An Alberta court said O’Leary’s company is not a party to the lawsuit, can’t move to dismiss the case
An Alberta court has ruled that Kevin O’Leary’s infrastructure company, which plans to build a $70 billion artificial intelligence data centre in the northwest region of the province, cannot stop a lawsuit challenging a water license that would help route water to the project.
Sturgeon Lake Cree Nation had filed the lawsuit against the government of Alberta and the Municipal District of Greenview, the third-largest rural municipality in the province, in October 2025. That spring, Greenview had obtained a water license from the province allowing it to divert water from the Smoky River, which is located near reserve land owned by SLCN.
The nation’s lawsuit, Sturgeon Lake Cree Nation v. Alberta, challenged the province’s decision to grant the license, alleging it had not been adequately consulted during the licensing process.
SLCN did not name O’Leary’s company, O’Leary Digital Limited, as a defendant in the lawsuit. However, months after the lawsuit was filed, O’Leary Digital told the Court of King’s Bench of Alberta it was supposed to be the ultimate beneficiary of the water license – the company plans to build an AI data centre in the area that will require a water source for its cooling system – and should therefore be a party in the proceedings.
The company noted that under Alberta’s court rules, lawsuits must be filed and served on “every person or body directly affected by the application” within six months of the decision being challenged, which is the water license in this case. Because SLCN never served the lawsuit on the company, it argued the lawsuit failed to comply with this rule and must be dismissed.
SLCN countered that it never knew about the company’s claim to the water license until the company asked the court to dismiss the lawsuit.
The Alberta court tossed out O’Leary Digital’s motion. According to the court’s Aug. 13 decision, the company’s “connection to the water license is both contingent and speculative” and it had failed to prove it would be “directly affected” by SLCN’s lawsuit.
The court also declined to grant O’Leary Digital intervenor status in the case.
The events leading up to the case date back to 2023, when Greenview started the application process for a license under Alberta’s Water Act that would allow it to divert 24 million cubic metres of water from the Smoky River. The province concluded that Greenview would have to consult with SLCN, and later granted a preliminary certificate to Greenview. However, Greenview neither notified nor consulted SLCN about the application.
Greenview then launched the application process for a water license to divert a smaller amount of water – six million cubic metres. The province ultimately concluded it was not necessary to consult with SLCN about the reduced water amount.
In December 2024, the Alberta government, Greenview, and O’Leary publicly announced the AI project. The announcement indicated that O’Leary’s company would purchase and develop thousands of acres of land, and that the location was selected for the project because of its proximity to natural resources including water.
The next month, SLCN wrote an open letter to Alberta Premier Danielle Smith, asking for all documentation and consultation records related to the water license. The provincial government told SLCN that no water license had been issued yet.
Months later, Greenview received its water license, prompting SLCN to appeal the license to Alberta’s Environmental Appeals Board. O’Leary’s company did not participate in the proceedings and was never identified as an interested party.
When SLCN asked O’Leary Digital for documents related to the proposed AI project, the company said it had not yet made a final decision about whether to move forward with the project and declined to hand over the documents. The nation then filed its lawsuit against Alberta and Greenview.
In its ruling, the Court of King’s Bench of Alberta said to determine whether a party is “directly affected” by a lawsuit, they must have certain rights or interests, like property rights or ownership interests, legal interests, or direct financial interests.
O’Leary Digital does not satisfy any of these categories because it does not own the water license, its legal status will not be affected by SLCN’s lawsuit, and the company will not have to pay anything – like damages – if SLCN is successful.
Despite the company’s claims that it will be the beneficiary of the water license, the court found that the company had not proven that this was actually the case. “This argument does not demonstrate that [O’Leary Digital] is directly affected by SLCN’s challenge to the water license,” the court said.
Orlagh O’Kelly, who represents SLCN, told Canadian Lawyer on Friday that in her view, Alberta’s “system is designed in a direction to really limit Indigenous consultation and participation.”
That makes the court’s ruling more significant. “This is a win in the sense that the First Nation can have these matters adjudicated without having it dismissed on the technicality,” O’Kelly says. She adds that this is the first time since the AI project was announced that SLCN has established they can challenge it through the courts.
Paul Daly, who also represents SLCN, said the ruling “sends the message that transparency in commercial development is very important and is a precondition for energy companies that wish to assert their rights to participate in judicial review proceedings.”
Moving forward, “where an energy company wants to be fully involved in a judicial review proceeding about the adequacy of consultation, they have to be transparent and upfront about their interests in the decision,” Daly adds. “They can’t sit back and wait until a judicial review application has been filed in order to raise an objection that they were directly affected and they weren't served.”
Heather Jenkins, a spokesperson for Alberta’s Minster of Justice, declined to comment on the decision since the matter is still before the court.
Counsel for O’Leary Digital did not immediately respond to a request for comment.
