First District Holds Sonoma County Vineyard Development (VESCO) Permit was Ministerial Approval Exempt from CEQA

Miller Starr Regalia
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On April 21, 2017, the First District Court of Appeal filed a 22-page published opinion providing significant guidance and analysis concerning the critical, but sometimes elusive, distinction between “discretionary” project approvals that are subject to CEQA and “ministerial” ones that are exempt from it.  Sierra Club, et al. v. County of Sonoma (Ronald and Ernest Ohlson, dba Ohlson Ranch, Real Parties in Interest) (1st Dist., Div. 1, 2017) ___ Cal.App.5th  ___. (As a matter of disclosure, I represent the real parties, the Ohlsons, in this action.)

Nature of the Action and The Court of Appeal’s Holding

The case involved a challenge by the Sierra Club and other environmental group plaintiffs (“Appellants”) to the Sonoma County Agricultural Commissioner’s issuance of a vineyard development permit to the owners of Ohlson Ranch under the provisions of County’s Grading, Drainage, and Vineyard and Orchard Site Development Ordinance (commonly known as “VESCO”).  The Commissioner determined the VESCO permit, which authorized development of a 54-acre vineyard on the Ohlsons’ remote western Sonoma County ranch, was a ministerial approval and therefore exempt from CEQA review.  Appellants’ action challenged this determination, contending VESCO contains vague, subjective standards for permit issuance that confer discretion on the Commissioner and that this rendered his permit approval decision – and all VESCO permit approvals, for that matter – subject to CEQA.

The Court of Appeal rejected Appellants’ arguments. It affirmed the trial court’s judgment denying their writ petition, and summarized its key holdings as follows:  “Although the ordinance may allow the Commissioner to exercise discretion when issuing erosion-control  permits in some circumstances, petitioners fail to show that the Commissioner improperly determined that issuing the Ohlsons’ permit was ministerial.  Most of the ordinance’s provisions that potentially confer discretion did not apply to the Ohlsons’ project, and petitioners fail to show that the few that might apply conferred the ability to mitigate potential environmental impacts to any meaningful degree.”

Factual and Regulatory Background, and Litigation Posture

As relevant background, Sonoma County grape growers could plant or replant vineyards “as a matter of right” without need of any permit or governmental permission until 2000, when the County enacted the first version of VESCO, which has been amended several times in the years since.  VESCO’s Article 8 requires growers to obtain an erosion-control permit to establish or plant a vineyard.  To do so they must submit plans and specifications meeting certain directives and requirements.  For low-erosion risk (Level I) sites the grower may prepare the plans, but for steeper and higher-erosion risk (Level II) sites, a civil engineer must prepare the plans.  VESCO’s Article 16 sets out substantive standards for conducting grading, drainage improvement, and vineyard and orchard site development, some of which require compliance with BMPs set forth in a separate publication of the Commissioner.

The Ohlsons’ October 2013 application for a Level II erosion-control permit for the 54-acre vineyard contained site maps, an engineer’s drainage report, and a biological-resources report, and indicated the cattle-grazed site included wetland areas and seasonal swales, but no trees or streams.  The application specified in detail the means whereby erosion and drainage were to be controlled and wetlands protected.

The Commissioner visited the site in December 2013 and used a 69-item checklist to review the application for completeness and substantive adequacy, prior to issuing the permit on December 30, 2013.  All items were marked as satisfied or left unmarked as inapplicable, and while the Commissioner sought some corrections or clarifications (which the Ohlsons made) he did not require any substantive changes in the application materials.  Several months after he approved the permit, the Commissioner issued a notice of exemption (NOE) declaring his action was ministerial and thus exempt from CEQA, and Appellants’ suit followed.  (While the opinion notes the trial court rejected Respondents’ and Real Parties’ “various procedural defenses” – which were not specified in the opinion, but which in fact included statute of limitations, mootness, and res judicata/collateral estoppel – the Court of Appeal expressly declined to reach these issues, stating in a footnote:  “We need not address the Ohlsons’ various procedural defenses because we affirm the trial court’s ruling on the substantive merits.”)

Key Takeaways From the Published Opinion

Key takeaways from the Court of Appeal’s opinion include:

  • The Court applied the “prejudicial abuse of discretion” standard of review in “reviewing the Commissioner’s determination, made in the initial step of the three-tiered [CEQA] process, that issuing the Ohlsons’ permit was exempt from CEQA review because the action was ministerial.” Noting that Guidelines § 15268(a) “makes clear that [t]he determination of what is ‘ministerial’ can most appropriately be made by the particular public agency involved based upon its analysis of its own laws, and [that] each public agency should make such determinations either as a part of its implementing regulations or on a case-by-case basis” (also citing Friends of Davis v. City of Davis (2000) 83 Cal.App.4th 1004, 1015; Sierra Club v. Napa County board of Supervisors (2012) 205 Cal.App.4th 162, 178), the Court stated it would review an agency’s related factual determinations for substantial evidence and pure questions of law de novo.
  • In discussing CEQA’s “ministerial exemption” (see Resources Code, § 21080(a), (b)(1)), the Court reviewed the relevant Guidelines (§§ 15357, 15369) and decades of leading case law defining and analyzing the terms “ministerial” and “discretionary,” distilling them and stating: “Courts continue to recognize that actions by a local agency are discretionary when they require the exercise of the administrator’s subjective judgment and are ministerial when they are taken under regulations that allow for little or no exercise of such judgment.”
  • The Court noted “[a]n important elaboration” of ministerial/discretionary analysis is the “functional test” announced in Friends of Westwood, Inc. v. City of Los Angeles (1987) 191 Cal.App.3d 259, which focuses on whether an agency has discretion to require project changes that would mitigate environmental consequences an EIR might reveal. Recent decisions applying Friends of Westwood’s functional test have recognized:  “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.”  (Quoting San Diego Navy Broadway Complex Coalition v. City of San Diego (2010) 185 Cal.App.4th 924, 934, internal quotes omitted.)
  • Noting that VESCO “itself categorically declares that issuing erosion-control permits is ministerial, except when an application seeks exceptions from the established standards[,]” the Court observed that “[b]ecause…a determination whether issuing a permit is ministerial or discretionary generally must be made on the basis of the project’s particular circumstances, we are skeptical of such a categorical declaration.” It found it didn’t have to decide whether VESCO’s “[categorical] declaration is always binding,” however, “because petitioners have not shown that any provisions that arguably grant discretion actually apply to the Ohlsons’ application so as to refute the Commissioner’s determination that issuing the permit was ministerial.”
  • In addressing Appellants’ contentions that a number of specific VESCO provisions called for the exercise of discretion, the Court stated: “We need not decide whether most of the provisions cited by petitioners confer discretion on the Commissioner because they did not apply to the Ohlsons’ application.  The relevant question in evaluating whether the approval of a particular project was discretionary is not whether the regulations granted the local agency some discretion in the abstract, but whether the regulations granted the agency discretion regarding the particular project.  In other words, a regulation cited as conferring discretion must have been relevant to the project.”  In further explaining CEQA’s project-specific focus in this context the Court stated:  “Our review is not directed to the regulations themselves but to the agency’s action in approving the project under those regulations.  Thus, any regulation cited as granting discretion to the agency must actually have applied to the project under review.  If it did not, the agency could not have exercised discretion under that regulation in approving the project.”
  • Applying these rules, the Court noted some of the provisions cited by Appellants were facially inapplicable to the Ohlsons’ project (e.g., those concerning watercourses, lakes and trees, which features were absent from the property), and some were excluded by the Commissioner as inapplicable, or applied only to post-approval vineyard operations and thus played no role in permit issuance.
  • After eliminating the inapplicable VESCO provisions, only 3 potentially relevant ordinance requirements remained: (1) a 50-foot wetlands setback “unless a wetlands biologist recommends a different setback”;  (2) that storm water be diverted “to the nearest practicable disposal location”; and (3) that applicant “[i]ncorporate natural drainage features…whenever possible.”  Even if the language of these provisions arguably conferred some discretion, however, that discretion would still have to be of a certain kind under CEQA’s functional test, i.e., discretion that gives the agency the ability to mitigate environmental damage in a meaningful way.  Deferring to the Commissioner’s determination under the facts here, the Court held Appellants failed to carry their burden of showing these provisions conferred meaningful discretion.
  • In rejecting Appellants’ argument that any kind of discretion was sufficient to trigger CEQA, the Court also pointed out that accepting that “argument would have the perverse effect of discouraging agencies from enacting ordinances, such as the ordinance here, specifically designed to mitigate environmental impacts through a permitting process. … [A]gencies would be motivated to avoid CEQA burdens by simply not enacting such ordinances in the first place.”
  • The Court also rejected Appellants’ argument that the VESCO permit was discretionary because the Ohlsons accepted the Commissioner’s recommendations that they include general mitigation measures not required by the ordinance in their engineering plans. Relying on the holding in Friends of the Juana Briones House v. City of Palo Alto (2010) 190 Cal.App.4th 286, 309 that “conditions voluntarily accepted by a permit applicant but not required under the applicable ordinance did not render the permit discretionary,” the Court stated:  “We decline to hold that the issuance of a permit, otherwise ministerial, is rendered discretionary and therefore subject to further CEQA review because the applicant offers to mitigate potential impacts in ways that are not required.”  Nor did the Court accept Appellants’ argument that the Commissioner’s requests for corrections and clarifications to the Ohlsons’ permit application demonstrated CEQA-triggering discretion; “the simple fact that an agency asks for more information does not establish that the applicant must provide that information before the applicant can compel the issuance of the permit” and Appellants failed to show the corrections and clarifications were significant enough to possibly alleviate adverse environmental impacts.
  • The Court also made some significant observations regarding the general nature of County’s VESCO, finding that “the Commissioner’s consideration of the Ohlsons’ application was confined by a series of finely detailed and very specific regulations. …. While these provisions may grant some discretion, the scope of any such discretion is drastically narrower than that which was conferred by the broad language of the regulations in [People v.] Department of Housing [& Community Dev. (1975) 45 Cal.App.3d 185], Day [v. City of Glendale (1975) 51 Cal.App.3d 817] and Friends of Westwood.  In addition, the provisions here are technical.  A provision that appears to a lay person to grant discretion to an agency might, as understood by a person with technical knowledge, grant little or none in the context of a particular proposed project.”

Implications and Significance of the Decision

Simply put, drawing the line between ministerial and discretionary action is extremely significant – it is the dividing line that determines whether a lead agency’s project approval is exempt from or subject to CEQA.  The Court of Appeal’s opinion applies and elaborates on CEQA’s “functional test” and holds that meaningful discretion – i.e., discretion the exercise of which could actually mitigate otherwise significant project impacts – is required to trigger CEQA compliance obligations.  The opinion discusses the relevant authorities and considerations in making the “ministerial/discretionary” determination, and emphasizes that it is properly analyzed and made in the context of a particular project, and not in the abstract or based on how the agency’s legal controls might be exercised over other projects.  The opinion thus provides significant guidance to agencies drafting or applying land use ordinances intended to establish a ministerial permitting scheme to avoid the burdens of CEQA review, and to project applicants proposing projects under such ordinances.

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