Fifth District Court Of Appeal Rules Communications Between Lead Agency And Developer Made Prior To Project Approval Must Be Disclosed In Litigation, Creating Split Of Authority In California Case Law

A citizens group challenged the development of a shopping center anchored by a Wal-Mart store by filing a lawsuit stating that the city violated the California Environmental Quality Act (“CEQA”).  After the city prepared the index for administrative record of proceedings, the citizens group protested that the index did not list any informal communications between the city and the project developer.  The city stated that all such communications were made through attorneys for each party, and so the communications were protected from disclosure under the attorney-client or attorney work-product privileges because the common interest doctrine applied.  The trial court agreed.  On appeal, the court of appeal vacated the trial court decision, holding that the common interest doctrine cannot apply prior to approval of a project.  (Citizens for Ceres v. Superior Court (— Cal.Rptr.3d —-, Cal.App. 5 Dist., July 8, 2013).


Wal-Mart Stores, Inc. and Wal-Mart Real Estate Trust (“Developer”) applied to the City of Ceres (“City”) to build a shopping center anchored by a Wal-Mart store.  The City certified an environmental impact report (“EIR”) and approved the development.  A local group, Citizens for Ceres (“Citizens”) opposed the shopping center and sued, claiming that the City’s approval violated CEQA.  The City began preparing the administrative record for the case and created a draft index.  Citizens wrote to the City, stating that the index did not list any communications between the City and the Developer.  The City replied that it had expected the project to be controversial, and so all communications made between the City and the Developer were marked “made by and between legal counsel” and were protected by the attorney-client privilege or the attorney work-product doctrine.  The City stated that disclosure of attorney communications between the City and Developer did not waive attorney-client or attorney work-product privileges because the common interest doctrine applied. 

Citizens filed a motion to augment the administrative record, asking the trial court to order the City to include the communications.  The trial court denied the motion.  Citizens petitioned the court of appeal to order the trial court to grant the motion.


The Fifth District Court of Appeal vacated the trial court decision, holding that, although CEQA does not abrogate existing privileges, the common interest doctrine did not apply to communications made between the City and the Developer before project approval.  The court of appeal explained that the common interest doctrine protects disclosures of legal advice between parties when the parties share an interest in obtaining legal advice on a common matter.  However, in the court’s view, the common interest doctrine cannot apply before project approval because the interests of the agency and the developer are “fundamentally at odds” at that point.  The agency’s duty before approval of a project is to conduct an environmental review and make a decision best supported by the facts, whereas the project applicant’s interest is to obtain a decision supporting development of its project.  The court stated that after project approval, the common interest doctrine could apply because then the interests of the agency and the developer in defending the EIR were aligned.

The court noted at the outset that its decision was possibly at odds with the ruling of the Third District Court of Appeal in California Oak Foundation v. County of Tehama (2009) 174 Cal.App.4th 1217.  In California Oak, the Third District held that the common interest doctrine applied in a joint effort between a lead agency and a project applicant to defend an EIR in court. However, the Fifth District stated that the Third District California Oak decision did not state explicitly whether the common-interest doctrine could be applied to preapproval disclosures. 

The court of appeal rejected Citizens’ argument that CEQA’s rules on the contents of the administrative record supersede evidentiary privileges such as the attorney-client privilege and work-product privilege.  The court observed that under California law, privileges exist only through statutory law, and so courts are not allowed to broaden or limit existing privileges or elaborate on privileges established by statute.  The court noted that the state Supreme Court has held that the policies underlying the attorney-client privilege, including promoting candid legal advice, apply to public agencies as much as they do to private citizens.

Turning to the question of whether the common interest doctrine applied, the court explained that in California, this doctrine is not an independent privilege, but instead identifies situations in which other privileges are not waived when disclosing legal information to third parties.  In order for the common interest doctrine to apply, the parties sharing information must have a “reasonable expectation” that the information will remain confidential.  For a reasonable expectation to exist, the disclosure of information must be “reasonably necessary,” which means that the parties must have a common interest in obtaining legal advice to “advance their shared interest” in a common legal matter.  The court noted that California’s common interest doctrine is relatively limited and that unlike federal law, California has no independent “joint defense privilege” and state courts are not free to create one through case-by-case interpretation.

Applying these concepts to the CEQA context, the court stated that before environmental review is complete, the lead agency is presumed to be neutral towards the project and focused on complying with CEQA.  That court opined that because the agency may not commit to approving the project before environmental review has taken place, it cannot have an interest “in producing a legally defensible EIR or other environmental document that supports the applicant's proposal.”  At the same time, a project applicant is interested in a favorable project decision.  The court concluded that these opposing interests mean that the common interest doctrine cannot apply to communications between the lead agency and the project applicant before project approval.

In contrast, after project approval, the court stated that the agency’s duty as an objective evaluator of a project no longer conflicted with the project applicant’s interest in pursuing a project, and thus the common interest doctrine could apply during this phase.  The court emphasized that its decision was not meant to state that members of an agency decisionmaking body could not have a favorable opinion of a project, or that an agency and an applicant could not work together to produce environmental documents.

Based on its conclusions, the court of appeal held that the City’s pre-approval communications with the Developer waived the attorney-client and attorney work product privileges, and therefore such communications had to be included in the administrative record under CEQA.


For a discussion on the referenced California Oak case, please see our Legal Alert entitled, Attorney-Client Privilege Was Not Waived When One Defendant Disclosed Legal Advice From Its Attorneys To A Codefendant In Their Joint Defense Of An Environmental Impact Report, July 9, 2009.


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Jonathan P. Hobbs, Daniel J. O’Hanlon or Leslie Z. Walker | 916.321.4500