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A new front opens in the data center wars.

A series of lawsuits filed in federal court asks a big question – are data center moratoria constitutional?
In early August, data center developer DC Blox sued the city of Nashville in federal court to overturn a zoning moratorium stopping them from building a hyperscale facility adjacent to the city zoo. “The Data Center Moratorium, moreover, is a targeted attack against DC BLOX, in violation of federal constitutional protections,” the suit argued, claiming that it defied the corporation’s due process and equal protection rights.
Around the same time, another developer – Wixom Industrial One – filed a federal lawsuit against the city of Wixom, Michigan, to try and “invalidate the city’s illegal police power moratorium” blocking their data center.
These two cases were far from novel or the first of their kind, and they’re now a fresh front in the battle over hyperscale data centers. At least that’s what some who work on these cases say: In April, attorneys with the law firm Vorys published a “client alert” asserting “many moratoria may be vulnerable to statutory, procedural, and constitutional challenges.” The attorneys advised that constitutional arguments against moratoria “may be stronger where a government singles out data centers without a sound factual basis, treats similar land uses differently without a reasonable basis, or adopts a restriction driven more by political pressure than by defensible planning or regulatory objectives.”
Months later, according to court documents, the Vorys attorneys who authored the alert now represent real estate firm Thor Equities in a federal case against the Ohio city of Urbana, arguing the city’s decision to reject their data center project broke “fundamental protections” under the U.S. Constitution. (Vorys and Thor Equities did not respond to requests for comment.)
It’s unclear how many of these kinds of cases have been filed to date. Data on federal court cases is quite opaque. But legal experts and industry attorneys tell me we should expect them to be on the rise as developers seek whatever tools they can find to get projects built.
“Bringing a lawsuit like this is fairly cheap, something they can do at a relatively low cost, and imposes a real cost on local governments to defend themselves,” said Daniel Metzger, director of the Cities Climate Law Initiative at Columbia Law School’s Sabin Center. “The cases out there will be bellwethers. And if successful, there’ll be a lot more of them.”
What developers probably want looks a lot like Hill County, Texas, where an LLC proposing an $80 million data center project was stymied in May by the state’s first countywide moratorium. (It predated Governor Greg Abbott’s temporary freeze of data center development in Texas by three months.) Within a period of only a few weeks, the LLC sued and the county rescinded the pause on approvals. The case was dropped a month later. Local reports state the county had to afterwards pay the corporation $100,000 in legal fees – a drop in the bucket compared to what a drawn-out court battle would have cost the rural county.
Metzger said whether the companies will win these cases is ultimately not the point – their goal is to win a finished data center, not a judicial ruling. By filing expansive litigation in the national court system, a hypothetical developer can exhaust the coffers of a city or county with legal expenses that are chump change compared to would-be billions in private financing for compute infrastructure.
“These lawsuits may deter some local governments from taking steps to oppose data center development, just because of the cost it would impose on them to defend a lawsuit, even if they know they have a strong legal basis for the action they want to take.”
Those I spoke to in private practice about data center developers’ constitutional arguments agreed with Metzger’s assessment that it’s too early to tell whether the companies will win. Generally, they said, a city or county will win this kind of case if it demonstrates a rational basis for its decision-making and courts typically want to defer to governmental autonomy. The onus will be on the developers to prove a moratorium was meritless – that’s the due process challenge – or unfairly targeted their industry in a way other sectors don’t face, which is the basis of the equal protection claim.
“What they’re saying is in essence that these actions the municipality is taking are arbitrary and capricious, which is one of the sort of catch-all standards,” Thomas Allen, a partner at K&L Gates, told me. “They say the laws lack a rational basis. And then they make equal protection claims, saying data centers are being singled out because of political concerns as opposed to actual things relevant to the legislature’s directive. They’re not basing their decisions on the underlying merits of the project but reacting to political pressure.”
“It’s a reliance question and it’s about the treatment of their projects,” added Laura Morton, an attorney with Ashurst Perkins Coie. “It’s always been important to talk about and engage with communities where your infrastructure is planned. Here, I think this is the developers going in, maybe having conversations, and then suddenly they’re getting a reversal after already receiving these approvals and making investments based off of what the conversations and rules were.”
The likelihood of these constitutional challenges reaching higher courts anytime soon is quite low. It’ll be a long time before we see one of these cases reach a verdict, let alone some kind of appeals process come to fruition. Nevertheless, the new legal ambiguity around these local restrictions is an important new facet of the data center wars, including for developers.
“Companies want to act within the law to get [things] done, so whatever tactics they can do to help get the project over the line that are legal and ethical, they may try those,” Allen told me. “And if that includes the pressure of a lawsuit, that’s a judgment they’ll have to make.”
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American offshore wind’s existential crisis was laid bare at this year’s Climate Week.
California and New York officials gathered on Tuesday at the New York Bar Association in Manhattan to tell attendees of the annual climate action mega-event about their efforts to hold the Trump administration to account. After Trump regulators upended wind projects off the East Coast and struck buyout trades with energy developers to ditch ocean wind leases, both states filed fresh legal action against the administration, targeting what they said were egregious abuses of taxpayer dollars that canceled once-promising projects that would’ve given gigawatts of power to grids expecting energy demand to spike.
“Every megawatt in offshore wind power is not a megawatt of fossil fuel generated power. That’s really important. That means fewer emissions that contribute to respiratory and cardiac disease,” Lem Srolovic, bureau chief of the New York attorney general’s environmental protection bureau, said at the event, as he and California attorney general Rob Bonta laid out the view that Trump’s actions against offshore wind were illegal.
The federal courts have concurred thus far, and it’s possible more judges will agree. But later in the event, Doreen Harris – CEO and President of the New York State Energy Research and Development Authority – said the quiet part out loud.
“Ultimately, the challenge we have in litigation is that even if successful, we deal with realities of what a commercial entity would do in response to these risks. That remains unresolved,” Harris confessed. “How do we move to an investable future for energy infrastructure if this is the way energy infrastructure has to be advanced?”
Indeed, more litigation clearly isn’t going to help the offshore wind sector’s prospects. As we’ve reported on time and again, the Trump administration has not only used every regulatory lever imaginable – and some once unimaginable – to delay wind farms, both on and offshore. But it has gone beyond the legal, now stalling onshore wind in ways industry says stretches the boundaries of court remedy. If that’s the case on solid ground, what future could possibly exist in the U.S. for an industry that must build entirely in federal waters? And even if Trump leaves office providing for a more industry-friendly president, couldn’t a future successor undo whatever they do as well?
“There may be some hesitancy to reinvest in offshore wind in the U.S. given what has happened in the Trump administration,” Kevin Beicke, vice president of project finance at Morningstar DBRS, told me in a phone interview. This week Morningstar, a leading market analysis firm, agreed with Harris’ assessment and reaffirmed a negative outlook for the entire American offshore wind industry through at least 2028 – adding the future beyond that horizon is essentially unknown.
“It’s my view these companies would need to see some kind of substantial support for their industry if they were to try and get back into it under a future administration. And public support would be needed to support a future administration providing regulatory and financial support to the U.S. offshore wind industry.”
So this begs the question: why are states bothering with litigation they probably know won’t improve the offshore wind sector’s fortunes in the near term?
Harris told me after the event that part of the litigation is to provide a signal to the business community that they shouldn’t abandon the U.S. offshore wind industry in the future.
“Very much so. It’s a move intended not only to preserve the processes and systems that are supposed to apply but also to say, ‘We are here because we are committed to the resource, and we’re committed to the companies developing it, and they can consider a state a partner to realize those outcomes.’ That’s what we want them to understand,” she told me.
Harris’ indignation didn’t surprise me, but it was especially prescient, as New York City’s annual Climate Week chaos became embroiled in a “will they or won’t they” news cycle around Trump’s freeze on wind energy permits. During the offshore wind event, news broke in Politico that President Trump told Interior Secretary Doug Burgum and Energy Secretary Chris Wright that he agreed to “green-light wind energy projects to strike [a] permitting deal” and that they’d “lift” the “blockade of renewable energy projects to get Senate Democrats moving on permitting.” The next day, at Heatmap House, Wright himself declined to speak declaratively on that report, instead signalling the issue was still a live ball. But he said a permitting deal would address concerns about “easier to build everything in America.”
Wright also suggested the administration had actively debated the de facto freeze on height clearances for wind turbines, which has essentially snagged the entire sector. “Wind has been very controversial and there have been spirited dialogues in the administration about this,” Wright told my colleague Robinson Meyer. “I do believe a successful permitting reform thing changes the playing field for anything you want to build in this country, including wind.”
When I asked Harris about the Politico report, she told me she’d rather focus on the courts. The same goes for California Energy Commission chair David Hochschild, who told me he doesn’t believe anonymous reports about a president “who also promised no new endless wars.”
“We want to make it crystal clear we’re going to fight for this and our support [for offshore wind] is going to continue,” Hochschild said. “The legal fight we’re engaged in now is necessary but not sufficient. We have a lot more work to do to build the ecosystem that’s necessary for this to come to fruition. For research and development. For permitting. For infrastructure. It’s a lot of work but we’ve done this before. All these barriers existed when we started with solar in the early days when there was skepticism.”
And more of the week’s top news around project development.
1. Ada County, Idaho – Trump’s push for more data centers on federal lands is causing a lot more ruckus and catching another solar company in the cross-fire.
2. Carbon County, Wyoming – Tell me if you’ve heard this one before: The Trump administration just delayed a large fossil-free power project after criticism from a powerful Republican senator. But this time, it’s hydropower.
3. Crawford County, Wisconsin – Fighting transmission lines in Wisconsin is bipartisan now.
4. Highland County, Ohio – If you want good news, here’s a slightly positive story in Ohio.
A conversation with Tom Matzzie of the Invest in Tomorrow Coalition
This week’s Q&A is with Tom Matzzie, chair of the Invest in Tomorrow Coalition – a pro-renewables Super PAC fighting lawmakers of both sides of the aisle who spurn the sector. The Super PAC won quite a few victories during the primary season, successfully boosting challengers to hardline conservatives in the U.S. that fought for cuts to the Inflation Reduction Act and are no longer going to serve in the Lower Chamber. Matzzie, also CEO of solar firm CleanChoice Energy, is intent the sector must go on offense to win more public bipartisan support and survive the Trump 2.0 era.
I chatted with Matzzie to hear how he’s looking at the general election season. The conversation revealed to me they want the renewables industry to be seen as politically lethal. And they’re paying close attention to the Wisconsin gubernatorial race.
The following conversation was lightly edited for clarity.
So first of all, how is your role going to change as we go into the general elections?
We’re focused on accountability for elected officials who decide they want to attack the clean energy industry, making it harder for us to exist. We have elected officials who say they want to kill projects. Our industry employs hundreds of thousands of people, and we also deploy hundreds of millions in capital, so we look at the attacks on the industry as something that needs accountability.
It’s not about people we just disagree with. It’s about the worst of the worst. And that will continue to be the focus.
We’re not announcing the new races as of yet. But if you look at what we did during the primary season we focused on members of the House Freedom Caucus who had a history of attacking the industry for their own political gain. We also supported a Republican during a primary who was being attacked by the chief NIMBY in her district.
Our M.O. will continue to focus on the House Freedom Caucus and people like them. These ideological trophy hunters on the far right are extremists.
By the end of the month, we’ll announce for sure. It’ll be a five-or-six week campaign towards Election Day.
How many candidates will be targeted?
No more than ten. I feel confident saying that.
Walk me through how you decide the message against these candidates?
The important thing is, we’re crafting a message about the industry. We’re telling a story about us. Whether we’re stronger or to be feared or to be ignored. So to that regard, the effectiveness and lethality of our political apparatus matters a lot.
While many voters care about our issues, in most elections, we’re not the top issues. There’s other things that would be more effective attacks on the incumbent or a way to build up a challenger. We go in, we do message research, we figure out the most efficacious way to move the voters we want to move, and this is the best practice in modern politics is to use data-driven approaches to targeting both voters and the message. What media they consume, how you reach them.
We’re telling a story about us, not just our issues.
As you determine what races to get into, how are you taking into account the whole “data center trojan horse” situation, like what’s happening in Wiscons–
So absolutely, we’re paying close attention to [GOP gubernatorial candidate] Tom Tiffany in Wisconsin, and his smear that every data center means 100,000 acres lost [for solar]. Which by the way, 100,000 acres of solar could probably power most of the upper Midwest. So yeah, we’re paying attention to what Tom Tiffany is saying in his race.
That’s the short way of saying it.
How is the data center backlash and the role it's playing in the midterms affecting your decision-making?
It’s not. We use a data driven approach on what to say, and you follow that approach without much concern because the data is better than rumors on the internet, for lack of a better term.
What we do know is that data centers that embrace solar and wind have received more popular support in those communities. Data centers that have community benefit agreements and more responsible purchase development have received better receptiveness.
If they’re concerned about a data center, they’re going to be even more concerned about natural gas on site. But we don’t see it showing up in the research at this point.
There’s a lot of research [showing] voters care about data centers but affordability is the primary thing showing up in the research as what voters are concerned about.