Decision leaves project developers exposed to potential records requests for both pre- and post- project approval communications with the approving agency.
The California Court of Appeal, Fifth Appellate District, issued a decision on Monday, July 8, 2013, in Citizens for Ceres v. Super. Ct. of Stanislaus County,1 potentially undercutting a 2009 decision in California Oak Foundation v. County of Tehama.2 The California Oak Foundation decision had clarified key elements of the “common-interest doctrine” which applicants commonly relied on for development projects in California to protect communications with agency lawyers from public disclosure. In its latest decision, the Fifth Appellate District held that pre-approval communications between the project applicant and the agency in the environmental review process are not protected by the common interest doctrine and must be included in the administrative record. Until other courts clarify these potentially conflicting decisions, project applicants should consider the possibility that their pre-approval communications with reviewing agencies may be discoverable in future litigation or under the California Public Records Act.
Background: The Common Interest Doctrine and California Oak Foundation (2009)
The common interest doctrine operates as an exception to the general rule that the attorney-client privilege or attorney work product protection is waived upon voluntary disclosure of the privileged information to a third party.3 Under the common interest doctrine, the disclosure of privileged or protected material by a lawyer, “when such disclosure is reasonably necessary for the accomplishment of the purpose for which the lawyer...was consulted, is not a waiver of the privilege.”4 For the common interest doctrine’s protection to attach, most courts require that the parties sharing the communication have a common interest in a matter of joint concern.5
The common interest doctrine has been applied in the context of communications between an agency and a project applicant during the California Environmental Quality Act (CEQA) review process. In the 2009 California Oak Foundation case, the County of Tehama shared privileged documents prepared by an the county’s outside law firm retained for advice on CEQA compliance with counsel for the project applicant. 6 The opinion does not clarify whether or not the documents were exchanged during the administrative CEQA review process. The Third Appellate District held that the shared communications remained privileged from disclosure without drawing a distinction between pre-approval and post-approval documents or explicitly holding that pre-approval communications were also protected by the common interest doctrine. However, certain portions of the language of the California Oaks opinion can be read as applying to pre-approval exchanges of documents. Relying on the common interest doctrine, the court held that disclosing advice related to compliance with CEQA requirements to co-defendants in a joint endeavor to defend an environmental impact report (EIR) was reasonably necessary for the purpose for which the legal representation was initially sought — to achieve compliance with CEQA, including “producing an EIR that will withstand a legal challenge....” The court stated:
“The purpose of achieving compliance with the CEQA law, reasonably viewed, entails a further purpose. It includes producing an EIR that will withstand a legal challenge for noncompliance. Thus, disclosing the advice to a codefendant 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.’”7
The Fifth Appellate District’s Decision in Citizens for Ceres (2013)
Court Holds That the Common Interest Doctrine Does Not Apply to Pre-Approval Communications
In Monday’s Citizens for Ceres decision, the petitioner challenged a court order permitting the City of Ceres to exclude communications between counsel for the City and the project applicant from the administrative record on common interest grounds.8 The petitioner argued that the common interest doctrine did not protect the subject documents. The Fifth Appellate District agreed that pre-approval communications between the City and the project applicant were not subject to the common interest doctrine, and must be included in the administrative record.9 Post-approval communications, on the other hand, may continue to be protected by the common interest doctrine.10
The court concluded that “when environmental review is in progress, the interests of the lead agency and a project applicant are fundamentally divergent. While the applicant seeks the agency’s approval on the most favorable, least burdensome terms possible, the agency is duty bound to analyze the project’s environmental impacts objectively.”11 Thus, “[t]he applicant and agency cannot be considered to be advancing any shared interest when they share legal advice at the preapproval stage. Under established principles, this means that the common-interest doctrine does not apply.”12
The court distinguished communications that take place after a project is approved. “After environmental review is complete and the agency has certified the EIR and approved the project, there is no longer any conflict between the agency’s role as an ally of the developer and its role as an objective evaluator of the project.”13 The court concluded that after project approval, “there is nothing about the agency-applicant relationship that would stand in the way of applying the common-interest doctrine, assuming its elements are satisfied with respect to the particular communications for which its protection is claimed.”14
The Citizens for Ceres case arose during post-approval litigation challenging the project. Opponents of future projects presumably would argue, however, that the court’s conclusions regarding the existence of a common interest privilege would have been the same had the issue arose in the context of a pre-approval California Public Records Act request for documents exchanged by the public agency with the developer before the agency’s approval of the project. The California Public Records Act15 requires government agencies to provide access to public records, unless a specified exemption applies. One of the specified exemptions under the Act involves attorney-client communications. But a finding that the record was submitted by or shared with a third party outside the agency would make the exemption inapplicable, even without a finding that the common interest privilege applied to such record.
Court Holds Common Interest Privilege Does Apply to Post-Approval Communications
The Citizens for Ceres court dealt with a situation involving documents to be included in the administrative record, which almost always includes only pre-approval documents, and would not include post-approval documents. However, the court directly held that post-approval documents exchanged between the applicant and the agency could be protected under the common interest privilege, stating: “[a]fter approval, by contrast, the agency and applicant have a united interest in defending the project as approved, and privileges are not waived by disclosures between them from that time onward” (emphasis in original).16
Court Holds CEQA Does Not Abrogate Privileges Generally
In addition to the common interest doctrine arguments, the petitioner further argued that certain CEQA provisions defining the administrative record abrogate the attorney-client privilege and the attorney work product doctrine. The court rejected that claim, concluding that Public Resources Code Section 21167.6 does not abrogate the attorney-client privilege or the attorney work product doctrine.17
The Impacts of Citizens for Ceres for Project Applicants
The state of the common interest doctrine protection for pre-approval communications is currently up in the air as a result of the apparently conflicting decisions in California Oak Foundation and Citizens for Ceres. The project applicant certainly is the party at risk if the CEQA document supporting project approval is inadequate as even the Citizens for Ceres court noted. Therefore, project applicants should take care to make their views known to lead and responsible agencies in a way that produces a defensible EIR and CEQA process. However, such exchange of views could serve as a “road map” to project opponents to point out the portions of the EIR which may be vulnerable.
For example, if an applicant tells the agency in a pre-approval communication that a portion of the draft EIR does not comply with CEQA and must be fixed, and the agency fails to do so, the applicant’s own communication can now be presented to the judge by project opponents in a subsequent lawsuit to support their claims, should that court follow Citizens for Ceres.
In light of the Citizens for Ceres decision, project applicants should consider the possibility that a court will follow Citizens for Ceres and find no privilege protects the pre-approval exchange of attorney-client and attorney work product privileged materials between the project applicant and lead and responsible agencies. A court might also follow the reasoning of the case and hold that no privilege prevents the public release of such documents under the California Public Records Act.18 Other privileges or protections, such as trade secret protections, should continue to be asserted, and are not expressly impacted by Citizens for Ceres.