Otay Ranch, L.People v. County of San Diego

Opinion McCONNELL, P. J. INTRODUCTION The primary issue in this appeal is whether, after a voluntary dismissal of a petition for writ of mandate, the trial court erred by allowing the County of San Diego (the County) to recover actual labor costs incurred for an attorney and paralegals to prepare an administrative record. Finding no error, we affirm the order and judgment. Preliminarily, however, we dismiss the appeals of The Otay Ranch, L.P. (Otay Ranch), a cancelled limited partnership, and Sky Communities, Inc. (Sky Communities), a suspended corporation, for lack of capacity. We deny the motion to dismiss the appeal of the remaining appellant, Sky Vista, Inc. (Sky Vista), which is an active corporation. FACTUAL AND PROCEDURAL BACKGROUND A The County approved a “Remedial Action Plan” (RAP) for a remediation project at the former Otay Skeet and Trap Shooting Range (Project) in Chula Vista, California, and adopted a “Final Mitigated Negative Declaration” (MND) on September 12, 2012. The Project involved “investigation and remediation of surface and subsurface areas impacted from historic shooting range activities” and included “remediation of soil impacted by lead and polynuclear aromatic hydrocarbons (PAHs), removal of ‘White Material^], as well as the removal of target debris and wood debris from the site.” The Otay Ranch, Sky Communities, and Sky Vista (collectively, Otay Ranch parties) are the former owners of the shooting range. They filed a petition for writ of mandate in October 2012 alleging the County (1) did not comply with the requirements of the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.) when it approved and adopted the MND and RAP without preparing an environmental impact report and (2) did not comply with Health and Safety Code section 25356.1 in approving the RAP. The Otay Ranch parties also sought declaratory and *64 injunctive relief. Real party in interest, Flat Rock Land Company, LLC (Flat Rock), is the current owner of the shooting range property and project applicant, which is undertaking voluntary remediation of the site before future development. B The Otay Ranch parties elected to prepare the record of the proceedings, subject to certification of accuracy by the County. (Pub. Resources Code, § 21167.6, subd. (b)(2).) After the court denied the Otay Ranch parties’ application for a temporary restraining order to halt the remediation work, the parties stipulated to extend the deadline for preparation and certification of the administrative record to the end of January 2013. The court set a briefing schedule and ordered a hearing date for July 12, 2013. In January, the parties stipulated again to extend the deadline for certification of the record of proceedings to February 8, 2013, and later agreed to a further informal extension. The parties met on February 7, 2013, to discuss the proposed CEQA record. According to counsel for the County, over half of the documents listed in the proposed index were documents not properly part of the CEQA record and the index omitted hundreds of documents that were part of the CEQA record. After this meeting, the Otay Ranch parties voluntarily dismissed the CEQA cause of action. The Otay Ranch parties filed an amended petition in April 2013 alleging a cause of action for lack of compliance with the Health and Safety Code and a request for declaratory relief. The Otay Ranch parties did not file the administrative record with the amended petition or indicate when the administrative record would be filed. On April 25, 2013, the court denied Otay Ranch’s request for an order shortening time to hear a motion to stay the briefing and hearing in this case pending the outcome of the trial in another case involving environmental cleanup of the shooting range. 1 During the ex parte hearing, the court inquired about the status of the administrative record. Since the Otay Ranch parties had not prepared the record, counsel for the County stated the County would undertake preparation of the administrative record and would file it with its answer, which was due within 10 days. The Otay Ranch parties did not object to the County preparing the record nor did it challenge the *65 County’s assertion the Otay Ranch parties would be obligated to pay the costs of preparing the record. C Because the County department responsible for maintaining the files associated with the project did not have the manpower or resources to prepare the administrative record, it asked the outside law firm representing it in the litigation to prepare the record. Counsel for the County worked with James G. Clay, the County staff member most knowledgeable regarding the project, to gather and electronically reproduce the pertinent portions of the administrative record. Although the County maintained the project files in a manner allowing the County to perform its responsibilities on the case over the previous decade, parts of the file were segregated, duplicated and disseminated to various staff, divisions and departments. Counsel for the County initially tasked preparation of the administrative record to experienced paralegals, document clerks and an electronic record vendor. However, as the work unfolded, it became necessary for the attorney to become actively involved in reviewing and organizing the record. Given the technical complexity of the documents, the scope of the record and the manner in which the documents were maintained, the attorney hired by the County was the only person who understood the interplay of the various versions of the documents as well as which documents should be included in the administrative record and which should not. According to Mr. Clay, the work required someone with specific knowledge and a comprehensive understanding of the project over the previous decade to reassemble various documents and technical reports with supporting documentation to prepare an adequate administrative record, but the County did not have adequate staffing to undertake this effort. The attorney and the paralegals worked extended hours and through the weekend to prepare the record. The County filed and served the administrative record on May 8, 2013, consisting of 326 documents totaling more than 18,000 pages. The following day, May 9, 2013, the Otay Ranch parties dismissed the entire action. D The County submitted a memorandum of costs seeking recovery of $66,638.14 for preparation of the administrative record. The Otay Ranch parties moved to tax the County’s cost, requesting the court disallow $59,545 for attorney and paralegal time incurred to prepare the administrative record. The Otay Ranch parties argued, as they do on appeal, attorney fees should *66 not be included in a cost award for preparation of the administrative record because attorney fees are not authorized in this action by contract, statute or law. The Otay Ranch parties did not object to $7,093.14 in record preparation costs for time spent by law firm document clerks and county staff or to costs associated with producing the electronic record through an outside vendor. The County opposed the motion arguing the “labor costs of ‘persons with specialized knowledge,’ are recoverable when they are reasonably necessary” to prepare an administrative record. The County presented declarations from Mr. Clay, defense counsel, and a paralegal explaining the process of assembling the administrative record and why it was reasonably necessary to expend attorney and paralegal time to prepare the administrative record. The County also submitted supporting billing statements. Noting the Otay Ranch parties failed to prepare the administrative record in the six months since the action was filed, the trial court ruled the Otay Ranch parties were responsible for the costs of preparing the record. The court ruled a recoverable cost incurred in preparing the record “must include the labors of the County” in preparing the record. Relying on this court’s holding in River Valley Preservation Project v. Metropolitan Transit Development Bd. (1995) 37 Cal.App.4th 154, 181 [43 Cal.Rptr.2d 501] (River Valley) that labor costs incurred for preparing an administrative record are allowable if “necessarily incurred and reasonable,” including labor for “persons with specialized knowledge” (ibid.), the trial court ruled “it was reasonably necessary” for the County’s attorney and her paralegals to prepare the administrative record since the County “did not have the resources or experienced personnel” to prepare the record. The court allowed the County to recover only attorney and paralegal time expended after the County decided to prepare the record on April 25, 2013, and disallowed requested time prior to that date. Therefore, the court awarded $37,528.14 in costs for preparation of the administrative record, which included $30,435 in labor costs for the County’s attorney and paralegals plus $7,093.14 in unchallenged costs. The court disregarded as untimely new evidence submitted in reply regarding an indemnity agreement between the County and Flat Rock. DISCUSSION I Motion to Dismiss * *67 II Cost for Preparing Administrative Record May Include Attorney and Paralegal Labor Sky Vista contends the trial court abused its discretion in this case by including compensation for the time the County’s retained counsel and paralegals spent to prepare the administrative record. It argues this amounts to an award of attorney fees, which are not expressly authorized by contract, statute or law. The County contends the trial court properly exercised its discretion to allow recovery of attorney and paralegal time after determining the time was reasonable and necessary for preparation of the administrative record. We agree with the County. A The costs to prepare the administrative record for an administrative mandamus action are recoverable. Code of Civil Procedure section 1094.5, subdivision (a), provides “[ejxcept when otherwise prescribed by statute, the cost of preparing the record shall be borne by the petitioner” and “[i]f the expense of preparing all or any part of the record has been borne by the prevailing party, the expense shall be taxable as costs.” Code of Civil Procedure section 1094.6, subdivision (c), specifies the contents of the administrative record and reiterates the petitioner must bear the cost of preparing the record stating, in relevant part, “[t]he local agency may recover from the petitioner its actual costs for transcribing or otherwise preparing the record.” In petitions alleging CEQA violations, Public Resources Code section 21167.6, subdivision (b)(1), requires payment of “any reasonable costs or fees imposed for the preparation of the record of proceedings in conformance with any law or rule of court.” 2 The plaintiff or petitioner may elect to prepare the record in a CEQA case or to agree to an alternative method of preparing the record, subject to certification of accuracy by the public agency. (Pub. Resources Code, § 21167.6, subd. (b)(2).) We construe similar statutes in light of one another. (Ziesmer v. Superior Court (2003) 107 Cal.App.4th 360, 366 [132 Cal.Rptr.2d 130].) The County asserts Code of Civil Procedure section 1094.6 requires an award of its “actual costs” without a determination of reasonableness or *68 necessity. However, the County did not cross-appeal and does not ask us to decide this point because it contends where, as here, a public agency prepares the administrative record and is the prevailing party, it is entitled to costs the trial court finds to be “reasonably necessary” and “reasonable in amount” to prepare the administrative record. (Code Civ. Proc., § 1033.5, subd. (c)(1)-(4); 3 see 1094.5; Marlow v. Orange County Human Services Agency (1980) 110 Cal.App.3d 290, 294-295 [167 Cal.Rptr. 776] [trial court properly exercised its discretion in determining cost of a hearing transcript sought under Code Civ. Proc., § 1094.5 was reasonable and necessary].) “Whether a particular cost to prepare an administrative record was necessary and reasonable is an issue for the sound discretion of the trial court. [Citations.] Discretion is abused only when, in its exercise, the court ‘exceeds the bounds of reason, all of the circumstances being considered.’ [Citation.] The appellant has the burden of establishing an abuse of discretion.” (River Valley, supra, 37 Cal.App.4th at p. 181.) Where “the determination of whether costs should be awarded is an issue of law on undisputed facts, we exercise de novo review.” (City of Long Beach v. Stevedoring Services of America (2007) 157 Cal.App.4th 672, 678 [68 Cal.Rptr.3d 779].) B Courts have long recognized the labor costs incurred to prepare an administrative record are recoverable items of costs. In Citizens for Quality Growth v. City of Mt. Shasta (1988) 198 Cal.App.3d 433 [243 Cal.Rptr. 727], the City presented evidence it did not have sufficient employees to prepare the record within the time required so it obtained assistance from a paralegal and a clerk from a private law firm to organize and index the documents. The trial court found the cost of preparation was necessarily incurred, but the appellate court reversed and remanded for the court to make a determination about whether the amount was reasonable. (Id. at pp. 447-448.) In River Valley, we affirmed an order allowing recovery of labor costs for an engineer and a paralegal employed by the agency to collect and index an administrative record. (River Valley, supra, 37 Cal.App.4th at pp. 180-183.) We noted the “history and complexity” of that case “required a complete, organized and adequately indexed administrative record for the *69 court’s proper review, necessitating the expense of physical and organizational skills to accomplish this result.” (Id. at p. 181.) Under the circumstances, we concluded the trial court acted within its discretion when it found “it was reasonably necessary for persons with specialized knowledge” to prepare the administrative record. (Ibid.) We held a commonsense reading of the CEQA cost recovery statute required costs for preparation of the administrative record to include time spent to prepare the record. Otherwise, it would defeat the statutory purpose by shifting the financial burden to the public agency. “[T]axpayers . . . should not have to bear the cost of preparing the administrative record in a lawsuit brought by a private individual or entity.” (37 Cal.App.4th at p. 182.) In St. Vincent's School for Boys, Catholic Charities CYO v. City of San Rafael (2008) 161 Cal.App.4th 989, 1013, 1019 [75 Cal.Rptr.3d 213], the appellate court affirmed an order awarding information technology fees and staff labor costs the City incurred to respond to the petitioner’s discovery demands to retrieve electronic data. The trial court did not award costs related to attorney efforts in preparing the record, but there was no challenge to the trial court’s decision in that regard. (Id. at p. 1013.) In affirming the order, the court stated “where necessary to preserve the statutory purposes of cost containment and expediting CEQA litigation, the prevailing party in a CEQA action may recover ‘reasonable costs or fees imposed for the preparation’ [citation] of the record, even if the nonprevailing party elected to prepare the record . . . .” (Id. at p. 1019.) More recently, in California Oak Foundation v. Regents of University of California (2010) 188 Cal.App.4th 227 [115 Cal.Rptr.3d 631] (California Oak), the appellate court affirmed an order including labor time for a paralegal and other university staff in an award of costs for preparation of an administrative record. (Id. at pp. 294-295.) The court noted the paralegal assembled and indexed the documents in the record and counsel for the university spent additional time reviewing and revising portions of the record. 4 Given the history and complex nature of the proceedings, the appellate court did not find it surprising “the University spent a great deal of time and expense ensuring the entire administrative record was prepared and copied in an appropriate manner.” (Id. at p. 295.) The appellate court could not say “the trial court exceeded the bounds of reason in accepting as reasonable the hours and rates claimed by the University for performing these necessary tasks.” (Ibid.) The California Oak court distinguished Hayward Area Planning Assn. v. City of Hayward (2005) 128 Cal.App.4th 176, 184-185 [26 Cal.Rptr.3d 783] *70 (Hayward), which disallowed recovery of record preparation costs sought under the CEQA statute where the agency delegated the task to a third party interested in the litigation. In Hayward, the court observed courts have allowed public agencies to collect the labor costs of outside assistance when preparing an administrative record, including the use of a private law firm, but no court “condoned the unilateral delegation of the task to a party with an interest in the litigation.” (Hayward, supra, at p. 184.) The California Oak court did not find Hayward controlling because the university prepared the record itself and did not improperly delegate record preparation to a third party. (California Oak, supra, 188 Cal.App.4th at p. 295.) Similarly here, the County did not delegate preparation of the record to a third party. The County undertook preparation of the administrative record after months of inaction on the part of the Otay Ranch parties, which initially elected to prepare the administrative record for their CEQA claim. Given the history and complexity of the project and how the documents were maintained, we cannot conclude the trial court exceeded the bounds of reason in determining it was “reasonably necessary” for the County’s retained counsel and paralegals to prepare the administrative record since the County “did not have the resources or experienced personnel to prepare the [rjecord.” Sky Vista does not challenge the labor costs charged for County staff or law firm document clerks to assist with preparation of the administrative record. It challenges only the labor costs incurred for an attorney and paralegals to prepare the record by arguing these costs constitute attorney fees. Under Sky Vista’s analysis, an attorney’s labor for preparation of an administrative record could never be recovered, even if the hourly amount charged was de minimis. Code of Civil Procedure sections 1094.5 and 1094.6 require a petitioner to pay “actual costs” and expenses of preparing the administrative record. Under the particular circumstances of this case where the trial court found it was reasonably necessary for the County to incur attorney and paralegal labor costs to prepare the administrative record within a short window of time, we see no reason to differentiate between those actual labor costs and actual labor costs for agency staff and document clerks to prepare an administrative record. Nor do we see a reason to differentiate between labor costs incurred by individuals directly employed by a public agency and those incurred by individuals employed by a private law firm retained by the agency, so long as the trial court determines, as it did here, the labor costs were reasonably and necessarily incurred for preparation of the administrative record. To hold otherwise would undermine the statutory policy of shifting the costs and expenses of preparing an administrative record away from the *71 public and to the private individual or entity bringing the lawsuit. (Code Civ. Proc., §§ 1094.5, subd. (a), 1094.6, subd. (c); see River Valley, supra, 37 Cal.App.4th at p. 182.) We are not persuaded by Sky Vista’s citation to Department of Forestry & Fire Protection v. LeBrock (2002) 96 Cal.App.4th 1137 [117 Cal.Rptr.2d 790]. In that case, the court did not allow a prevailing party to recover attorney fees in an action filed against her by California’s Department of Forestry and Fire Protection to recover the costs of suppressing a fire originating on her property. (Id. at pp. 1138, 1140.) After analyzing the pertinent Health and Safety Code provisions, the court concluded the statutes delineated recovery for “the costs of suppressing the fire, providing rescue or emergency services, investigation, making reports, and costs relating to accounting for the fire and collection of the suppression and rescue costs,” but did not mention attorney fees for enforcing or defending an action to recover such costs. (Id. at pp. 1140-1141.) Here, Code of Civil Procedure section 1094.6, subdivision (c), provides for recovery of the “actual costs for transcribing or otherwise preparing the record.” It does not delineate or limit those costs to certain categories. Nor is the County seeking to recover attorney fees for enforcing or defending an action. It is simply seeking to recover the costs it actually incurred to prepare the record. Sky Vista’s citation to Science Applications Internat. Corp. v. Superior Court (1995) 39 Cal.App.4th 1095 [46 Cal.Rptr.2d 332] (Science Applications) is also inapposite. In a prior appeal in that case, we reversed an attorney fee award concluding the contract language at issue did not permit recovery of attorney fees. We remanded to consider whether items the trial court awarded for “litigation expenses” amounted to attorney fees, which would be disallowed under the terms of the contract, or as otherwise recoverable costs under Code of Civil Procedure section 1033.5. (Science Applications, supra, at p. 1099.) On a petition for writ of mandate challenging the new award of costs, we concluded the costs of hiring a “ ‘high tech’ ” paralegal to organize documents and access them in discovery and trial were not recoverable under the terms of the contract at issue in that case for the same reason we disallowed recovery of attorney fees. (Id. at p. 1104.) Science Applications did not involve costs and expenses associated with preparation of an administrative record and it has no application to the facts before us. C The Otay Ranch parties did not challenge below the reasonableness of the hourly rates charged for the attorney and the paralegals for record preparation, which were discounted from their regular rates to $350 and $100 per hour, respectively. Sky Vista makes no such challenge on appeal. However, *72 the trial court undertook its own assessment of the reasonableness of those rates. It took into account the nature and complexity of the case, the results obtained, the amount of work involved, the skill required and the time consumed as well as the court’s own knowledge and experience with the rates charged in the community for similar work and concluded the “rates charged are at the low end of what the court would consider reasonable given the experience of counsel.” The court did limit the amount awarded to only those hours reflecting labor after the date on which the County affirmatively elected to prepare the administrative record. We find no abuse of discretion in this regard. III Evidence Submitted in Reply * DISPOSITION The appeals of Otay Ranch and Sky Communities are dismissed. The order and judgment awarding costs for preparation of the administrative record is affirmed. The County is entitled to costs on appeal. Nares, J., and Aaron, J., concurred. Footnotes [1] This is one of several cases pending in the San Diego Superior Court concerning the environmental cleanup of the former shooting range. (Otay Land Co. v. U.E. Limited, L.P. (No. GIC869480); Otay Land Co. v. U.E. Limited (37-2009-00101976-CU-OR-CTL); Otay Land Co. v. U.E. Limited (37-2012-00104941-CU-BT-CTL).) [*] See footnote, ante, page 60. [2] The word “reasonable” was added to subdivision (b)(1) of Public Resources Code section 21167.6 in 2002. (Stats. 2002, ch. 1121, § 4, p. 7189; see Historical and Statutory Notes, 56B West's Ann. Pub. Resources Code (2007 ed.) foll. § 21167.6, p. 194.) [3] Code of Civil Procedure section 1033.5, subdivision (c) provides: “Any award of costs shall be subject to the following: [$ (1) Costs are allowable if incurred, whether or not paid. [][] (2) Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation. [j[] (3) Allowable costs shall be reasonable in amount. H] (4) Items not mentioned in this section and items assessed upon application may be allowed or denied in the court’s discretion.” (Italics added.) [4] It is not clear from the court’s discussion of the facts if attorney time was included in the cost award. [*] See footnote, ante, page 60.