Plaintiffs can file suit in state court, federal judge rules

EPHRATA — A federal judge has dismissed a lawsuit filed against Grant County PUD by cryptocurrency companies that charged the utility district had engaged in discrimination when establishing a separate rate class for “evolving industries.”

The suit, filed in December 2018 by six cryptocurrency companies and one individual, alleged that the PUD and its commissioners acted illegally and unconstitutionally when they adopted the emerging industries rate. United States District Court Judge Rosanna Malouf Peterson dismissed the federal charges in a decision dated March 12.

“The Court has concluded that plaintiffs’ constitutional and federal law claims fail as a matter of law,” Peterson wrote in her decision.

She said the plaintiffs have the right to file a suit in state court.

The cryptocurrency operators claimed the PUD’s establishment of an “evolving industries” class, rate class 17, violated their rights under the commerce and due process clauses of the U.S. Constitution. The plaintiffs claimed that being assigned to Class 17 violated their property rights.

“Because plaintiffs’ due process claim has morphed over the course of this litigation, it is difficult to determine exactly what the property interest at issue is,” Peterson wrote.

The cryptocurrency operators alleged that increasing their electrical rates threatened investments they had made in Grant County. “Plaintiffs have not directed the Court to any cases suggesting that a person’s or company’s ‘investment’ alone is a property interest protected by substantive due process.”

The cryptocurrency operators also alleged the higher rates amounted to confiscation of their property, but Peterson said she couldn’t find any legal precedents for that argument, and the plaintiffs didn’t furnish any.

Peterson ruled that PUD commissioners had the right to set rates, writing that setting rates is a legislative act. She also ruled the rate class wasn’t discriminatory and that it didn’t place an undue burden on the cryptocurrency companies.

The suit was filed by Blocktree Properties LLC, Cyteline LLC, 509 Line LLC, Mim Investors LLC, Miners United LLC, Wehash Technology LLC and Mark Vargas. The suit named the PUD and 10 unnamed utility district employees as defendants. The original suit also named the five commissioners at the time the rate class was approved in August 2018, who were Bob Bernd, Terry Brewer, Larry Schaapman, Tom Flint and Dale Walker. The suit was amended to include the commissioners elected in November 2018, Nelson Cox and Judy Wilson.