# Why Data Center Development Is Facing a Legal Reckoning — retained record

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source: [news](https://highsignal.app/data/news) (news:datacenterknowledge)  published 2026-08-10 22:13 ingested 2026-08-11 07:07

[original source ↗](https://www.datacenterknowledge.com/regulations/why-data-center-development-is-facing-a-legal-reckoning)

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Why Data Center Development Is Facing a Legal Reckoning
As anti-data center opposition grows, developers must prepare for litigation to combat misinformation and protect projects, writes Heath Cheek.
August 10, 2026
The rising summer heat has also brought a rise in temperatures from the anti-data center movement. While NIMBYism is not new in American life, the rapid escalation of the anti-data center movement is driving it toward litigation.
Already this summer, just in Texas, we have seen Hill County enter into and then quickly abandon a data center moratorium after the filing of a $100 million lawsuit, the scuttling of a proposed data center by Diode Ventures near Cedar Creek Lake after organized community opposition formed, and Governor Greg Abbott putting a freeze on new data center development until an audit of the Texas grid is completed.
Nationally, over $64 billion in projects have been blocked or delayed across two dozen states, with over 140 activist groups popping up overnight. For data center developers, litigation may be the only recourse.
Defamation as a Tool to Combat Misinformation
Rhetoric and tactics by data center opponents need to be carefully monitored and logged because when advocacy turns into misinformation, it can lead to litigation.
Case in point is last year’s jury verdict in Energy Transfer v. Greenpeace regarding Greenpeace’s opposition to Energy Transfer’s Dakota Access Pipeline.
Energy Transfer sued Greenpeace for spreading a multi-year misinformation campaign that falsely claimed that the pipeline crossed tribal land, that it destroyed sacred sites, and that its security used violence on protestors.
A North Dakota jury awarded Energy Transfer more than $667 million on its defamation claims, despite the need to prove actual malice by clear and convincing evidence. The lesson from that case is that when protestors or activists cross the line into spreading outright falsities, defamation law can be a powerful check on their tactics.
Critical Factors to Consider
When using defamation as a tool to combat misinformation, there are three key issues to keep in mind.
First, not all statements are actionable under defamation law. Subjective opinions are not actionable (i.e., “I don’t want that data center near my property,” or “data centers destroy the environment,” or “data centers are a scourge on society”). Only misstatements of objectively verifiable facts are actionable (i.e., “data centers do not pay property taxes,” or “data centers emit dangerous radiation”).
Second, the speaker is important. A single local resident making an actionable misrepresentation at a town hall or city council meeting is probably not worth pursuing for multiple reasons. But a well-funded group running advertisements containing a falsehood might be. Especially if – as recent reports have indicated – such a group is funded by foreign money with an ulterior motive (a fact which could be fleshed out in discovery).
Anti-SLAPP as a Sword and Shield
Finally, many states (including Texas) have anti-SLAPP laws that provide a strong shield against speech made in matters of public concern, such as data center development. Anti-SLAPP laws require courts to rigorously scrutinize defamation claims early in the process, often through a motion to dismiss.
While a typical lawsuit can take years to work through the system and slow development, anti-SLAPP motions to dismiss require the plaintiff to provide specific evidence of falsity, fault, damages, and malice.
A party cannot file a lawsuit subject to anti-SLAPP and hope to later develop the facts through discovery. Instead, the filing party must have prima facie proof of each element described in the filing.
The penalty for not doing so is that a court can not only dismiss the case at the pleading stage but also award attorneys’ fees to the defendant for having to fight the lawsuit. Thus, losing an anti-SLAPP motion to dismiss could cost hundreds of thousands of dollars in attorneys’ fees for a losing plaintiff.
Likewise, in certain circumstances, a data center developer facing a baseless lawsuit can use anti-SLAPP as a sword against that suit if a protestor interferes with the right to free speech or the right to petition the government.
This would speed up litigation and avoid the trap of a project stalling while litigation takes years to progress.
For example, if a protestor files suit against a developer claiming that the developer is misrepresenting facts to the local government to obtain approval for the development, then the developer can invoke anti-SLAPP to dispose of the claim relatively quickly. But anti-SLAPP would not apply to many other categories of lawsuits (i.e., nuisance claims, zoning cases, cases solely against the government authorities).
Preparing for the Legal Challenges Ahead
No one starts developing a data center expecting litigation to result. But as pushback against data centers becomes more organized and widespread, parties should begin to anticipate the likelihood of litigation.
When parties feel they have no recourse, such as in jurisdictions with limited land-use authority, litigation may be the only tool to block or slow development. Likewise, a developer may need to resort to litigation to clear opposition that has crossed the line.
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