Court Rejects Government’s Power to Dismiss Citizen Suits and Turbine “Mobile Source” Exemption on Motions to Dismiss X.AI Data Center Suit

Two recent decisions in the National Association for the Advancement of Colored People’s (NAACP) case against X.AI’s use of combustion turbines to power one of its large data centers have teed up appeal of key legal issues with substantial implications for data center litigation and citizen suits more broadly.

In April 2026, the NAACP filed a citizen suit under the Clean Air Act against X.AI Corp. and MZX Tech, LLC alleging that the MZX Colossus Gas Plant in Southaven, Mississippi is operating in violation of the Clean Air Act.¹ The gas plant provides power to an X.AI data center that supports the Grok platform. The NAACP claimed that the portable gas turbines at the plant lack required stationary source permits. The litigation has raised the threshold question of whether citizen suits may be maintained over the objection of the federal government, and the substantive question of whether turbines affixed to portable flatbed trailers are mobile sources that do not require stationary source permits. The district court has now resolved both of these key issues (among others), setting up potential appeals to the Fifth Circuit.

Citizen Suits

Over the summer, the United States moved to intervene in the case as a plaintiff, and simultaneously to dismiss the NAACP’s claims. The Clean Air Act gives the U.S. Environmental Protection Agency (EPA) Administrator a statutory right to intervene in citizen suits.² The United States argued that this right to intervene includes the right to dismiss a citizen suit unilaterally, because the Clean Air Act gives the government primacy over when and how the statute should be enforced. Allowing a citizen suit to continue in the face of the government’s refusal to enforce would, in the view of the United States, intrude on the government’s enforcement discretion. While the U.S. brief insisted that the court was not in a position to evaluate the government’s reasons for seeking dismissal of the NAACP’s claims, the brief and accompanying declarations advanced White House energy policy, national security, and the U.S. military’s interests in X.AI platforms as reasons for seeking dismissal of the suit. The government also argued that citizen suits running counter to the government’s enforcement priorities may violate Article II’s exclusive grant of law enforcement power to the Executive Branch, and that the doctrine of constitutional avoidance supports interpreting the Clean Air Act to encompass the government’s authority to dismiss a citizen suit.

The district court granted the government’s motion to intervene, but in an October 19, 2026 decision rejected the motion to dismiss.³ The court held that nothing in the text of the Clean Air Act gives the government power to terminate a citizen suit unilaterally.⁴ The statute does otherwise provide several parameters for government participation in citizen litigation beyond just the government’s right to intervene. In particular, the court emphasized that citizens wishing to bring a suit must notify EPA of their potential claims 60 days before filing. The plaintiff must also serve the complaint on the Attorney General and EPA. The government may comment on any proposed consent judgments resulting from such suits, and no such suit is allowed where EPA “has commenced and is diligently prosecuting” action to require compliance.⁵ The court reasoned that, if the government were empowered to dismiss any citizen suit by exercise of its own discretion after intervening, the “diligent prosecution” bar would be meaningless.

Because the court found the statute unambiguous, it also rejected the constitutional avoidance argument. Even so, the court did not share the government’s apprehension of “serious constitutional doubts” arising from the Act’s citizen suits, characterizing such suits as congressionally enabled avenues for private party enforcement through litigation rather than stand-ins for government enforcement.

As of the date of this post, the government has not sought appeal of the court’s denial of its motion to dismiss. The course of any appeal would be highly consequential, as non-governmental organizations around the country continue to pursue Clean Air Act citizen suits against data centers. Public Citizen and Sierra Club have challenged development of a Texas data center without obtaining “major source” permits,⁶ and a New Jersey group recently threatened to sue New Jersey’s largest data center over permitting of portable gas generators.⁷ These cases will test the reach of environmental citizen suits on issues and industries that the federal government has decided should not face enforcement.

Citizen suit provisions also are common in federal environmental statutes, and the Clean Air Act’s provision served as the template for several of them. The Clean Water Act’s citizen suit provision, which Congress modeled on the Clean Air Act, has the same features the court relied on here. Those include a 60-day notice requirement and a bar on citizen suits where EPA or a state “has commenced and is diligently prosecuting” an enforcement action.⁸ The Endangered Species Act likewise authorizes “any person” to bring suit to enjoin violations of the Act, including violations by federal agencies.⁹ Similar provisions appear in the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation, and Liability Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the Emergency Planning and Community Right-to-Know Act, and the Surface Mining Control and Reclamation Act, among others.¹⁰ Courts routinely borrow precedent across these statutes. The United States’ own brief in this case acknowledged that the provisions are similar enough that decisions under one are “persuasive” as to the others. A ruling that the government may intervene and dismiss a Clean Air Act citizen suit would therefore likely be invoked well beyond the Clean Air Act context.

Turbines as Mobile Sources

In a subsequent decision on October 30, 2026,¹¹ the court also rejected X.AI’s motion to dismiss on the basis that the turbines are exempt from Prevention of Significant Deterioration (PSD) new source review permitting as “mobile sources.” In particular, X.AI argued that the turbines, mounted on flatbed trailers and intended to remain on site for less than 12 months, are “mobile sources” as ordinarily understood under Mississippi’s State Implementation Plan (SIP). The Mississippi Department of Environmental Quality (DEQ) had agreed with that classification in a formal determination letter to the company.

The court, acknowledging that “mobile sources” are excluded from permitting and that the term is not defined in the SIP, agreed with plaintiffs that the PSD regulations and definitions in 40 C.F.R. Parts 51 and 52 that DEQ incorporated into its SIP define “mobile source” at 40 C.F.R. § 51.50 as “a motor vehicle, nonroad engine or nonroad vehicle.” The court then applied the Section 51.50 definition of “nonroad engine,” meaning “an internal combustion engine (including fuel system) that is … not affected by sections 111 or 202 of the [Clean Air Act].” The court found that Part 60 Subpart KKKK standards for stationary combustion turbines (with specified minimum heat inputs) apply to the turbines. In particular, the court explained that the Subpart KKKK definition of “stationary combustion turbine” means a combustion turbine that “is not self-propelled or intended to be propelled while performing its function,” though “[i]t may, however, be mounted on a vehicle for portability.” 40 C.F.R. § 60.4420.

The general EPA definition of “nonroad engine” under 40 C.F.R. § 1068.30 includes an engine that is, by itself or in or on a piece of equipment, portable or transportable, but — like § 51.50 — also excludes an internal combustion engine that is regulated under 40 C.F.R. Part 60. Since the Part 60 Subpart KKKK definition of stationary combustion turbine that is subject to the standards includes such turbines “mounted on a vehicle for portability,” the Part 1068 result would be consistent.

The court further rejected defendants’ reliance on the DEQ letter, finding that a state agency interpretation that conflicts with the regulatory language does not control, especially since the court found that the DEQ interpretation did not depend on facts within the DEQ’s expertise. The court noted that DEQ’s letter might preclude DEQ itself from changing its position and imposing civil liability, but does not bar citizen plaintiffs from asserting a contrary interpretation and does not bind the court to DEQ’s interpretation.

Implications and Next Steps

The arguments from both the U.S. Department of Justice and X.AI may be contested on appeal. In particular, the government’s contention that it has the prerogative as part of its enforcement discretion to intervene and dismiss any citizen suit for any reason as a matter of statutory authority and Article II of the U.S. Constitution would have broad implications. Other environmental statutes have similar citizen suit provisions. Specifically with regard to data centers, the federal government has asserted that infrastructure buildout is an important matter of national policy. Federal authority unilaterally to dismiss citizen suits, regardless of their merit, could also provoke local communities to pursue alternative mechanisms to disrupt data center development that they perceive to violate environmental requirements, such as zoning limitations. EPA, for its part, has recently sent to the White House for review a proposed rule that is expected to allow qualifying portable combustion turbines, increasingly used to power data centers, to be regulated as “nonroad engines” (i.e., mobile sources) rather than as stationary sources.¹² These developments warrant close attention, both for their impact on data center development and on any future industrial buildout.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.