DC BLOX has filed a federal lawsuit against Metro Nashville, alleging city officials deliberately blocked the company’s controversial data center next to the Nashville Zoo despite a determination that the project had a vested right to move forward.
The lawsuit, filed Aug. 11 in U.S. District Court for the Middle District of Tennessee, challenges Nashville’s recently passed data center moratorium and seeks to force Metro to resume processing permits for the proposed development on Grassmere Park Drive.
The company noted in its suit that the city's own zoning administrator determined the project had a vested right to continue the project.
The 29-page complaint escalates a monthslong battle and comes after the Metro Nashville Council on Aug. 4 authorized
the city to potentially acquire the 23.49-acre property through eminent domain.
In its suit, DC BLOX alleges Nashville leaders used “every tool” and “every avenue” available to stop a project that was legal under existing zoning rules when its permit applications were submitted.
The lawsuit cites Council member Courtney Johnston, who sponsored the moratorium and publicly said she was “doing everything I can, legislatively and otherwise, to prevent this project from coming to fruition.”
DC BLOX also alleges that during a June 12 phone call, then-Metro Law Director Wally Dietz told one of the company's attorneys the city “would do whatever it could to ensure that the DC BLOX Project was not developed.”
Metro Law Director Tyler Yarbro in a statement said the city is reviewing the lawsuit and is “confident that Metro has acted lawfully in its dealings with DC Blox and in the enactment of the moratorium on data center permitting.”
DC BLOX said in a statement that the suit “speaks for itself.”
At the heart of the lawsuit is whether DC BLOX secured legal rights to develop the property before Nashville changed its rules governing data centers.
The company entered an agreement in November 2025 to buy the Grassmere property for approximately $23 million and says it spent substantial money on engineering, environmental work and other preparations before closing on the property July 16.
The site had previously housed office and data center operations for Asurion, according to the complaint. DC BLOX argues that history gives it an additional legal right to continue and expand the property's previous data center use.
Nashville's Council passed a moratorium July 21, halting certain data center permits and appeals through as late as Dec. 1. The measure was intended to give the city time to address concerns about data centers’ electricity demands, cooling systems, environmental impact and proximity to homes, schools, parks and the Nashville Zoo.
Before Nashville adopted its new data center regulations, the city's zoning code did not have a separate land-use classification for data centers. The city instead classified them under existing categories such as general office or warehouse, the lawsuit says.
The lawsuit alleges Metro Legal said the moratorium would halt even projects with vested rights. But at the same time, Metro Legal acknowledged that vested projects retain the right to build under the rules in place before the moratorium.
The company says Metro has since placed its permits on hold, delaying construction and jeopardizing customer commitments and other obligations. It alleges Metro refused to issue grading and demolition permits even after reviewing agencies approved them.
The company is asking a federal judge to declare the moratorium unconstitutional and is seeking an unspecified amount in damages.
This article originally appeared on Nashville Tennessean: DC BLOX sues Nashville over moratorium blocking data center
