[AI](/news/ai/)
[AI](/news/tag/ai/)
[AI INFRASTRUCTURE](/news/tag/ai-infrastructure/)
[DATA CENTER MORATORIUMS](/news/tag/data-center-moratoriums/)
[HILL COUNTY](/news/tag/hill-county/)
[LITIGATION](/news/tag/litigation/)
[PROJECT AQUILA](/news/tag/project-aquila/)
[REGULATION](/news/tag/regulation/)
[TEXAS](/news/tag/texas/)
- RCM Hill filed a federal lawsuit on May 27, 2026, challenging Hill County’s moratorium and seeking more than $100 million in damages. [1] - The complaint described Project Aquila as a planned 1,235MW data center on more than 800 acres in unincorporated Hill County. [1] - Hill County’s Commissioners Court rescinded the moratorium on June 4 and replaced it with a data center development checklist and industrial-project review process. [2][3] - Local reporting says RCM Hill dismissed the case with prejudice on July 9 after Hill County agreed to pay $100,000 toward the developer’s legal fees. [4][5]
Hill County, Texas, rescinded its one-year moratorium on new data center construction after RCM Hill LLC filed a federal lawsuit alleging that the county lacked authority to impose the ban and seeking more than $100 million in damages. The county’s June 4 action is documented in its Commissioners Court records. [1][2][3]
RCM Hill’s complaint described Project Aquila, a planned 1,235MW data center on more than 800 acres in unincorporated Hill County near Hillsboro. The developer said it had entered into four contracts to purchase the site for more than $80 million and had spent nearly $1 million on development and due-diligence work. [1]
Hill County replaced the blanket with a checklist and review process for major industrial projects. Local reporting says RCM Hill later dismissed the case with prejudice on July 9, ending the litigation without a judicial ruling on whether the county had authority to impose the moratorium. [3][4]
The Lawsuit #
RCM Hill filed its complaint in the U.S. District Court for the Western District of Texas on May 27, 2026, naming Hill County and three members of the Commissioners Court as defendants. The complaint argued that Texas counties may exercise only powers granted by state law and that Hill County lacked authority to impose a categorical moratorium on data center construction in unincorporated areas. [1]
The suit asserted claims involving ultra vires government action, regulatory taking, due process, arbitrary and capricious conduct, and impairment of contracts under the Texas Constitution. It also alleged that the moratorium threatened the project’s position in ERCOT’s “Batch Zero” large-load interconnection process. [1]
The County’s Reversal #
The Commissioners Court voted unanimously on June 4 to rescind the moratorium, according to the county’s meeting record and contemporaneous reporting. The county adopted a Data Center Development Checklist and a major-industrial-development review framework in its place. [2][3]
The new process requires developers to provide project-specific information on infrastructure, traffic, water and other impacts. It does not amount to a court determination that the original moratorium was unlawful. [3]
Case Ends Without a Ruling #
Rescinding the moratorium did not immediately end the lawsuit. KWTX reported that RCM Hill filed a stipulation of dismissal with prejudice on July 9, 2026, terminating the case; KXXV separately reported that the county agreed to pay $100,000 toward the developer’s attorney fees. [4][5]
Because the case ended before a merits decision, the litigation did not establish a binding precedent on the authority of Texas counties to impose similar data center moratoriums. The new checklist approach could still face legal scrutiny if developers challenge its application. [4]
Further sources #
[1] RCM Hill LLC’s original complaint in the U.S. District Court for the Western Di… ↗
[2] Hill County Commissioners Court minutes page, which links the June 4, 2026 meet… ↗ [3] KERA/TPR report on Hill County’s June 4 reversal and replacement review require… ↗
[4] KWTX report on the July 9 dismissal with prejudice and Hill County’s reported $… ↗
[5] KXXV report identifying the $100,000 payment as part of the resolution of RCM H… ↗
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