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Data Center Boom Fuels Legal Firestorm
11 Sep
Summary
- Data centers now consume 70% of land-use attorney's time.
- Over 300 jurisdictions enacted moratoriums against data centers.
- Law firms create specialized data center teams for new business.
Once welcomed by cities, data center projects powering the AI boom are now facing a significant backlash nationwide, leading to a surge in legal activity. Land-use attorney Jason Morris reports spending approximately 70% of his time on data center projects, a dramatic increase from previous years.
This shift has created a lucrative new area of business for law firms. Plaintiffs' lawyers are collaborating with communities to obstruct development, resulting in over 300 jurisdictions in 44 states enacting moratoriums. Conversely, law firms representing data center builders and investors are actively engaged in litigation concerning land use, environmental impacts, and noise.
Defending developers, Morris is battling lawsuits over water consumption and noise, while also navigating regulatory approvals. Cities are increasingly hostile due to the immense power and water demands of hyperscale data centers. The complexity of these cases utilizes every legal tool available, generating substantial billable hours for legal professionals.
Major law firms are establishing dedicated data center and digital infrastructure teams, with energy lawyers in high demand due to the facilities' power needs. Simultaneously, mass tort lawyers are filing class-action lawsuits, alleging that continuous noise from cooling systems and power generators disrupts neighbors' property use and reduces property values.
Legal experts suggest that if lawsuits effectively slow development, the industry may seek federal legislation to pre-empt local opposition, similar to actions taken after past opposition to wireless cell towers.
