Data Centers in the Crosshairs: How to Avoid Becoming a Target of Nuisance Lawsuits

At a Glance

• A new wave of nuisance class actions is targeting operational data centers, with plaintiffs focusing on continuous noise from facility infrastructure.
• Plaintiffs are using permitting records, regulatory issues, public statements, and alleged gaps between promised and actual impacts to support negligence and nuisance theories.
• Developers can reduce litigation risk by coordinating permitting, public communications, community outreach, insurance and contract review, and government-relations activity with legal strategy from the outset.

A slew of recently filed class actions signals an evolving litigation strategy targeting the impacts of data center operations near residential neighborhoods. Haley v. X.AI Corp., No. 3:26-cv-00148 (N.D. Miss.), has drawn the most attention, which involves a 57-unit gas-turbine installation powering AI operations at gigawatt scale and a putative class of more than 10,000 members.

Other lawsuits focus on cooling systems, generation, and other typical data center operations, and allege various theories of state, private, and public nuisance, negligence, and related legal claims on behalf of residents located between half a mile and one mile from the operations. Unlike lawsuits that challenge zoning or permitting decisions before construction, these nuisance claims specifically target data centers that are already built and operational, which will become increasingly common as more data centers come online.

Emerging Themes in Data Center Nuisance Litigation

Recently filed class action lawsuits targeting data center operations follow a similar pattern. Each targets continuous 24/7 noise from HVAC infrastructure, cooling towers, diesel generators, or gas turbines, alleging that operators failed to use reasonably available acoustic controls. Plaintiffs frame the standard of care around theoretical "best available" technology (perhaps drawing on similar concepts in environmental law), attempting to set a higher bar for what constitutes compliance with the applicable standard of care.

So far, these lawsuits focus almost exclusively on noise. Other environmental concerns frequently associated with data centers, such as water consumption and thermal discharge impacts on local water supplies, have not yet featured prominently in this wave of class litigation. These issues, however, have drawn significant attention and may eventually give rise to their own tort theories.

How Can Companies Mitigate the Risk of These Lawsuits?

Building on the ongoing trend of litigation, these lawsuits mark a notable addition to efforts to block data center construction at the local level, such as zoning or permitting disputes. These new suits target operational data centers after they are fully built. This pattern of allegations reflects a growing focus on ongoing activities, such as noise and environmental impacts, that have been common in previous lawsuits against other operations, such as Combined Animal Feeding Operations (CAFOs), animal production, or historic impacts from industrial facilities located near residential areas.

As these lawsuits increasingly focus on operational impacts rather than simply opposing new construction, it is important to employ some foundational strategies to help combat the common tactics plaintiffs are using for their cases.

1. Avoid Environmental Violations and Carefully Document Appeals or Resolution of Any Violations

   A key feature of these complaints is the strategic use of ancillary regulatory issues as evidence supporting nuisance claims. Environmental penalties for paperwork deficiencies or violations, including failure to obtain required permits, are routinely cited in nuisance complaints to demonstrate negligent operation or construction. For developers and owners, it is obviously best to avoid any environmental violations. But, like on many large projects, they can occur. If they do, it is important to keep good and thorough records of all environmental issues encountered on data center projects, including how any direct or ancillary environmental issues were appealed or resolved, and how — both prior to and during construction of the project — developers or owners carefully considered and evaluated the environmental impacts of the project (if any) on its neighbors.

2. Coordinate Public Communications with Legal Strategy

   Developers should recognize that zoning and permitting processes create a documentary record that plaintiffs will scrutinize in subsequent tort litigation. A well-managed zoning plan that includes coordinated engagement can strengthen a tort defense by establishing a contemporaneous record of reasonable decision-making.

   A key is to ensure that permit applications, public testimony, and communications with public officials accurately reflect the project's potential impact and that any variances or conditions are supported by documented engineering or other professional opinions. Gaps between what was represented during permitting and actual operational impacts will be highlighted by plaintiffs as evidence of fault.

3. Invest in Neighborhood Outreach as Part of Overall Strategy to Build Goodwill among Potential Witnesses

   Proactive community engagement, in close coordination with legal counsel, can reduce the likelihood of nuisance litigation while cultivating goodwill among neighbors who may later serve as witnesses. Developers should look beyond traditional public relations efforts and consider ways to give nearby residents a tangible stake in the project's success, but should do so in close coordination with the legal team to ensure that communications are managed appropriately and that internal deliberations or assessments for community outreach are protected.

   Owners and developers should also maintain practical outreach measures, such as dedicated hotlines for noise or related concerns, and they should keep records of community engagement to show they are taking and addressing community concerns seriously.

4. Carefully Review Contractual and Insurance-Related Coverage

   Indemnification provisions should be structured to address nuisance claims involving the project owner, developer, contractors, equipment suppliers, and operators. Owners and developers should also review all commercial general liability (CGL) and environmental insurance programs for coverage against potential exposures, including potential pollution-exclusion issues.

In Closing

Given these claims' current centrality of local regulatory and political dynamics, developers should ensure that communications with government officials — whether through in-house personnel, third-party government relations consultants, or trade associations — are managed with an eye toward potential discovery. Close coordination with litigation counsel on the preservation, privilege, and discoverability of government relations materials is an increasingly important part of project risk management in this space.

Because plaintiffs will likely focus on what operators knew about noise impacts and when, internal communications, monitoring data, and consultant reports may become key discovery targets. Once credible pre-suit threats emerge, operators should issue a written litigation hold and structure any noise or environmental investigation through counsel for the purpose of providing legal advice. Technical consultants should be retained through outside counsel where appropriate; and if multiple entities are sued, the sharing of privileged material should include consideration of common-interest or joint-defense protections.

Those who embed these practices into their projects from inception will be better positioned both to avoid litigation and to defend it successfully if it comes.

For More Information

Faegre Drinker will be following these lawsuits closely as they develop. For further information, you may contact the authors.