Sunday, January 9th, 2011
This is as confusing and sordid as any green building dispute I have seen. Consider yourself warned.
Over the holidays, Michael Anschel informed me that the the Builders Association of the Twin Cities (BATC) had sued Minnesota GreenStar and filed a restraining order against using a green building standard.
Despite that simple statement, there is a lot more to this story. Here is the best summary I can come up with after reviewing the lawsuit filed by the BATC and a blog post by Anschel on the subject.
The BATC worked with other associations to create a green building standard, called the Green Homebuilding Guidelines. BATC and the other entities then created a new entity, Minnesota GreenStar, to run the green building standard (much like the Green Building Certification Institute runs LEED). At some point, BATC became disenchanted with either Minnesota GreenStar and/or the Green Homebuilding Guidelines, and decided to file a lawsuit to essentially take over administration of the Guidelines. If you believe the complaint, the reason for BATC’s disenchantment was Minnesota GreenStar’s failure to repay a loan and GreenStar’s intent to license the green building standard to other states. If you believe Anschel’s post, BATC’s reasons are more sinister and have to do with weakening the Green Homebuilding Guidelines.
Lets start with the lawsuit itself.
On December 9, 2010, the BATC filed a restraining order and lawsuit against Minnesota GreenStar. BATC claims that in 2006, it developed the Green Homebuilding Guidelines and further asserts it owns the intellectual property rights to the Guidelines. BATC also points out it that it contributed $50,000 to develop the Guidelines.
In 2007, BATC, along with two other entities, formed Minnesota GreenStar, which began using the Green Homebuilding Guidelines. At some point in 2008, GreenStar filed registered copyrights for the Green Homebuilding Guidelines, which would give GreenStar intellectual property rights to the Guidelines.
This is where events get a bit confusing. BATC alleges that in 2010, it provided an additional loan to GreenStar. Despite this additional loan, BATC claims that GreenStar ran into financial trouble:
“On September 15, 2010, GreenStar conducted a meeting of its Board of Directors and disseminated its Business Plan . . . in which GreenStar relied on continued sponsorships, a one-year deferment on its Promissory Note obligations to BATC, and significant additional funding from BATC. . . . GreenStar also indicated its intent to license the Green Homebuilding Guidelines developed and owned by BATC to other states to raise revenue for GreenStar.”
BATC goes on to ask the Court for four things:
1. Judgment of $50,000 for an alleged breach of the loan;
2. Judgment declaring that BATC owns the intellectual property rights to GreenStar and GreenStar is restricted from using or licensing the Guidelines;
3. Temporary and permanent injunction against GreenStar from using the Guidelines; and
4. Attorneys fees.
Taken at its face, the complaint suggests that BATC is concerned about the prospect of licensing the Green Homebuilding Guidelines to other states. But why would a builders association be concerned about this?
According to Anschel, BATC’s motives are more complicated. In a blog post at Construction Law Musings, Anschel explains that BATC actually intends to develop a new green building certification program that allows for self certification. Anschel believes BATC’s move is a step backwards for green building in Minnesota. If BATC intends to create a new green building standard in Minnesota, then it certainly makes sense why it would want to take over and limit Minnesota GreenStar and the existing Green Homebuilding Guidelines.
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