Somach Simmons & Dunn - CEQA Compliance Documents Produced by Agency Counsel Are Subject to Attorney-Client Privilege
Third District Court of Appeal Holds CEQA Compliance Documents Produced by Agency Counsel Are Subject to Attorney-Client Privilege and Need Not Be Included in Administrative Record
June 23, 2009
by Kelley M. Taber
Clarifying a point of ambiguity in the California Environmental Quality Act (CEQA), Public Resources Code section 21000 et seq., regarding the contents of administrative records, the Third District Court of Appeal has ruled that documents prepared by a lead agency’s legal counsel for the purpose of ensuring compliance with CEQA are protected by the attorney-client privilege, that privilege is not waived, and the documents are not required to be included in the administrative record, where the agency shares those documents with the real party in interest. (California Oak Foundation v. County of Tehama (June 11, 2009), Case No. C057578, 2009 D.A.R. 8485.)
The privilege issue arose in a challenge by the California Oak Foundation (COF) to Tehama County’s certification of an environmental impact report (EIR) and approval of a specific plan for residential and commercial development along Interstate 5 between Red Bluff and Redding. The County had shared with the project developer four documents prepared by its outside counsel providing advice on CEQA compliance issues. (California Oak Foundation, supra, 2009 D.A.R. at p. 8494.) COF moved in the trial court to include the documents, which the County claimed were protected from disclosure by the attorney-client and work product privileges, in the administrative record. The trial court denied the motion, rejecting COF’s argument that CEQA section 21167.6, which specifies the contents of administrative records, abrogated the privilege.
The Third District Court of Appeal upheld the trial court’s denial of the motion, noting that there was no clear evidence that section 21167.6’s disclosure requirement was intended to repeal existing law regarding privilege. The court also rejected COF’s claim that the County waived the attorney-client privilege by sharing its counsel’s CEQA compliance documents with the real party in interest, project developer Del Webb Corporation. Citing the “leading case” concerning privilege waiver, OXY Resources California LLC v. Superior Court (2004) 115 Cal.App.4th 874, and Evidence Code section 912(d), the court found that the County’s disclosure of its legal advice to the developer was not a waiver of the attorney-client privilege because the disclosure was “reasonably necessary for the accomplishment of the purpose for which the lawyer … was consulted ….” (Id. at p. 8495.) The court found that the County had retained its outside counsel for the purpose of achieving compliance with CEQA, and that purpose, “reasonably viewed,” included “producing an EIR process and product that will withstand a legal challenge for noncompliance.” (Id.) Thus, disclosing its counsel’s legal advice regarding CEQA compliance to a co-defendant in the subsequent joint endeavor to defend the EIR in litigation “can reasonably be said to constitute ‘involvement of third persons to whom disclosure is reasonably necessary to further the purpose of the [original] legal consultation.’” (Id., citing OXY Resources, supra, 115 Cal.4th at pp. 890, 893, 899.)
As a practical matter, lead agencies, applicants and counsel for each frequently work closely to ensure that the environmental documents prepared for an applicant’s project comply with CEQA and withstand potential legal challenge. To that end, counsel for applicants prepare legal analyses designed to further compliance with CEQA, and applicants often share this information with the lead agency. Under the reasoning of the California Oak Foundation decision, such shared legal advice also should be protected from disclosure. To ensure that legal advice relating to CEQA compliance remains protected, counsel for lead agencies and applicants alike should be sure to properly designate confidential information as protected by the attorney-client privilege and work product doctrine.
California Oak Foundation also is of note as the second CEQA case in recent months by the Third District Court of Appeal to reject a petitioner’s claims on the grounds they had not been specifically raised in the administrative process. (See also California Native Plant Society v. City of Rancho Cordova (2009) 172 Cal.App.4th 603 (CNPS).) While the California Oak Foundation court addressed the question of exhaustion of administrative remedies in the portion of the opinion not certified for publication, making it not citable as precedent, the analysis may nevertheless be of interest to CEQA practitioners, as published opinions addressing the specificity of objections necessary to fulfill CEQA’s requirement that petitioners exhaust their administrative remedies for each claim raised in litigation are rare. Coming just a few months after the CNPS decision, where the court similarly determined that many of the petitioner’s arguments challenging the City’s EIR had not been raised at the administrative level and thus were barred, the California Oak Foundation decision also may suggest a trend towards tightening of standards for exhaustion by the Third District Court of Appeal.
In California Oak Foundation, the court rejected a number of the petitioner’s objections to the EIR’s treatment of the feasibility of mitigation traffic impacts to Interstate 5 because no party had raised the specific objections during the administrative proceedings that COF sought to raise in litigation. As an initial matter, the court the rejected COF’s contention that general comments of Caltrans opposing the level of mitigation funding for I-5 impacts were sufficient to justify all of COF’s specific claims of error in failing to adequately assess and provide feasible mitigation for projected increased traffic congestion to I-5. (California Oak Foundation, supra, 2009 D.A.R. at pp. 8488-8489.) The court also addressed exhaustion in the context of each of the various specific arguments presented by COF, taking a narrow view of the exhaustion doctrine. As but one example, the court rejected COF’s argument that the exhaustion requirement was satisfied as to its claim that the County erred by not accounting for the commercial component of the project to contribute to traffic mitigation because the public facilities financing plan (PFFP) and an economic consultant’s report noted that the PFFP did not include analysis of the commercial component. Specifically, the court found that no objection or question regarding the failure to consider commercial revenues was raised in the administrative proceedings, and “passing observations about the limited scope of the PFFP were not ‘present[ation]’ to [the County of] Tehama of 'alleged grounds for noncompliance with [CEQA],’ required for exhaustion ….” (Id. at pp. 8489-8490.)
Like CNPS, California Oak Foundation indicates would-be petitioners must be careful to articulate their specific objections to a lead agency’s methodology and determinations during the administrative process, and lead agencies should not hesitate to assert the defense of failure to exhaust administrative remedies to legal challenges based on objections that were not presented during the administrative proceedings.