More than a decade ago, a state appellate court ruled that developers could hire their own consultants to prepare environmental impact reports required by the California Environmental Quality Act (CEQA). Now, prompted by events surrounding the controversial Newhall Ranch development in Los Angeles County, a Southern California legislator has launched an effort to outlaw the practice. Assembly Bill 406, introduced February 14 by Assemblywoman Hannah-Beth Jackson (D-Santa Barbara) would prohibit anyone except the lead public agency or a consultant employed by the lead agency from preparing draft CEQA documents. It also would forbid the use of confidentiality agreements to prevent those consultants from publicly disclosing their findings — a tactic increasingly used by large developers, ostensibly to protect "trade secrets" — and would prohibit landowners from denying government employees and consultants access to their property to conduct environmental surveys. The use of private consultants to draft EIRs has long made project opponents squirm. How objective can a study be, they ask, when it is being drafted by people paid by the developer, whose financial interest in a favorable outcome is so clear and urgent? That concern was given new weight in recent months by a criminal investigation into the environmental review for Newhall Ranch. The project, proposed to be built over 25 years on 12,000 acres at the northwest end of the booming Santa Clarita Valley, would contain enough houses, condos and apartments for about 70,000 people. Newhall Land and Farming Company, developer of the nearby planned community of Valencia, is the developer. Because of its size and location — an undeveloped swath of oak-studded hills and valleys abutting growth-averse Ventura County —the Newhall Ranch project has been a magnet for controversy and litigation. That litigation has so far resulted in one court ruling of statewide significance: A Kern County Superior Court judge in 2000 ordered the company to redo the analysis of water availability in the project's environmental impact report, finding that Newhall had improperly relied on "paper" supplies from the State Water Project in determining that there would be no need to tap local groundwater. The company's latest entanglements, however, stem not from the perennial California struggle over water but from discovery of a rare plant on the Newhall Ranch property. Previously thought extinct, the San Fernando Valley spineflower was rediscovered in 1999 on land in the Santa Monica Mountains in Ventura County where another large development, Ahmanson Ranch, is planned. Given the ecological similarity between the Ahmanson and Newhall properties, it was logical to suspect the rare plant might be present at both, and in 2000 Newhall hired biologists to look for it. The biologists found one stand of spineflowers along a dirt road at Newhall Ranch, and several other stands of what they suspected were members of the same species. According to court documents recently obtained by the Los Angeles Times, Newhall then told the biologists to stop searching and reminded them that they were bound by a confidentiality agreement that barred them from disclosing what they'd found to anyone outside the company. The suspect plants were never sent to a lab for testing. When Newhall released a revised draft EIR in 2001, it reported just the single confirmed stand of spineflowers along the road, and concluded that the plants could easily be protected by fencing if the development were allowed to proceed. Environmentalists were suspicious and so were investigators for the California Department of Fish and Game (DFG), who contacted the Los Angeles County District Attorney's Office with allegations that Newhall was covering up the presence of additional stands of the endangered plant. Prosecutors began an investigation, and last year obtained a warrant to search Newhall's property. After the search, Newhall acknowledged having found additional stands of spineflowers, but said that any destruction of endangered plants took place during the course of routine agricultural operations and was therefore lawful. The company subsequently filed new environmental documents disclosing the additional spineflower populations. The company has steadfastly denied wrongdoing — and the District Attorney has dropped his investigation — but the episode renewed skepticism about the Los Angeles County policy allowing developers to hire their own consultants to prepare disclosure documents required by CEQA. Los Angeles County is hardly alone in doing so. The practice was given a stamp of judicial approval in 1991 by a state appellate court (Friends of LaVina v. County of Los Angeles, 232 C.A.3d 1446; see CP&DR Court Cases, September 1991), which rejected an environmental group's claim that an EIR was "tainted" because it was prepared by a consultant retained by the developer. The court held that as long as the county used its own independent judgment in approving the EIR, the process was valid. A least 166 cities and counties allow developers to hire their own consultants to prepare CEQA documents, according to the Governor's Office of Planning and Research. So the Newhall episode raises a question of broad significance: For whom are those consultants really working? Under CEQA, legal responsibility for determining the environmental impact of a proposed project belongs to the lead permitting agency. The existing law, and AB 406 reaffirms, however, that the public agency may hire private consultants to prepare EIRs, and then bill project applicants for the EIR's cost. Private consultants engaged in the CEQA process are, in essence, acting as proxies for that public agency, even though the developer is paying the bills. But if those consultants are acting as surrogates for the public, can their work product legally be kept out of the public record through the sort of confidentiality clause Newhall used to prevent its biologists from talking about spineflowers? If so, the policy potentially turns CEQA on its head, helping developers suppress unfavorable information rather than forcing full disclosure. Jackson's bill is meant to eliminate that unintended consequence of the 1991 appellate court ruling, while specifically exempting legitimate trade secrets from the disclosure requirements. "These are issues that people who work with CEQA have been concerned about for a while," said Sandra Spelliscy, general counsel for the Planning and Conservation League, which sponsored AB 406 in response to the Newhall Ranch controversy. "The whole point of CEQA is transparency," Spelliscy said. Sources: Sandra Spelliscy, Planning and Conservation League, (916) 313-4513. Newhall Land and Farming Company, (661) 255-4000. Assemblywoman Hannah-Beth Jackson, (916) 319-2035.