Land for U.S. Data Centers Is Now Being Seized Through Eminent Domain

The construction boom around artificial intelligence in the U.S. is gathering steam: according to the Pew Research Center, the country is home to more than 3,000 data centers, with roughly 1,500 more under construction. The trouble is that hardly anyone wants to live near them — polls show that seven in ten Americans oppose building AI centers in their own neighborhoods. The reasons they cite are thoroughly down-to-earth: rising utility bills, noise, pollution and the loss of green space. The servers that process text and images for large language models like ChatGPT consume enormous quantities of water and electricity — in 2024, data centers accounted for more than 4% of the country's total power use.

But the conflict is flaring up over more than just the buildings themselves. To power these voracious facilities, utilities need new transmission lines, and those inevitably cut across private land. When owners refuse to sell a parcel, eminent domain comes into play — the government's power to seize private property without the owner's consent. Such suits are already being filed in Georgia, Pennsylvania and other states.

What the law says

The article's author, Aaron Walayat, is a law lecturer at the University of Dayton who specializes in exactly this subject. He points out that the Fifth Amendment to the U.S. Constitution permits taking land only for “public use” and only with “just compensation.” The government itself rarely resorts to this; more often the power is delegated to utility companies — “common carriers.” But the rules differ from state to state. In Texas, for instance, the state Supreme Court ruled that a project must “serve the public” rather than be built solely for the developer's profit.

The federal courts read the “public use” standard broadly. In the landmark ruling in Kelo v. City of New London (2005), the Supreme Court found it permissible to take homes for economic development around a Pfizer facility. The irony is that the development never happened, and Pfizer itself eventually left New London. Public outrage was so fierce that 45 states passed laws restricting eminent domain, and the courts of Michigan, Ohio and Oklahoma flatly barred seizing property for another private party's benefit “for the sake of the economy.”

The outcome is far from clear

Case law on transmission lines is contradictory. The supreme courts of South Dakota and Vermont upheld such takings, finding that improving grid reliability for local customers is a genuine public benefit. In 1984, by contrast, a Mississippi court rejected a similar claim: the line ran from the state into Louisiana, benefiting not a single Mississippi resident.

Hence the author's conclusion: as long as the matter concerns grid reliability for “local” customers, a land taking will most likely survive in court. But if new lines in fact serve only a data center and bring no benefit to the state's residents, landowners have a real chance to challenge the forced sale.

Source: Hacker News