Neighbor files lawsuit against Bitcoin mine operator; emails show county official opened door for mine shutdown in June | WJHL

LIMESTONE, Tenn. (WJHL) – A rural Bitcoin mine is still operating two weeks after Washington County’s Planning Administrator sent a letter demanding its shutdown — and is also the subject of a civil lawsuit filed in August.

The lawsuit filed by a nearby property owner claims noise from the mine creates a nuisance that “unreasonably interferes” with her “use and enjoyment” of her property.

It asks for the mine to be shut down and requests personal damages as well as compensation for decreased property values.

The suit – and an answer by Red Dog’s attorney that acknowledges the mine operates at full capacity from 8 p.m. weeknights to 2 p.m. the following weekdays, and all weekend from 8 p.m. Fridays — is among documents News Channel 11 received through a public records request.

Data pods at the Red Dog Technologies Bitcoin mine adjacent to BrightRidge’s Bailey Bridge Road substation in Limestone, Tenn.

Those documents also reveal that with neighborhood concerns already high, Washington County Mayor Joe Grandy’s planning administrator informed him in early June that the mine didn’t comply with zoning rules and the county could move to shut it down.

The documents also show Grandy apparently was hesitant to make such a move, even into mid-July. According to a spokesperson, Grandy, who represents the county on BrightRidge’s board of directors, was in meetings Wednesday and unable to respond to a request for an interview or statement.

Planning Administrator Angie Charles shared her opinion in a June 4 email that Bitcoin mining was not a permitted use under a rezoning power distributor BrightRidge was granted in February 2020.

Charles wrote to Grandy and County Attorney Allyson Wilkinson, “the use of cryptocurrency mining by a private company is not permitted on the property.”

Almost six weeks later, Charles emailed Grandy, copying Wilkinson, and reminded him of her “suggestions and recommendations” and that she believed “we have processes in place to stop work until such time as the site can be brought into conformance.”

Charles added, “It is my understanding that you (Grandy) are not wanting to proceed with those processes at this time, but please let me know if your position changes.”

At issue is a Bitcoin mine — which officially is also a blockchain data center –on Bailey Bridge Road in Limestone’s New Salem community owned by Red Dog Technologies.

Red Dog leases the property from BrightRidge next to the power distributor’s Bailey Bridge Road substation and uses electricity directly from that substation to power its equipment.

Noise complaints from neighbors in May first spurred Washington County commissioners to revisit their approval of a February 2020 BrightRidge request to rezone the land from A-1 (agriculture) to A-3 (agricultural business).

Residents within sight of the mine and others from a mile or more away said the noise from the site was beyond tolerable.

Bitcoin mines use high-powered computer equipment requiring constant cooling. Noise from the fans cooling the processors and graphics cards spurred the complaints.

Red Dog and BrightRidge worked to rectify noise issues this summer. But after Red Dog’s Todd Napier updated them on progress in August, commissioners unsatisfied with the response asked County Attorney Allyson Wilkinson to determine whether they could order it shut down.

They complained that the rezoning request, which never mentioned a private partner or a Bitcoin mine but referenced a “blockchain data center,” was misleading. That request also referenced “small fans” that would produce sound but that “the noise is considered small and will not impact or be heard from adjoining properties.”

The day of their Sept. 27 meeting, Wilkinson shared a memo with her opinion: commissioners could direct Charles to order the mine shut down, and pursue the issue in court if BrightRidge didn’t comply.

Like they did to approve the initial rezoning, commissioners voted unanimously to pursue the mine’s shutdown.

What commissioners, neighbors are saying

Danny Edens was among commissioners who questioned Red Dog’s Napier from the first time he appeared at a meeting in late July.

During the week of Oct. 11, Edens told News Channel 11 he understands the dilemma BrightRidge faces, less than a year into a five-year contract with Red Dog.

When the story first broke, BrightRidge CEO told News Channel 11 Red Dog immediately became their biggest customer, using enough electricity to power 10,000 homes, and that the mine’s revenues would help BrightRidge hold its rates lower for standard residential customers.

“I do believe that BrightRidge is in a tough situation,” said Edens, who added that he has “a lot of respect” for Dykes.

“I believe they want to have good relationships with the community, but on the other side of that coin they’ve got a binding contract.”

But Edens said he fully supports the commission’s directive to have Charles order the crypto mining stopped and for the county to pursue legal action if it isn’t.

“Whether it was intentional or not, it has become an issue in the community,” Edens said. “I would like to see them stand with the citizens and stand with the commission and put the community over money.”

Matt Martin lives further away from the mine than some neighbors, but he said the noise is an annoyance at his home on Laws Road. Martin spoke in appreciation of Red Dog’s efforts to reduce the noise at the commission’s Sept. 27 meeting.

But Martin spoke before Wilkinson and told commissioners the mine violated the zoning resolution — and he said a shutdown is the best possible outcome in his mind.

Limestone resident Matt Martin

“Once we realized in the last commission meeting that shutting it down was even an option, that kind of opened Pandora’s box for us,” Martin said. “Well, not for us, but maybe for BrightRidge and Red Dog, where if they’re out of compliance and there is a recourse the county can take to get them to shut down. That’s definitely our preference.”

Martin said as he learned more about the operation, one positive outcome was meeting more neighbors and learning the opinions and experiences of those living further away and those within sight.

Most were definitely not expecting this kind of noise, especially those close by,” he said. “It’s noticeable, whether you’re parallel with it – there’s three or four houses that used to have a beautiful view. Now, the view is one thing, but the noise is a whole other.

“It’s 24/7. They run hotter at night – the fans are louder at night – I really feel for them. I can hear them from here, and it’s a mild annoyance, but just knowing that, I can’t imagine what they’re going through.”

The lawsuit: When does noise ‘constitute a nuisance?’

Carolyn Broyles, who lives on S.G. Hensley Road about a mile from the Bitcoin mine, sued Red Dog in Washington County Circuit Court on Aug. 13. Also named as a plaintiff is “Quality Properties,” a general partnership that owns more than 200 acres of agricultural property near Broyles’s 5.6-acre residential property.

Broyles, who declined to comment for this story, is the widow of Roadrunner Markets convenience store chain founder Warren Broyles, and Quality Properties LP held much of that business’s property before the family sold the chain.

The lawsuit, filed by attorney Rick Bearfield, claims noise from the mine “constitutes a nuisance which unreasonably interferes with the plaintiffs’ use and enjoyment” of her property.

It claims the “constant and continual” noise increases at night, that it’s “excessive,” and that it can be heard at all times not just from the plaintiffs’ properties but “in the surrounding community.”

The suit describes the noise as above normal levels for talking and sleeping at Broyles’s home and in the surrounding community, and it “causes Broyles and others to live in positive discomfort.”

Morning fog hangs over rural land along S.G. Hensley Road in Limestone, Tenn. Oct. 12.

The suit requests that the court order Red Dog to quit operating the mine, or to “abate the noise to a level that does not interfere with use and enjoyment of the Broyles Parcel and the Quality Parcels.”

It also asks for a jury trial and awards of both personal damages and damages for “the diminution in value or rental value of the Broyles Parcel … resulting from the nuisance.”

In an answer filed Sept. 13, attorney Christopher Owens denied that the noise was excessive.

Denials of some other claims, including the noise being audible at all times in the community, above normal levels for sleeping and talking, and loud enough to cause people to “live in positive discomfort,” were more technically worded.

Owens wrote that Red Dog “is without sufficient information or knowledge to admit or deny the allegations contained therein and therefore the allegations stand denied.”

The same basis for denial was used for several other claims about the noise disturbing “a person of ordinary sensibilities.”

The answers return to straight denials for claims that the noise constitutes a nuisance that interferes with Broyles’s use and enjoyment of her property and that the nuisance has caused personal damages and damage to property values.

No further documents have been filed in the case.

Martin said the claims made in Broyles’s suit align with his experience and what he’s heard from neighbors.

“If they’ve got an avenue to mitigate that or even eliminate it, then I support them in doing that,” Martin said.

He said he’s on the side of anyone, whether a private citizen or the county, that’s trying to get the situation remedied in the most complete way possible.

“I don’t think that anybody is being unreasonable in wanting them to adhere to the original rezoning request that they had written, or had a hand in writing,” Martin said.

“I definitely back my neighbors. I mean, we’re a small community here. Like I said, everybody I’ve talked to has said they hate it. I’ve talked to a guy that lives on the other side that’s said since the wall went up, it just changed the pitch. He’s not seen much of a difference.”