Supreme Court Rules Blanket Classification of Well Construction Permits as Ministerial is Unlawful

September 2nd, 2020

By: Anne Baptiste

In Protecting Our Water & Environmental Resources v. County of Stanislaus (2020 Cal. LEXIS 5541) the California Supreme Court ruled the County of Stanislaus (County) violated CEQA by categorically classifying all well construction permits as ministerial projects exempt from CEQA review.

The case concerned the County’s interpretation of its well construction permit ordinance, Chapter 9.36 of the County Code, which incorporated standards from a Department of Water Resources bulletin, Bulletin No. 74. The County classified an entire category of well construction permits as ministerial, unless a variance was sought, although language in several of the standards authorized discretionary judgment in issuing permits. For example, Standard 8.A provided guidelines of distances proposed wells should typically be sited from potential sources of contamination; it also gave officials discretion to increase or relax those distances and allowed permits to be denied or conditioned as warranted on a case-by-case basis. Petitioners challenged the County’s practice and asserted issuance of the well construction permits was discretionary and thus subject to CEQA.

The trial court ruled that issuance of nonvariance approvals was ministerial. The court of appeal reversed. It agreed that many of the County’s decisions under Chapter 9.36 were ministerial acts but found compliance with Standard 8.A was a discretionary action.

Based on the language of Standard 8.A, case law, and the CEQA Guidelines, the Supreme Court concluded that whether the issuance of the permits is ministerial or discretionary depends on the circumstances. Thus, it found the County could not classify the permits as either categorically ministerial or discretionary.

The Supreme Court began by reviewing several cases applying the “functional test.” Under the functional test, a project is ministerial if the agency either (1) has no discretionary authority to deny or shape a project or (2) has some discretionary authority over a project but lacks authority to address the project’s environmental impacts. Where an agency is authorized to disapprove or condition a project to address environmental concerns, the project is discretionary. Although the functional test applies to individual project approvals—and thus was not directly applicable to the County’s categorical classification—the Supreme Court noted its factors were instructive.

The Supreme Court determined the County’s interpretation of Chapter 9.36 was subject to de novo review. The Court further emphasized that its review was guided by the principles that “CEQA must be interpreted ‘to afford the fullest possible protection to the environment within the reasonable scope of the statutory language’” and “to reduce or avoid environmental damage by requiring project changes when feasible.” With these principles in mind, the Supreme Court concluded the County violated CEQA by categorically classifying the permits as ministerial.

The Supreme Court explained that Standard 8.A conferred significant discretion to the county health officer because the officer may deny or condition project approval where necessary to protect against well contamination. The Supreme Court stated: “The permit approval process allows County to shape a well construction project in response to concerns that could be identified by an environmental review.”

The Supreme Court rejected multiple arguments asserted by the County as justification for the blanket classification. It explained the County’s argument that Section 8.A was merely part of a larger regulatory scheme, properly classified as ministerial, conflicts with CEQA Guidelines section 15268(d) and case law. The County’s argument that Chapter 9.36 did not authorize the County to mitigate all environmental concerns failed because the question is whether the agency was empowered to do anything, rather than everything, to mitigate CEQA impacts. Additionally, the Supreme Court refused to allow a misreading of CEQA to prevent potentially increased costs and delays associated with discretionary decisions.

The Supreme Court then rejected the County’s argument that its interpretations of Chapter 9.36 and Bulletin No. 74 were owed deference. First, the County was not interpreting its own ordinance, but state standards explicitly incorporated from Bulletin No. 74. Additionally, because the County claimed the ministerial exemption applied to an entire category of permits as a matter of law, the decision included no factual determinations that would be afforded deference as would be the case when issuing an individual permit. Citing Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 7, the Supreme Court acknowledged that the County’s interpretation bore consideration, but “the amount of deference due is ‘situational.’” The Supreme Court found the County’s position was not authoritative because the County failed to establish that it had an advantage over the courts in interpreting Bulletin No. 74 or that its interpretation was “probably correct.”

Thus, the Supreme Court rejected the County’s argument that the issuance of the category of permits was always ministerial, reiterating that Standard 8.A provided enough discretion to the County to render some permitting determinations discretionary.

However, the Supreme Court also rejected the argument that the issuance of the permits was always discretionary. The presence of provisions granting authority is not determinative alone, and CEQA Guidelines section 15268(a) allows case-by-case classification for permits issued under the same ordinance. Pursuant to CEQA Guidelines section 15357, the Supreme Court inferred that “[i]f the circumstances of a particular project do not require the exercise of independent judgment, it is not discretionary.” Accordingly, the Supreme Court concluded that the County’s blanket classification was unlawful but Petitioners failed to demonstrate all permit issuances are discretionary.

Key Point

When an ordinance contains standards that authorize a degree of independent judgment regarding environmental concerns, an agency cannot categorically classify the issuance of permits under it as ministerial. However, if the agency does not need to apply discretion to a particular permit, that permit may still be classified as ministerial.