Data center dispute says Texas firm tricked Montana company

Darrell Ehrlick

(Daily Montanan) As artificial intelligence and data centers dominate conversations about technology, energy needs and political regulation, few things illustrate how deeply those issues have penetrated, even in Montana, than the fight that is happening in Broadview.

Broadview, population 139, sits 31 miles from Billings, the state’s largest city. But a recently filed lawsuit in state district court shows that a patch of land, a power substation, and investors from around the country are in a legal tussle that both sides say is worth billions — plural.

The opening lines of the lawsuit — complete with italics —  hammer themes of deception, money and a sense of urgency to capitalize on AI and data farming in a place more commonly associated with a traditional definition of agriculture.

“This case is about how a Texas private equity fund duped a loyal Montana businessman into selling it hundreds of acres surrounding a key power substation by promising him the power he needed to build and run a data center — and then deliberately refused to provide that power so it could build its own data center on that land and take the hundreds of millions he would have made. After he lived up to his word and sold the land to that private equity fund, it took the land, stole his idea and is now building its own data center in an effort to put his hundreds of millions into its pockets. This private equity fund should be held accountable for its deceit, tortious interference, breaches of contract, and the massive damages it caused.”

The pages and pages of court documents outline a plan by well-known Montana businessman Rick Tabish to build a data center, his purchase of land surrounding a substation owned by NorthWestern Energy, and a deal with an energy company that would allow him to fast-track his plans, with billions of profit at stake as a sort of gold rush has hit the United States in an effort to outfit the world with AI.

Tabish is suing the company building a data center on part of the Broadview land, and attorneys for that data center said they were ready to provide power to Tabish’s data center company, but he couldn’t meet his obligations. Furthermore, in court documents, attorneys for the company said they had an agreement to discuss providing power to Tabish’s data center, but no specific contracts. Furthermore, attorneys say the former company that had the power available to Tabish no longer exists after it reorganized its power holdings.

A powerless situation

Tabish’s business, FX Solutions, purchased a donut shaped parcel of 430 acres that surrounded a Broadview substation  — an important location because of the massive amount of power needed to run FX’s power needs.

Despite being close to the substation owned by NorthWestern, getting power on a large-scale, commercial level is not the same as just hooking up to the power lines, like a residential property.

Instead, FX needed to obtain an interconnection agreement with a supplier to provide the power. Industrial and commercial properties aren’t necessarily obligated to a utility, unlike “captive” residential customers.

According to court documents, the process, especially for data centers,  is complex with companies waiting in line for both regulatory approval and multi-million dollar equipment that could handle the extreme power demands, including needing more energy than the entire state of Montana uses on an average day.

Purchasing power from a public service utility like NorthWestern would be time-consuming and costly, the court documents say. Part of the delay could have stemmed from the likely oversight by the Montana Public Service Commission as it considered what such demand would do to customers’ rates. PSC oversight would have likely considered whether a provider like NorthWestern has enough generating capacity to provide the power without destabilizing residential customers.

Even as FX was investing in plans that would have purchased power through NorthWestern, it was approached by Broad Reach Power about a deal: If FX sold 350 acres of the parcel to the group, which has sizable renewable energy holdings in Montana, the company would provide ample power to run FX’s center, offering a cheaper and quicker alternative than working through NorthWestern. Because Broad Reach Power had its own generation, it could sell energy directly without complex regulatory approval.

Moreover, the lawsuit claims that Broad Reach Power brokered the deal to sell FX power at very competitive rates — $24 per megawatt hour. According to the lawsuit, the power deal meant Tabish and his company could leap forward quickly, getting into the AI-data center landscape before others. While market prices for power can vary wildly depending on weather and conditions, recent “spot” rates for power average from $50 to $60 per megawatt hour.

“This was a critical development for FX because it meant FX would be one of the early data centers in the country and be able to start making massive profits immediately,” court documents said.

The court documents also allege that at about the same time, largely because of huge demand for more power across the country being fueled by data centers, Broad Reach Power understood that its deal would mean selling power to FX at significantly below market rate.

“And FX only agreed to sell BRP the land so it could use this power and get its data center up and running rather than if it had to keep standing in line at NorthWestern,” the suit says.

Attorneys for Tabish, which include the Edwards and Culver law firm in Billings, say that BRP’s private-equity owner, EnCap, realized how valuable the plan was “and secretly worked behind the scenes to stop BRP from providing power” so it could build its own center — something currently being planned.

“While the defendants now have FX’s 350 acres and are reaping all the benefits from it as they move on to trying to fill their pockets with data center money, FX is out hundreds of millions of dollars and is left standing alone with a virtually useless 80-acre plot that continues to sit idle,” the suit said. “The key to data center success is getting the right power and the right land to access the power source — and that’s not easy to come by.”

The lawsuit claims FX and Tabish spent a million dollars just to start the application process to stand in line with NorthWestern to get a power load from the substation. Attorneys said that Broad Range encouraged Tabish to stop talking with NorthWestern, and that caused not just a loss of money FX had invested, but it lost any priority status it may have had.

“It can take years and millions of dollars to get (the interconnection agreement) because of the required environmental impact studies and lengthy application process,” the lawsuit said.

EnCap, which owned and controlled BRP, is based in Texas and specializes in the energy section. According to the lawsuit, it has raised more than $40 billion from investors.

Broad Reach Power, meanwhile, has been signing leases with Montana ranchers and landowners to put solar and wind projects on properties. The lawsuit claims that BRP represented to Tabish that it needed the land close to the Broadview substation to tie into the substation.

“That’s when BRP started making the promises it didn’t keep. BRP convinced FX that it should drop its interconnection agreement with NorthWestern and have BRP provide FX the power it need to run its data center in exchange for FX selling BRP the land it wanted,” the lawsuit said.

The court documents said that the land sale agreement also included language related to the power-purchase agreement that provided FX power at the $24 per-megawatt price, scaling up the power load to deliver 300 megawatts by 2023 and later provide as much as 1 gigawatt.

Meanwhile, the court documents said EnCap was working behind the scenes to create its own data center by starting the company “Quantica Infrastructure.” The lawsuit said that EnCap then transferred the assets of Broad Reach Power to the new corporation, leaving just a corporate shell behind.

“BRP promised to sell FX power at a mere $24 a megawatt, the industry price for a megawatt of power has been skyrocketing this entire time and FX could never buy power at a price close to that today,” the lawsuit said. “EnCap knew those megawatt prices were rising daily so it made sure that BRP didn’t have to sell FX power at those lower prices.”

The suit claims that FX has lost out “on massive profits and to potentially sell its data center for over a billion dollars.”

Quantica

The lawsuit alleges that after realizing that Tabish was sitting on a very profitable business model, and realizing that the agreement FX alleges was in place would significantly undervalue power, EnCap transferred all the assets to a new company. Those assets included their wind and solar companies.

“EnCap and Quantica have stripped BRP of all assets it could have used to provide power to FX so that BRP no longer has the practical ability to perform its obligation,” it said. “EnCap and BRP never intended to sell their wind and solar projects to Mr. Tabish, and only used the potential sale as a way to distract him and FX from the fact that they no longer want to provide the power they’d promised for FX’s data center.”

Tabish also said that after Broad Reach Power cut off communication with him in 2024, that he learned that an interconnection agreement between NorthWestern had never been modified by Broad Reach Power as the company promised. Tabish said in court documents that he later learned that the interconnection, the way Broad Reach Power had proposed, didn’t exist, but impossible for it to exist.

“This shows that BRP was just stringing FX along and never intended to provide FX with power for its data center,” the lawsuit said.

An agreement to an agree

The lead attorney for Quantica, Robert Sterup of Brown Law Firm, said in a responsive filing with Yellowstone County District Court that there was never a contract for a power deal, only that there was an “agreement to agree,” but those terms were never solid. No contract was ever signed.

Furthermore, Quantica alleges Broad Reach Power has been dissolved and ceases to exist. The filings said Tabish knew of it, and there’s nothing to sue.

The court documents show there was discussion of power-purchase agreement discussed in 2021, but only that Broad Reach Power said it was “prepared to offer a long-term power purchase agreement,” but discussion about a power-purchase agreement is not a contract, and neither sides agreed to the terms.

“Because no valid and enforceable power purchase agreement exists, FX’s claims based on the existence of an enforceable power purchase agreement, Counts 1 through 4 are subject to dismissal,” Sterup wrote. “FX’s attempt to enforce the purported agreement-agree is barred by the doctrine of impossibility.”

The doctrine of impossibility is a legal concept that says that a contract’s provision can be excused — or ignored — if the contract provisions are impossible. In this case, Quantica says that even if it had power available, according to the alleged agreement that FX claims, the data center was never built, and therefore never able to accept power.

“FX fails to allege, because it cannot, that as of the Fourth Quarter of 2021, and through the Third Quarter of 2023 (and to the present), FX owned or operated a data center capable of taking delivery of any power,” the response said.

Quantica announced that it was building its own data center on July 28, 2025 on the parcel of land it purchased from FX. According to the lawsuit, Quantica plans to use its own energy to run the center, and also has secured an agreement with NorthWestern to provide between 500 megawatts and 1 gigawatt of power to the Broadview property. One gigawatt of power is more energy than NorthWestern Energy supplies to the state of Montana on an average day.

“This means that all potential sources of power that could be used to run FX’s data center have been secured by EnCap and Quantica to run their data center — effectively eliminating FX’s ability to operate its planned data center,” the lawsuit said.

The lawsuit is seeking an unspecified amount of damages for breach of contract, breach of good-faith dealing, and unjust enrichment.