by William W. Abbott and Janell M. Bogue

The recent case of Hayward Area Planning Association v. City of Hayward (2005) Cal.App.4th 176 illustrates the importance of proper trial court record preparation in CEQA cases. Plaintiffs, community groups opposed to a proposed project, filed suit against the City of Hayward (City) and alleged that the City had not complied with CEQA. The developer, Hayward 1900, was identified as the real party in interest.

Pursuant to Public Resources Code, section 21167.6, the plaintiffs asked the City to prepare the record of proceedings rather than attempting to compile it themselves. The City subsequently asked the law firm representing the developer to prepare the record, but did not notify the plaintiffs of the arrangement. After the trial court denied the plaintiff’s petition and entered judgment for the City and the developer, the court awarded costs. The City did not submit a cost bill, but the developer sought over $50,000. Plaintiffs argued that they should not be compelled to pay because the statute does not authorize the court to award preparation costs to a real party in interest without the plaintiffs’ consent.

The court said that there are only three acceptable ways to prepare a CEQA record. The first way is to allow the public agency, in this case the City, to prepare and certify the record. Next, the plaintiff can prepare the record subject to agency certification. Finally, the parties together can agree to an alternative method of preparation with agency certification. None of these were done. The City did not notify the plaintiffs that it handed over preparation to the developer’s lawyers, so the plaintiffs had no chance to agree to this alternate method. Also, the court said that the City’s delegation was inconsistent with the statute’s purpose to minimize preparation costs. Because the real party in interest was seeking reimbursement rather than the City itself, there were no compelling reasons for the City to supervise and limit excessive costs. The court did say that it is normal and proper for the agency to ask the real party in interest for assistance in preparing the record, but “unilateral delegation of the task to a party with an interest in the litigation” is unacceptable. The court went on to deny all of the costs that the developer incurred.

The Hayward court laid out a bright-line test for cost recovery when the plaintiff asks a public agency to prepare the record under Public Resources Code section 21167.6. If the plaintiff asks the agency to prepare the record, the agency itself must incur the expense. The agency may request outside assistance from the real party in interest as long as costs are reasonable. But it may not entirely delegate the preparation to the real party in interest, absent an agreement with the plaintiff. If the agency does delegate, the real party in interest runs the risk of losing all costs associated with record preparation. As illustrated by this case, that penalty could be a hefty one.

William W. Abbott is a partner and Janell Bogue is a law clerk with Abbott and Kindermann, LLP. For questions relating to this article or any other California land use, environmental and planning issues contact Abbott & Kindermann at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.