A Missoula computing company has filed the first lawsuit testing Montana’s Right to Compute Act, arguing that the city’s new data center rules leave it no place inside city limits to grow.
CubCloud AI chief executive Joshua Rhines filed the case, Rhines v. City of Missoula, on Nov. 4 in the Fourth Judicial District Court in Missoula County, according to the Goldwater Institute’s case page. The Arizona-based group is representing him through the Big Sky Legal Project, a partnership with the Montana-based Frontier Institute. It is the project’s first case.
The complaint asks a judge to declare that Missoula’s October zoning amendment violates the state law and to bar the city from enforcing it.
What the city changed
Missoula’s rewritten zoning code took effect earlier this year. It allowed data centers in heavy industrial zones, but those zones don’t appear on the city’s zoning map. The code also had a gap: a building could host computing equipment anywhere in the city as long as the equipment took up less than half the floor space. Montana Free Press reported that the amendment approved in October closed that gap by defining a data center by how the equipment is used rather than by how much of a building it fills. Goldwater puts the council vote at 10-2 on Oct. 5.
CubCloud says it has 18 employees and has put close to $2 million into a headquarters in the city. Its existing site on Kestrel Drive near Missoula Montana Airport met the old rules because computing gear used about 20% of the floor area, according to the complaint as described by Montana Free Press. Rhines had planned a separate building on the same lot for more servers. Under the new rules, the company says, that building can’t go up there or anywhere else in Missoula, and it couldn’t rent the computing power to outside clients even if it did.
The law being tested
The Legislature passed the Right to Compute Act in 2025, and Gov. Greg Gianforte signed it that spring. Montana was the first state to adopt one. The law treats owning and using computing resources as tied to property and free speech rights. Under Mont. Code Ann. § 2-10-204, any government limit on that use has to be “demonstrably necessary and narrowly tailored to fulfill a compelling government interest.” The statute lists examples of interests that qualify, including fraud prevention and abating common-law nuisances caused by physical data center infrastructure.
That nuisance language is likely to matter. CubCloud’s complaint argues its facilities don’t produce noise, odor or other effects that would bother neighbors, so a citywide restriction reaches well past any real harm.
City Attorney Ryan Sudbury told Montana Free Press that the city hadn’t been served as of Monday morning, that officials discussed the Right to Compute Act while drafting the amendment, and that Missoula will defend the change. He noted the law has never been tested in court.
Where the county stands
The suit lands while local governments around Missoula are still working out how far they can go. Missoula County’s own consultant study, which we covered in October, recommended zoning rules rather than a ban and found that even small operations can add real demand for power and water.
Inside the city, Council Member Kristen Jordan is drafting a two-year moratorium on heavy industrial development, aimed at large AI data centers, that could reach the council in the coming weeks. Under Goldwater’s case schedule, the next step in court is the city’s formal response to the complaint.
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