Recent Ohio Cases Involve Viticultural Activities and Zoning

In some states, “agricultural” activities are exempt from county (and, sometimes, township) zoning.  However, the line between what is “agricultural” and what is not gets blurred.  For example, in 1971, the Iowa Supreme Court ruled that the use of a four-acre tract as the site for two 40,000 capacity chick-growing houses was not “agricultural” but was “commercial” and not exempt from county zoning.  They changed their mind, however, in a 1996 decision that involved a hog confinement facility in contract production with a Pennsylvania company when they determined that the facility was exempt from county zoning even though the proposed facility was separate from any traditional farming operation carried on by the hog farmers.  

Similar issues arise with “niche” type agricultural activities – activities occurring on small tracts of land that are also combined with on-site processing.  Often, these activities are part of other agritourism activities.  One question is whether such activities are “agricultural” and thereby exempt for local zoning regulations.  Indeed, that was the question in one recent Ohio case.

In this case, a county zoning inspector sued some residential property owners when they began operating a small winery on their property in a residential zoning district.  Before they began operations, the property owners contacted the county zoning inspector to inform her of their plans and to ask about local requirements for starting a winery on residential property. The inspector indicated that there was no county permitting or licensing process for wineries and told the property owners that they could begin operations at any time.  So, the property owners began growing a small amount of grapes, and began making and bottling wine for sale on the premises largely from imported grapes and grape juice. They advertised their business locally and through the Ohio Department of Agriculture’s website.  The winery offered off-street parking and did have a small sign out front to advertise the business. 

A newly-elected county zoning inspector challenged the owners’ use of their property, and sued on the basis that the operation of the winery violated county zoning rules.  That regulation specified permitted uses of residential property in the county including certain home occupations, the use of accessory buildings, automobile parking, and the like.  The property owners argued that the operation of the winery was an “agricultural use,” which was permitted under county zoning regulations. “Agriculture” was defined in the county zoning regulations as including “viticulture.” Nevertheless, the trial court found that the county zoning regulations did apply to the winery, and that the winery operations (even though “viticulture-related) were not agricultural in scope under the regulations.  The trial court issued an injunction shutting down the winery, and the owners appealed their case to the Ohio Court of Appeals. 

On appeal, the court examined the county zoning regulations and tried to ascertain the scope of the zoning commission’s regulatory authority and permitted uses of residential property in the county. They found that the township zoning commission may not prohibit the use of any land for “agriculture.” The property owners argued that “viticulture” activities (the cultivation of grapes for the making of wine) qualified as an agricultural use and that the processing of the wine was just secondary to the grape growing process. The zoning commission disagreed, stating that since the winery purchased nearly 95% of the grapes used in their wines from out-of-state, the production and processing of wine was the primary business use.   The appellate court determined that the zoning commission’s finding was the key to the case. While the growing of grapes was permissible as an agricultural use on the property, any processing activities must be done in conjunction with the goods produced on the land.   In this instance, the grape growing activities were “directly and immediately” related to an agricultural use, but the processing of the grapes was not primarily agricultural.  In other words, the processing and marketing of the wine was the primary use of the property, not the grape growing activities.  Thus, the property owners’ current use of the property was subject to county zoning, and was properly enjoined because the property owners had not obtained a permit from the township.  So, under this type of zoning scheme, such operations will need to plant their vines and not begin processing activities until the primary source of grapes for processing and marketing activities is from on-site production.  Terry v. Sperry, 186 Ohio App.3d 798, 930 N.E.2d 846 (2010).

Note:   A dissenting judge would have deemed “agricultural” any building or structure that is used for the vinting and selling of wine, regardless of its source, that are located on land used for viticulture.  But, that still begs the question of when the land is deemed to be used for “viticulture.”  The dissent didn’t answer that question. Simply planting some vines as a means of getting around a zoning restriction when the wine is actually produced from imported grapes would seem to be an easy end-run around the zoning law.

The Ohio Supreme Court later stayed the court’s opinion pending a future opinion by the Ohio Supreme Court.  Terry v. Sperry, 125 Ohio St.3d 1447, 927 N.E.2d 1127 (2010).

The Ohio Court of Appeals decided another ag zoning/viticulture case in May of 2011.  In that case, an owner of a 64-acre lot in a residentially developed area converted portions of the property to the growing of grapes and production of wine (viticulture activity).  They ran into problems with local zoning authorities, but the court ultimately held that the viticulture activity was an “agriculture activity” that was exempt from otherwise applicable zoning requirements.  The activity involved the installation of several 250-gallon tanks and the planting of three acres of grapes capable of producing 12 tons of grapes each year (15,000 bottles of wine).  The court held that the winery activities were an ag activity and, therefore, the court’s prior decision in Terry v. Sperry didn’t apply.  Because an ag activity was involved, a pavilion that the landowner’s used for wine making and selling was exempt from township zoning regulations and the past non-ag use of the pavilion was immaterial.  In addition, a crush pad attached to the winery was also exempt from township zoning, and a bridge constructed to provide access to a forested portion of the lot was entitled to a variance from setback requirements.  Concerning the bridge, there was no detrimental impact on adjoining properties or on the delivery of governmental services and the owner was not aware of the setback requirement at the time the bridge was constructed.  

A concurring opinion took note that the conversion of the property to a winery occurred after the residential development of the surrounding property and could constitute a nuisance.  However, that issue was not before the court.  Schable, et al. v. Troyan, et al., 2011 Ohio 2452 (Ohio Ct. App. 2011).

Update on Terry v. Sperry 

On July 12, 2011, the Ohio Supreme Court issued its opinion in Terry v. Sperry.  The court began its analysis by noting that the applicable statute (Ohio Revised Code §519.21(A)) bars any township zoning commission, board of township trustees or board of zoning appeals from prohibiting agricultural uses on land or the use of buildings or structures incident to agricultural uses – including buildings or structures used primarily for venting and selling wine that are located on land that is used for viticulture.  So, there are two situations where property is exempt from zoning – (1) where the property is used for agricultural purposes; and (2) where the construction or use of buildings or structures on the property is incident to an agricultural use of the land.

As applied to the facts, the court reasoned that for the property to qualify as being used for “agriculture,” the landowner’s venting and selling activity had to be secondary to the production of grapes.  But, because the landowner’s venting and selling of wine on the property were so significant compared to the amount of grape production actually occurring on the property, the landowner’s winery operation did not fall within the general definition of “agriculture.”  But, that answered only part of the question.  The question remained as to whether buildings were being used on the property that was incident to an agricultural use of the land – the venting and selling of wine.  On that point, the Court concluded that the statutory language was clear and unambiguous.  The township simply could not regulate the zoning of buildings that are used primarily for venting and selling wine.  In addition, the Court noted that there was no requirement that the venting and selling of wine be a secondary or subordinate use of the property or that viticulture be the primary use of the property – the township could not prohibit the use of the property for venting and selling wine if any part of the property (no matter how small) was used for viticulture.

So, the Court reversed the appellate court’s decision and remanded the case to the trial court. Terry v. Sperry, et al., 2011 Ohio 3364 (2011).