Developer sues for Colorado River water for data center

lawsuit seeks – A developer behind what would be California’s largest AI data center has sued to access Colorado River water after the Imperial Irrigation District denied his request. The case hinges on 287 million gallons of water for a 330-megawatt project, and it has ignit

By the time the Imperial Irrigation District denied his request, the plan had already started to take shape in numbers—330 megawatts of computing power, and a claim of 287 million gallons of Colorado River water to cool it.

This month. Imperial Valley Computer Manufacturing filed a lawsuit seeking access to Colorado River water for the proposed project in Southern California’s Imperial Valley. The developer behind the effort. Sebastian Rucci. says the data center would be the largest AI data center in California if built.

The Colorado River supplies freshwater for 40 million people, and in the Imperial Valley it is the only source of freshwater. The river is already the focus of countless disputes over water use across the West. and Imperial Valley communities—long shaped by drought and water-supply stress—have become the front line for a new version of that conflict.

Imperial Irrigation District’s denial is what turned the water request into a lawsuit, filed after the local agency that delivers Colorado River water rejected the company’s request for water for the project.

Rucci argues the project won’t worsen overall pressure on the river. He said the company would fallow—stop irrigating nearby farmland—and use that water to cool the data center instead. In an interview. Rucci told Business Insider the proposal would have “zero impact” because the data center would not require any additional allocation from the Colorado River. adding that its water demand would be similar to that of a 160-acre farm.

But for water specialists and local advocates, the case is less about a single facility’s gallons and more about what happens when farmland’s water rights are treated like industrial inputs.

A question behind the lawsuit

The fight is sharpened by what the Imperial Valley produces and what could be lost if land is dried up. Cattle, alfalfa, lettuce, and spinach are among the top commodities tied to the region’s agricultural identity.

John Fleck, a writer and water policy expert at the University of New Mexico, said shifting land out of agricultural production is a “values question,” even if it affects “a small amount.”

Michael Cohen. a senior fellow at the Pacific Institute focusing on Colorado River Basin water use. said the issue isn’t necessarily the amount of water a facility would use. but the plan to “access farmland. dry it up. and reallocate it for industrial use.” He said resistance in agricultural communities often comes from jobs.

“There’s a lot of resistance in any agricultural community to ‘buy and dry’ because that’s jobs,” Cohen said.

Rucci has described a different deal structure. He said his company has a contract to purchase the land and water assignments from farmers. He also said he pursued this strategy after proposals to use reclaimed water were rejected.

Even if farmers profit from selling land or water rights, other parts of rural economies can be hit, experts said. Rucci and the county-backed economics he cites point to job growth, but critics argue the impact can spread beyond farm owners.

Rhett Larson, a water-law expert at Arizona State University, framed the stakes in blunt terms: if it weren’t for Colorado River agriculture around Imperial and Yuma, Arizona, “no one in America could afford a salad in February.”

Larson said while farmers may make money selling land or water rights, people often hurt are the “fertilizer salesmen, tractor repairmen, teachers, dry cleaners, or anyone in these rural communities who doesn’t have land or water rights to sell.”

Rucci’s promise of jobs and growth

Rucci’s pitch is that the project would be an economic engine for Imperial County. He said the data center would bring major economic benefits to the county. including 1. 688 construction jobs. over a hundred permanent jobs. and an estimated $2.95 billion in economic improvement over 30 years. citing an independent economic study prepared for the county.

“Economic diversification is exactly what the area needs,” Rucci said in an emailed statement, pointing to Imperial County’s high unemployment. State data cited him unemployment rate of about 17% as of May.

As communities across the United States push back against data centers, the lawsuit has landed in a region where water has never been a routine business input—it has been survival infrastructure.

Who gets to decide water

At the center of the tension is not just how much water is used, but who controls the water system.

Eric Reyes, an Imperial Valley resident and executive director at the advocacy organization Los Amigos de la Comunidad, said he believes the lawsuit is meant to bypass Imperial Irrigation District, a publicly owned utility governed by an elected board.

Reyes said water rights in the area have long been held in trust by the IID rather than individual landowners. He described the developer’s plan as a threat to that structure.

“The lawsuit is an attempt to circumvent the Imperial Irrigation District (IDD). a publicly owned utility governed by an elected board. ” Reyes said. He also said the developer’s plan “raised a huge red flag” because it could involve a “private deal with a landowner and then use it for his own purpose.”.

Reyes said he sees the strategy as an attempt to “circumvent IID’s control and give landowners more power over water.” He added that some landowners, as he characterized it, want to “farm water instead of farmland”—or sell water intended for farming—because it can be more lucrative.

Rucci rejected the circumvention argument. He said the company is not trying to evade IID control and that farmers have the right under state law to assign water. He also insisted the proposals would not require “a single additional drop” from the Colorado River.

That dispute over governance—public trust versus private assignment—sits alongside the dispute over water use.

Larson said water fights in the West rarely end at conservation alone.

“Everybody will say, ‘Well, we need to conserve water,’ but they’ll often stop at that point,” Larson said. “We need to ask another question, which is, ‘conserve it for what?’”

He said moving water from farms to data centers could be a community choice, but it would come with tradeoffs.

The river’s long-term math

All of it points to a larger pressure the basin can’t escape: limited supply against expanding demand.

Larson said the Colorado River basin “has to decide what we want to be when we grow up and what it will take to get there.” He added, “We have enough water to do a lot of great things. But we don’t have enough water to do every good thing.”

Rucci’s lawsuit, its promised economic lift, and the objections from farmers and advocates all land on the same question—how to weigh an AI buildout against the water system that has sustained farming and shaped lives in the Imperial Valley.

And the timing is hard to ignore. The dispute comes as the Colorado River continues to be stretched, and as the U.S. builds new demand for computing power—one that, in this case, is being pursued with a wager that land can be paused, water rerouted, and the overall river allocation left unchanged.

Colorado River water Imperial Valley AI data center Imperial Irrigation District water rights lawsuit Sebastian Rucci Imperial Valley Computer Manufacturing drought water policy California