By GAGE WILSON
For Glasgow News 1
The legal battle surrounding a proposed hyperscale data center in Cave City has expanded, with a second lawsuit now asking a Barren Circuit Court judge to invalidate the city’s 2024 annexation of the property where the project is planned.
The complaint, filed June 30 by Kentucky Industrial Alliance, LLC, names the City of Cave City, the Cave City Council and the Joint City-County Planning Commission as defendants. While the company’s first lawsuit challenged the city’s 12-month moratorium on data centers and information technology facilities, the new filing reaches back nearly two years, arguing the annexation itself was legally defective and should be declared void.
If successful, the lawsuit could have implications beyond the city’s temporary moratorium. Rather than contesting how Cave City regulates the proposed data center, the complaint asks the court to invalidate the ordinance that brought approximately 245 acres of the former Branstetter property into the city’s corporate limits.
According to the complaint, Branstetter Family Holdings signed a consent to annexation on April 1, 2024, covering property adjacent to Cave City. The Joint City-County Planning Commission later held a public hearing on Aug. 19, 2024, before recommending the annexation and zoning the property primarily I-2 Heavy Industrial, with a smaller portion designated B-3 Highway Service Business.
The Cave City Council approved the annexation through Ordinance 24-9-9C on Sept. 11, 2024. The ordinance was certified and filed with the Kentucky Secretary of State later that month, officially bringing the property into the city’s limits.
That annexation laid the groundwork for Kentucky Industrial Alliance’s proposal to construct a large-scale data center on the former Branstetter property along Doyle Avenue. The proposal sparked months of public debate, with residents voicing concerns over water consumption, electrical demand, noise, environmental impacts and the scale of the development. In May, the council adopted a 12-month moratorium on new data centers while city officials and planners study potential long-term regulations.
The new lawsuit, however, centers on a much smaller tract within the larger property: the approximately .09-acre Shaw Cemetery.
The cemetery at the heart of the lawsuit
The cemetery has its own chain of title dating to a 1902 deed from J.S. and Hattie Vaughn to W.G. Lyons, according to the complaint. Kentucky Industrial Alliance alleges Branstetter Family Holdings did not own the cemetery parcel when it signed the consent to annexation and therefore could not legally consent to annexing that property into Cave City.
The complaint further states that on Dec. 1, 2024, Barren Circuit Court entered a default judgment declaring Kentucky Industrial Alliance the successor in title to the Shaw Cemetery following litigation involving the heirs of J.S. Vaughn.
Because the cemetery allegedly had a different owner than the Branstetter property, Kentucky Industrial Alliance argues Cave City could not utilize Kentucky’s consent annexation process, which requires written consent from all property owners included in the annexation. Instead, the company contends the city should have followed the state’s standard annexation procedures, which include additional notice and hearing requirements.
“The City of Cave City, Kentucky and the City Council of Cave City failed to comply with KRS 81A.412(1) in that the owners of record of the Shaw Cemetery did not give prior consent in writing to the annexation,” the complaint states.
The lawsuit also alleges the annexation ordinance omitted the cemetery parcel entirely, leaving what it describes as an “island” surrounded by annexed property but never formally incorporated into the city.
Rather than asking the court to remove only the cemetery from the annexation, Kentucky Industrial Alliance argues the entire ordinance must be invalidated because the city intended to annex one unified industrial site.
“The cemetery parcel is not severable from the annexation ordinance because the city intended to annex a contiguous, unified industrial site and would not have annexed the remainder without the entirety,” the complaint states.
Although the cemetery has become central to the new litigation, it has been part of the public conversation surrounding the proposed development for more than a year.
Cemetery move sparks debate
In 2025, Bobby Richardson, acting on behalf of Kentucky Industrial Alliance, petitioned Barren Fiscal Court to authorize relocating graves from the Shaw and nearby Overstreet cemeteries, describing the burial grounds as abandoned and overgrown. Under Kentucky law, the county was required to advertise the proposed relocation and allow a 60-day period for objections before taking action.
That same year, Glasgow News 1 spoke with Peggy Hill, believed to be the last known descendant of the Shaw family. After researching her family’s history, Hill publicly supported relocating the graves to Cave City Cemetery, saying she believed the move would better preserve the cemetery while making it easier for future generations to visit.
Following the statutory waiting period, Barren Fiscal Court voted in June 2025 to approve the relocation request. Kentucky Industrial Alliance agreed to cover the costs associated with moving the graves under the supervision of a licensed funeral director, while the Cave City Cemetery Commission agreed to accept the remains.
The relocation process later resurfaced during a June special-called meeting of the Cave City Council, where City Attorney Bobby Richardson responded to criticism surrounding the Branstetter property and the removal of graves. Richardson defended his role in the process, noting the cemetery occupied only a small fraction of the overall tract and maintaining that the legal advice he provided the city was based on applicable law.
Kentucky Industrial Alliance’s latest filing does not challenge the relocation of the graves or the Fiscal Court’s approval of that process. Instead, it argues the question before the court is who legally owned the Shaw Cemetery when the property was annexed in September 2024 and whether the city complied with Kentucky’s annexation statutes at that time.
The company is asking Barren Circuit Court to declare Ordinance 24-9-9C void, set aside the annexation and schedule a speedy hearing on the matter.
The filing marks the second pending lawsuit involving the proposed data center. Earlier this month, Kentucky Industrial Alliance sued the city, the council and the Joint City-County Planning Commission over the city’s 12-month moratorium, arguing its development application should be considered under the regulations in place before the moratorium was adopted.
Both lawsuits remain pending.
A lawsuit is one side of a legal argument. All three parties named in the lawsuit have 20 days from the day they each received a summons on July 1 to file a response. No responses had been filed as of Monday, July 6.
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