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Blocktree Props., LLC v. Pub. Util. Dist. No. 2 of Grant Cty. Wash.

United States District Court for the Eastern District of Washington

March 12, 2020, Decided; March 12, 2020, Filed

NO: 2:18-CV-390-RMP

Opinion

ORDER GRANTING IN PART DEFENDANTS' RENEWED MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT

BEFORE THE COURT are the parties' Cross Motions for Summary Judgment. The Court has considered the briefing, the relevant precedent, the record, and is fully informed.

BACKGROUND

This case involves the cryptocurrency industry and the rates that cryptocurrency companies pay for electricity. Cryptocurrency is a digital currency that exists solely on the internet; it is unregulated and unmanaged by third parties, such as banks or governments. ECF No. 81 at 7-8. Cryptocurrency is made possible by a technology called blockchain. Id. Blockchain is the technology through which cryptocurrency transactions are verified and tracked across networks of computers, working as a digital ledger. Id. Blockchain, functioning as a ledger, records every transaction in which each [*3]  particular crypto coin has been used. For blockchain to track cryptocurrency transactions, the transactions must be verified by independent blockchain participators. ECF No. 81 at 7-8. These blockchain participants, also known as cryptocurrency miners, verify cryptocurrency transactions, essentially by solving complicated mathematical problems. ECF No. 81 at 8-9. The first miner to solve the problem, verifying the transaction on the blockchain (ledger), is rewarded, often in cryptocurrency. Id. Miners rely on advanced and specialized computer hardware to successfully mine cryptocurrency. Id.

Because cryptocurrency mining is technologically complex and requires advanced equipment, one of a miner's biggest expenses is electricity. ECF No. 81 at 9; ECF No. 106-3 at 4. Cryptocurrency miners work to reduce their power bills by locating their operations in areas with inexpensive and reliable access to large amounts of electricity. ECF No. 106-3 at 4.

Grant County, Washington, has some of the lowest electric rates in the country. Id. Electric rates in Grant County are set by Public Utility District No. 2 ("the District"). See id. The District is established under Title 54 of the Revised Code [*4]  of Washington and operates as a municipal corporation at the direction of elected Commissioners, who are assisted by hired staff. ECF No. 37 at 9. Pursuant to District Resolution 8768, district staff prepare electric rate schedule proposals. ECF No. 106-3 at 6. Then, the Commission decides whether to adopt the proposed rate schedules. Id.

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2020 U.S. Dist. LEXIS 43294 *; 2020 WL 1217309

BLOCKTREE PROPERTIES, LLC, a Washington limited liability company; CYTLINE, LLC, a Delaware limited liability company; 509 MINE, LLC, a Washington limited liability company; MIM INVESTORS, LLC, a Washington limited liability company; MINERS UNITED, LLC, a Washington limited liability company; MARK VARGAS, an individual; WEHASH TECHNOLOGY, LLP, a Washington limited liability company, Plaintiffs, v. PUBLIC UTILITY DISTRICT NO. 2 OF GRANT COUNTY WASHINGTON, a Washington municipal corporation; TERRY BREWER, individually and in his official capacity; BOB BERND, individually and in his official capacity; DALE WALKER, individually and in his official capacity; TOM FLINT, individually and in his official capacity; LARRY SCHAAPMAN, individually and in his official capacity; NELSON COX, individually and in his official capacity; JUDY WILSON, individually and in her official capacity, and DOES 1-10, managers and employees of Grant County PUD, individually and in their official capacities, Defendants.

Prior History: Blocktree Props., LLC v. Pub. Utility Dist. No. 2 of Grant Cty. Wash., 380 F. Supp. 3d 1102, 2019 U.S. Dist. LEXIS 54423 (E.D. Wash., Mar. 29, 2019)

CORE TERMS

rates, cryptocurrency, property interest, customers, electricity, Evolving, summary judgment, miners, interstate commerce, legislative act, state law, Staff, substantive due process, procedural due process, nondiscriminatory, interstate, regulation, matter of law, private right, blockchain, protects, cause of action, private remedy, rate setting, discriminatory, provisions, licensees, setting rates, new rate, confiscatory