Bell Nunnally Partner Heath Cheek authored the Data Center Knowledge article “Why Data Center Development Is Facing a Legal Reckoning,” with assistance from Summer Associate Jonathan Naylor. The piece examines the growing opposition to data center projects, and the litigation risks developers may face as disputes over proposed developments intensify.

Cheek points to recent developments in Texas, including a short-lived data center moratorium in Hill County, opposition to a proposed project near Cedar Creek Lake and a freeze on new data center development pending an audit of the Texas grid. Against this backdrop, he argues that developers should increasingly prepare for litigation as organized opposition grows.

“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.”

Cheek focuses on defamation law as a potential response when opposition moves beyond opinion into objectively verifiable false statements. He notes that developers should carefully monitor and document rhetoric surrounding their projects, while recognizing that not every inaccurate or critical statement will support a defamation claim.

Cheek also examines the role of anti-SLAPP laws, including Texas’ statute, which can require parties pursuing certain claims involving matters of public concern to produce evidence supporting their case early in the litigation. For developers facing some types of lawsuits, these laws may also provide a mechanism for seeking an early dismissal.

The piece concludes, “No one starts developing a data center expecting litigation to result.” But with opposition becoming more organized and widespread, he advises parties to anticipate potential legal challenges and prepare accordingly.

To read the full article, please click here.