A New Court Fight Over California’s “Health Protection Zone” Drilling Ban

A new federal lawsuit is taking direct aim at California’s 3,200-foot “health protection zone” drilling ban under SB 1137, arguing the state has effectively wiped out the productive use of privately owned mineral rights without compensation. The case, John Morgan and Melinda Morgan v. Doug Ito, was filed in the U.S. District Court for the Central District of California and challenges SB 1137 as an unconstitutional taking under the Fifth Amendment (via 42 U.S.C. § 1983).

What the lawsuit claims

According to Pacific Legal Foundation (PLF), the Morgan family holds a severed mineral estate (mineral rights separate from the surface estate) tied to two parcels in Santa Barbara County, with the intent to generate royalty income and preserve a multi-generation legacy. PLF alleges SB 1137’s blanket restrictions, especially the 3,200-foot setback from “sensitive receptors,” function as prohibition, not regulation, because the Morgans’ mineral estate falls inside the newly designated zone.

The complaint adds detail: the Morgans have leased mineral rights to Cat Canyon Resources and California Resources Corporation for royalty payments; both reportedly pay shut-in fees, and the lawsuit alleges the leases are likely to be abandoned because SB 1137 prevents drilling or other work needed to restore idle wells to production. The complaint also asserts there are no applicable exceptions that would allow new drilling or returning existing wells to production on the parcels.

Why this matters to California’s energy reality

Regardless of where one falls politically, California still runs on liquid fuels, and policy choices that restrict in-state production tend to increase reliance on imports, exporting jobs and wealth while importing risk. (If California is going to buy crude, buying it “next door” beats buying it from “somewhere with a flag you wouldn’t fly on your porch.”)

CIPA note

CIPA has no direct connection to PLF or the plaintiffs in this case. That said, the underlying principle, protecting lawful access to California mineral estates and allowing responsible development, aligns with the interests of California’s independent producers and the efforts being pursued by NOPEC, which filed a lawsuit against the state on SB 1137 last March. That case is set for this November.

The bigger trend: courts as the pressure valve

This lawsuit is also part of a wider pattern: when regulation crosses the line into de facto shutdown, property owners increasingly test it in court under constitutional, administrative, and procedural theories. In separate California litigation over local oil and gas permitting, a Kern County Superior Court order (Nov. 21, 2025) found the County had complied with a prior writ and lifted the suspension on Kern’s revised local oil and gas permitting ordinance, another reminder that courts can become the backstop when policy fights harden into stalemate.

What to watch next

• Early motions: Expect threshold fights over standing, ripeness, and the scope of requested relief. Since NOPEC was successful on these fronts, it is expected the PLF lawsuit would also fare well.

• Takings framework: The complaint leans heavily on the concept that eliminating all economically viable use of a mineral estate can trigger a taking.