Henry Gifford's $100M LEED Lawsuit Dismissed "With Prejudice"
Henry Gifford, photo by Travis Roozee
TreeHugger has covered Henry Gifford's $100 Million Class Action Filed Against LEED and USGBC. Lawyers like Shari Shapiro didn't think much of his chances, and wrote in Green Building Law:
To the best of my research, Mr. Gifford is not a LEED AP, and indeed, from his website and publications, he has outspokenly denounced the USGBC and LEED. Mr. Gifford does not appear to own any property certified LEED. In short--the USGBC's actions have not harmed him His career, if anything, has been enhanced by the USGBC's position.
When Gifford filed his amended lawsuit, I questioned how he would prove he was harmed by the alleged false advertising. It turns out that this was one of the lawsuit's fatal flaws.
A plaintiff that brings a lawsuit must show standing in order to prove that the right person is bringing the lawsuit. Since Gifford's allegations of false advertising fell under the Latham Act, he had to satisfy two tests to show standing:
(1) The Strong Categorical Test
"The strong categorical test provides that 'the plaintiff must be a competitor of the defendant and allege a competitive injury.'" The court held that Gifford, a building energy efficient consultant, and the USGBC, which certifies buildings, were not competitors because Gifford does not certify buidings.
(2) The Reasonable Commercial Interest Test
Under the reasonable commercial interest approach, a plaintiff must demonstrate "both likely injury and a causal nexus to the false advertising." Perosnally, I always believed this test would be Gifford's downfall. In holding that Gifford failed this test, the court explained that owners could hire any consultant they wanted for a LEED building. Furthermore, the court posited that even if Gifford could show one owner that would only hire a LEED Accredited Professional consultant, it could not be proven that the owner's decision was based on the alleged false advertising.
In short, the court deemed the lawsuit too speculative. I think the court got it right.
The USGBC is cracking open the biodynamic local bubbly tonight; Rick Fedrizzi said in a press release:
The Court dismissed the federal false advertising claims "with prejudice," meaning that the Court's dismissal of those claims is final and that plaintiffs are barred from filing a new suit based on those claims. The Court's ruling simultaneously dismissed plaintiffs' state law false advertising claims.
"This successful outcome is a testament to our process and to our commitment to do what is right," said Rick Fedrizzi, president, CEO and founding chair, USGBC. "Thousands of people around the world use LEED because it's a proven tool for achieving our mission of transforming the built environment. We're grateful that the Court found in our favor so we can give our full attention to the important work before us."
More at Green Building Law Update
More on Henry Gifford:
$100 Million Class Action Filed Against LEED and USGBC
LEED-bashing Reaches New Heights In Fast Company
Three Green Building Lawyer Bloggers Predict The Next Big Thing