CubCloud AI sues Missoula over data-center rules, invoking Montana’s right to compute

Montana’s Right to Compute Act protects private computing resources, but CubCloud AI says Missoula’s zoning rules leave it nowhere in the city to grow. The company sued on November 4 to block enforcement, arguing that the restrictions violate state law. Missoula intends to defend the change, bringing that protection into a concrete land-use dispute.

The dispute is not over a proposed giant computing campus. CubCloud provides AI and cloud computing infrastructure to local businesses, including fitness centers, insurers and telecommunications providers, according to its lawyers. Its complaint describes an 18-person company planning a separate building for more computing equipment at its existing site near Missoula Montana Airport.

Goldwater Institute attorneys represent CubCloud through the Big Sky Legal Project, a joint initiative with the Frontier Institute. Goldwater says it filed the case in the Fourth Judicial District Court in Missoula County. The company and CEO Joshua Rhines want a declaration that the ordinance violates the act and an order preventing enforcement.

A permitted use with no place on the map

Missoula’s zoning code, adopted in late 2025 and effective earlier this year, allowed data centers in heavy industrial areas. But no land on the city’s zoning map carried that designation. The code also inadvertently allowed data centers elsewhere when they occupied less than half of a facility, creating an opening for smaller operations inside buildings with other uses.

The council closed that opening in October by changing the definition of a data center. The revised rules classify facilities by how their equipment is used, rather than how much floor space it occupies. Goldwater says the council approved the ordinance 10–2 on October 5. The change makes the activity, not its share of a building, the deciding factor.

CubCloud’s Kestrel Drive facility had met the earlier requirements because computing resources occupied about 20% of its floor area, according to the complaint. Goldwater describes a building of less than 4,000 square feet, with computing equipment occupying less than 850 square feet. The company’s property covers 4.5 acres and is zoned for light industrial use, its lawyers say.

The restriction is therefore a zoning barrier rather than an express prohibition in the ordinance’s text. A developer could seek rezoning to the heavy industrial category, the Missoulian reports. But without that change, CubCloud says it cannot build similar facilities either on the property it already owns or elsewhere within city limits.

The legal test: necessity, not just classification

Montana lawmakers passed the Right to Compute Act in 2025. It connects computational resources to property and free-expression rights, limiting government interference unless justified by a compelling interest, such as public health and safety. Goldwater’s account quotes the requirement that restrictions be “demonstrably necessary and narrowly tailored to fulfill a compelling government interest.”

That does not mean computing facilities are exempt from nuisance rules. Goldwater acknowledges that the act allows governments to address excessive noise or light, provided restrictions meet its necessity and tailoring requirements. CubCloud’s argument is that Missoula’s approach sweeps in its operations without tying the restrictions to those effects.

The complaint argues that the city has not identified a compelling governmental interest supporting the restrictions. Even if it could identify one, CubCloud contends, the ordinance is not narrowly designed to serve it. The company also alleges that its facilities do not create noise, odors, physical intrusions or other conditions that unreasonably interfere with neighboring properties.

Nobody knows what the law is intended to do or what it means.

Ryan Sudbury, Missoula city attorney, speaking to Montana Free Press

Missoula prepares to defend its authority

City Attorney Ryan Sudbury told Montana Free Press that officials discussed the Right to Compute Act while drafting the zoning amendment. As of the morning of November 9, the city knew about the lawsuit but had not been served. Sudbury said the law had not been tested in court and that Missoula would defend its action if served.

Small size alone does not settle the question of local impacts. Missoula County’s recently released data-center study found that even smaller operations can significantly affect energy demand, water use, and air and water pollution. Those general findings are distinct from CubCloud’s allegations about its own facilities, leaving the company’s specific effects and the ordinance’s legal justification at the center of the dispute.