The Imperial Valley Water Lawsuit: A Data Center Developer Sues for 260 Million Gallons of Colorado River Water

The Imperial Valley is one of the most water-dependent places in the country: a desert made into farmland by the largest single allocation of Colorado River water of any user in the basin, held and delivered by the Imperial Irrigation District. Every proposal to use that water for anything other than crops is a political event, and the district has spent two decades in litigation and negotiation over how much it must give up as the river shrinks.

Into that, IVCM proposed an AI data center complex that would need about 260 million gallons a year, roughly 880 acre-feet, for cooling, which works out to about 750,000 gallons a day. Local reporting framed the number as the annual water use of about 7,300 county residents. The company applied to the district for the water; the district rejected the application in May 2026.

The lawsuit, filed in early June, argues that the district's rejection left the company no choice and that it has a right to the water anyway. The theory is a farmland swap. IVCM has leased 160 acres of active farmland near the site. Fallow those fields, the argument runs, and the water they would have consumed under the district's allocation is freed for the facility, a use no less legitimate than growing alfalfa. The company also says it had negotiated recycled water agreements with the cities of Imperial and El Centro before both cities withdrew.

The district's general counsel declined to comment on pending litigation, but the district's position is not a mystery. Its board chair, Karin Eugenio, published an editorial opposing the project, and the board began considering a new pricing structure for large-scale energy consumers, a signal that if data centers come to the valley, the district intends to set the terms rather than defend a lawsuit each time.

The county moved faster. In June 2026, the Imperial County Board of Supervisors scheduled an emergency pause on data center development, and the cities of Coachella, Indio, and Imperial, along with Imperial and Tulare counties, adopted 45 day urgency moratoriums that were later extended, according to the national tracker summarized in our moratorium tracker. Reporting described a groundswell of opposition from residents and from local and state officials. Whatever the court decides about the farmland theory, the political question of whether the valley wants this use of its water has already been answered.

The tracker's other water entries are about consequences: Amazon's $20.5 million Oregon nitrate settlement over what left its facilities, the Newton County families' suit against Meta and the Louisa County suit against Amazon over what construction did to wells, and the Dalles records case over whether the public could even learn how much Google used. Imperial Valley is about supply, in advance, in the one region where supply is the entire economy.

It is also the second developer-as-plaintiff case on the tracker after Related Digital v. Saline Township, where a developer sued a township that denied its rezoning and won a consent judgment. The Michigan case was about land. This one is about water. Both ask the same underlying question: when a community says no, can a developer make a court say yes?

If a data center is proposed in a region with a contested water supply, the Imperial Valley fight shows where the decisions get made:

• The water district, not the zoning board, may be the real gate. A campus that cannot get water cannot run. Find out who allocates yours and what its rules say about new industrial users.
• Watch the farmland. Leasing and fallowing fields to free up water is a strategy, and it shows up in land records before it shows up in a hearing.
• Numbers move officials. Reporting that put 260 million gallons next to 7,300 residents did more than any hearing. Convert the request into terms your neighbors understand.
• Moratoriums buy time, not outcomes. The county's pause stops new applications; it does not decide the lawsuit. Our guide to fighting a proposed data center covers the rest of the toolkit.

If a project near you is already in a legal fight, or you believe your own water has been affected by one, our free case review connects you with an independent attorney in our network who handles data center cases in your state, at no cost and with no obligation. Our water claims guide covers what residents can do when the harm has already happened.