California Supreme Court Throws the Barn Doors Open, Finding That Groundwater Well Permits Aren’t Necessarily Ministerial

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On August 27, 2020, in Protecting Our Water and Environmental Resources v. County of Stanislaus, Case No. S251709 (“Protecting Our Water”), the California Supreme Court held that the County in that instance could not categorically classify its issuance of groundwater well construction permits as ministerial decisions exempt from environmental review under the California Environmental Quality Act (“CEQA”) (Pub. Resources Code, §§ 21000 et seq.).  While the Court’s Opinion does not state that all well permits must undergo CEQA review, it narrows the grounds on which the ministerial exemption may apply.  And since county well ordinances across the State comprise similar provisions, this ruling upsets the common practice of treating such permits as ministerial, not subject to CEQA.  More importantly, however, the Court’s ruling interrupts a growing trend in the cases to provide some relief from CEQA where agencies lack sufficient discretion, and creates uncertainty for lead agencies by holding that ministerial permitting decisions must be reviewed on a case-by-case basis.

Background

The distinction between discretionary and ministerial actions under CEQA is a critical one, as it fixes a public agency’s responsibility to analyze and minimize potential environmental impacts before it approves a project. As the overarching environmental protection law in California, CEQA broadly requires review of all “discretionary projects proposed to be carried out or approved by public agencies.” (Pub. Resources Code, § 21080(a).)  Environmental review of projects under CEQA can, in some cases, entail years of analysis, document preparation, public participation, and litigation.

The CEQA Guidelines (14 Cal. Code Regs., §§ 15000 et seq.) define a discretionary project as any project that requires the exercise of judgment or deliberation when an agency decides to approve or disapprove a particular activity.  (Guidelines, § 15357.)  Ministerial actions, on the other hand, are statutorily carved out as exempt from CEQA review.  (Pub. Resources Code, § 21080(b)(1).)  A ministerial decision involves “little or no personal judgment … as to the wisdom or manner of carrying out” a project.  (Guidelines, § 15369.)  An agency “merely applies the law to the facts as presented but uses no special discretion or judgment in reaching a decision.”  (Id.)  The amount of judgment or deliberation an agency can exercise in a given scenario “depends on the authority granted by the law providing the controls over the activity.”  (Id., § 15002(i)(2).)  Even where a ministerial approval could result in environmental impacts, CEQA review is not required where the approving agency lacks the authority or the ability to “shape the project” in way to sufficiently respond to the identified environmental concerns.  (Mountain Lion Foundation v. Fish & Game Com. (1997) 16 Cal.4th 105, 107 (“Mountain Lion Foundation”), citing Friends of Westwood, Inc. v. City of Los Angeles (1987) 191 Cal.App.3d 259, 267 (“Friends of Westwood”).)

Public agencies are encouraged to identify which of their projects and actions can be categorically deemed ministerial, based on the applicable laws and ordinances governing them. (Guidelines, § 15268.)  The oft-cited example provided in the CEQA Guidelines illustrates what makes a decision ministerial: “A building permit is ministerial if the ordinance requiring the permit limits the public official to determining whether the zoning allows the structure to be built in the requested location, the structure would meet the strength requirements in the Uniform Building Code, and the applicant has paid his fee.”  (Id., § 15369.) Like building permits, many counties have issued well construction permits as ministerial decisions, governed by the local ordinances that limit decision-making to the application of adopted technical construction standards.

Well Permit Ordinance

Much like many other counties, Stanislaus County issues its groundwater well permits pursuant to chapters 9.36 and 9.37 of the County Code.  As directed by California Water Code section 13801, Chapter 9.36 incorporates the technical construction criteria set forth in the California Department of Water Resources’ Bulletin No. 74, concerning the “location, construction, maintenance, abandonment, and destruction” of groundwater wells for the purpose of protecting groundwater quality. (Opinion, p. 5.)  Chapter 9.37 prohibits the issuance of permits that would result in the unsustainable extraction or export of groundwater supplies.  Following the recommendation in CEQA Guidelines section 15268, the County adopted CEQA procedures in 1983 that classified all well construction permits that do not require a variance as ministerial decisions on the basis that the County is limited to assessing whether a proposed well meets the adopted Bulletin No. 74 standards.

In 2014, plaintiffs challenged the County’s ministerial classification of its permits, arguing the criteria contained in the State standards require the County to exercise discretion, thus prompting CEQA review.  The plaintiffs identified four Bulletin No. 74 standards they believed necessitate the exercise of independent judgment: Standard 8.A (requiring wells to be an “adequate” distance from contamination sources); Standard 8.B (concerning “possible” placement of wells relative to the groundwater gradient); Standard 8.C (concerning “possible” placement of wells relative to flooding areas); and Standard 9 (requiring wells be “effectively” sealed).  The trial court was not persuaded, finding the County only determined whether applications met certain technical standards, which was ministerial in nature.

The Fifth District Court of Appeal overturned the trial court’s ruling, holding that unlike the more objective findings under Standards 8.B, 8.C, and 9, the determination of well-spacing under Standard 8.A is inherently discretionary because it requires the County to employ subjective judgment.  (Protecting Our Water & Environmental Resources v. Stanislaus County, 2018 WL 4042782.)  That same day, the Fifth District issued a nearly identical decision in Coston v. Stanislaus County, 2018 WL 4042821, holding that the County’s authority to decide the location and spacing of individual wells under Standard 8.A renders the permit approval process discretionary, even where the individual permit in question does not require a spacing determination.

In contrast, the Second District Court of Appeal reached the opposite conclusion only two months prior in California Water Impact Network v. County of San Luis Obispo (2018) 25 Cal.App.5th 666 (“CWIN”).  There, the court held that the County of San Luis Obispo’s issuance of well permits under the standards adopted in its ordinance was ministerial and thus exempt from CEQA.  Consistent with earlier case law, the CWIN court found that the ordinance and incorporated State standards impose only fixed technical requirements and do not allow the kind of discretion necessary to “shape the project” to warrant CEQA review.

The Protecting Our Water Opinion

In recognition of the conflict in the lower courts, the Supreme Court granted review of Protecting Our Water and deferred further action on the Coston and CWIN decisions pending its resolution.  The core issue presented to the Court was whether the County’s issuance of well construction permits is ministerial or discretionary under CEQA.

The County argued that its administration of the permits must be ministerial because its options to mitigate any potential environmental damage are limited to location adjustments, which on their own are not enough to meaningfully address CEQA concerns.  (Opinion, p. 18.)  Plaintiffs, on the other hand, argued that CEQA should apply to every well permit approval, since the County must exercise discretion any time it decides if a permit meets the governing standards.  (Id., at 9.)  Writing on behalf of the Court, Justice Carol Corrigan rejected both parties’ positions, holding instead that a blanket designation of “ministerial” or “discretionary” is simply inconsistent with the reality that some permit decisions may require discretion, while others may not.  (Opinion, p. 21.)

The Supreme Court’s holding in Protecting Our Water poses significant practical implications for public agencies that have made categorical designations of ministerial decisions pursuant to CEQA Guidelines.  Prior to this Opinion, it was well-established that requiring CEQA review only for discretionary projects “implicitly recognizes that unless a public agency can shape the project in a way that would respond to concerns raised in an EIR, or its functional equivalent, environmental review would be a meaningless exercise.”  (Mountain Lion Foundation, 16 Cal.4th at 117.)  Mountain Lion Foundation established a functional standard to be used as a touchstone for determining whether CEQA review is required, focusing on the agency’s ability to meaningfully address the environmental concerns that might be identified.

As courts have consistently held, “CEQA does not apply to an agency decision simply because the agency may exercise some discretion in approving the project or undertaking.  Instead to trigger CEQA compliance, the discretion must be of a certain kind; it must provide the agency with the ability and authority to ‘mitigate …environmental damage’ to some degree.”  (San Diego Navy Broadway Complex Coalition v. City of San Diego (“Navy Broadway Complex”) (2010) 185 Cal.App.4th 924, 934, emphasis added; see also Sierra Club v. Napa County Bd. of Supervisors (2012) 205 Cal.App.4th 162, 179 [the discretionary component of an action must give the agency authority to consider a project’s environmental consequences to trigger CEQA]; McCorkle Eastside Neighborhood Group v. City of St. Helena (2018) 31 Cal.App.5th 80, 89 [a public agency does not have authority to mitigate environmental harms flowing from a ministerial approval in a “meaningful way”].)

While it cited approvingly to the McCorkle and Sierra Club cases, the Court ultimately found them inapplicable here.  Without a particular permit approval to evaluate, the Court eschewed the functional test described in Mountain Lion Foundation and Sierra Club in favor of generally holding “Standard 8.A gives County sufficient authority, at least in some cases,” to make the issuance of well permits discretionary.  (Opinion, p. 21.) The Court indicated that limitations on an agency’s ability to mitigate environmental impacts do not render environmental review meaningless where at least some hypothetical authority—in this instance, well relocation or permit denial—exists.  (Id.)  In doing so, the Opinion seemingly lowered the threshold for the type and degree of discretion that triggers CEQA review.  (See Opinion, p. 19 [“Just because the agency is not empowered to do everything does not mean it lacks discretion to do anything.”].)  This holding appears in conflict with CEQA’s own definition of ministerial decisions, which may involve “little or no” personal judgment.  (Guidelines, § 15369.)  A county considering the exemplar ministerial building permit described in Section 15369 of the Guidelines must determine whether a permit application satisfies a number of technical building requirements; if it does not, the County has the authority to deny the permit.  Under the Court’s Opinion, it would seem that basic denial authority is sufficient discretion to warrant review under CEQA.

Countenancing its rejection of the County’s ministerial categorization, the Court also denied the plaintiffs’ overbroad request that all permit approvals be declared discretionary.  In doing so, the Court preserved the existing law that “[p]ermits issued under an ordinance are not necessarily discretionary simply because the ordinance contains some discretionary provisions.”  (Opinion, p. 22, citing Sierra Club, 11 Cal.App.5th at 32.)  Furthermore, although the Court denied granting any deference to the County’s legal interpretation of its governing authority under Chapter 9.36 for purposes of its categorical designation, any factual determination that a particular issuance decision is ministerial would be “entitled to great weight.”  (Opinion, p. 20.)  Thus, the County’s permit approvals under Chapter 9.36 may still be ministerial “[i]f the circumstances of a particular project do not require the exercise of independent judgment,” such as when there is no contamination source identified near a proposed well.

Despite imposing responsibility on the County to determine whether CEQA review is needed for each well permit, the Court declined to comment on the scope of the County’s authority once an environmental review process was commenced.  (See Opinion, p. 19 fn.10 [“We are not called upon here to determine the scope of County’s authority once an environmental review process begins. We express no view on that issue.”].)  To comply with CEQA, counties are required to make a host of findings and incorporate mitigation and alternatives where necessary to lessen environmental impacts.  (Pub. Resources Code, § 21081.)  The CEQA process also involves comprehensive notice and hearing procedures, investigations, and covers issues far beyond the groundwater quality concerns covered in Chapter 9.36 of the County Code.  But where the governing statute does not allow the issuing authority to condition or deny well permit approvals to mitigate environmental impacts that exist outside of the adopted well standards, CEQA review serves no purpose.  Query whether a county well ordinance focused solely on protecting water quality provides sufficient discretion—and indeed the obligation or duty—to administer groundwater rights or limit the volume of groundwater extractions where impacts are limited to water supply.

Conclusion

Because many counties administer their well programs utilizing similar ministerial classifications, the Supreme Court’s Protecting Our Water Opinion has significant practical considerations statewide.  Counties (and other lead agencies) will now need to tread more carefully in classifying a whole permitting scheme as ministerial and not subject to CEQA.  Applying a case-by-case approach imposes significant uncertainty and new analytic burdens on counties that have historically relied on the categorical ministerial exemption for the hundreds of permitting decisions made each year.  Groundwater well applicants—and applicants for other ministerial land use permits from counties, cities, or other public agencies—can expect significant new delays, expenditures, and legal challenges in obtaining approvals for what have been classified historically as ministerial permits.

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