Huge San Jose data center for China-based firm is jolted by lawsuits

SAN JOSE — Several subcontractors have filed lawsuits to recoup millions of dollars from a China-based telecommunications titan, claiming the firm failed to pay for their construction work on a vast San Jose data center.

China Mobile International, a unit of Beijing, China-based China Mobile, developed the data center on 7.5 acres of land that it owns at 6320 and 6340 San Ignacio Ave. in south San Jose.

The data center structure, which is owned by China Mobile International, was built by Plaza Construction, which, as is customary, used an array of subcontractors to carry out specialized tasks related to the project.

At least four subcontractors have brought legal complaints against China Mobile International because they weren’t paid for some or all of their work in the building, according to allegations in the lawsuits filed with the Santa Clara County Superior Court.

The data center appears to be closed, according to several in-person observations by this news organization. The parking lot, as observed multiple times during the day and at night on weekdays, is nearly or completely devoid of vehicles. At least two security guards are present inside the building upon occasion. Google lists the data center as “permanently closed.”

The data center totals 312,200 square feet, according to city planning documents. That includes two big data structures that flank an office structure in the middle.

Among the subcontractors that have filed lawsuits and mechanic’s liens against the data center property, and the amounts they say they are owed, according to documents filed with the county court:

• Rosendin Electric, $7.5 million, for electrical work.
• Southland Industries, $2.7 million, for several tasks that included mechanical, plumbing, insulation and crane and rigging work.
• Sunsteel, $1 million, for labor, material, supplies and equipment work.
• Alcal Glass Systems, $113,000 for glazing work.

The lawsuits and uncertain operating status of the data center arise in the wake of multiple actions taken by federal authorities starting about three years ago.

This news organization has reached out by separate emails to China Mobile and China Mobile International requesting a comment about the situation.

In 2019, the Federal Communications Commission denied an application by China Mobile to provide telecommunications and other services in the United States.

In November 2020, then-President Donald Trump issued an executive order that prohibited American companies and American citizens from owning shares in companies that the U.S. Defense Department determined had links to the People’s Liberation Army, which is China’s primary military force. PLA-linked companies included China Mobile.

In March 2022, the Federal Communications Commission added several companies, including China Mobile International USA, to its list of communications equipment and service providers deemed threats to U.S. national security.

“For the first time, the FCC (in 2021) published a list of communications equipment and services that pose an unacceptable risk to national security,” FCC Chairwoman Jessica Rosenworcel stated in a prepared release on March 25. China Mobile International USA was among several companies that were added to the list that day.