Lawsuit filed against Eagan asks court to void city's data center moratorium

A lawsuit filed against the City of Eagan is asking a Minnesota court to void the Twin Cities suburb's data center moratorium.

The complaint, filed on behalf of the Minnesota company Eagan Capital, LLC, on June 15, claims the city is "seeking to regulate energy usage" through the moratorium, which it called "ill-advised" and "unlawful."

The interim ordinance passed unanimously by the Eagan City Council on Feb. 17 states that "no new data center may be located in Eagan within 500 feet of residential homes or use more than 20 megawatts of electricity through Feb. 17, 2027, unless the Council lifts the moratorium earlier," the city's website said.

According to the complaint, which cited Minnesota law, the Minnesota Public Utilities Commission regulates the electricity industry in Minnesota, including electricity demand, and the City of Eagan doesn't have the authority to do so. 

The lawsuit added that a city ordinance must be "legitimately tied to the planning process and public health, safety, and welfare" and alleges Eagan acted arbitrarily and capriciously in passing the moratorium because a "data center's power usage is not related to a data center's impact on the environment, water or wastewater demand, or public health, safety, and welfare."

Eagan Capital is asking the court to declare that the moratorium is void, that the city "exceeded its delegated authority" by passing it and that city officials are prohibited from enforcing it, court documents said. The company is also asking for monetary damages "in excess of $50,000."

The city sent the following written statement in response to the lawsuit:

"Eagan Capital applied for an Interim Use Permit after City staff identified that temporary trailer-mounted chiller units had been installed and placed into operation without the required permits. In May, the City Council denied the Interim Use Permit because the proposed use was not lawful under the property's current zoning. Eagan Capital has since filed lawsuits challenging both the City's land use decision and the legality of the City's data center moratorium. The City is confident in its position and intends to vigorously defend its moratorium through the legal process. While we will not comment on pending litigation, we are able to provide factual information about the City's decisions and the public process that led to them."