Tag: Common-Interest Doctrine

Fourth District Holds that Agencies May Not Destroy, But Rather Must Retain All Writings Required by CEQA’s Administrative Record Statute.

General Posted by Bridget McDonald

The Fourth District Court of Appeal in Golden Door Properties, LLC v. Superior Court of San Diego County (2020) 53 Cal.App.5th 733 (“Golden Door III”) held that the broad and inclusive language in Public Resources Code section 21167.6 requires lead agencies to retain all project-related writings and e-mails during the CEQA statute of limitations period or any CEQA litigation. The court issued a writ of mandate directing the San Diego County Superior Court to permit petitioners to conduct discovery against San Diego County to recover unlawfully deleted e-mails for the record of proceedings. The court also ruled on matters related to mootness, discovery in CEQA cases, the common interest doctrine, and the Public Records Act.

BACKGROUND

San Diego County’s E-mail Retention and Deletion Policy

In June 2008, the County of San Diego (“County”) adopted an administrative policy that provided for the automatic and permanent deletion of e-mails after 60 days, except for e-mails identified by e-mail users as “official records.” E-mails identified as “official records” must be retained for at least two years, and e-mail users must classify qualifying e-mails as “official records” within 60 days of creating them. E-mails considered “official records” under the policy include those: “made for the purpose of disseminating information to the public”; “made and kept for the purpose of memorializing an official public transaction”; “required by law to be kept”; or, “necessary and convenient to the discharge of a County officer’s official duties and…made or retained for the purpose of preserving its informational content.” The policy also excluded “preliminary drafts, notes, or inter- or intra-agency memoranda not kept in the ordinary course of business and the retention of which is not necessary for the discharge of County’s officer’s official duties,” from the definition of an “official record.”

The Newland Real Estate Project & Procedural Background

In January 2015, Newland Real Estate Group (“Newland”) proposed a mixed-use development project (“Project”) consisting of 2,134 new residential units and 81,000 square feet of commercial development. Petitioner, Golden Door Properties (“Petitioner” or “Golden Door”), owned and operated a 600-acre spa and resort near the proposed project site. In April 2014, Golden Door had warned the County it would oppose Newland’s proposed Project—as it had previously done with a similarly proposed project in 2009—citing environmental concerns and general plan violations.

In December 2016, while the County processed Newland’s Project application, Golden Door sued the Vallecitos Water District (“District”), Newland, and the County. The suit alleged that the District lacked adequate water supplies to support the Newland Project, which would result in adverse groundwater overextraction. To defend against that litigation, the District, the County, and Newland, entered into a “Confidential Joint Defense Agreement.”

In June 2017, the County released a draft environmental impact report (EIR) for the Project. Shortly thereafter in July 2017, Golden Door submitted a Public Records Act (PRA) (Gov. Code, § 6250 et seq.) request seeking the draft EIR’s technical analyses. The County refused production on grounds that only consultants had possessory rights to the documents. Golden Door submitted a second PRA request in October 2017, which sought copies of the County’s consultant contracts and “all documents and communications in the County’s possession” pertaining to the Newland Project. In response, the County produced, among other documents, only 42 emails that spanned the 60-day period between September through October 2017. When questioned about e-mails spanning from the entire three-year environmental review process, the County explained its 60-day automatic e-mail deletion program, and refused to produce copies of deleted e-mails that may still have been in consultants’ possession.

On June 18, 2018, the County released a second draft EIR for the Project. The following day, Petitioner sued the County once again, alleging that it: (1) used unauthorized consultants to prepare the EIR’s technical studies; (2) failed to executed a consultant memorandum of understanding (MOU) in accordance with County CEQA guidelines; (3) improperly destroyed official records; and (4) improperly withheld records under the PRA. In July 2018, the County and Newland entered into another “Confidential Joint Defense Agreement.” That same month, the trial court issued a temporary restraining order directing the County to stop deleting project-related emails.

On September 26, 2018, the County’s Board of Supervisors approved the Newland Project and certified the final EIR. In anticipation of potential CEQA litigation, the County and Newland entered into yet another “Confidential Joint Defense Agreement” to defend against potential claims challenging the County’s Project approvals. In October, two CEQA lawsuits were subsequently filed against the County, including one by Petitioner, Golden Door. The superior court consolidated the two CEQA cases, along with Golden Door’s June 2018 PRA action against the County.

In January 2019 and thereafter, Golden Door conducted civil discovery against the County, Newland, and two of the County’s environmental consultants. The County produced nearly 6,000 documents, but partially refused discovery requests that sought documents pertaining to the County’s compliance with Golden Door’s initial PRA requests. Golden Door also attempted to obtain the County’s deleted e-mails from Newland and subpoenaed the consultants for other Project-related notes, e-mails, studies, and agreements, but both parties opposed the requests.

Golden Door subsequently filed motions to compel discovery and to require the production of privilege logs for the withheld documents. A discovery referee was appointed to resolve the discovery disputes and ultimately issued several rulings in favor of the County, Newland, and the environmental consultants. The superior court adopted the referee’s recommendations and the various plaintiffs filed the first of three petitions for writ of mandate with the Court of Appeal. The appellate court denied the petition and plaintiffs sought Supreme Court review. The Supreme Court directed the Court of Appeal to show cause as to why the first petition should not issue. The appellate court did so and filed an additional order to show cause for the second petition, thereby consolidating the two writ proceedings.

In October 2019, the CEQA plaintiffs filed a motion to augment the record by seeking to add documents the County omitted from the record, and other material plaintiffs had submitted to the County prior to its approval of the Project and certification of the EIR. The superior court “mostly” denied the motion, allowing the addition of only certain documents. Thereafter, Plaintiffs filed their third writ petition in the Court of Appeal.

On March 3, 2020, the County’s voters rejected the Newland Project in a referendum election. The County Board of Supervisors rescinded the Project’s General Plan Amendment, Specific Plan, zoning changes, and other approvals in April 2020. However, the Board did not vacate its certification of the Final EIR or its approval of the Project’s tentative map. Though Newland ultimately withdrew the Project, the Court of Appeal rendered a decision given the likelihood of the reoccurring e-mail retention issue.

COURT OF APPEAL DECISION

Mootness

As a threshold matter, the Fourth District considered whether the writ petitions were moot because the County had rescinded some, but not all of its Project approvals. The appellate court held that the petitions were not moot because the County did not rescind all project approvals and counsel for Newland indicated that the Project will likely return in some form, perhaps in reliance on the certified Final EIR and tentative map. The court also explained that even if these issues were moot, it had discretion to retain the case because it presented an issue of broad public interest that is likely to reoccur, the parties’ controversy may reoccur, and the County’s e-mail deletion policy remained a material issue of statewide significance.

The County’s E-mail Retention Policy

The Fourth District’s analysis began by interpreting the scope of requisite administrative record documents contemplated by Public Resources Code section 21167.6. The section requires that the record include any document that “ever came near a proposed development or to the agency’s compliance with CEQA in responding to that development.” Moreover, section 21167.6, subdivision (e) uses very broad and inclusive language, which provides that records “shall” include “correspondence” submitted to and transferred from the respondent agency regarding the Project or CEQA compliance, as well as all “internal agency communications” relating to the Project or CEQA compliance.

The court further found that section 21167.6’s broad mandate comports with CEQA’s intent of providing information and disclosure. A complete record is essential for courts to fulfill their role in assuring that an agency’s determinations are lawful under CEQA and supported by substantial evidence. Based on the plain language of the statute, the court held “that a lead agency may not destroy, but rather must retain writings section 21167.6 mandates for inclusion in the record of proceedings.” The court also found that the trial court erred in finding that the County’s e-mails were extra-record evidence; rather, the e-mails plaintiffs sought to include were record evidence contemplated by section 21167.6.

The appellate court also rejected the discovery referee’s finding that the County’s e-mail destruction policy was lawful. The court found that the referee had inappropriately equated non-official emails with preliminary drafts in determining that “[n]on-official emails and other preliminary drafts” are not included under section 21167.6. The court noted that e-mails are a method of communication, while preliminary drafts describe content. Section 21167.6, subdivision (e)(10) “expressly requires certain preliminary drafts—namely, ‘any drafts of any environmental document, or portions thereof, that have been released for public review’—to be included in the record of proceedings.” In contrast, administrative drafts of EIRs, draft staff reports, and other similar preliminary documents that preceded those circulated for public review are not to be treated as part of the record of the agency’s proceedings. Similarly, agencies need not include e-mails in the administrative record that are irrelevant to a project or a project’s CEQA compliance (i.e., email equivalents to “sticky notes, calendaring faxes, and social hallway conversations” are not within the scope of section 21167.6, subdivision (e) and do not need to be retained).

While the Fourth District held that under the County’s e-mail retention and deletion policy the requisite document should have been retained for at least two years, the court did not reach the issue of how long other agencies must keep their e-mails before destroying them. The court’s opinion does not hold that e-mails must be kept “in perpetuity”—rather, the CEQA statute of limitations and a final judgment serve as relevant considerations to assessing when e-mails may be destroyed.

Discovery in CEQA Litigation

The Fourth District overturned the discovery referee’s denial of plaintiff’s motions to compel discovery against Newland and the County’s consultants. The court held that plaintiffs were not inappropriately attempting to enlarge the record; they were properly seeking discovery of documents that should have originally been included.

Because section 21167.6 is mandatory and broadly inclusive, the court held that discovery to obtain record components should largely be unnecessary. However, in cases such as these where documents may have been wrongly excluded from the administrative record, discovery is possible in a CEQA proceeding.

The Common Interest Doctrine

The County’s objections to Golden Door’s discovery requests cited the common interest doctrine. Golden Door’s subsequent May 2019 motion to compel asked the County to produce a privilege log. The County’s initial privilege log identified 3,864 withheld documents, and amended privilege log identified 1,952 withheld documents.

Golden Door asserted that the common interest doctrine did not apply to the documents shared between the project applicant and the county prior to October 10, 2018, the date the county board adopted the last project approval. The court disagreed, holding that the referee correctly determined the common interest doctrine applied pre-project approval. The court distinguished Ceres for Citizens v. Super. Ct. (2013) 217 Cal.App.4th 889, by pointing out that Golden Door had already sued the County twice prior to Project approval, each time seeking orders to kill the Project, thereby creating a common interest between the County and the Newland to defend the Project pre-approval.

The court explained that entities with common legal interests may share attorney-client privileged information without waiving that privilege. For these reasons, the Confidential Joint Defense Agreement between the County, the District, and Newland was proper because they were entered into after litigation had commenced.

Public Record Act Exemptions

Lastly, the Fourth District considered whether the County appropriately relied on the “preliminary draft exception” and the “deliberative process privilege” to withhold approximately 1,900 documents from discovery. Under the PRA’s preliminary draft exception, agencies need not disclose preliminary drafts, notes, or inter/intra-agency memoranda that are not retained by the public agency in the ordinary course of business if the public interest in withholding those records outweighs the public’s interest in disclosure. Similarly, the deliberative process privilege applies to the mental processes by which an agency reached a given decision, which includes the substance of conversations, discussions, debates, deliberations, and materials reflecting advice, opinions, and recommendations by which government policy is processed.

Here, the court overturned the referee’s recommendation by finding that the declaration in support of the County’s privilege log lacked sufficient detail to justify withholding over 1,900 documents. The declaration failed to discuss individual documents and how the exceptions apply—rather, the County only discussed the 1,900 documents as one “enormously large unified group.” Moreover, while the court recognized the difficult balance the County must strike in determining what to release or withhold, the County here only provided “broad conclusory claims” that “merely echo[ed] public policies underlying claims of privilege generally.” The court held that the County had failed to carry its burden of establishing that the public interest in withholding the documents clearly outweighed the public interest in disclosure.

Remedy

The court rejected plaintiff’s contention that the County’s inadequate record requires a judgment on the merits as premature. On remand, the plaintiffs are allowed to complete discovery. The court also granted the consolidation of the writ petitions and overturned many of the discovery referee and superior court’s findings. The court directed the trial court to vacate its order denying Golden Door’s motion to augment the record because the County’s long-standing e-mail retention and deletion policy is unlawful. Finally, once discovery is complete, Petitioner should be afforded a reasonable period of time to augment the record.

MODIFIED DECISION ON DENIAL OF REHEARING

On August 25, 2020, the Fourth District issued an order denying three petitions for rehearing filed by Golden Door, the County, and Newland, and modifying the court’s July 30, 2020 opinion. Notably, the order expanded the original opinion’s analysis of the “common-interest”/“joint defense” doctrine. The court reiterated that the discovery referee properly applied the doctrine to communications between the County and Newland because Golden Door’s Vallecitos and PRA lawsuits sought to “defeat” or “mortally wound” the Project before it had been approved. In a subsequent footnote, the court explained that the common-interest doctrine may keep the attorney-client and work-product privileges in-tact for the purposes of defending against those two lawsuits. However, that common interest does not absolve the County of its duties as a lead agency under CEQA.

– Mina Arasteh, Bridget McDonald

Fifth District Court of Appeal Holds “Common-Interest” Doctrine Cannot Apply to Protect Disclosures Between a Lead Agency and a Developer before Project Approval

General Posted by Web

Citizens for Ceres v. Superior Court of Stanislaus County (2013) __Cal.App.4th__ (Case No. F065690) involved a petition for writ relief from an order of the superior court. The Fifth District Court of Appeal’s order upheld claims by the city and developer that hundreds of documents could be excluded from the administrative record under protection by the attorney-client privilege or the attorney work-product doctrine. The court ruled that CEQA does not abrogate the attorney-client or attorney work-product privileges, but that the common-interest doctrine does not protect otherwise privileged communications disclosed by a developer to the city, or vice versa, prior to the approval of a project.

Background

On Sept. 12, 2011 the City of Ceres certified an EIR for a project by real parties in interest, Wal-Mart Stores, Inc. and Wal-Mart Real Estate Trust. Citizens for Ceres (Citizens) challenged the EIR alleging that the city failed to comply with CEQA. Citizens also challenged the city’s decision to exclude all communications between itself and the developer from the administrative record. Citizens argued that under CEQA (Public Resources Code, § 21167.6, subd. (e)) communications between the city and developer, as well as the city’s internal communications, are required to be included in the record. Further, Citizens alleged that no privileges applied because Section 21167.6 states that it applies “notwithstanding any other provision of law.”

The city argued that that the communications were protected by attorney-client privilege, work-product privilege, or other privileges and protections, including the common-interest doctrine. The city and the developer deliberately structured their communications to be based on privilege, realizing the project would be controversial. The city provided a privilege log, but maintained there was no obligation to do so.

After production of the privilege log and multiple hearings, however, the parties had not reduced the number of documents in dispute and Citizens were still contesting several hundred documents. The trial court upheld all the privilege claims on the basis that Citizens had not met its burden to prove the privilege asserted for the documents was inapplicable.

Court of Appeal’s Decision

On appeal, Citizens argued that Section 21167.6 renders all privileges inapplicable, or alternatively that the City never made the necessary showing of facts to establish that the privileges applied to the documents.

The court began by reviewing attorney-client privilege, the attorney work-product privilege, and the purposes of both. The court noted that the party claiming a privilege has the burden of establishing facts necessary to support the prima facie claim. This establishes a presumption the relevant communication was made in confidence, shifting the burden of proof to the opponent to establish that the communication was either not confidential or that the claimed privilege does not apply. According to the court, the “purpose of the attorney-client privilege is to enhance the effectiveness of our adversarial legal system by encouraging full and candid communication between lawyers and clients.” The purpose of the work-product privilege is to protect attorneys’ privacy to encourage thorough trial preparation, which includes analysis of unfavorable aspects of cases.

The court, however, rejected Citizens’ argument that the phrase “notwithstanding any other provision of law” in section 21167.6 abrogates the attorney-client privilege or the attorney work-product privilege. The court noted that Evidence Code section 911(b) forbids courts from creating privileges or exceptions through case-by-case decision making. The court found, however, that knowing this constraint, “the Legislature did not likely intend to make CEQA administrative records a privilege-free zone by the indirect means of placing the phrase ‘notwithstanding any other provision of law’ at the beginning of section 21167.6, four subdivisions away from the administrative-record provisions in subdivision (e).” The court noted that public policy and the public interest support granting privilege to public agencies, despite competing concerns for open government. In light of the similar considerations that apply to the attorney work-product doctrine, the court stated it believed that if the Legislature had intended to abrogate all privileges for the purposes of compiling CEQA administrative records, it would have expressly stated such intent.

With respect to the application of the common-interest doctrine to communications between an agency and a developer for the purposes of CEQA, the court found that the doctrine does not protect agency-applicant disclosures made before project approval. The common-interest doctrine is derived from Evidence Code sections 912 and 952 and a Law Revision Commission comment on Evidence Code 952 which remarks about extending the attorney-client privilege to communications between two parties’ attorneys regarding matters of “joint concern.” In general, the doctrine permits disclosure between parties with a common interest, without waiving privileges, when the disclosure is necessary to accomplish the purpose for which the parties sought legal advice. The court found, however, that prior to completion of environmental review and project approval, an agency and developer cannot have an interest protected by the common interest doctrine. The court noted that the applicant’s primary interest is that the agency produces a legally defensible EIR that is favorable to the project. Yet, a lead agency is presumptively neutral and objective in its interests during the environmental review and project approval process. Therefore, before a lead agency has approved a project, it cannot have a biased interest in producing an EIR that supports the applicant’s proposal. While both parties have an interest in producing a legally adequate EIR, the court determined that “the agency cannot share the applicant’s interest in an EIR that supports the project as proposed until the environmental review process is complete.” Thus, the court found that the lead agency and developer interests are “fundamentally at odds” such that they waive privileges associated with any communications they disclose to each other before the project’s approval.

The court recognized that its holding may conflict with the holding by the Third District Court of Appeal in California Oak Foundation v. County of Tehama. There the court upheld the application of the common-interest doctrine as preventing waiver in the county’s disclosure of certain document to counsel for the developer. The Third District found that the purpose of achieving compliance with CEQA includes producing an EIR what will withstand a legal challenge for noncompliance and, therefore, disclosing “advice to a codefendant in the subsequent joint endeavor to defend the EIR” falls under the common-interest doctrine. The court of appeal in Citizens for Ceres argued that italicized language from California Oak impliedly referred to a disclosure occurring after the project’s approval. The City and Developer argued that the Third District’s remarks in California Oak referred to all privileged communications, including those related to the production of a legally defensible EIR (i.e., occurring prior to project approval). The court disagreed and declined to follow California Oak if that was the case.

The court further found that, while San Bernardino Valley Audubon Society, Inc. v. County of San Bernardino (1984) 155 Cal.App.3d 738 supports the view that an agency and applicant may have a common interest in ensuring an EIR is compliant with CEQA, it does not establish a common interest for the purposes of the common-interest doctrine. Furthermore, the court rejected the city and developer’s contentions that the court’s holding conflicted with the proposition that the applicability of the common-interest doctrine does not depend on the commencement of litigation. The court noted the attorney-client privilege and attorney work-product doctrine apply in many situations not yet involving litigation and that, in this case, the time of project approval, rather than commencement of litigation, was the crucial point in time.

Thus, the court of appeal concluded the city and developer waived attorney-client and attorney work-product privileges for all communications disclosed before the city approved the project. Therefore, communications under the scope of Section 21167.6, subdivision (e) must be included in the administrative record. The common-interest doctrine still applies to communications protected by privilege disclosed after project approval.