AINEWS
A developer argues Montgomery Township's June data center ban ignored its own planning process; the township's underlying authority to exclude uses is what the court will weigh.
A $300 million lawsuit filed in Somerset County Superior Court this summer is asking a New Jersey court to strike down Montgomery Township's newly enacted ban on data centers, and to decide whether a town that has already zoned a site for industrial use can still flatly forbid the modern industrial use most in demand there.
On July 31, E. Kahn Development Corp. sued Montgomery Township, seeking at least $300 million in damages and a court order blocking the township's newly enacted data-center ban. The complaint targets Ordinance No. 26-1779, approved by the Township Committee on June 18, which added a flat prohibition on data centers across the entire municipality and a written definition of the term to the township's land development code (wdhafm.com).
The case turns on a 257-acre parcel whose existing conditions sit at the center of the developer's argument. The property is the former Kenvue research, office, and manufacturing campus, a Johnson & Johnson consumer-health spinoff that announced its move to Summit in 2024. E. Kahn bought the site in or around December 2025. The township already classifies the parcel industrial. It already carries dual 69,000-volt transmission lines on an existing industrial footprint. And the developer filed a general development plan application in October 2025, followed by a light-industrial site plan application on April 15 that the planning board declared complete on June 9 and that remains pending (wdhafm.com).
The complaint's central claim is that the Township Committee acted on "public hysteria and political attention rather than sound land use planning" when it adopted the categorical ban. The developer's counsel, Craig M. Gianetti, told the Township Committee the dual transmission lines already on the site make it unusual, and that tough zoning standards would address community concerns more cleanly than a blanket prohibition (wdhafm.com).
The complaint presses that argument further. It alleges the Planning Board's June 8 recommendation in favor of the ordinance lacks any discussion in the meeting minutes or video, and shows no Master Plan consistency review, which the complaint treats as the ordinance's central procedural defect (wdhafm.com).
The township's strongest counter is not whether the developer is right about the process. It is whether the developer is right about the remedy. New Jersey municipalities retain broad authority to define and exclude land uses, including through categorical bans, and the developer's case is built to attack the procedure, the absence of a Master Plan consistency review in the record, rather than the underlying power to say no. A court that buys the procedural argument could strike the ordinance on this record and force a more deliberate process next time. It does not have to bless data centers on the Kenvue parcel, and the complaint's $300 million in damages would still face a long road.
The ruling will be measured against New Jersey's other pending moratoriums and draft bans, which are moving through town councils across the state. A ruling for the developer would push those towns toward performance standards and project-by-project review. A ruling for the township would ratify the categorical approach and give other committees cover to do the same.
For now, the site plan application sits pending, the ordinance remains on the books, and the question on the record is the one the lawsuit forces the court to answer: with the parcel already zoned industrial, already wired for high voltage, and already carrying a developer's application, can the town still draw a line at the front door?