The judge in an ongoing legal battle over a data center under construction in Birmingham’s Oxmoor Valley neighborhood dismissed from the lawsuit on Wednesday a briefly existing company involved in land sales that increased the data center site’s price by $66 million.
Jefferson County Circuit Court Judge Javan Patton Crayton also dismissed three of eight counts against the remaining three defendants. She offered no reasoning for her decisions in the ruling.
Lakeshore Data Center, LLC was the middle buyer and seller in a chain of three transactions on the same day in October 2025. The company formed in September 2024 and dissolved in December 2025.
Ken Perry, attorney for Lakeshore Data Center, argued at an Oct. 22 hearing that his client couldn’t be legally responsible for the zoning decisions or construction-site nuisances that nearby residents are suing over.
“There's nothing illegal about – whether you call it flipping or whatever – buying property and then selling it later on at a profit,” Perry said in court. “That's just not illegal as a matter of Alabama law.”
Mark Parnell, an attorney for residents Gail and Robert Sansome, told the judge Lakeshore Data Center should remain in the case because its property transaction could have been part of a civil conspiracy. Civil conspiracy involves multiple parties colluding to use legal means to accomplish illegal results or to use illegal means to accomplish legal results or to deprive another party of legal rights.
He pointed out that Lakeshore Data Center’s business address matches that of Hoar Construction, another defendant in the lawsuit and the company building the data center for tech firm Nebius. Hoar Construction's CEO and Lakeshore Data Center's manager were the same person, he said.
“Our allegations are Hoar and Lakeshore are one and the same,” Parnell said. “Hoar’s CEO orchestrated this cascade of acquisitions, made $9 million in a matter of minutes and his company has a multi-million-dollar construction project out there.”
Judge throws out three counts
Crayton also dismissed three claims in the lawsuit while keeping the residents’ primary challenges alive for a trial slated for March. The lawsuit alleges the city of Birmingham, which is also a defendant, illegally granted permits for the data center, which is located near homes and a school in a mixed-use zoning district.
The judge threw out the plaintiffs’ claims related to data center regulations the Birmingham City Council approved June 9. The city’s attorneys argued those changes to the zoning ordinance were irrelevant because the city issued permits for the Nebius data center site earlier in the year.
The judge also rejected allegations defendants violated permitting and demolition provisions of the Birmingham Technical Code. Defense attorneys argued municipal technical codes are meant to protect general public safety rather than to create rules that allow people or organizations to sue each other for financial compensation.
The third count Crayton tossed out involves claims that once the data center is operating, it will harm residents by introducing noise, heat and other nuisances. The defense argued Alabama law doesn’t allow courts to rule on potential harms future activity could cause.
Crayton dismissed this count “without prejudice,” meaning residents could refile the claim in the future. She permanently dismissed the other two counts.
