A Pinevale Superior Court judge on Sunday issued a temporary injunction stopping work on Calyxion Cloud’s Cedar Lake data centre, citing “substantial questions” about the county’s environmental review and water-rights allocations. The ruling, delivered by Judge Elena Morris in a packed courtroom on Sept. 20, 2026, comes after weeks of escalating protests and a legal petition filed by local residents and the county attorney’s office; construction crews were ordered to stand down immediately.
The project — announced in March and approved by the Pinevale County Board in June — had been pitched as a major economic boon: Calyxion promised 300 construction jobs, roughly 60 permanent positions and an estimated $4.7m in annual property and sales tax revenue. Opponents argued those gains were outweighed by a projected 1.2 million gallons-per-day draw on local water sources and a 220-megawatt peak power demand that could force use of backup diesel generators during grid shortages.
The court’s injunction follows a petition by the community group Citizens for Cedar & River (CCR) and a county lawsuit alleging the firm’s environmental impact statement failed to account for subsurface aquifer flow and emergency generator emissions. Tom Ackerman, CCR’s campaign director, said the ruling validated long-held concerns. “This injunction is a vindication for families who have lived off this watershed for generations,” Ackerman said. “We asked for the facts and the court has demanded the facts be produced.”
Calyxion’s chief executive, Darren Hollis, called the halt “deeply disappointing” and said the company would pursue remedies in the courts. “We entered Pinevale with a commitment to invest in the community and to build responsibly,” Hollis said in a statement. “Calyxion will seek a prompt review and, if necessary, every legal remedy available to protect our project and our backers.” The company also confirmed that lead investor Orchid Capital has frozen a scheduled $120m tranche pending the outcome of the injunction, and that several regional suppliers have paused deliveries to the site, affecting contracts valued at about $18m.
In the state capital, Governor Evan Sloane said his administration would convene an emergency audit of large data-centre approvals and has directed staff to draft a temporary moratorium on projects above 100 megawatts while the review proceeds. “No project should trade community water and climate stability for corporate profit,” Sloane said in a late Sunday briefing. He called for a special legislative session the week of Sept. 25 to consider new standards for water use, grid impact assessments and community consent provisions.
Local leaders reacted with a mix of relief and alarm. Pinevale Mayor Rosa Martinez, who supported the original approval after an independent county study estimated significant fiscal benefits, warned of immediate consequences for workers and small firms. “This ruling puts our town’s future at risk,” Martinez said. “We lost momentum for Main Street projects that depended on that payroll. At the same time, our residents demanded oversight — and now they’ve been heard.” County banks have placed a temporary freeze on development loans tied to the site, and at least one construction contractor has laid off 28 workers pending clarity.
Economists who track energy and land-use conflicts warned the stoppage could have broader market effects. Dr. Leila Harrow, an analyst at the Mid-Atlantic Energy Institute, said delays typically raise costs and chill investor appetite for similar rural projects. “A legal pause of this scale adds months to timelines and can tack on hundreds of millions in contingency costs,” Harrow said. “More importantly, it signals to capital markets that permitting risk is now a central line-item.” If the state adopts tougher standards this month, dozens of pending facilities across three states could face new conditions or pauses, analysts said.
The next chapter is set for Oct. 6, when Judge Morris will hear Calyxion’s motion for a stay and detailed briefs from county and state agencies. For the residents who have been camping at the gated entrance to the Cedar Lake site, the pause is a moment of triumph. “We didn’t want to stop jobs,” said CCR organizer Ackerman, standing under a banner at the roadblock. “We wanted a project that didn’t drain our wells and darken our skies. Today’s order shows communities can change the balance.”
