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Cover-300x227Pillsbury’s experience with data centers dates to the dot-com era. Since then, we’ve counseled the industry as proprietary centers were supplemented, and in some cases supplanted, by physical and cloud-based systems of larger dedicated enterprises. The data center landscape is now international in scope and diverse in speciation, with edge, modular, enterprise and hyperscale facilities each playing important yet distinctive roles, and just as there is no single locus of data center expertise in legal practice, there is no single locus of capabilities and users in the business environment. Pillsbury’s Data Centers team accordingly deploys a one-stop, hub-and-spoke model that reflects the complex ecosystem in which these localized points of computation sit. In an effort to gather these nodes of knowledge and experience into a distinctive publication, the Pillsbury Guide to Data Centers brings together a curated selection of articles which reflects the experience of our firm’s interdisciplinary team in advising clients on the development, acquisition, financing, construction and operation of data centers across the U.S. and internationally. These articles are intended to be enduring reference pieces that lawyers and clients of all levels of sophistication may wish to keep handy as they encounter questions and challenges in this field.

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On June 9, 2025, the U.S. Environmental Protection Agency (EPA) proposed granting the State of Texas  primary enforcement authority—commonly referred to as “primacy”—over the permitting and regulation of Class VI underground injection control (UIC) wells under the Safe Drinking Water Act (SDWA). This would authorize the Texas Railroad Commission (RRC) to regulate the geologic sequestration of carbon dioxide (CO₂) through Class VI wells—an essential component of carbon capture and storage (CCS) infrastructure.

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Resilience-episode-6-1-300x169In the newest episode of Resilience, Pillsbury’s Shellka Arora-Cox and Brookfield Asset Management’s Brian Callahan discuss one of the most dynamic corners of the energy and infrastructure market: private debt.

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It seems like such a simple question. Who owns data centers?

Ownership structures in the digital economy are more varied than might appear on the surface. While the largest computing and cloud service providers, such as Apple, Amazon (AWS), Microsoft (Azure) and Google (Cloud)—also known as “hyperscalers”—do own and operate a significant portion of their global infrastructure, they are increasingly partnering with third-party developers and investors, including real estate investment trusts (REITs), to expand capacity and deploy capital quickly and efficiently. This article provides a guide to how the most prominent strategic and financial players are engaging in this sector.

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The U.S. Department of the Interior (DOI) announced on May 30 that it will invoke emergency permitting procedures to accelerate environmental review of select geothermal energy projects, with three proposed geothermal projects in Nevada to be among the first projects to undergo expedited review.

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The rapid growth of electricity demand from data centers has emerged as a major challenge for the U.S. power sector. Much of this demand is being driven by the deployment of large learning models (LLMs) and generative artificial intelligence (AI). These workloads require large-volume, high-uptime computational infrastructure, and correspondingly large, reliable power supplies.

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In a closely watched opinion issued on May 16, 2025, the Texas Supreme Court in Myers-Woodward, LLC v. Undergrounds Services Markham, LLC, — S.W.3d —, No. 22-0878, 2025 WL 1415892 (Tex. May 16, 2025) resolved a long-uncertain issue of subsurface property rights in the context of salt dome mining. The Court held that, unless a deed provides otherwise, subsurface voids created by salt mining operations are owned by the surface estate holder, not the mineral interest holder. By rejecting a salt-specific rule, the Court harmonized ownership principles across subsurface formations, applying a uniform rule regardless of the type of mineral removed.

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THE U.S. SUPREME COURT

City and County of San Francisco v. EPA (March 4, 2025)
In the first major environmental decision by the Court in the 2024 Term, the Court’s analysis of the Clean Water Act concluded that there was no provision in the Act supporting the imposition by EPA of an ambiguous water quality standard. Indeed, the majority lamented the absence of any concrete plan to achieve compliance. In addition, the Act’s “permit shield,” that deems a permittee to be in compliance with the law if it is adhering to the terms of its permit, could be imperiled by this new standard. (Interestingly, the opinion does not mention the recent revocation of the Chevron doctrine, which placed many agency determinations beyond the reach of the reviewing courts.) There were four dissenters, led by Justice Barrett, who was persuaded that a receiving water quality determination permit condition was consistent with the Court’s review of the CWA.

The city of San Francisco owns and operates a complex wastewater treatment facility that is subject to a municipal Clean Water Act NPDES permit issued by EPA. However, the latest permit renewal contains new provisions that make the permittee “responsible for the quality of the body of water into which the permittee discharges pollutants.” The Supreme Court, holds that this new requirement is not authorized by the text of the Act. Moreover, even if a permittee “punctiliously” follows every requirement of the permit, if the quality of the receiving water falls below the applicable standard—which the permit does not set forth in any particularity—the Court suggests that the city could be heavily penalized for such a transgression even though it was never obligated by the permit to take any specific steps other than those it undertook.

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Even as the Trump administration moves to block state and local climate liability efforts, states and municipalities continue to advance lawsuits seeking to hold fossil fuel companies liable for harms associated with climate change. Most recently, the State of Hawaii initiated a climate deception lawsuit, and the City of Charleston, South Carolina, submitted a briefing in a pending case—each alleging that the fossil fuel industry engaged in a decades-long campaign to mislead the public about the risks of fossil fuel consumption and climate change. Both developments come as the Trump administration escalates its opposition to such suits, issuing on April 8 an executive order (EO), Protecting American Energy From State Overreach, targeting and filing lawsuits making constitutional challenges to state-led climate litigation and legislative actions—including a preemptive action against Hawaii just days before the state’s filing.

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As the Securities and Exchange Commission (SEC) steps back from defending its March 2024 Climate Disclosure Rule, companies face growing uncertainty in navigating an increasingly fragmented and uncertain landscape of state and international mandates—with no uniform standards in sight. This development signals a broader shift under the Trump administration, which has prioritized deregulation, withdrawn support for federal disclosure mandates, and signaled opposition toward state-level requirements. The resulting regulatory divide leaves companies with a patchwork of emerging rules and limited guidance on how to harmonize compliance across jurisdictions.

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