Missoula company CubCloud AI has sued the city of Missoula over a recent zoning change that blocks data center development within the city limits, citing the state’s Right to Compute Act.
The company, represented by the Arizona-based Goldwater Institute through the Big Sky Legal Project, argues in the lawsuit filed Nov. 4 that the city’s rules preventing it from expanding its business are not supported by a “compelling governmental interest,” nor are they narrowly tailored as required by the Right to Compute Act.
“The City’s new ordinance targets data centers because it considers them the wrong type of business,” said the Goldwater Institute’s Dave Roland in a press release. “The fact that the ordinance’s blanket restrictions sweep in CubCloud shows they are not narrowly tailored toward protecting the public from excessive noise, light, pollution, etc., as the Right to Compute Act requires.”
Missoula City Attorney Ryan Sudbury told Montana Free Press that, as of Monday morning, the city had not been served with the lawsuit but that he was aware of the case. Sudbury said city officials had internal discussions about the Right to Compute Act while crafting the zoning amendment and that the city plans to defend the change.
“Nobody knows what the law is intended to do or what it means,” Sudbury said. “It has not been tested in court. … If we get served, we will defend the city’s action.”
The Montana Legislature passed the Right to Compute Act in 2025. The law links the development of computational resources, such as data centers, to constitutional rights, including property and freedom of expression. As with other constitutional rights, government infringement of the right to compute is limited except when driven by a compelling governmental interest, such as the preservation of public health and safety.
While some local governments have argued the law prevents them from regulating data centers, others, including Missoula County, have moved forward with crafting new rules. Large data center proposals have received significant pushback from residents. Missoula County’s recently released data center study found even small-scale operations can have some significant impacts on energy demand, water use and air and water pollution.
The city adopted a new zoning code in late 2025 that went into effect earlier this year. While the new code allowed data centers in heavy industrial areas — which are not included on the zoning map — the rules inadvertently permitted data centers citywide if they took up less than 50% of a facility. The amendment approved in October closed that loophole by revising the definition of a data center and regulating the facilities based on how the equipment is used rather than how much floor space it occupies.
CubCloud AI was founded about a year ago and has 18 employees, according to the complaint. The business provides private computational resources, remote data processing, server hosting and cloud computing services. CubCloud operates a facility on Kestrel Drive near the Missoula Montana Airport that previously met the city’s requirements because the computational resources occupied about 20% of the floor area, the complaint said. Joshua Rhines, CubCloud CEO, planned to build a new stand-alone building on the site that would house additional computing resources.
Under the city’s updated rules, the business could not build similar facilities on its existing site or anywhere else within city limits. The complaint argues the facilities do not generate noise, odors, physical intrusions or other adverse conditions that would constitute a nuisance or unreasonably interfere with neighboring properties.
The complaint argues the zoning amendment violates the Right to Compute Act by restricting the company’s ability to own or use computational resources and is not supported by a compelling government interest. Even if a compelling government interest was identified, the rule is not narrowly tailored to fulfill that interest, the complaint states.
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How Montana’s ‘Right to Compute Act’ stymies data center regulation
While the goals of public pushback against data center development are clear, a 2025 state law — the Right to Compute Act — has effectively tied the hands of county commissioners whose constituents are pushing for regulation. “We are between a rock and a hard spot right now,” Yellowstone County Commission Chair Mark Morse said in a September interview. “We don’t know what we have the power to do.”
Rhines and CubCloud request the court declare the city rule violates the Right to Compute Act and enjoin the city from enforcing it.
“A victory in this case will affirm that free expression and property rights apply just as vigorously to modern digital infrastructure as they do to printing presses and traditional brick-and-mortar commerce,” said Roland, with Goldwater Institute, in the press release.
The Goldwater Institute is a public policy research and litigation organization focused on limited government, individual liberty and free speech, according to its website. The organization has partnered with the Montana-based Frontier Institute, a conservative think tank, on the Big Sky Legal Project to provide free legal services to Montanans “whose rights are being violated by federal, state, or local government.”
Missoula City Council Member Kristen Jordan argued last month that the zoning code is insufficient to prevent data center development, which could be approved through a rezoning request. Jordan is working on a proposal to enact a two-year moratorium to allow the city to write more thorough rules regulating data center development. The proposal will likely appear before the council in the coming weeks.
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