E. Kahn Development Sues Montgomery Township, NJ for $300M Over an Ordinance Banning Both Data Centers and Detention Centers

E. Kahn Development Corp. filed suit against Montgomery Township in Superior Court, Somerset County, on July 31, 2026, challenging Ordinance No. 26-1779, adopted by the Township Committee on June 18, 2026. The ordinance amended the township’s land development rules to add a prohibition reading, “Data centers are specifically prohibited throughout Montgomery Township,” and added a data-center definition to the code. The suit seeks a declaration that the ordinance is invalid, an injunction against its enforcement, and $300 million in damages.

The plaintiff owns the 257-acre former Kenvue campus in Skillman — Block 14001, Lot 2 and Block 13001, Lot 15 — a research, office, and manufacturing site that emptied after Kenvue announced in 2024 that it was relocating to Summit, and which E. Kahn purchased in or around December 2025. The property carries dual 69,000-volt transmission lines, the existing high-voltage infrastructure that made it attractive for a data center in the first place. Counsel Craig M. Gianetti argued before the Township Committee for evaluation rather than prohibition: it is “not something to eliminate a modern and necessary infrastructure use without evaluating whether it can be accommodated anywhere in town,” and tough zoning standards could address community concerns without a categorical ban.

The timing is the legal theory. E. Kahn filed a general development plan application in October 2025 and a site plan application on April 15, 2026 for light industrial development. That application was declared administratively complete on June 9 — nine days before the ban was adopted — and remains pending before the Planning Board. A second procedural attack targets the Master Plan consistency review: the complaint alleges the Planning Board recommended adoption on June 8, but “the minutes of the June 8, 2026 Planning Board meeting and the video recording of same, which is posted on the Township’s official website, do not reflect any discussion regarding whether the Ordinance was consistent with the Township’s Master Plan.”

The quotation that has traveled furthest from this wave is from this complaint, not Monroe’s: “The action of the Township Committee was clearly based upon public hysteria and political attention rather than sound land use planning.” That framing — municipal action as crowd reaction rather than planning judgment — is the arbitrary-and-capricious theory shared across the New Jersey suits, and it is a direct attack on the legitimacy of resident mobilization as an input to zoning.

Montgomery is the single point where the data-center fight and the detention-infrastructure fight touch the same instrument. Ordinance 26-1779 prohibits both data centers and detention centers. That is not evidence of one mechanism, and it should not be read as one: they are two prohibitions carried in a single ordinance, aimed at two different classes of unwanted land use, and a municipality’s zoning power over a private data-center developer is not the same legal posture as its power over a federal detention contractor, against whom local zoning is preempted. The convergence here is in a township’s list of things it does not want, not in the law that governs them.

Township Planner and Administrator Lori Savron said officials do not comment on pending litigation and that the township had not yet been served as of mid-August. No ruling has issued. See research-new-jersey-datacenter-ban-wave-cran-and-developer-litigation-2026-08 for the state pattern.