Federal class-action lawsuit filed over Dowagiac data center noise

As a Las Vegas-based company plans to expand its data center operations in Michigan, residents living near its current facility are taking them to court, citing constant, noisy operations. 

Liddle Sheets P.C., a law firm based in Detroit, announced a federal class-action lawsuit against Alliance Cloud Services LLC on Tuesday, with the firm representing residents living within one mile of the company’s data center in Dowagiac, Mich. 

The complaint, filed in the U.S. District Court for the Western District of Michigan, argues these residents have been unable to use and enjoy their property due to the noise the facility generates 24 hours a day, seven days a week. 

“My husband and I have been unable to use our yard since this facility began operating,” Lindy Valenzuela, one of the named plaintiffs, said in the complaint. “It is impossible to stay outside for longer than 10 minutes at a time before succumbing to headaches. The noise also penetrates the inside of our house even with the windows closed.”

The complaint said Alliance Cloud Services has “failed to implement adequate soundproofing equipment at its Data Center that properly absorbs, captures, and/or prevents the escape of noise, thereby resulting in the offsite emission of excessive noise beyond its property” arguing that a properly constructed and maintained facility would have taken steps to reduce the noise.

“These people had no say in the introduction of this large and loud data center into their otherwise peaceful community,” Laura Sheets, the lead lawyer on the case, said in a statement.  “This community just wants to be able to enjoy their homes, and they want the data center to deal with the noise and be a better neighbor.”

Alliance Cloud Services’ parent company, Hyperscale Data, Inc., did not respond to a request for comment.

While the facility was initially used to mine Bitcoin, Hyperscale Data announced in 2024 that it intended to shift those operations to another facility in Montana, while expanding the capacity of the Michigan facility to support artificial intelligence development.

At the end of March, the company said it secured an agreement to purchase 48.5 acres of land – more than doubling the amount of land it owns in Dowagiac.

In an open letter to Hyperscale Data Inc. CEO Will Horne dated April 1, Dowagiac Mayor Patrick Bakeman saying the company had neither applied, nor received any approvals needed to facilitate its expansion.

On May 11, the company said in a statement that it had prospective customers showing strong interest in its Michigan data center, and that they expected to enter into one or more power and infrastructure lease agreements in the coming weeks and months.