Jason Morris, a land-use lawyer based near Phoenix, now spends about 70% of his time on data center cases, up from roughly 10% a few years ago, as communities and developers clash in courtrooms across the United States, CNN reported.
Morris spent years helping residential, commercial and industrial developers cut through red tape and overcome resident opposition in the Phoenix area. He occasionally advised data center builders as well, work that used to be a small side of his practice.
Data center projects were once nearly automatic approvals. Cities welcomed them because the buildings resembled office parks and generated little traffic, and the Phoenix region became a hub for the data centers powering the artificial intelligence boom. Then came the backlash, and with it, the demand for lawyers.
More than 300 jurisdictions in 44 states have now adopted moratoriums against data centers, according to the report.
Lawyers on both sides of the fight
On one side, plaintiffs-side lawyers are working with local communities and advocacy groups to build legal obstacles that slow development. On the other, lawyers representing data center builders and investors are handling a growing volume of litigation over land use, environmental impact and noise.
Morris defends developers, operators and technology companies in lawsuits tied to noise and water use, and also fights regulators to secure permits for construction. He said the newest generation of hyperscale data centers built for artificial intelligence are far larger than earlier facilities and consume enormous amounts of energy and water, prompting cities to weigh the tradeoffs more carefully. Morris said these were the hardest cases of his career, with every legal tool being deployed.
A profitable niche for law firms
The legal tangle around data centers translates into a large volume of billable hours. Major firms including Latham & Watkins, Perkins Coie and WilmerHale advertise high-end data center services to clients on their websites, and firms are investing heavily in partners with experience on such projects.
Morris said that once both large and small law firms start listing data centers on their websites, it tells you everything you need to know about the business potential. Larger firms have formed dedicated data center and digital infrastructure teams that combine lawyers specializing in energy, regulatory and real estate law.
About a third of large law firms now have a dedicated data center practice group or team, according to a Bloomberg Law survey released in June.
Energy lawyers in high demand
Energy lawyers are in particularly high demand because of the enormous power needs of data centers. Tyler O'Connor, an energy litigator at Crowell & Moring in Washington, advises data center developers on energy compliance and infrastructure.
Clean energy projects were the main focus of the energy sector under the Biden administration, O'Connor said, but they have since been overtaken by the expansion of data centers. He said that even when his team is not working directly for data center clients, almost all of the work his practice handles now is shaped by the rise of the industry.
Communities take legal action over noise
Mass tort lawyers are also reaching out to residents living near data centers through social media and filing class actions against operators. Laura Sheets, a lawyer in Detroit, recently filed one of the first nuisance cases in the country against a data center operator in Michigan.
Sheets said that as these facilities began appearing everywhere, unhappy residents started contacting her, and the cases turned out to be a natural fit for her practice. She has filed four nuisance complaints against data centers in four states and is preparing additional cases.
The lawsuits argue that continuous noise from data centers' cooling systems and backup power generators substantially interferes with neighbors' use and enjoyment of their property, the legal standard for proving a private nuisance. They also claim the facilities are lowering the value of nearby homes.
A legal playbook borrowed from heavy industry
The case against data centers follows a legal playbook often used against large industrial facilities. Michael Pollack, a professor at Cardozo School of Law who focuses on land-use law, said courts will apply the same set of environmental and land-use laws already used for other industrial disputes to data centers.
Could Congress step in?
Some of this lucrative legal work may eventually dry up. If the lawsuits succeed in slowing development, the data center industry could lobby Congress to pass legislation preventing municipalities from blocking new construction, which would choke off the wave of local suits.
Pollack pointed to a precedent: after communities blocked wireless cell towers throughout the 1990s, Congress made it harder for municipalities to ban wireless antennas and towers through the Telecommunications Act of 1996. He said companies could similarly turn to state legislatures or Congress to pass laws giving them an advantage over local opposition.
