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

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.


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.