Tehama County did not have to disclose publicly advice it received from an outside law firm on how to comply with the California Environmental Quality Act while dealing with a controversial development project, the Third District Court of Appeal has ruled.

The unanimous three-judge panel ruled that the four documents were protected by attorney-client privilege or work product privilege, even though Tehama County shared the documents with the project's developer.

In an unpublished portion of its opinion, the Third District ordered Tehama County to reconsider the financial feasibility of increased traffic mitigation fees for the project, because the county failed to disclose an advisor's e-mail expressing skepticism about economic feasibility claims.

The retiree development, Sun City Tehama, is proposed by Del Webb California and would be built along Interstate 5 between Red Bluff and Redding (see CP&DR, November 2006). It would contain about 3,700 housing units and a 44-acre shopping area on a 3,300-acre site of oak woodlands and pasture.

Tehama County approved the project's specific plan and certified an environmental impact report in late 2006. The California Oak Foundation sued to block the project, arguing that the EIR's handling of the project's impacts to oak woodlands and traffic was inadequate. The foundation lost in Tehama County Superior Court. The group appealed and won a reversal on one claim.

Most of the appellate court's opinion is unpublished, meaning it may not be cited as legal precedent. The only published portion of the ruling concerns the release of four documents prepared by a law firm retained by the county. During trial court proceedings, the foundation asked Judge Richard Scheuler to compel Tehama County to put the documents into the administrative record. The county opposed the request, and Scheuler sided with the county. On appeal, the foundation argued the California Environmental Quality Act (CEQA) – specifically, Public Resources Code § 21167.6 – requires the disclosure.

But the court said the statute did not apply here. Attorney-client or work product privilege "is a general background limitation to disclosure requirements" and the CEQA section "is at best ambiguous concerning intent to override privilege," the court concluded.

The foundation's contention that the county had waived its attorney-client privilege when it shared the documents with Del Webb's attorneys was also rejected by the court.

Writing for the court, Justice Kathleen Butz cited OXY Resources California LLC v. Superior Court, (2004) 115 Cal.App.4th 874, 890: "‘While involvement of any unnecessary third person in attorney client communications destroys confidentiality, involvement of third persons to whom disclosure is reasonably necessary to further the purpose of the legal consultation preserves confidentiality of communication.'"

The foundation argued Del Webb's involvement was not reasonable necessary because the county's purpose was CEQA compliance, while the developer's purpose was winning project approval. Butz called the foundation's view of the county's role "too crabbed."

"The purpose of achieving compliance with the CEQA law," she wrote, "entails a further purpose. It includes producing an EIR process and product that will withstand a legal challenge for noncompliance. Thus, disclosing the advice to a co-defendant 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.'"

In an unpublished portion of its decision, the Third District ordered Tehama County to reconsider its rejection of higher traffic-mitigation fees for the project because it failed to include in its EIR regarding economically feasibility.

The project development agreement calls for about $10 million in I-5 traffic mitigation fees. Caltrans insisted the project's fair share for needed improvements should be about $60 million. The county refused to raise the fees, saying they were not economically feasible.

In the e-mail, the county's economic advisor had earlier suggested that higher infrastructure costs might be feasible because they would be offset by the lower cost of land in remote Tehama County. The court ruled the county had a duty to disclose the e-mail because it concerned a point of contention among experts.

The court sent the matter back to Tehama County "for the limited purpose of allowing the Board [of Supervisors] and the public an opportunity to consider the effect of this evidence and any further germane showing that it may engender on the issue of the financial feasibility of a greater fee to mitigate traffic impacts on I-5."

The Case:
California Oak Foundation v. County of Tehama, No. C057578, 2009 DJDAR 8485. Filed June 11, 2009.

The Lawyers:
For California Oak Foundation: Thomas Lippe, Lippe, Gaffney, Wagner, (415) 777-5600.
For the county: Arthur Wylene, county counsel's office, (530) 527-9252.
For Del Webb California: Richard Zeilenga, Stowell, Zeilenga, Ruth, Vaughn & Treiger, (805) 446-1496.