The Data Center Ordinance and the Lawsuit Against It

What the ordinance does

Ordinance No. 26-1779 amends Chapter 16 of Montgomery’s Land Development Code. It adds two lines to Subsection 1.5, “Prohibited Uses”:

Data centers are specifically prohibited throughout Montgomery Township.

Detention centers are specifically prohibited throughout Montgomery Township.

It also adds definitions of both terms to Subsection 2.1. The detention-center definition reaches facilities run by “a private or government entities” alike, and covers people held in transit to or from a court, jail or prison as well as asylum seekers and undocumented immigrants awaiting immigration decisions. (The recitals go further, naming immigration detention centers, private detention facilities and correctional facilities.) They give the township’s stated reasons: for data centers, increased electrical demand, noise from cooling equipment, large water consumption, and incompatibility with surrounding land uses; for detention centers, public-safety and emergency-services demands and environmental and economic burdens. The stated purpose is “to ensure the orderly development of the Township and to protect existing residential, commercial, and environmental resources.”

The Township Committee adopted it on June 18, 2026, by a 4-0 roll call — Martin, Ahn, Deputy Mayor Taylor Todd and Mayor Singh. At the hearing a resident told the Committee that other New Jersey towns — she named Pemberton, Andover, Red Bank and Asbury Park — had already begun moving to protect themselves, and that this ordinance would add Montgomery to that list.

The Planning Board step

Under the Municipal Land Use Law, a zoning amendment goes to the Planning Board first, which reviews it and reports on whether it is consistent with the Master Plan. That happened on June 8, 2026, in a discussion of about twelve minutes.

Most of it was about drafting. One member noted the detention-center definition appeared to capture the Montgomery Township Police Department’s own holding cells, in the building the Board was sitting in, and the Board agreed to recommend a carve-out. Another argued the data-center definition said nothing about scale and might sweep in an ordinary employer with a large server operation; the answer from the table was that the definition turns on a facility’s primary use. Board Attorney Karen Cayci framed the motion: find the ordinance consistent with the Master Plan, and separately recommend exempting the local police. It carried 9-0. No member of the public spoke.

Two things follow from that meeting. The minutes state, in terms: “The Board found the ordinance to be consistent with the Master Plan.” And the Board’s recommended police carve-out did not survive — the ordinance as adopted on June 18 contains no exemption for the Montgomery Township Police Department.

The public hearing

At the June 18 hearing, Craig Gianetti of Day Pitney, for E. Kahn Development, asked the Committee to reject or carry the ordinance, arguing that a blanket prohibition must bear a reasonable relationship to a legitimate planning objective and that the Municipal Land Use Law contemplates asking where a use can be accommodated rather than eliminating it outright. He also told the Committee the company’s by-right site plan application for the Grandview Road campus had already been deemed complete, so in his view the ordinance would not reach it; his stated concern was future effect — that an approved use would become a pre-existing nonconforming one. The township has not conceded that reading on the record. A partner in the property followed with the site’s technical case: dual 69 kV transmission lines feeding an on-site substation, fiber along the rail corridor, enough acreage for berms, landscape buffers and what he called sheer linear separation from neighbouring properties, and closed-loop cooling he said loses about five percent of its water a year.

Six speakers backed the ban, on energy, water, heat, noise and land-use grounds: Montgomery residents Dawn Cohen, Mary Reece, Nancy Herrington and Kendra DiPaola, Mike Pisauro of The Watershed Institute, and Jenny Psaki, who told the Committee she is not a Montgomery resident but came to support the ordinance. The Committee closed the hearing and adopted the ordinance that night.

The lawsuit

On July 31, 2026, E. Kahn Development Corp. filed a complaint in lieu of prerogative writs in the Law Division of Somerset County Superior Court, docket SOM-L-001072-26. New Jersey Monitor has published the complaint, so what follows comes from the document, not from reports about it.

The parties. The plaintiff is E. Kahn Development Corp. alone, a Pennsylvania corporation based in Malvern, represented by Craig M. Gianetti and Grace Chun of Day Pitney. The defendant is the Township of Montgomery alone. The four LLCs that hold title to the site are not parties, and neither is the Planning Board.

The five counts.

1. Prerogative writs. The ordinance is arbitrary, capricious and unreasonable, and the Committee’s action “was clearly based upon public hysteria and political attention rather than sound land use planning.”
2. Declaratory judgment. The Planning Board failed to conduct the Master Plan consistency review the Municipal Land Use Law requires, N.J.S.A. 40:55D-26.
3. Violation of the MLUL, ultra vires. A townwide ban advances none of the purposes in N.J.S.A. 40:55D-2.
4. Inconsistency with the Master Plan. The Committee did not make the findings N.J.S.A. 40:55D-62 requires.
5. Equal protection under the New Jersey Civil Rights Act, N.J.S.A. 10:6-2(c). This count alleges harm, including “diminution in property value, loss of ability to market the property for highest and best use, [and] costs incurred in reliance on the LM Zone.”

What it asks for. Each count asks for declarations that the ordinance is invalid, an injunction against enforcing it, counsel fees and costs, and “such other relief as the Court may deem just and equitable.” No dollar amount appears anywhere in it. The Civil Rights Act count is the one to watch: that statute lets a winning plaintiff recover attorney’s fees.

The complaint also refers to the township’s affordable housing case as Docket No. L-SOM-152-25. The township’s own minutes give that case as SOM-L-153-25. We cannot say which number is right without the court’s docket. Neither number changes anything else on this page.

The Planning Board’s own minutes contradict Count Two. The count says the Board did not review the ordinance for consistency with the Master Plan. But the consistency finding is written into the June 8 minutes explicitly, the Board Attorney framed the motion around it, and the motion as voted included it. What is fair to the developer’s side is that the finding was stated rather than argued: the Board’s recorded debate was about definitions and a police carve-out, not about which Master Plan goals a townwide ban serves. Whether a court treats a stated finding as sufficient is an open question, and this page cannot answer it.

As of September 17, 2026, the township had not been served. The township attorney told the Committee that night: “I have reviewed the complaint that we have not been served with, but it has been filed.” No ruling and no hearing date has been reported. A separate, earlier suit by the same developer, E. Kahn Development Corp. v. Montgomery Township Planning Board, SOM-L-000096-26, filed January 22, 2026, also remains pending. It challenges the Board’s December 8, 2025 refusal to hear a General Development Plan, which Montgomery has no ordinance authorizing. The Planning Board last discussed it in closed session on September 14, 2026.

Correction: the “$300 million” figure is false

Do not repeat it. In August 2026, NJ.com reported that the suit sought more than $300 million in damages from Montgomery, and a syndicated item carried by WDHA, Magic 98.3 and WMTR repeated the figure in its headline. Other coverage picked it up from there.

On the record at the September 17, 2026 Township Committee meeting, the township attorney said the complaint had been read and that the figure is not in it:

That is completely incorrect… There is no demand for $300 million in that lawsuit. I suspect it was shoddy reporting, and it reported on another lawsuit filed in a different municipality. It didn’t come from Montgomery.

The evidence supports that account. A $300 million data-center suit does exist in New Jersey — in Monroe Township, brought by Hexa Builders, LLC and 3043 Williamstown Urban Renewal, LLC over a property on the Black Horse Pike in Williamstown. Different municipality, different plaintiffs, different property. Patch’s own Montgomery story states no damages figure at all.

The complaint settles it. New Jersey Monitor published the full document, and it asks for no money at all beyond counsel fees and costs (see The lawsuit above). The developer said the same: Eli Kahn told The Montgomery News on August 20, 2026 that the report was false, and the paper corrected its own story, writing that multiple outlets, itself included, had “falsely reported” the figure.

The correction came later than it needed to, but earlier than this page first said. On August 20, 2026, the township attorney at the time, Wendy Rubinstein Quiroga, answered Mayor Singh’s question on the record. She said the amount “referenced in the paper is a mistake as there are two other lawsuits that have been filed in the State but that is not the amount filed against the Township.” The minutes record it. Even so, resident Nancy Castilino, who had written to the township about the Kenvue property on August 17, told the Committee on September 17 that the $300 million figure had frightened residents on fixed incomes, and asked why nobody had publicly corrected it.

Where the figure is still published. As of October 3, 2026, without a correction we could find:

• NJ.com, August 13, 2026, as syndicated on Yahoo News
• WDHA and Magic 98.3, August 14, 2026, with the figure in the headline; WMTR carried the same item
• A candidate for Township Committee repeated it in a published 2026 questionnaire answer; see the 2026 election page

If you see the figure repeated, the complaint is the answer.

Watch it yourself: the township attorney on the $300 million figure, 1:03:10.

Why this thread now touches the others

At the same September 17 meeting, the township attorney said a redevelopment plan over the Kenvue site “would also short circuit that possibility of a data center,” and expressed confidence that the redevelopment law “would be a road out of all of these lawsuits.” The data-center ban, the housing case and the redevelopment study are being argued separately, but the township is now describing them as one negotiation.

Elsewhere in New Jersey

Montgomery’s ban is one of a growing number, and it is not the only one in court. Two other challenges filed in the summer of 2026 have taken different paths.

• Andover Township (Sussex County). National Land Developers LLC sued on July 10, 2026 to void Andover’s townwide ban, Ordinance 2026-13, on MLUL grounds much like E. Kahn’s. After the township moved to dismiss in August, township officials said the developer was dismissing the suit with prejudice, which means it cannot be refiled. (WRNJ, October 2, 2026) Andover’s mayor noted that its ordinance had been found consistent with the Master Plan before adoption, as Montgomery’s was.
• Monroe Township (Gloucester County). Hexa Builders’ suit, the source of the $300 million figure, was removed to federal court and is pending as No. 1:26-cv-08284 in the District of New Jersey. A motion to dismiss was filed September 1 and an amended complaint on September 18. There has been no ruling.

Neither case binds a Somerset County judge. They show only that these suits are being fought, and sometimes dropped, case by case.

State law has moved too, though none of it overrides a local ban. On July 7, 2026 Governor Sherrill signed S-731/A-796, which creates a separate tariff for large-load data centers. On August 27 she signed P.L. 2026, c. 75, which requires data centers to report their energy and water use to the Board of Public Utilities twice a year. (NJBIA, Day Pitney) Day Pitney, the firm that wrote that summary of the reporting law, also represents E. Kahn.

A proposed statewide pause. Senate bill S4659 (Cryan, Zwicker), introduced October 1, 2026, would apply to data centers with at least 25 megawatts of IT load. It gives the Department of Environmental Protection 15 months to report on their impacts, and until 90 days after that report, “no data center shall be constructed in the State and no State or local government agency shall issue a permit” for one. Projects already under construction or approved before it takes effect are exempt. It was referred to the Senate Environment and Energy Committee and has not moved since. It would add a statewide pause, not displace a local ban, and it has no bearing on the lawsuit. (Bill text)

The nearest state review of a data center. The NJDEP is taking comment until November 9, 2026 on a draft air permit for “PN-DC1,” a proposed data center at 4405 Route 1 in South Brunswick. The permit covers its twelve diesel backup generators and nothing else: not water, noise or siting. It is a permit for one site, not a statewide rule, and it does not affect Montgomery’s ordinance. It shows what the state’s air review of a data center looks like. Comments go through the DEP’s online form, referencing PI 19525 / PCP250001. (DEP public notice, comment form)