Bitcoin Mining Firm Core Scientific Sues CES Corporation for $4.7M Over Defective Modular Data Center
On Monday, April 22, 2024, bitcoin mining company Core Scientific filed a lawsuit against modular data center manufacturer CES Corporation.
Core Scientific claims in their complaint, filed with the United States District Court for the Western District of Texas, that they had an agreement with CES Corporation to purchase a pre-fabricated modular data center for over 3 million dollars. This modular data center was intended to expand Core Scientific’s physical hosting capacity for bitcoin miners at their facility in Calvert City, Kentucky.
However, according to Core Scientific, CES Corporation repeatedly failed to uphold its end of the agreement. First, CES Corporation delivered the modular data center months later than its committed delivery date of March 31st, 2022. They also allegedly failed to fulfill their responsibility to deploy and install the modular data center.
When the modular data center was finally delivered in June 2022, Core Scientific immediately found issues. Management servers were missing and could not find replacements from CES Corporation. Core Scientific also took on the unexpected costs and time of installing the modular data center themselves since CES Corporation did not follow through on the planned installation.
Core Scientific further claims that once operational, the modular data center was “plagued by fundamental and extensive defects” that rendered it largely unusable, according to the complaint. Heating, ventilation, and air conditioning units were defective as were electrical systems, pumps, fuses, and spill prevention features. Software and control systems also faced persistent errors.
Despite notifying CES Corporation of these issues, Core Scientific says the problems were never properly resolved under the one-year warranty provided. They incurred additional costs trying to repair the modular data center but ultimately had to decommission it in January 2024 due to the extensive defects.
In addition to damages associated with the purchase and failed operation of the modular data center, Core Scientific is also seeking the return of $1.5 million they claim was paid to CES Corporation by mistake in June 2022. While CES Corporation acknowledged the payment was sent in error, the company refused to return the funds, according to the complaint.
Through this lawsuit, Core Scientific is pursuing damages over $4.7 million from CES Corporation related to breach of contract, express and implied warranties, as well as claims of money had and received and unjust enrichment regarding the unreturned mistaken payment of funds.
Please contact BlockTribune for access to a copy of this filing.
