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CEQA Updates

Keeping You Up-to-Date on the California Environmental Quality Act

Posts from July, 2013


Court Finds the Mutual Desire to Comply with CEQA does not Create a Common Interest Between Lead Agencies and Developers

Tuesday, July 16th, 2013

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.

Superior Court Awards Over $600,000 in Costs to Agency for Preparing an Administrative Record

Tuesday, July 16th, 2013

In June 2012, petitioners, three local government agencies (Counties of Butte and Plumas, and Plumas County Flood Control and Water Conservation District), appealed a decision by the Yolo County Superior Court in County of Butte et al. v. Department of Water Resources et al. (2012, No. CV09-1258). The Superior Court had denied their petitions for writ of mandate to set aside an EIR prepared by the Department of Water Resources (DWR) for the relicensing of the Oroville Facilities, a component of the State Water Project. The agencies also appealed a judgment by the court awarding DWR $675,087 in costs incurred to prepare the administrative record required to proceed with the suit.

In awarding the costs, the court explained: “The questions here are whether the record preparation complied with the statute and whether the cost to prepare the record was reasonable and necessary.” The court first noted that CEQA requires broad inclusion of materials related to the project proceedings. Virtually all of the documents DWR included in the 327,261-page record fell into one of the mandatory categories set forth in Public Resources Code section 21167.6(e).

The only remaining question was whether DWR’s costs were necessary and reasonable. DWR provided extensive documentation on the staff time involved in obtaining, reviewing, organizing, and indexing the record, along with the hourly wage paid to the employees involved in record preparation. DWR appropriately outsourced a component of the record preparation to a consultant that had been involved in the original project and was therefore best suited to prepare the portion of the record related to its work on the project. The cost per page was calculated as $2.06. Based on the complexity and need for expert involvement in the preparation of this massive record, the court found DWR’s costs to be necessary and reasonable.

Lastly, the court noted a number of actions petitioners could have taken to limit record preparation costs, including preparing the record themselves or stipulating to the exclusion of any materials they deemed unnecessary to the prosecution of their case. Instead, petitioners failed to comment on the cost until receiving the final bill, despite multiple updates and solicitations for input by DWR during the record preparation process.

The case, County of Butte et al. v. Department of Water Resources et al. (C071785, app. pending), is currently pending before the Court of Appeal, Third District, with appellants’ reply brief due on July 30, 2013.

Actions by a City, Including Granting of a Loan, Did Not Commit the City to a Project prior to Approval in Violation of Save Tara

Tuesday, July 16th, 2013

In Neighbors for Fair Planning v. City and County of San Francisco, 2013 Cal. App. LEXIS 506, the Court of Appeal, First District, affirmed a trial court’s decision denying a petition for writ of mandate to set aside defendant’s EIR certification and approval of a project involving a community center and affordable housing.

Real party in interest, a local nonprofit organization, owned and operated an existing community center. The project involved replacing the existing one-story community center with a new, larger community services facility, and building a new five-story building containing 48 units of affordable housing. Plaintiff, an association of local residents, opposed the project based on its proposed height and density, and potential traffic impacts.

After defendant City and County of San Francisco (City) certified the EIR and approved the project, plaintiff filed its petition for writ of mandate, alleging the City had approved the project long before EIR certification in violation of CEQA Guidelines sections 15004 and 15352. Relying heavily on Save Tara v. City of West Hollywood, 45 Cal. 4th 116 (2008), plaintiff alleged City had improperly committed itself to the project as proposed through multiple actions prior to EIR certification. First, the City had issued a loan to nonprofit real party in interest for predevelopment activities. Second, a City supervisor had introduced an ordinance to allow for greater density on the site. Third, City officials made statements in support of the project.

In its opinion, the Court of Appeal distinguished the circumstances of this case from those in Save Tara. The Court first observed the loan issued by the City here only funded predevelopment activities; the loan agreement expressly stated the City’s lack of commitment to the project; and the loan amount was due in full if the project was denied by the City. All of these factors stood in contrast to the loan agreement in Save Tara. Second, the Court noted the introduction of an ordinance by an elected official for the consideration of the decision-making body does not constitute a decision by a public agency; here, the ordinance was only approved by the Board of Supervisors following EIR certification. Lastly, the Court distinguished the public statements made by the City of West Hollywood in Save Tara and those made by the City here. In the former case, the city manager and mayor publicly used language demonstrating a firm commitment to the project as proposed, while here one County Supervisor expressed her general support for the project.

Key Point: The facts in Save Tara were particularly egregious. Neighbors for Fair Planning joins the line of cases distinguishing Save Tara and provides further guidance on the types of actions a lead agency may take in connection with a project prior to completing CEQA review.

Supreme Court Holds Monetary Exactions Must Have a Nexus and be Roughly Proportional to Impacts of a Proposed Development

Tuesday, July 16th, 2013

For nearly two decades, the U.S. Supreme Court’s decisions in Nollan v. California Coastal Commission, 483 U.S. 825 (1987),and Dolan v. City of Tigard, 512 U.S. 374 (1994), have provided the standard for evaluating the legality of development permit conditions requiring the dedication of interests in real property. Nollan required local governments to show a nexus between the development’s impact and the applicable permit condition (e.g., whether the land dedication would help achieve the government’s stated purpose). Dolan added to the nexus requirement, by mandating a rough proportionality between a development’s impact (e.g., on public facilities) and any condition imposed on an applicant. However, until Koontz v. St. Johns River Water Management District, 2013 U.S. LEXIS 4918 (2013), it was not clear for the purposes of federal law whether the aforementioned nexus and rough proportionality tests applied to monetary exactions on which development permits were conditioned. In Koontz, the U.S. Supreme Court held that such monetary exactions were subject to the Nollan and Dolan tests.

Plaintiff Koontz owned a 14.9-acre, undeveloped parcel in Florida, a large portion of which consisted of wetlands. He sought approval to develop 3.7 acres from the local district charged with wetlands protection, offering the district a conservation easement over the remaining 11 acres. The district determined that the land dedication he offered was insufficient to protect local wetlands. Instead, the district proposed that he could either develop one acre of the site and dedicate a conservation easement over the rest of the site, or develop the site as proposed with the payment of an in-lieu fee to restore off-site wetlands. Plaintiff refused, his permit application was denied, and he filed suit in state court, arguing the government had taken his property without just compensation. The state trial and appellate courts found in his favor, but the Florida Supreme Court reversed, holding that monetary exactions imposed as a condition of development were not subject to the heightened scrutiny given to land dedication requirements imposed by development permits.

The U.S. Supreme Court reversed the Florida Supreme Court’s decision, noting that a per se takings approach (i.e., Nollan/Dolan) is appropriate where the demand for money is related to a particular, identifiable property interest. The Court also explained the applicability of the unconstitutional conditions doctrine, which holds that the government cannot coerce people into relinquishing their constitutional rights—here, the right not to have property taken without just compensation. Furthermore, denial of a permit based on an applicant’s refusal to consent to an unlawful condition would still represent an unconstitutional conditions violation, even though the government never actually takes any property. The Court remanded the case to the Florida Supreme Court for further proceedings, without deciding the merits.

The effect of this case in the CEQA context will be minimal. The State CEQA Guidelines already specify that “[m]itigation measures must be consistent with all applicable constitutional requirements,” specifically citing both Nollan and Dolan. (CEQA Guidelines § 15126.4(a)(4).) Because CEQA already requires ad hoc exactions specified in mitigation measures to be roughly proportional to a project’s impact, the Court’s decision in Koontz basically validates current CEQA practice. (See id. § 15126.4(a)(4)(B).)

Key Point: The principles set forth in Nollan and Dolan have been applied by courts in numerous federal and state decisions. Koontz establishes that these principles apply whether a public agency seeks a concession from a developer in the form a physical dedication or monetary exaction. Because CEQA already reflect the conclusion reached in Koontz, the holding is unlikely to result in a significant change in how development project are evaluated and mitigated pursuant to CEQA.

Court Rejects CEQA and Williamson Act Challenges to a San Benito Solar Power Project

Tuesday, July 16th, 2013

In Save Panoche Valley v. San Benito County, the Court of Appeal for the Sixth Appellate District affirmed a ruling denying a petition for a writ of mandate alleging violations of CEQA in San Benito County’s (County) approval of a solar power project and related cancellation of Williamson Act contracts. This decision follows on the heels of recent cases, including North Coast Rivers Alliance v. Marin Municipal Water District (2013) 216 Cal. App.4th 614, reflecting a trend of increased judicial deference to agency decision-making under the “substantial evidence” standard of review.

Real parties in interest proposed to construct a solar farm on 4,885 acres of land used for cattle grazing in San Benito County’s Panoche Valley, 15 miles southwest of Fresno County. The project necessitated the cancellation of Williamson Act contracts covering portions of the property. The County prepared a draft EIR evaluating various project alternatives, including a project with a smaller footprint and a project relocated to Fresno County.

In the final EIR, the project was modified to mitigate a number of the significant environmental effects identified in the draft EIR. The revised project would have a 34% smaller footprint, would establish a conservation easement over a large portion of the property, and would lower the height of the solar panels. The County Board of Supervisors (Board) approved the project development agreement and cancellation of the Williamson Act contracts, and certified the final EIR.

Appellants argued that: (1) the Board’s findings regarding cancellation of the Williamson Act contracts were not supported by substantial evidence; (2) the Board’s findings regarding the infeasibility of the environmentally superior project alternative were not support by substantial evidence; (3) adopted mitigation measures improperly deferred mitigation and/or were not sufficient to reduce significant effects; and (4) the Board’s statement of overriding considerations was untimely because it preceded project approval. The Court of Appeal rejected each of these arguments, as discussed below.

First, the Court explained the Board was required to make two findings to cancel the subject Williamson Act contracts: (1) other public concerns substantially outweighed the Act’s objectives, and (2) no proximate non-contracted land was available and suitable for the proposed use. Since the record showed the project would further the State’s renewable energy goals, substantial evidence supported the Board’s finding that other public concerns substantially outweighed the Act’s objectives. The Board’s finding that no proximate non-contracted land was available for the project was also supported by substantial evidence because the alternative site identified was about 60 miles away, in two different counties, and was partially encumbered by Williamson Act contracts.

Second, the Court held there was substantial evidence supporting the Board’s finding that the environmentally superior alternative identified in the EIR was infeasible. The Board cited multiple reasons in support of its finding of infeasibility, but the Court only considered three of them ( the alternative site’s lack of proximity, its location outside the county, and its private ownership) before concluding the Board’s finding was supported by substantial evidence.