A federal judge has halted construction of a planned Immigration and Customs Enforcement (ICE) facility near Gilroy, California, ruling that the federal government must address environmental review requirements before the project can proceed. US District Judge Eumi Lee granted a preliminary injunction on Friday, September 11, in a lawsuit brought by California Attorney General Rob Bonta and Santa Clara County. The order keeps construction on hold while the court considers the next steps in the case. The dispute centres on a 24.5-acre property in an unincorporated area of Santa Clara County that the federal government leased in January 2025 for use as a potential ICE holding facility. State and county officials argued that construction began without the required environmental assessment or consultation with local authorities.
In her ruling, Lee found that the county and state had identified specific environmental harms that could result from the development. The federal government, meanwhile, had not demonstrated that delaying construction would significantly obstruct immigration enforcement or cause substantial economic hardship. The site has raised concerns over possible hazardous materials left behind by a previous tenant, a pesticides research company, as well as the effects of construction on local wildlife, agricultural land and existing infrastructure. Another concern is the property's sewage capacity. The existing septic system was designed to accommodate about 40 daytime employees, whereas the planned facility could accommodate considerably more people on site. According to court filings, the federal government said the holding facility would accommodate up to 10 people, although its attorneys did not commit to a maximum occupancy figure. The ICE office would employ about 50 immigration agents, with approximately 60 people potentially visiting for daily check-ins. Judge Lee found that the projected increase in activity raised concerns about the septic system's capacity. In her ruling, she wrote that “either overburdening the existing septic system or constructing a new system pose a risk of irreparable environmental harm.” The property owner, Elmwood Capital Group, argued that it could make changes to the septic system to meet regulatory requirements. However, Lee noted that construction had already begun without the necessary permit process. Federal lawyers had described the work as an office relocation from Morgan Hill and argued that it did not require an environmental review. Lee rejected that position, describing the argument as “absurd and contradicted by the record”, according to the San Francisco Chronicle.
Bonta and Santa Clara County filed their lawsuit in June 2026, seeking to stop the project over alleged violations of federal and state laws. Their legal challenge cited the National Environmental Policy Act, the Immigration and Nationality Act, the Intergovernmental Cooperation Act, the Administrative Procedure Act and California's Williamson Act. The plaintiffs argued that proceeding without the required review threatened land that has been protected for agricultural use since the 1960s. They also raised concerns about hazardous materials and the potential effects on surrounding communities and the local ecosystem. The federal government had previously agreed to pause construction until September 9. The Friday injunction continues the halt, with the court finding that the state and county were likely to succeed in their legal challenge. Bonta said the administration had attempted to advance the project without complying with environmental safeguards or consulting affected communities. Santa Clara County Counsel Tony LoPresti said the ruling reinforced the need to follow the legal process before developing a facility of this scale. He also questioned whether the project could be completed given the site's infrastructure limitations and environmental concerns.
The court has directed the parties to meet and confer before submitting a proposed order by September 30. Setting out the scope of the injunction. That process will determine what activities, if any, can continue at the property while construction remains suspended. LoPresti said possible work could include soil testing, inspections or installing fencing to secure the site.
