On Tuesday, October 1, 2024, BlockTribune reported that Judge Allen Dodson of Arkansas is facing a lawsuit filed by the crypto mining company NewRays. The lawsuit, submitted to the district court of Arkansas, alleges that Dodson, along with prosecuting attorney Phil Murphy, has engaged in selective enforcement of noise regulations that target NewRays’ operations.
NewRays established a data center in Faulkner County in October 2022, asserting that it did so without any existing zoning restrictions. However, following complaints from local residents about noise generated by the facility, the county implemented new noise ordinances that include decibel limits and penalties for violations. The company claims that these regulations were enacted specifically to hinder its operations.
In its complaint, NewRays argues that the enforcement of the local ordinance violates the Arkansas Data Centers Act, which was enacted in April 2023. This legislation is intended to safeguard large computing and data mining operations from discriminatory local regulations. The company contends that the actions taken by Judge Dodson and Murphy were coordinated to enforce the ordinance in a manner that is prejudicial to NewRays, potentially in support of a civil lawsuit filed by residents against the firm.
The legal dispute intensified when NewRays attempted to transfer the civil lawsuit to federal court. However, the county district court, presided over by Judge Dodson, asserted its jurisdiction over the case, further complicating NewRays’ legal strategies.
Justin Daniels, a partner at Baker Donelson, highlighted the broader implications of this case, suggesting that it reflects a pattern of scrutiny directed at crypto companies due to prevailing negative perceptions associated with cryptocurrency, particularly regarding energy consumption.
Moreover, NewRays’ complaint indicates that discussions surrounding a specific “crypto mine ordinance” began as early as June 2023, with the company alleging that this ordinance was specifically crafted to discriminate against its operations while permitting other businesses that produce greater noise to continue without similar oversight.
As the situation develops, NewRays is seeking both preliminary and permanent injunctive relief to halt the enforcement of the disputed noise regulations against its operations. The outcome of this lawsuit may set a significant precedent for the treatment of crypto mining operations in Arkansas and potentially influence similar cases in other jurisdictions.
Source: BlockTribune
