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In 1947 the American Bar Association (ABA) asked
to criminal law and legal issues in subjects of cur-
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rent public interest. ALI-ABA also offers courses via
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American Law Institute
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Tsan Abrahamson Berkeley California


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4025 Chestnut Street, Philadelphia, Pennsylvania 19104-3099  •  www.ali-aba.org


2
ALI-ABA Audio Seminar

Attorney's Role in LEED Construction


May 29, 2009
Telephone Seminar/Audio Webcast

TABLE OF CONTENTS
Page
PROGRAM SCHEDULE ix
FACULTY PARTICIPANTS xi
FACULTY BIOGRAPHIES xiii
STUDY MATERIALS
1. Attorney’s Role in LEED Construction--PowerPoint Presentation 1
by Shari Shapiro and Chris Cheatham

vii
2
PROGRAM SCHEDULE
for May 29, 2009

Program Schedule Eastern Central Mountain Pacific/Arizona Alaska Hawaii

National
Teleseminar/Webcast 12:30 p.m. 11:30 a.m. 10:30 a.m. 9:30 a.m. 8:30 a.m. 6:30 a.m.

Adjournment 1:30 p.m. 12:30 p.m. 11:30 a.m. 10:30 a.m. 9:30 a.m. 7:30 a.m.

Scope and Purpose: Green design and construction and the potential for inclusion
of “LEED” certification requirements present opportunities for clients of construction
and real estate attorneys. Counsel must know and outline the best practices for
incorporating these requirements into construction contracts and obtaining LEED
certification. This teleconference and live audio webcast will provide an overview of
LEED certification for green buildings and offer practical advice for negotiating green
construction projects. Our speakers will discuss the current status of the
requirements and the attorney’s role as well as look to what may be next as interest
in LEED certification increases.

Topics include:

• What is the LEED rating system and what other standards exist?
• Will one system be the preferred standard?
• What are the risks to Green Building and how do I manage these risks for my
clients?
• What are the benefits to LEED certification?
• What does the future hold for Green Building?
• What legal issues are unique to Green Building and LEED certification?

Faculty

Shari Shapiro, Obermayer, Rebmann, Maxwell & Hippel LLP, Philadelphia, PA

Chris Cheatham, Watt, Tieder, Hoffar & Fitzgerald, LLP, Washington, D.C.

Program (All Times EDT)

12:30 p.m. Attorney’s Role in LEED Construction – panel discussion

Questions and Answers

1:30 p.m. Adjournment

* Questions and Answers will be integrated into the program. Questions are welcome
in advance of and during the seminar by e-mail to TSQuestions@ali-aba.org (Subject
line: Faculty question).

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Total 60-minute hours of instruction: 1.0; Total 50-minute hours: 1.2

Suggested Prerequisite: Limited experience in legal practice in subject matter.

Educational Objective: Development of proficiency in performance of intricate and


complex legal tasks within a narrow area, provision of information on recent legal
developments; maintenance of professional competence as a practitioner.

Level of Instruction: Intermediate

x
ALI-ABA Audio Seminar

Attorney's Role in LEED Construction


May 29, 2009
Telephone Seminar/Audio Webcast
PLANNING CHAIR

Shari Shapiro
Obermayer Rebmann Maxwell & Hippel LLP
1617 John F Kennedy Blvd
Philadelphia, PA 19103-1821

FACULTY

Chris Cheatham
Watt Tieder Hoffar & Fitzgerald, LLP
8405 Greensboro Dr Ste 100
Mc Lean, VA 22102-5106

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2
ALI-ABA Telephone and Audio-Only Webcast

Attorney’s Role in LEED Construction


TSPX06/TWPX06

Faculty Biographies

Speakers
Shari Shapiro
Obermayer, Rebmann, Maxwell & Hippel LLP
Philadelphia, Pennsylvania
Shari Shapiro is an associate with Obermayer Rebmann Maxwell & Hippel LLP. She is a
member of the Environmental Department.

Ms. Shapiro is a LEED Accredited Professional. Ms. Shapiro focuses her practice on
green building law, which includes sustainable project financing, regulatory drafting,
land use approvals, contracts, and conflict resolution. Ms. Shapiro is the Sustainability
Coordinator for Obermayer’s Sustainability Initiative.
Ms. Shapiro maintains a blog on legal issues related to Green Building, available at
www.greenbuildinglawblog.com.

Ms. Shapiro is the Co-Chair of the ABA State and Local Government Section
Subcommittee on Land Use/Environmental Law, and is on the Board of Directors of the
Delaware Valley Green Building Council.
Ms. Shapiro recently coordinated a seminar entitled “Getting Green Done…Right,”
exploring the nuts and bolts of environmentally sustainable and economically viable
development projects. Ms. Shapiro made a presentation on “Local Regulation of Green
Building Projects” at the seminar.

Ms. Shapiro earned her Juris Doctorate degree from the University of Pennsylvania
where she received the Milton C. Sharp Award for Best Grades/Best Research in Urban
Renewal or Land Use Planning. While attending the University of Pennsylvania, she
obtained a Certificate in Business and Public Policy from the Wharton School of
Business.

Ms. Shapiro received her Bachelor of Arts Degree in Development Studies and Modern
British History from Brown University.

Ms. Shapiro is admitted to practice in the states of Pennsylvania and New Jersey.

xiii
Chris Cheatham
Watt, Tieder, Hoffar & Fitzgerald, LLP
Washington, D.C.

Chris focuses his practice on suretyship, construction, government contracts, and


commercial contract law. He also holds a Leadership in Energy and Environmental
Design® Accredited Professional (LEED AP) designation. The LEED rating system is
the nationally recognized benchmark for design, construction and operation of high-
performance green buildings. As a LEED AP, Chris is part of a select group of attorneys
nationwide who have recognized the significance of “green” building trends and he is the
first Virginia practicing attorney to attain the designation. Chris possesses an
understanding of green building strategies to assist clients through the LEED certification
process, from startup to final verification of a project’s green measures, as well as
navigating clients through the evolving green building regulatory requirements.

Chris has assisted clients in disputes arising from a variety of construction projects,
including locks and dams, complex levee systems, housing complexes, airports and
residential homes. In addition to his litigation experience, Chris has drafted and
negotiated contract documents, provided advice in contract administration, and prepared
claims on behalf of sureties and contractors.

Memberships and Affiliations


• American Bar Association
o Forum on the Construction Industry
o Tort Trial & Insurance Practice Section
o Fidelity & Surety Law Committee
• AGC of Metropolitan Washington D.C.
o Young Contractors Forum
• Virginia Bar Association
o Construction and Public Contracts Law Section
o Civil Litigation Section
o Young Lawyers Division
o DC Habitat for Humanity
 Environmental Community
• USGBC National Capital Region Chapter

Publications and Presentations


• Author, "White Paper: Virginia's Green Building Battle," U.S. Green Building
Council National Captial Regional Chapter, Website Resources, April 2008.
• Author, "Virginia's Green Building Battle," Virginia State Bar, Construction Law
and Public Contracts News, Spring 2008.
• Author, "Does Your Arbitration Agreement Have Holes Making Rulings Less
than Final?" Watt, Tieder, Hoffar & Fitzgerald Newsletter, Summer 2007.
• Contributor, American Bar Association Forum on the Construction Industry,
Construction Law Glossary, 2008.

xiv
• Author, "Does Your Arbitration Agreement Have Holes Making Rulings Less
than Final?" Watt, Tieder, Hoffar & Fitzgerald Newsletter, Summer 2007.
• Contributor, Construction Law Glossary, American Bar Association Forum on the
Construction Industry, 2008.

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2
1

ALI-ABA Audio Seminar

Attorney's Role in LEED Construction


May 29, 2009
Telephone Seminar/Audio Webcast

Attorney’s Role in LEED Construction


PowerPoint Presentation

By

Chris Cheatham
Watt Tieder Hoffar & Fitzgerald, LLP
Mc Lean, Virginia

Shari Shapiro
Obermayer Rebmann Maxwell & Hippel LLP
Philadelphia, Pennsylvania
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Attorney’s Role in
LEED Construction
Shari Shapiro, LEED AP, Esq.
Chris Cheatham, LEED AP, Esq.

May 29, 2009


What is “green” building?
• A green building, also known as a
sustainable building, is a structure that is
designed, built, renovated, operated, or
reused in an ecological and resource-
efficient manner. Green buildings are
designed to meet certain objectives such as
protecting occupant health; improving
employee productivity; using energy, water,
and other resources more efficiently; and
reducing the overall impact to the
environment.
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Why build green—


the green reason
• The built environment has a profound impact on
our natural environment, economy, health, and
productivity.
• In the United States alone, buildings account for:
• 72% of electricity consumption,
• 39% of energy use,
• 38% of all carbon dioxide (CO2) emissions,
• 40% of raw materials use,
• 30% of waste output (136 million tons
annually), and
• 14% of potable water consumption.
Why build green—the OTHER
green reason
• The overall green building market (both non-residential and residential)
is likely to more than double from today’s $36-49 billion to $96-140
billion by 2013 (Source: McGraw Hill Construction (2009). Green
Outlook 2009: Trends Driving Change.)
• The value of green building construction is projected to increase to $60
billion by 2010 (Source: McGraw-Hill Construction (2008). Key
Trends in the European and U.S. Construction Marketplace:
SmartMarket Report.)
• The construction market accounts for 13.4% of the $13.2 trillion U.S.
GDP (Source: Department of Commerce (2008). Annual Value of
Construction Put in Place.)
• The green building products market is projected to be worth $30-$40
billion annually by 2010 (Source: Green Building Alliance (2006).
Green Building Products: Positioning Southwestern Pennsylvania as
the U.S. Manufacturing Center.)
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United States Green


Building Council
(USGBC)

•Founded in 1993
•Non-profit trade org
•Develops LEED
•USGBC Chapters
Leadership in Energy
and Environmental
Design (LEED)

•Established in 2000
•Green building rating system
•Developed by USGBC
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Certified Silver Gold Platinum
26-32 33-38 39-51 52-69 pts.
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Other Rating Systems


• Green Globes

• Energy Star

• NAHB

• Earthcraft
Benefits of Green Building
Certification
• Verification

• Marketing

• Regulation

• Incentives
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LEED Certification Process


• Registration

• Design Review

• Construction Review

• Certification

• [Appeal]
Green Building Risks
• Parties and Risks
• Owner – choose green building approach
• Architect – incorporate green design
• Contractor – build to plans and
specifications
• Sub-contractors – same as contractor
• Sureties – bond the green contractor
• LEED consultant – ???
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Green Building Risks


• How do you manage green building risks?
• Understand the Obligee’s expectations
• This is your risk
• Scrutinize the Green Building Contract
• This is how you manage risk
Legal Issues: LEEDigation
• Shaw Development v. Southern Builders
• The Contract
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Legal Issues: LEEDigation


• Shaw Development v. Southern Builders
• The Contract:
Legal Issues: LEEDigation
• Shaw Development v. Southern Builders
• Damages
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Legal Issues: Defects


• “Don’t Let Green Design Cause Red Ink”
• Frank Musica, Victor O. Schinnerer and
Co.
• AIA Convention – 2007
• 21 green building claims
Legal Issues: Defects
• Energy Use Above Promise
“Architects and consulting engineers signed
contract that stated that projects would ‘reduce
operating costs by 50 percent’ over schools of
similar size. Energy usage is comparable to other
schools recently designed and constructed. School
system is publicly embarrassed, disappointed and
blamed as being ‘hoodwinked’ by architect and
engineers. School system brings claim.”

“Don’t Let Green Design Cause Red Ink,” Frank Musica


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Legal Issues: Defects


• Guarantee of Indoor Air Quality
“Lured by the promise of ‘healthier and
more productive occupants’ basic to LEED
publicity, tenant rents space in Silver
certified building. At end of first year,
tenant’s records indicated greater use of
sick leave. . . . Tenant demands rent rebate
from project based on promise of a
healthful workplace and tenant sues
architect.”
“Don’t Let Green Design Cause Red Ink,” Frank Musica
Legal Issues: Regulation
• Green practices are being incorporated into state
and local zoning and building codes and
ordinances
• 14 percent of U.S. cities with populations of
more than 50,000 have green building programs
• The number of counties with green building
programs has grown by nearly 400 percent since
2003
• Federal statutes require federal agencies to procure
recycled material, reduce energy consumption and
prevent pollution.
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Types of Green Building


Regulations
• Command and Control Type Regulations
• July 17, 2008—California adopts green building
code for all new construction statewide
• 2007—Boston, Washington, San Francisco, Los
Angeles mandate green building requirements
for new construction above a specified square
footage
• Financial Incentives
• 2008—Portland enacts “feebate” structure
• Non-Financial Incentives
• Expedited permitting; increased FAR, building
height or density for green buildings
AHRI v. City of Albuquerque
• Adopted in 2007, set to take effect in June of 2008, the
Albuquerque Energy Conservation Code was part of
the City’s attempt to significantly reduce carbon
dioxide and green house gas emissions.
• July 3, 2008—Air Conditioning, Heating and
Refrigeration Institute and other HVAC trade
organizations, contractors and distributors sued the
City of Albuquerque to stop components of the city's
high performance building code from taking effect.
• Argue that the Energy Policy and Conservation Act
of 1975 (“EPCA”), 42 U.S.C. 6201, et seq., preempt
the building code's provisions related to energy
efficiency of HVAC products.
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AHRI v. City of Albuquerque


• October 3, 2008, Chief District Court Judge Martha
Vazquez granted the preliminary injunction, and laid
out her opinion that the Albuquerque Code was indeed
preempted.
• “There is no doubt that Congress intended to
preempt state regulation of the energy efficiency of
certain building appliances in order to have
uniform, express, national energy efficiency
standards.”
• “At the time the Code was drafted the Green
Building Manager, by his own admission, was
unaware of federal statutes governing the energy
efficiency of HVAC products and water heaters and
the City attorneys who reviewed the Code did not
raise the preemption issue.”
Other Regulatory Pitfalls
• State preemption

• Rational relationship requirement

• Void for vagueness

• Confiscatory takings/Reasonable Fees

• Improper delegation of authority


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The Future
• The Stimulus and Green Building: Funding
• General Services Administration

$4.5 billion
• Department of Defense

$3.6 billion
• States

$3.1 billion and $3.2 billion


The Future
• The Stimulus and Green Building: Risks
• LEED Certification Guarantees

-www.fedbizopps.gov
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Cap & Trade

• What is Cap and Trade?

• How might it effect buildings?

• Waxman-Markey Bill
New Model Building Codes
• ASHRAE
Standard 189

• ICC
Commercial
Green Building
Code

• CalGreen Code
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