality had not been delivered and it had seen increased sick days, poorer production and employee complaints about eye strain and drafts.

Another case involved an architect who was sued by a developer that claimed "guaranteed" LEED Gold certification had not been achieved due to budget and time constraints. The developer had touted the anticipated LEED certification in order to attract tenants at higher rents.

Musica noted that none of these claims have been litigated ­– all have either settled or been dropped.

However, last year the American Institute of Architects changed its code of ethics and standard contract to commit "the Institute and its members to become experts in sustainability," he said.

The changes mean that "we are likely to see more claims in a year or two and some of those may be decided by litigation."

LEED's critics

As LEED has evolved into the dominant building certification standard in the U.S., numerous critics have emerged.

Brian D. Anderson, a lawyer at Axley Brynelson in Madison, Wis., characterized the process of achieving LEED certification as "filling out a checklist."

"Typically, what people do is pick off the low-hanging LEED fruit – things like bicycle parking facilities, labeled parking lots for hybrid vehicles, some minimal water savings, purchases of green power," said Anderson, whose practice focuses on commercial real estate. "You can get those points relatively easy."

But he contends that acquiring LEED points doesn't necessarily translate into a green building.

"I think it's dangerous to make a claim that because your building has achieved a certain level of LEED certification that it's going to produce these specific benefits," he said. "There are a lot of exaggerated claims, and as an attorney reading through these things, I think, 'Oh my goodness; somebody's going to get sued.'"

Anderson believes that claims that occupants of LEED-certified buildings are healthier and more productive are particularly shaky. He said the research to support those conclusions is lacking, "and once plaintiffs' lawyers get hold of these kinds of claims they'll rip them to shreds."

Another potential legal problem is that LEED creates a preference for the use of materials that are manufactured within close proximity to construction sites in order to reduce transport emissions. But Anderson says there may be Commerce Clause issues with that kind of restriction.

"What if someone a little further away can manufacture the product more efficiently, has better employment practices, and discharges less into the environment?" he asked. "I don't know if it's supportable to say that a locally produced product is a better good than anything else."

Shareholder suits are also a possibility.

Anderson said that LEED is unveiling a new program in which large retail companies can "bulk certify" large numbers of stores in one shot, on the grounds that the stores share the same design.

This kind of broad-scale investment by public companies to obtain LEED certification will have to be disclosed to the Securities and Exchange Commission, "and anything that it submitted to the shareholders and to the SEC can enter the very fertile grounds of securities litigation," he said.

Lawyers at risk?

Ujjval Vyas, a lawyer with the Alberti Group, a Chicago-based consulting company focusing on sustainable building, believes that professional liability claims over green building certification may not be limited to design professionals. He says that lawyers may run some risk as well.

The Green Building Council has created a separate entity called the Green Building Certification Institute to administer credentialing programs for green building practices, including credentialing for professionals, such as lawyers.

In order to be certified as a LEED-AP (accredited professional), applicants must pay $300-400 and pass a test.

As of Sept. 1, there were 98 LEED-AP lawyers in the U.S. Vyas and Anderson are among them.

But Vyas said that too many lawyers and law firms are positioning themselves as green advocates without a real ability to add value.

Those lawyers and firms "tout the [LEED] designation as providing them some kind of fundamental way to add value to the counsel that they give because now they understand the building process," he said. "But LEED accreditation is not about building; it's about the LEED process. It means that you're accredited to help somebody file the paperwork. It's not about the substance of what's in buildings and the ability to guide someone in that regard."

Promise less

Jeffrey D. Masters, a real estate litigator and partner at the Los Angeles office of Cox Castle Nicholson, said that he is advising builders and developers to be careful about what they promise in LEED projects.

"I'm telling them, 'Don't just characterize the building as green. Be specific about the particular product or technology you use, don't just say the project is green or sustainable. It's just impossible to quantify," he said.

Michael W. Nelson, a LEED-AP lawyer with Green Building, Inc., a Milford, Mich. environmental services company, stressed that LEED projects should spell out the responsibilities of each person on the team.

"Whether it is in a design-build relationship or a contract management approach, the responsibilities for achieving a certain level of LEED certification should be expressly identified," he said.

According to Lawrence Ostema, a LEED-AP lawyer with Horack Talley Pharr & Lowndes in Charlotte, N.C, as owners and tenants grow more savvy about LEED they are putting more flexibility into their contracts.

He said that tenants are increasingly taking the position of "'We will sign a lease before you get your certification, but we want to have a rent reduction if you miss the targeted level of green. Or if you entirely miss it, we can terminate the lease.' A smart landlord or developer would say, 'If we agree to that that, then if we exceed LEED Silver – we get LEED Gold – then you'll pay us more.'"

If an owner misses LEED certification, Ostema said, he could go after the general contractor or the architect. The liability quest could even trickle further downstream, all the way to product manufacturers.

But from the plaintiffs' lawyer's perspective, it won't be necessary to identify who's responsible when a building doesn't get its anticipated certification or it doesn't perform up to snuff.

"You don't have to pick among the carnage," said Murano. "You just throw everybody into the mill and say, 'You didn't collectively perform. You guys flesh it out. All I know is that I asked for a LEED Platinum building, you said OK and you didn't meet that."

FTC investigating green certification

Meanwhile, the Federal Trade Commission has been addressing the issue of green certification of buildings as part of a broader examination of consumer products.

LEED-AP lawyer Tricia J. Sadd of the Philadelphia office of Montgomery McCracken said that the FTC is changing its guidelines on how the Federal Trade Commission Act should apply to environmental claims.

The Commission held a hearing on July 15 specifically addressing buildings and textiles and is expected to be issuing "green guides" on environmental marketing for all products later this year.

(Douglas J. Levy, associate editor of Michigan Lawyers Weekly, and Diana Smith, staff writer at North Carolina Lawyers Weekly, contributed to this article.)

Questions or comments can be directed to the writer at: dick.dahl@lawyersusaonline.com