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In Citizens for Ceres v. Superior Court of Stanislaus County, petitioners sought writ relief from the trial court’s order excluding hundreds of documents from the administrative record based upon the attorney-client privilege and attorney work-product doctrine asserted by the city and the project applicants/developers. The Court of Appeal, Fifth District, ordered the trial court to vacate its order sustaining the city’s and applicant’s privilege claims and overruled all privilege claims for communications disclosed between the city and applicant prior to the city’s certification of the EIR for the proposed project.

Prior to project approval, the city and the project applicant agreed the applicant’s proposed project would be controversial and, due to the high risk of litigation, all communications between legal counsel for the city and for the applicant were to be privileged and “protected from disclosure by the attorney-client privilege, the attorney work-product doctrine, the legislative privilege, the joint defense privilege and, potentially, other privileges and protections.” As predicted, a lawsuit was filed challenging the city’s approval of the project and certification of the EIR. When preparing the administrative record for litigation, the city did not include any of the “privileged” correspondence between the city and the applicant. The City also omitted administrative draft documents and documents not otherwise released to the public. Petitioner objected on several grounds, asserting the city improperly excluded hundreds of documents form the record. The trial court upheld the various privileges and found in favor of the city.

On appeal, the Court addressed two issues in the published portion of its decision. First, whether CEQA’s provisions defining the administrative record (specifically, Public Resources Code section 21167.6(e)) abrogate the attorney-client privilege and the attorney work-product doctrine in their entirety. And second, whether the common interest doctrine protects communications disclosed between the city and applicant prior to approval of the project.

While the Court found the first question to be “difficult” due to a lack of controlling authority, it concluded section 21167.6 does not abolish the attorney client privilege or work product doctrine. However, in a holding that could potentially jeopardize the common practice of agency-applicant joint defense agreements, the Court found the common-interest doctrine does not protect agency-applicant disclosures made before project approval. Because the interests of a lead agency and a project applicant are “fundamentally divergent” while the project application is pending, the Court held the common-interest interest doctrine cannot operate to prevent waiver of privileges when the agency and applicant disclose communications to each other during the application’s pendency and prior to project approval.

The Court noted that California does not provide an independent statutory joint defense or common interest privilege, and the common-interest doctrine only preserves privileges when parties with common interests disclose privileged communications to each other. In applying the doctrine, the Court found that while a lead agency and a project applicant/developer may have a common interest in preparing a legally defensible environmental document, a developer would have no interest in the development of an environmental document that does not support the developer’s proposal. Thus, the only “common interest” that could exist would be the creation of a legally defensible environmental document that supports the applicant’s proposal. Such an “interest” would be contrary to CEQA.

The law presumes that, before project approval, a lead agency has a neutral and objective interest in compliance with CEQA. In its neutral role, the agency could reject a proposed project or select a project alternative that the applicant opposes. The Court cited the Supreme Court’s decision in Sava Tara v. City of West Hollywood and stated “CEQA forbids an agency to be committed to accepting an applicant’s proposal before environmental review has been completed.” In light of the agency’s duty to remain neutral, it cannot have an interest, prior to project approval, in producing a legally defensible environmental document that supports the applicant’s proposal. “Before completion of environmental review, the agency cannot have as a legitimate goal the secret preparation, in collaboration with the applicant, of a legal defense of a project to which it must still be uncommitted.” And thus, the lead agency’s interest is “fundamentally at odds” with the applicant’s interest.

The Court was not persuaded by the city’s and developer’s reliance on California Oak Foundation v. County of Tehama, which held that disclosing advice to a co-defendant in the subsequent joint endeavor to defend the EIR in litigation can reasonably be said to constitute a common interest. While the city and developer interpreted California Oak to protect agency-applicant communications both before and after project approval, the Court found the case “arguably means the disclosure by the agency to the applicant took place after the project was approved” and, in such instance, the application of the doctrine is proper because after project approval there is “no conflict between the agency’s role as an ally of the developer and its role as an objective evaluator of the project.” To the extent California Oak is interpreted as set forth by the city and developer, the court disagreed with that decision.

Having found the common interest doctrine did not apply, the Court concluded “the city and developer have waived the attorney-client privilege and the protection of the attorney-client work-product doctrine for all communications they disclosed to each other before the city approved the project [and] any such communications that fall within section 21167.6, subdivision (e) must be included in the administrative record.”

In the unpublished portion of the decision, the Court addressed the remaining related issues but notably declined to provide an opinion regarding whether Section 21167.6, subdivision (e)(10) allows a lead agency to exclude from the record only administrative drafts of environmental documents (as argued by petitioners) or to also exclude administrative drafts of all preliminary documents that were not either submitted to the lead agency or circulated for public review.

Key Point: Pre-approval communications between a lead agency and a project applicant are not protected by the common-interest doctrine, thus the attorney-client privilege and work-product doctrine are considered waived and such communications may be included in the administrative record.

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