JONESBOROUGH, Tenn. (WJHL) – Washington County’s lawsuit against BrightRidge and Bitcoin miner Red Dog Technologies is headed back to court after county commissioners rejected a settlement offer Monday night.
People cheered in a packed courtroom at the county’s justice center after commissioners voted 13-2 against allowing Red Dog to build a new mine in Telford, close the existing one in Limestone, ending a legal battle that began last November.
Efforts to shut down Red Dog’s 25-megawatt Bitcoin mine in Limestone — for violating the county’s zoning ordinance — were stalled in Washington County Court after the commission agreed to a draft settlement in early June. The proposal prompted Red Dog to build a new facility in Telford’s Washington County Industrial Park (WCIP) and quickly sparked protests from people in that part of the county.
Commissioner Jim Wheeler said he was “disappointed with the language of the final settlement,” which differed significantly from the draft agreement reached in June by Red Dog CEO Trey Kelly. He cited how noise would be measured and enforced as one of the main differences.
“I don’t think we’re close to what we said,” Wheeler said.
The county’s lawsuit against both Red Dog and BrightRidge is likely to be set for a jury trial soon in Washington County Chancellor John Rambo’s court. BrightRidge was the original defendant in the lawsuit because it leases the property to Red Dog, sells its power, and originally sought and received rezoning for that property.
“There’s a risk,” Wheeler said of returning to the court. “I think it’s wise for us … to acknowledge that there is a risk, and what that does is send a stronger message that we’re willing to take that risk.”
The 12 citizens who spoke during public comment covered a range of topics about the mine’s impact, but there was a common refrain: Residents don’t want Bitcoin mining in the county, and Red Dog’s Kelly said in June that Red Dog doesn’t. working in an unwanted place.
“The people of New Salem (Limestone) and the people of Telford are united on this one thing: Bitcoin mining is not welcome in Washington County,” said Craig Ponder, pastor of New Salem Baptist Church. Ponder resides where the company’s current Bitcoin mine has been operating since late 2020.
Emily Curran, of Kyker Road, Telford, took her two young sons to the podium. He asked and suggested that commissioners in counties near the current mines “stand up for my family, my children, and anyone near the school (Grandview Elementary) who will be affected by the Bitcoin mining operation,” he said.
Curran also spoke to commissioners in other counties, asking them to “set a precedent here and now.”
Like the 11 others who spoke, Curran’s comments were met with applause from more than 100 people in the commission chambers.
The vote was necessary because the June draft was unofficial, and it took almost five months to work on the final written agreement, which required a new vote. That was long enough for the 15-member commission to gain seven new members after the August election and for organized opposition to grow in Telford.
It was also long enough for David Bright, who owns and operates Bright’s Zoo a few miles from the proposed WCIP site, to join the opposition to the settlement. He said he would close the zoo if a Bitcoin mine opened nearby, and he compared what he said was no benefit to the community from Bitcoin mining to the taxes and electricity bills the zoo has paid since January 2019.
These include $653,497.86 in sales tax, $71,189 in property taxes and $307,780 in electric bills.
John Abe Teague has owned the farm since 2002, a quarter mile from Grandview Elementary and Industrial Park. He said he and his wife have adjusted to living near the school and living near the industrial park.
“It’s progress,” Teague said. “This is work. But I can tell you tonight that my wife and I are totally against Red Dog.”
On Nov. 3, the county’s Commerce, Industry and Agriculture committee voted 4-0 to recommend the full commission reject the settlement proposal. A fifth member of the committee, Ken Huffin, is also on the BrightRidge board and abstained from the vote.
New Commissioner Huffine and Marty Johnson, who represent the district where the limestone mine is located, were the only no votes Monday.
Kelly, CEO of Red Dog’s parent company GRIID Infrastructure, was also present but declined to speak after the vote. He submitted the following written statement:
“I am disappointed that after months of good faith negotiations with Washington County leaders, a resolution has not been reached,” Kelly wrote. “While the litigation is ongoing, Red Dog Technologies and GRIID Infrastructure will not be commenting further at this time.”
Dan Westbrook, who lives in Telford, spoke during the public comment period and made a very different point.
Even if Red Dog can solve the noise problem at a new site, he said, many other concerns remain, including the generation of e-waste as computers age or become obsolete.
“(I’m) very happy with the way it turned out,” Westbrook said. “I think when the vote is 13 to 2, it sends a very strong message that we are ready to go to court.”
What comes next?
For several months after the draft settlement proposal was approved, the current mine continued to operate non-stop near the BrightRidge substation on Bailey Bridge Road. The settlement project called for it to be closed no later than the end of 2024, or as soon as Red Dog starts operating a new mine at Telford.
The facility consists of high-powered computers that solve complex algorithms to “mine” new cryptocurrency. Fans cooling computers at the limestone mine generate significant noise, leading to complaints from people living in the rural community starting in May 2021.
Washington County Chancellor John Rambo will now determine when a jury trial will be scheduled. This process can take months, with any appeal pushing back a final resolution by more than a year.
Whether Red Dog will continue to operate the Limestone mine during the trial is an open question. News Channel 11 previously reported that Red Dog’s parent company, GRIID, did not qualify for a line of credit with its lender.
In September, lender Blockchain Access Limited agreed to switch its line of credit to a $57 million term loan. Bitcoin’s price has hovered between $16,000 and $21,000 for most of the past six months, after surpassing $50,000 around the time the lawsuit was filed in November 2021.
A local economist told News Channel 11 on Nov. 10 that it’s an open question whether GRIID Infrastructure’s financial problems will directly affect how long it can operate in Washington County.
“If they are meeting their variable costs with their Bitcoin income, their lender can be quite patient during the ‘crypto winter,'” said David Campbell, an economist at Milligan University. These variable costs include energy from BrightRidge, which leases land to Red Dog next to the Bailey Bridge Road substation, and other debt-free ongoing costs.