Newrays One LLC v. Faulkner County, Arkansas
4:24-cv-00824
| E.D. Ark. | Oct 6, 2024Background
- NewRays One LLC sought a preliminary injunction against Faulkner County, Arkansas, and county officials over the enforcement of Ordinance 23-20, a noise ordinance targeting cryptocurrency mining facilities.
- NewRays claimed the Ordinance would harm its operations and raised constitutional and statutory challenges, including First Amendment, preemption, equal protection, contract clause, due process, and takings claims.
- The proceedings were expedited due to the Plaintiff's request for emergency relief before enforcement actions could proceed.
- The Court reviewed the record and heard a six-hour evidentiary hearing before ruling.
- The only actual enforcement risk for NewRays was a possible $1,000 fine and the prospect of future abatement/injunction if it violated noise standards, but evidence suggested NewRays could comply with permissible noise levels.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| First Amendment Retaliation | Defendants retaliated for protected litigation activity | No evidence of retaliatory motive or expansion by defendants | No likelihood of success; claim fails |
| Preemption (State Law) | County lacks authority to criminalize new conduct under Ark. law | County validly legislated under state authority | County has authority; no likelihood of success |
| Contract Clause | Ordinance impairs pre-existing contracts | Ordinance does not alter or impair any contract | No evidence of impairment; claim fails |
| Procedural Due Process | State action affects federal civil litigation rights | No articulable harm; parallel actions are distinct | No defined injury; claim has no merit |
| Equal Protection (Strict Scrutiny) | Enactment motivated by anti-Chinese/alienage sentiment | Ordinance was to address noise, not discriminatory motive | No proof of discriminatory motive; claim fails |
| Takings Clause | Ordinance/potential enforcement is an uncompensated taking | Regulation to abate noise is a valid exercise of police power | No taking; no likelihood of success |
Key Cases Cited
- Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109 (8th Cir. 1981) (Dataphase preliminary injunction factors).
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (standard for granting preliminary injunctions).
- Planned Parenthood Minn., N.D., S.D. v. Rounds, 530 F.3d 724 (8th Cir. 2008) (probability of success threshold for enjoining laws).
- Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252 (1977) (standard for proving discriminatory legislative motive).
- Penn. Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978) (regulatory takings analysis).