A brother-sister duo from Santa Barbara County has sued California, contending that a state law prohibiting the drilling of new oil and gas wells infringes on their family’s property rights.
John and Melinda Morgan, owners of a long-held mineral estate in Santa Barbara County, filed a complaint in the U.S. District Court for the Central District of California on January 27, 2026.
They argue that Senate Bill 1137 eliminates any productive use of the estate, according to a statement by the Pacific Legal Foundation, which represents the siblings.
What is SB 1137?
Signed in 2024 by Governor Gavin Newsom, SB 1137 restricts new oil and gas drilling activities within 3,200 feet of homes, schools, hospitals, workplaces, and other “sensitive receptors.”
Beginning January 1, 2025, existing wells or production facilities with a wellhead inside a health protection zone are required to comply with additional health, safety, and environmental standards under the law.
The law establishes health protection zones around areas defined as containing sensitive receptors.
The Morgans’ Argument in the Lawsuit
“The effect was not regulation; it was prohibition,” the Pacific Legal Foundation said in its statement.
The Morgans’ mineral estate sits within a newly designated health protection zone, which the Foundation said rendered their family enterprise unusable.
The family has had the estate since 1939, according to the lawsuit, which states that their grandmother’s husband drilled multiple oil wells in the Los Angeles area in the early 20th century.
The Morgans’ grandmother passed on some of the mineral rights, including minerals located on and underneath two parcels in Santa Barbara County.
According to the lawsuit, the siblings planned to use the mineral rights to generate royalty income for retirement and to pass the rights on to future generations.
The lawsuit states that those plans were hampered following the passage of SB 1137.
The ban on drilling new wells on the two parcels and returning the existing wells to production effectively prohibits any use of the estate, the siblings argued in their lawsuit.
Calling the law lopsided, the Foundation said that SB 1137 punishes property owners while allowing the public to build whatever it chooses.
Any new development within 3,200 feet of the mineral estate will “instantly destroy its economic value, with no limits, no notice, and no compensation,” the Foundation said.
Not only does SB 1137 prohibit the economic use of the siblings’ mineral rights, but it also violates the Fifth Amendment, the lawsuit claimed.
The Foundation said the law “entrenches an ideology that treats private ownership as a problem, abundance as a threat, and prohibition as progress—while ignoring innovation, technological advancement, and constitutional limits.”
Justice Department Seeks Injunction Against SB 1137
The Morgans’ lawsuit follows the U.S. Justice Department filing a complaint in the U.S. District Court for the Eastern District of California over SB 1137.
On January 14, 2026, the Justice Department challenged the state over the law, stating that it would “knock out about one-third of all federally authorized oil and gas leases in California.” Seeking a declaration that SB 1137 be deemed unconstitutional, the lawsuit sought an injunction against its enforcement.
Stating that federal law, the Mineral Leasing Act and the Federal Land and Policy Management Act, preempts SB 1137, President Donald Trump directed the Justice Department to stop the enforcement of state laws that “unreasonably burden domestic energy development.”
Characterizing SB 1137 as an “unconstitutional and radical policy” from Governor Newsom, Attorney General Pamela Bondi said the law “threatens the country’s energy independence and makes energy more expensive” for Americans.
Bad investment. GOO!
So, they’re saying the only drillable areas on their property are within “3,200 feet of homes, schools, hospitals, workplaces, and other ‘sensitive receptors[?]’” Why do they want to drill new wells that close to these sensitive areas? Nothing in the law prohibits existing wells other than complying with safeguards. They already have wells that appear to be producing. Maybe not? Either way, just because you own the land doesn’t mean you can poison those around you.
Lease it to a solar or wind developer if you want to make some easy money without hurting others. Better yet, sell it and invest in something other than something that can cause cancer in your new neighbors.
This looks like a “hey trump, look at me” lawsuit. The law spells out what an applicant needs to do to comply with the law if they plan to establish a wellhead within an established health protection zone, and I’m confident those extra measures are significant- they gd oughta be! -, but the law doesn’t say you can’t do it. The Morgans just don’t want to incur the cost because they won’t make as much money from an oil production operation. They’re saying the law “effectively” prohibits them and therefore literally prohibits them, but the truth is that it just makes it more expensive.
And please spare us this entirely laughable 5th amendment argument! That’s just a shiny object to wave at the president, who’d love nothing better than get involved in a lawsuit against CA.