A federal class-action lawsuit filed in Michigan accuses Alliance Cloud Services LLC, a subsidiary of Hyperscale Data Inc., of creating excessive industrial noise from its Dowagiac artificial intelligence and cloud computing data center, with nearby residents arguing the facility has disrupted the use of their homes.
The lawsuit, filed in the U.S. District Court for the Western District of Michigan, seeks to represent homeowners living within one mile of the Dowagiac facility. Court filings accuse the company of failing to implement sufficient sound mitigation measures to prevent excessive noise from traveling beyond the property line.
According to the complaint, the site operates continuously, 24 hours a day, seven days a week. Nearby homeowners say the sound can be heard outdoors and inside their homes.
Residents accuse the company of creating a private nuisance through excessive industrial noise from the data center. Private nuisance claims are commonly used in disputes involving alleged noise, smoke, pollution, odors, or vibrations that interfere with the normal use of nearby property. Courts generally look at whether the alleged disruption is serious, ongoing, and beyond what homeowners in the area would ordinarily be expected to tolerate.
Even when industrial projects receive permits or otherwise operate legally, nearby property owners may still pursue nuisance claims if they argue the activity creates persistent disruptions that interfere with residential life. The dispute centers on whether the alleged noise from the data center goes beyond what homeowners in the area should reasonably be expected to tolerate.
The Dowagiac operation was initially used for Bitcoin mining before Hyperscale Data announced plans in 2024 to shift those activities to Montana and expand the Michigan location for artificial intelligence and high-performance computing operations.
Earlier this year, Hyperscale Data announced an agreement to acquire an additional 48.5 acres near the existing site, more than doubling its land holdings in Dowagiac. The company said the purchase would support future expansion of its artificial intelligence and high-performance computing operations.
Dowagiac officials later raised concerns about the proposed expansion. In an April 1 open letter addressed to Hyperscale Data Chief Executive Officer Will Horne, Mayor Patrick Bakeman stated the company had not yet applied for or received the approvals needed to move forward with the development. Local residents have pushed for a moratorium on new or expanded data centers in the area, arguing that communities have had limited input over projects that could bring increased industrial activity near homes.
The case comes as rapid expansion in artificial intelligence and cloud computing increases demand for large data processing facilities that require significant electrical capacity and around-the-clock cooling systems. The growth of data center projects across the United States has fueled disputes over electricity demand, water use, zoning, industrial noise, and the impact large computing facilities may have on nearby communities.
The lawsuit seeks damages and other relief for homeowners who argue the facility has interfered with the normal use of their property.
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