- At least six publicly documented lawsuits or legal challenges are tied to local data-center bans or moratoriums in Texas, Minnesota, North Carolina, Tennessee and Ohio. [1] - Hill County, Texas, repealed its one-year moratorium after RCM Hill sued for more than $100 million. The county replaced the ban with a development checklist, and the case was later dismissed after the county agreed to pay $100,000 in legal fees. [2] - National counts vary because trackers measure different things. One analysis counted more than 300 bans or moratoriums enacted since 2023, while a later update reported more than 500 local bans in July.
[3] Data-center developers are beginning to sue local governments that or block new projects, turning a fast-growing dispute over AI infrastructure into a series of tests over zoning authority, constitutional protections and development rights. [4]
Publicly documented cases include challenges in Hill County, Texas; Eagan, Minnesota; Chatham County, North Carolina; Hawkins County, Tennessee; Nashville; and Lordstown, Ohio. The claims differ by jurisdiction, but developers generally argue that officials lacked authority to impose a categorical , failed to follow required procedures or interfered with projects that had already advanced under existing rules. [1]
A Texas reversal gave developers an early win #
The clearest result so far came in Hill County, Texas. Commissioners approved a one-year moratorium on new data-center construction in unincorporated areas on May 12, 2026. RCM Hill LLC then filed a federal lawsuit seeking more than $100 million, arguing that Texas counties lacked the legal authority to impose a blanket construction ban. The company said it had spent more than 16 months and nearly $1 million pursuing Project Aquila, a proposed 1,235-megawatt facility on roughly 800 acres. [2]
The county rescinded the moratorium unanimously on June 4, about two weeks after adopting it. Hill County replaced the ban with a checklist requiring developers to provide information about infrastructure, traffic, water and other resource impacts. The lawsuit was dismissed July 9, and meeting minutes show the county agreed to pay $100,000 in legal fees. [2]
The reversal did not decide whether every local moratorium is unlawful. It did show the financial risk that a county may face when it adopts a ban without a clear statutory basis. Hill County’s attorney had warned commissioners that Texas counties might not possess the authority to halt data-center construction outright. [2]
Other courts are being asked to define local power #
In Eagan, Minnesota, Eagan Capital sued after the city adopted a one-year moratorium in February. The interim ordinance bars new data centers within 500 feet of homes and restricts facilities using more than 20 megawatts through February 17, 2027, unless the City Council ends the earlier. The company argues that the city is improperly regulating electricity demand, an area overseen by the Minnesota Public Utilities Commission. [5]
Eco TIP West LLC filed a separate complaint in Chatham County, North Carolina, after county commissioners imposed a 12-month moratorium on February 11. The company says it had spent more than $11 million on a planned data center of approximately 750 megawatts at Triangle Innovation Point West, a heavy-industrial site near Moncure. Its complaint argues that the project had progressed under existing zoning and should be exempt from the moratorium. It also challenges the county’s process and asserts property-rights claims under North Carolina law. [6]
In Hawkins County, Tennessee, cryptocurrency operator ExoticRidge Crypto Company LLC sued over a resolution banning data centers and cryptocurrency mining. The complaint alleges that the county failed to follow required planning, notice and public-hearing procedures and violated due-process and equal-protection protections. The case remained pending, with the county filing an answer in May. [7]
A similar dispute is pending in Ohio’s Supreme Court. Bristolville 25 Developer LLC and BHGH Properties LLC challenged Lordstown’s effort to halt their project after the village first adopted a ban, repealed it and replaced it with a 180-day moratorium. The developers argue that their site-plan application predated the restrictions and that the village must continue processing it. [8]
Nashville case centers on a project near a zoo #
Nashville’s dispute involves DC Blox’s proposed 10-megawatt data center on property near the Nashville Zoo. Metro Council imposed a moratorium through December 1 after opposition to the project intensified, including a petition that Axios reported had attracted more than 500,000 signatures. DC Blox alleges that the moratorium was a targeted action against the company and violated federal constitutional protections. [9]
The company also argues that the property had previously been used for a data center and therefore had vested rights under Tennessee land-use law. DC Blox says Metro continued processing another data-center application that was pending when the moratorium took effect while stopping its own demolition, grading and building permits. Metro officials dispute the vested-rights position. [9]
Nashville adopted additional data-center rules in July, but city zoning officials said those rules may not apply to DC Blox’s project because of the timing of its application. The lawsuit had not produced a ruling as of August 13, 2026. [10]
The national count depends on what gets counted #
There is no single official national registry of data-center moratoriums. The counts now circulating measure different things, including active temporary s, permanent bans, expired measures, proposed restrictions and broader permit or zoning limits. A tracker cited by Deseret News counted 69 jurisdictions with active moratoriums as of April 2026, alongside four permanent local bans. [3]
The Information’s broader analysis counted more than 300 temporary and permanent bans enacted since 2023 and more than 75 additional measures under consideration as of late June. Tom’s Hardware, citing a later update from The Information, reported that local bans had risen above 500 in July. That figure should be described as a count of bans or restrictions, not a definitive count of active moratoriums alone. [3]
The policy arguments behind the measures are consistent across many of the cases: local officials and residents cite demands on electricity and water systems, noise, air pollution, land use and the possibility that ratepayers will absorb grid-upgrade costs. Developers respond that local governments cannot use temporary rules to nullify existing zoning, vested rights or applications already in progress. The pending cases will determine how those claims are balanced under state and federal law. [4]
Further sources #
[1] Overview of developer lawsuits and legal challenges in Hill County, Eagan, Chat… ↗
[2] Hill County complaint, reversal of the moratorium, replacement checklist, dismi… ↗
[3] National counts of active moratoriums and broader bans or restrictions. ↗
[4] Developer claims, local-government authority disputes and community concerns ov… ↗
[[5] Eagan Capital lawsuit and the city’s February moratorium restrictions. ↗](https://www.mprnews.org/story/2026/07/07/city-of-eagan-faces-lawsuit-over-data-center-moratorium)
[[6] Eco TIP West complaint describing Chatham County’s moratorium, the proposed 750… ↗](https://nsjonline.com/wp-content/uploads/2026/04/26CV000456-180_COMPLAINT_without-exhibits.pdf)+4 more
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