In a published decision filed September 15, 2014, the First District Court of Appeal reversed and remanded a trial court’s post-judgment order granting an unsuccessful CEQA petitioner’s motion to tax the entire $64,144 cost bill of respondent City.  Coalition for Adequate Review v. City and County of San Francisco (1st Dist. 2014) ___ Cal.App.4th ____, Case No. A135512.

City’s costs were largely incurred in preparing a supplemental record of proceedings.  The trial court’s order was based on its legally erroneous reasoning that the City could not recover costs because petitioner had elected to prepare the record, and because a sizable cost award would have a “chilling effect” on lawsuits challenging important public projects.

The First District’s opinion provides clarification and guidance on a number of significant issues relating to preparation of the administrative record and responsibility for related costs in CEQA actions, although it leaves others unanswered.  Key points include:

  • “[W]hether a claimed cost comes within the general cost statute, and is recoverable at all…. [and] the interpretation of CEQA’s record preparation provisions … in Public Resources Code Section 21167.6, subdivisions (a) – (f), present[ ] … question[s] of law subject to de novo review.”
  • “Whether a cost item was reasonably necessary to the litigation … presents a question of fact for the trial court and its decision is reviewed for abuse of discretion.”  (Internal quotes omitted.)  This same “abuse of discretion” standard of review applies to the trial court’s determination of whether “a particular cost to prepare an administrative record was necessary and reasonable….”
  • Public Resources Code § 21167.6 provides flexibility in procedures for preparing the administrative record (or “record of proceedings”); in addition to the “traditional procedure” whereby the petitioner requests the respondent public agency to prepare the record, “[t]he statute also provides for other record preparation options to help reduce record preparation costs.”  The statute thus provides:  “The plaintiff or petitioner may elect to prepare the record of proceedings or the parties may agree to an alternative method of preparation of the record of proceedings, subject to certification of its accuracy by the public agency, within the [60-day statutory] time limit….”  (Quoting Pub. Resources Code, § 21167.6(b)(2).)  The 60-day time limit for the agency to certify the record for accuracy and completeness (which period can be extended by court order or stipulation of the parties) applies regardless of whether the agency prepares the record, or whether petitioner does so, or whether it is prepared by another agreed-to means.
  • The statute provides:  “The parties shall pay any reasonable costs or fees imposed for the preparation of the record of proceedings in conformance with any law or rule of court….”  (Pub. Resources Code, § 21167.6(b)(1).)  The Court held that “[t]h[is] cost provision, by its plain terms, places the costs an agency incurs in preparing the record on the parties, not on the public agency.”  It further held that:  “The rationale for doing so is that “‘taxpayers … should not have to bear the cost of preparing the administrative record in a lawsuit brought by a private individual or entity.’”  (Quoting Black Historical Society v. City of San Diego (2005) 134 Cal.App.4th 670, 677.)
  • “Accordingly, a petitioner can be ordered to pay for a requested record during the early stages of the litigation, before the merits of the case are ever heard.  [Citations.]  Indeed, a public agency can refuse to release a record it has been asked to prepare until the petitioner making the request has paid the agency’s preparation costs.”  (Citing Black Historical Society, at 674, 677-678.)
  • These rules and principles “do[ ] not mean a public agency can charge a petitioner or party whatever it wants for preparing the record” since the statute also contains a “cost-containment policy” which “mandates [that] the ‘party preparing the record shall strive to do so at a reasonable cost in light of the scope of the record.’”  (Quoting § 21167.6(f).)  A petitioner can, by interim motion, challenge an agency’s record preparation charge as excessive or unreasonable, just as it can so challenge an agency-prepared record as either incomplete or as including documents not properly part of the record.
  • A petitioner’s election to prepare the record itself does not ipso facto preclude the public agency from recovering supplemental record preparation costs incurred to ensure a statutorily-complete record is prepared and certified.  The statute contains no such prohibition; moreover, its cost provision specifies “the parties, not the public agency, are to pay for the record” and it requires that a record prepared by any means must becomplete.  Thus, according to the Court:  “When a record prepared under [§ 21167.6] (b)(2) is incomplete, and an agency is put to the task of supplementation to ensure completeness, the language of the statute allows, and the purpose of the record preparation cost provision to protect public monies counsels, that the agency recoup the costs of preparing the supplemental record.”
  • While the parties may agree to a smaller (and less expansive) record so long as it will be adequate for judicial review of petitioner’s claims, where they do not so agree “a public agency is not required to put itself at risk of a statutorily incomplete record.”  (Emph. in orig.)  Indeed, any reduction in the record’s contents is “presumptively prejudicial to project proponents … who will be saddled with the task of pointing to things in the record to refute asserted inadequacies in the EIR.”
  • The City here successfully moved (over petitioner’s opposition) to supplement the record prepared by petitioner with a large number of documents to ensure it was statutorily complete, and the trial court’s supplementation order was affirmed on a prior appeal.  The Court held that “[u]nder these circumstances, we have no trouble concluding the City was effectively put to the task of preparing a statutorily complete record and, therefore, may recover its reasonable costs of preparing the supplemental record.”
  • In a footnote, the Court rejected petitioner’s argument – raised for the first time at oral argument on appeal – that rather than moving to prepare a supplemental record below the City should, in light of petitioner’s election, have moved for an order directing petitioner to prepare the supplement.  The cases cited by petitioner did not “even suggest[ ] a public agency cannot, itself, take action to ensure a statutorily complete record where, as here, the petitioner disputes the agency’s assessment that the record is incomplete.”
  • In rejecting the trial court’s “chill” rationale for denying costs, the Court held it was refuted by the provisions of CEQA that allow an agency to recover costs (Pub. Resources Code, § 21168, by incorporating CCP § 1094.5), and place the responsibility for record preparation costs on the parties, not the public agency.  It quoted another court’s statement that:  “Groups like petitioner are free to exercise their petition rights, but as has been often said in other contexts, freedom is not free.”  (Quoting San Diego Citizens Group v. County of San Diego (2013) 219 Cal.App.4th 1, 11.)
  • In providing further guidance to the trial court in exercising its discretion on specific claimed cost items on remand, the Court observed that while “[t]he City may claim reimbursement for reasonable labor costs required to prepare the supplemental record[,]” it was aware of “no authority … indicating labor costs to review a petitioner-prepared record of proceedings ‘for completeness’ in connection with certification … and recoverable record preparation costs.”  It noted such “review is a chore public agencies face in every case in which petitioner elects to prepare the record …, and if an agency could always claim a sizeable amount for review ‘for completeness’ or for ‘certification,’ that would defeat the legislature’s aim of providing for lower-cost record preparation alternatives.”  Further, according to the Court, such review “can easily blur into review for strategy, implicating the kind of attorney fee award neither authorized nor sought here.”
  • Accordingly, on remand the trial court would have to “review the City’s claimed paralegal costs to determine which of these costs were for work reasonably required to prepare the supplemental record (e.g., locating, copying, indexing, and assembling documents) and are recoverable, and which were for review of the record petitioners prepared “for completeness” and are not recoverable.”
  • As to the other costs, messenger costs of $392 for transporting record materials retrieved from the planning department to City Hall were potentially recoverable as labor costs of assembling the record; the trial court did not abuse its discretion in denying $8,053.12 for staff time responding to document requests made by petitioner at the outset of the litigation when they were gathering documents for the record; excerpts of the administrative record prepared and submitted by the City to the trial court as an aid could qualify as photocopies of exhibits for which costs were recoverable; the $804.35 cost of City’s copy of the record could qualify as recoverable if “reasonably necessary”; and City’s messenger fees for court filings (though not postage and express delivery costs) could be allowed in the trial court’s discretion.

The First District Court of Appeal’s opinion reaffirmed and refined a number of important  principles regarding CEQA’s statutory cost-containment policy and allocation of responsibility for record preparation costs.  It did not reach another significant issue that looms large as a practical matter in CEQA litigation, and which will ultimately require future authoritative judicial resolution, i.e., petitioner’s alternative argument that the City could not recover for staff time retrieving and producing record documents that petitioners sought under the Public Records Act, “under which [Petitioner argued] a governmental entity is not entitled to recover production costs.”