Farmington Data Center Lawsuit: Annexation Deal and Court Ruling

The Farmington data center lawsuit is a consolidated legal challenge in Dakota County District Court brought by eight residents and Castle Rock Township against the city of Farmington, Minnesota, over its 2024 approval of a roughly 340-acre data center campus. The plaintiffs allege the city rezoned the land without the township’s consent in violation of a binding annexation agreement, and in November 2025 a judge denied the city’s motion to dismiss, allowing the case to move forward.¹

The Project Being Challenged

The development at issue is the Farmington Technology Park, a planned campus of up to 12 data center buildings totaling about 2.5 million square feet across 340 acres. The developer is Tract, a Denver-based company that prepares land for hyperscale data center operators.² The site includes the former Fountain Valley Golf Course and nearly 200 acres known as the Angus Property, which Farmington School District 192 sold to Tract for $18 million.³ At full buildout the project is estimated at about $5 billion. No tenant has been publicly announced.⁴

The Farmington City Council annexed parcels from Castle Rock Township in April 2024, rezoned the site to “mixed-use commercial industrial,” and on December 2, 2024 voted 4-1 to approve a development contract with Tract.³ Tract also received a height variance allowing 80-foot buildings, double the district’s 40-foot limit, with a 250-foot setback.⁵

Who Is Suing and What They Claim

Two separate suits have been filed and consolidated. The first was filed November 29, 2024 by eight residents operating as the Coalition for Responsible Data Center Development: Drea Doffing, Brian Haskin, Gary Johnson, Cathy Johnson, Mark Pearson, Terrie Pearson, Catherine Peregrino, and Jeff Schottler (Case No. 19HA-CV-24-5838). Castle Rock Township’s board voted unanimously on January 14, 2025 to bring its own suit, filed on or about February 11, 2025 (Case No. 19HA-CV-25-992). The township’s claims closely track the coalition’s, and the two cases were consolidated while maintaining separate complaints.⁶

The coalition’s amended complaint raises five counts:

Breach of contract, alleging Farmington violated the annexation agreement by rezoning without Castle Rock’s consent and skipping the agreement’s dispute-resolution process.
Declaratory judgment, seeking a court declaration that the rezoning is prohibited by the agreement and is arbitrary, capricious, and unlawful.
Judicial review of the zoning decision, arguing the rezoning was inappropriate for the project’s scale and should be voided.
A Minnesota Environmental Rights Act declaratory judgment claim, alleging the project will pollute, impair, or destroy protected natural resources.
A MERA claim seeking temporary and permanent injunctions to block the project until environmental compliance is demonstrated.⁷

Because the residents were not parties to the annexation agreement, they argue they can sue on it as “intended third-party beneficiaries,” meaning the agreement was designed to protect people in their position.⁸

The Annexation Agreement at the Center of the Case

The document driving the litigation is the Orderly Annexation Agreement between Farmington and Castle Rock Township, first approved in 2006 and updated in 2017. It governs how land in the township can be brought into the city, and it covers 918 acres, including the golf course property.⁹

Section 3.3 of the 2017 agreement prohibits Farmington from adopting or modifying a Comprehensive Plan designation for industrial or commercial use inside the annexation area without the consent of the Castle Rock Town Board. The plaintiffs allege that in September 2024 Farmington notified Castle Rock of its intent to redesignate the data center parcels for mixed-use commercial/industrial, then approved the changes without obtaining the required consent.¹

What the Court Has Decided So Far

Farmington moved to dismiss both complaints. Both motions were denied.¹⁰ The ruling on Castle Rock Township’s case came on November 10, 2025 from Judge Tracy L. Perzel of the Dakota County District Court. Judge Perzel found the 2017 agreement “ambiguous” on the key question of whether Castle Rock retains control over commercial and industrial land use for parcels already annexed into Farmington.¹

That ambiguity is a factual question the court cannot resolve on a motion to dismiss, so the breach of contract and declaratory judgment claims must proceed. The judge noted that Minnesota law expressly authorizes municipalities and townships to enter binding annexation agreements that include joint planning and land-use controls, and that taking the township’s allegations as true, it was “possible to grant relief on evidence consistent with the Complaint.”¹ The city said it was disappointed but would continue to follow the legal process.¹¹

What Residents Say Is at Stake

The coalition’s complaint alleges the project will worsen air quality and noise pollution, consume unprecedented amounts of water and electricity, and harm residents’ physical and mental wellbeing.⁵ More specifically, plaintiffs point to risks to groundwater and nearby trout ponds from runoff, diesel generators with on-site fuel storage, and light pollution affecting local wildlife.⁷

Residents have also questioned whether a 250-foot setback is adequate for buildings up to 80 feet tall next to established neighborhoods, and have raised concerns that infrastructure costs will fall on local taxpayers.⁵

What the City and Developer Say

Farmington has maintained that its Comprehensive Plan and zoning permit the Technology Park.¹¹ Mayor Nick Lien has supported the project, citing job creation and what he called a “huge property tax footprint” that would help balance the city’s tax base. On water, the mayor has said the project’s capped annual usage of 50 million gallons is equivalent to what the former golf course used for irrigation.⁴

Tract has said the approvals came through a “full, open, transparent, and fair hearing” process and passed by “overwhelming majorities” of the Planning Commission and City Council.⁵ The developer has said it will protect the local aquifer and comply with local ordinances.⁴

Where the Case Stands

As of mid-2026, the consolidated case remains active. With both motions to dismiss denied, litigation is expected to move into discovery and potentially toward trial, though no trial date has been publicly scheduled. The coalition has said it is continuing to gather information for discovery.¹²

The city has continued to act on the project in parallel with the litigation. On April 20, 2026, the Farmington City Council approved an application to divide the original Technology Park plat into two additions and approved updated development contracts for both. The city also acknowledged in a November 2025 statement that it had not received a specific development application for any building within the park, meaning no construction proposal was formally pending at that time.¹¹

1
IRP. Castle Rock Township v. City of Farmington Order
2
S2G Investments. Tract
3
Star Tribune. Farmington Data Center Lawsuit Tract
4
MPR News. In Farmington, a Data Center Project Spurs New Bonds Between the Left and the Right
5
GovTech. Farmington, Minn. Residents Sue to Stop Data Center Park
6
Legalectric. Coalition for Responsible Data Center Development v. City of Farmington, Memorandum
7
The Brockovich Report. They Wanted a Grocery Store, They Got a Data Center
8
Legalectric. Coalition for Responsible Data Center Development v. City of Farmington, Memorandum in Opposition
9
Republican Eagle. Annexation Agreement Causes Disorder
10
CRDCD. Lawsuit Updates
11
City of Farmington. Data Center – Farmington Technology Park
12
Hometown Source. Castle Rock Files Lawsuit Against Farmington Over Data Center