NEW YORK—The dismissal of a lawsuit alleging false advertising against the Washington-based U.S. Green Building Council and its Leadership in Energy and Environmental Design green building certification program is expected to spark more litigation, say observers.

In an Aug. 15 ruling, a New York federal judge dismissed Henry Gifford et al. vs. U.S. Green Building Council et al., a lawsuit brought by Mr. Gifford and others alleging that the Green Building Council made false statements under federal law “regarding the energy- and money-saving aspects of LEED certification.”

The lawsuit by the group that included builders, consultants, architects and engineers alleged that the Green Building Council's false statements diverted customers from the plaintiffs' businesses to LEED-accredited professionals.

It cited a 2008 press release that said the results of a 2008 study indicated “that new buildings certified under the LEED certification system are, on average, performing 25% to 30% better than non-LEED-certified buildings in terms of energy use.”

No standing to sue

However, the New York federal judge ruled that the plaintiffs did not have standing to sue under federal law.

“Plaintiffs plainly do not compete with USBC in the certification of ‘green' buildings or the accreditation of professionals,” Judge Leonard B. Sand said in his decision. “Likewise, plaintiffs do not adequately allege a reasonable commercial interest that is likely to be damaged by USGBC's alleged false statements,” the opinion said.

The court, however, said the plaintiffs still could bring false advertising and deceptive trade practices claims under New York state law. Observers said another option is to appeal the ruling.

“Thousands of people around the world use LEED because it's a proven tool for achieving our mission of transforming the built environment,” Rick Fedrizzi, the Green Building Council's president, CEO and founding chair, said in a statement. “We're grateful that the court found in our favor so we can give our full attention to the important work before us.”

Plaintiffs weighing options

Mr. Gifford's attorney, Norah Hart, an associate with New York-based Treuhaft & Zakarin L.L.P., said plaintiffs in the case are weighing their options.

Commenting on the ruling, Edward B. Gentilcore, a partner at Duane Morris L.L.P. in Pittsburgh who is not involved with the case, said, “There's always the possibility that another plaintiff could come along to try to pick upon the first steps taken by Mr. Gifford and take the case to the next level.”

This case “laid out, I think, a potential road map for potential discovery on LEED and the USGBC's green building rating process in general,” said Mr. Gentilcore.

Eyes to the future

If others follow Mr. Gifford's lead, “the case does provide some viable areas for inquiring how it is that the LEED program was developed and how it is administered.”

“The industry as a whole will be waiting in fascination to see how those developments unfold,” Mr. Gentilcore said.

Commenting on the ruling, Karen Enger, vp and director of practice risk management at Lockton Cos. Inc. in Kansas City, Mo., said the Green Building Council does not guarantee that LEED-certified buildings will save energy, although the organization has released a study and other materials that suggest “that this is so. Like everything else, this is only going to be evident over time,” she said.

“The important thing to keep in mind here” is “there is more to it than just getting the LEED certification,” Ms. Enger said. “How the building is maintained will reflect whether it is energy efficient or not” and a building does not have to be “LEED-certified to be energy efficient,” she said.