MAC

The Vermont Supreme Court (Court) issued a decision on May 30, 2025, that appears to dramatically change the landscape of municipal zoning in terms of the scope of the agricultural exemption for certain activities and structures. The decision overrules an Environmental Division of Superior Court (Environmental Court) determination that an Essex Junction man’s duck-raising and cannabis-cultivation operations were exempt from municipal regulation under 24 V.S.A. § 4413(d)(1)(A). The Environmental Court ruled that it constituted a commercial farming operation subject to the Vermont Agency of Agriculture Food and Markets (AAFM) Required Agricultural Practices (RAPs) Rule. See In re 8 Taft Street DRB & NOV Appeals.  

It has been the longstanding conventional legal wisdom that certain farms subject to the RAPs were afforded a broad exemption from municipal zoning regulation under 24 V.S.A. § 4413(d)(1)(A). The Environmental Court judge followed the historical understanding of the farming exemption, ruling that the farm was exempt entirely from the municipality’s zoning regulations because it was determined to be a “farm” by AAFM and subject to RAPs. The Court, however, held that the law “does not prohibit all municipal regulation of farming if that farming is subject to the RAPs Rule.” Instead, the Court said the law only “prohibits municipal regulation of ‘required agricultural practices,’ or the agricultural land-management standards intended to protect Vermont’s waters established by the RAPs Rule and imposed on certain ‘agricultural practices.’” 

The takeaway of this case is that the exemption from municipal zoning for farms regulated by the RAPs is narrower than previously understood and there is authority – albeit limited – for municipalities to regulate farms through municipal zoning. Though we now know the scope of the agricultural exemption is limited to issues addressed by the RAPs, the extent to which a municipality can use zoning to regulate farms outside that exemption is still uncertain. We await a ruling from the Environmental Court on remand (i.e., it will decide the case again with the new direction from the Supreme Court) for some clarity on the parameters of municipal authority to regulate farms through zoning. Our Advocacy team has shared that this is a potentially political hot potato as we approach the end of this legislative session and veto session. Hopefully, the legislature won’t act in haste to revise any statutes as a result before anyone has a chance to understand the impact of the upcoming Environmental Court case and its implications on the existing statutory framework. We will keep members informed as things proceed in the judicial and legislative branches. For now, we suggest not changing your approach to handling farms at the local level until the ink dries. 

The answer to this question is heavily fact dependent, but generally, the principle of sovereign immunity will protect a town from tort liability (e.g., negligence, trespass, and nuisance) in cases where the town is performing governmental, rather than proprietary, functions. (For more information about governmental vs. proprietary acts, see our Sovereign Immunity fact sheet.) Governmental functions include building and maintaining town highways and their accompanying drainage systems. Vermont follows the civil law doctrine of water, which prohibits an upper landowner from increasing the drainage, and thus the burden, on a lower landowner. This means that a town cannot actively direct water onto an adjoining landowner's property. In applying this rule of the law, the Vermont Supreme Court has stated, "an upper property owner cannot artificially change the manner of flow by discharging it onto the lower land at a different place from its natural discharge. Such interference with the flow of surface water is a form of conduct that may result in a trespass or nuisance." Canton v. Graniteville Fire District No. 4, 171 Vt. 551 (2000). Artificially changing the manner of flow would include using a culvert to intentionally divert water from a natural watercourse to flow upon private property or in any way collecting and channeling surface water onto private property in quantities greater than or in a manner different from its natural flow. All these actions could potentially expose a town to tort liability as well as a takings claim (taking private property for public use without just compensation). However, a town won’t be liable for a highway that merely repels water that flows naturally onto private property. The closer a town comes to directing surface water into pre-existing natural waterways and drain ways, the less likely a town will be found liable.  

While towns are immune from liability when property damage is caused by surface water drainage systems installed to protect their roads, an exception exists when a town fails to repair a culvert necessary to allow a natural stream to pass under a town highway after receiving notice that the culvert is not functioning as intended. Sovereign immunity will not bar recovery for property damage caused by a town’s failure to repair a culvert constructed for a natural stream after receiving notice that the culvert is blocked. Graham v. Town of Duxbury, 173 Vt. 498 (2001).