In a significant legal victory for a crypto mining company, a federal judge ruled against an Arkansas county government in a lawsuit concerning noise regulations imposed on crypto mining operations.
The dispute stemmed from an October ordinance enacted by the Arkansas County Quorum Court, aimed at imposing stricter noise limits on crypto mines within the county, situated in southeastern Arkansas near the delta region adjacent to the Mississippi River.
In a ruling issued on Wednesday by a federal district court, the county entered into a settlement enforced by a consent decree, prohibiting it from enacting similar ordinances in the future. Additionally, the county was ordered to pay $90,000 in compensation for legal fees and other expenses incurred by the crypto company, Jones Digital, LLC.
Jones Digital initiated the lawsuit in November 2023, naming an Arkansas County judge, sheriff, and prosecuting attorney as defendants, alleging that the ordinance violated Act 851, commonly known as the Arkansas Data Centers Act of 2023. This legislation broadly prohibited local governments from passing ordinances specifically targeting crypto mining operations.
Coinciding with the court ruling, the state legislature swiftly passed two bills aimed at rescinding Act 851’s prohibition on local noise ordinances pertaining to crypto mining. These bills were promptly signed into law just two days later, effectively nullifying Act 851’s restrictions.
However, a crucial provision of the consent decree stipulates that it remains unaffected by any amendments to Act 851 or subsequent state statutes. Consequently, Jones Digital’s crypto mining operation appears to be exempt from county-level noise regulations, effectively grandfathered in under the terms of the decree.
Senator Joshua Bryant, a sponsor of both Act 851 and the recently enacted laws, emphasized that the new legislation empowers local officials to address noise issues within reasonable bounds. While the laws do not specify decibel limits, they mandate noise reduction measures such as soundproofing, quieter mechanical systems, or setbacks from neighboring buildings.
Senator Bryant underscored the importance of compliance with state regulations, emphasizing that crypto mines must adhere to the law, with potential repercussions for non-compliance.
Despite attempts to solicit comment from Jones Digital, LLC., the company remained unreachable for response.
The legal outcome of this case not only underscores the evolving regulatory landscape surrounding crypto mining but also highlights the complex interplay between state and local authorities in regulating emerging industries.