OPINION: In competing data center developers’ road forward, Switch wins — for now

Judge Jason Woodbury might not be a music fan, but in granting a preliminary injunction this past week in a case involving competing data center developers he has Switch Ltd. humming a tune that sounds a little like On the Road Again.
Woodbury on Wednesday issued a thoughtful and thorough 31-page order in favor of the Nevada data center powerhouse in its legal dispute with Tract Management Company over the location of a land easement on the sprawling Tahoe Reno Industrial Center (TRIC.) The argument has provided insight into the larger battle between the two companies that has Tract attempting to enter the rapidly expanding market that Switch has dominated at both ends of the state.
The judge ruled that Tract’s efforts to move an easement as Switch was acquiring the landlocked acreage from industrial park developer Roger Norman violated the terms of that part of its purchase agreement. Switch owns thousands of acres on either side of Tract’s land and by previous agreement was given access to cross the middle ground. The timing of Tract’s decision to move the easement was duly noted.
“As Switch was acquiring the landlocked property from Mr. Norman’s company, Tract changed the location of the easement, relying on its authority in the Easement Agreement to do so,” Woodbury wrote. “But the Easement Agreement imposes conditions on Tract’s unilateral relocation. The language of those conditions frames the dispute in this case.”
And those conditions changed substantially upon relocation. The width of the road was reduced from 100 feet to 20 feet, and the new road crossed terrain that made improving it for construction, infrastructure and heavy traffic flow much more difficult and costly, the judge wrote after touring the site.
“The evidence establishes Tract’s relocated easement is inferior to the easement promised to Switch by the Easement Agreement,” Woodbury wrote. “And inferior in ways that are obvious.”
On the issue of infrastructure, he determined, “Switch’s link to utilities is not just impaired, it is effectively severed. The evidence strongly indicates the new easement cannot house utilities and was never intended to. This breaks half the Easement Agreement’s promise to Switch.”
He continued, “These deficiencies are meaningful. Transforming the hills of Storey County into cutting-edge data centers takes heavy construction equipment, and a lot of it. It also takes utilities, and a lot of them. The evidence establishes that the new easement cannot accommodate either.”
The ruling gives Switch lead trial counsel Joshua Hamilton of Latham & Watkins LLP reason to smile and, he says in a statement, that it “recognizes the irreparable harm to Switch from Tract’s actions by ensuring that the status quo of the Original Easement Area is preserved through at least trial in March 2026.”
Tract sifts through the ruling and finds its own nugget. "We are pleased with the Court's order maintaining the status quo, including our relocation of the easement, until trial next March, and look forward to prevailing at trial," a company spokesperson states.
Short of a settlement, March can’t come soon enough for both parties. In addition to being a costly litigation that filled Woodbury’s courtroom to capacity with sparring legal minds in a two-day hearing in June, both sides have millions of dollars invested and the potential of billions at stake in the booming and competitive data center market.
Switch founder and CEO Rob Roy testified in June that the company has signed breakthrough agreements with mega-clients to construct new data center colocation plants, all of which require infrastructure such as water, power and, of course, a proper access road.
That doesn’t include the mounting number of reports in the business press about the possibility of Switch going public in what’s being called a $40 billion initial public offering. Keeping to a tight construction deadline is likely to be job one.
Tract also has a lot at stake with its foray into a market in which Switch has maintained a large footprint. The preliminary injunction isn’t good news, but it’s located on a small stretch of a 1,500-acre property. Whether it is singing The Long and Winding Road is uncertain, but it, too, has progress to make and promises to keep.
To date, this litigation and its potential impact on the Nevada data center market, as well as the environment for that matter, hasn’t attracted much attention in the media. Perhaps that will change as the scheduled trial draws closer.
In the meantime, all roads really do lead to the behemoth industrial park outside Reno that grows larger by the day.
John L. Smith is an author and longtime columnist. He was born in Henderson and his family’s Nevada roots go back to 1881. His stories have appeared in New Lines, Time, Readers Digest, Rolling Stone, The Daily Beast, Reuters and Desert Companion, among others.