Costs for SF Upheld for Its Defense of Enviro Project

     SAN FRANCISCO (CN) – Though it may chill environmental challenges of public-works projects, government agencies that bite back and win are still entitled to big payouts, a California appeals court found Monday.
     The Coalition for Adequate Review and other groups sued San Francisco – unsuccessfully – over plans to revitalize the area around Market and Octavia streets, formerly occupied by an ugly elevated gash called the Central Freeway.
     After the First Appellate Court affirmed dismissal of the challenge, city officials demanded reimbursement of more than $64,000 in costs to prepare thousands of pages to supplement the environmental record the groups prepared under the California Environmental Quality Act, or CEQA.
     The groups balked at the figure and asked the trial court judge for a full review. They pointed to the fact that they had prepared the main record themselves, and that the city’s supplemental record had little value to the resolution of the case.
     Additionally, the groups found it unreasonable and unnecessary to reimburse the city for paralegals, staff and couriers. The judge in the case agreed to a review, and eventually found the city should pay for the supplemental record it made on its own.
     The trial court also held that giving San Francisco a cost award as large as the one it sought would “certainly chill any desire by members of the general public to seek court review of important civic undertakings.”
     On appeal, a panel for the First Appellate Court agreed that a review of San Francisco’s $64,000 demand was appropriate. The portion of CEQA that allows groups to prepare the record themselves does not automatically bar an agency from recovering money spent to prepare its own record – in the interest of the complete picture, the three-judge panel held.
     Also, the city had offered to hold off on preparing its own record until after it had filed an opposition to the groups’ petition. They rejected that and instead demanded that the city make its own record even before opening briefs were filed, the 22-page opinion notes.
     “Moreover, the city did not unilaterally prepare a supplemental record,” Judge Kathleen Banke wrote for the court. “Rather, it filed a motion for leave to do so, identifying the documents it intended to include. Petitioners filed opposition, making some of the same arguments they have made in opposition to the city’s claimed record preparation costs. The trial court granted the city’s motion, but not entirely, excluding from the supplemental record documents that essentially duplicated documents already included in the record petitioners had prepared.
     “As to the documents the trial court allowed, it expressly found they were statutorily required to be in the record under CEQA. The court also expressly found the city’s preparation of a supplemental record to include these documents did not violate the city’s obligation to minimize record preparation costs. In our prior opinion we affirmed the court’s supplementation order, including on the ground petitioners failed to carry their burden on appeal to demonstrate error.”
     The panel also found that the trial court’s belief that a large costs award to the city would chill the desire for future challenges had no legal basis.
     “CEQA itself refutes a general ‘chill’ rationale to deny record preparation costs to a public agency,” Banke wrote. “Furthermore, CEQA expressly provides that the parties, not the public agency, are to pay record preparation costs. This statutory obligation implements a different, but equally important policy – that public monies should not be used to fund CEQA challenges brought by private parties. This policy is all the more compelling where, as here, a private party loses its CEQA challenge on the merits.”
     The panel agreed, however, that some of San Francisco’s costs – including $50,000 for paralegals, at a rate of between $159 and $165 an hour – may be unreasonable or not recoverable at all.
     “Because the trial court denied costs entirely, it did not consider the reasonableness of the city’s claimed costs,” Banke wrote. “On remand, it must exercise its discretion in this regard.”
     Development has already begun around Market and Octavia streets in the Hayes Valley district, with recently finished, 1,001 square-foot condos coming on the market for nearly $1.4 million.

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