Texas Blockchain Council, et al. v. Department of Energy, et al.
CASE SUMMARY
On behalf of the Texas Blockchain Council and Riot Platforms, Inc., NCLA persuaded the the Department of Energy (DOE) and Energy Information Administration (EIA) to end an attempt to force cryptocurrency mining companies to hand over sensitive information through a mandatory survey. NCLA alleged that the Office of Management and Budget (OMB) had given EIA emergency permission to collect this data despite EIA’s failure to demonstrate that short-cutting the statutory process would prevent public harm, as federal law requires.
Without following the notice-and-comment process, EIA Administrator Joseph DeCarolis requested on January 24, 2024 that OMB allow his agency to demand monthly information collections from cryptocurrency mining companies about their energy consumption, including sensitive and highly proprietary information. DeCarolis’s request relied on EIA’s assertion that cryptocurrency mining “potentially disrupted the electric power industry,” claiming that EIA should be allowed to skip the Paperwork Reduction Act’s required comment process before such data collection “because public harm is reasonably likely if normal clearance procedures are followed.” However, EIA never established that public harm would likely result if its “emergency” request were denied.
On February 23, NCLA secured a Temporary Restraining Order blocking EIA’s survey for 14 days nationwide. On March 1, DOE and EIA agreed to withdraw the survey and destroy any information they received in response to it. They also agreed to withdraw their February 9 notice, which sought comments about continuing the emergency survey. Instead, the agencies said they would publish a new notice in the Federal Register proposing data collection and allow comments to be submitted for 60 days afterward, in accordance with the Paperwork Reduction Act.
NCLA’s lawsuit alleged that in unlawfully demanding these companies’ data, EIA appeared to be responding to political pressure rather than a genuine emergency implicating public harm. But the Paperwork Reduction Act allows emergency exceptions only in limited circumstances.
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CASE STATUS: Active
CASE START DATE: February 22, 2024
COURT: U.S. District Court for the Western District of Texas
CASE DOCUMENTS
March 1, 2024 | Notice of Agreement
March 1, 2024 | Order
March 1, 2024 | Supplemental Declaration of Dominic J. Mancini
March 1, 2024 | Supplemental Declaration by Joseph Decarolis
February 23, 2024 | Order Granting Plaintiffs’ Motion For Temporary Restraining Order
February 22, 2024 | Plaintiffs' Motion for a Temporary Restraining Order
February 22, 2024 | Verified Complaint for Declaratory and Injunctive Relief
PRESS RELEASES
March 1, 2024 | NCLA Persuades Energy Dept. to Halt Unlawful Emergency Demand for Cryptocurrency Mining Data
Washington, DC (March 1, 2024) – Today, the New Civil Liberties Alliance settled with the Department of Energy (DOE) and the Energy Information Administration (EIA) to formally end an attempt to force cryptocurrency mining companies to hand over sensitive information about their operations through a mandatory Cryptocurrency Mining Facilities Survey. NCLA alleged that the Office of Management and Budget (OMB) had given EIA emergency permission to collect this data despite EIA’s failure to demonstrate that short-cutting the statutory process would prevent public harm, as federal law requires. Representing the Texas Blockchain Council and Riot Platforms, Inc., NCLA celebrates this victory in defense of privacy rights and the rule of law, thanking co-counsel Gray Reed and Cherry Johnson Siegmund James for their tireless work every step of the way.
Without following the notice-and-comment process, EIA Administrator Joseph DeCarolis requested on January 24 that OMB allow his agency to demand monthly information collections from cryptocurrency mining companies about their energy consumption, including sensitive and highly proprietary information. DeCarolis’s request relied on EIA’s assertion that cryptocurrency mining “potentially disrupted the electric power industry,” claiming that EIA should be allowed to skip the Paperwork Reduction Act’s required comment process before such data collection “because public harm is reasonably likely if normal clearance procedures are followed.” In fact, EIA never established that public harm would likely result if its faux “emergency” request were denied.
On February 23, NCLA secured a Temporary Restraining Order blocking EIA’s survey for 14 days nationwide. Now, DOE and EIA have agreed to withdraw the survey and destroy any information they received in response to it. They also agreed to withdraw their February 9 notice, which sought comments about continuing the emergency survey. Instead, the agencies will publish a new notice in the Federal Register proposing data collection and allow comments to be submitted for 60 days afterward, in accordance with the Paperwork Reduction Act. The federal agencies have additionally agreed to fully reimburse NCLA’s travel expenses under the Equal Access to Justice Act through today.
NCLA’s Texas Blockchain Council v. Dept. of Energy lawsuit alleged that in unlawfully demanding these companies’ data, EIA appeared to be responding to political pressure rather than a genuine emergency implicating public harm. But the Paperwork Reduction Act allows emergency exceptions only in limited circumstances. EIA is wise to abandon this effort and pursue any proposed survey through proper legal channels. NCLA will remain vigilant against future Administrative State attempts to unlawfully collect Americans’ information and property.
NCLA released the following statements:
“Public notice and comment is integral to how our government functions. We are pleased that the parties were able to reach an agreement and secure the opportunity for our clients—and the public at large—to comment on the government’s proposal. It is critical that our nation’s data remain impartial and that starts with an open and transparent process.”
— Kara Rollins, Litigation Counsel, NCLA
“We appreciate the government’s prompt recognition that it had no plausible ‘emergency’ justification for circumventing the notice-and-comment requirements put in place to prevent rushed and ill-considered agency action, but it shouldn’t have required an emergency lawsuit to stop EIA’s lawless survey. OMB and the Office of Information and Regulatory Affairs are supposed to be the watchdogs here, but it seems they may be asleep at the switch.”
— Russ Ryan, Senior Litigation Counsel, NCLA
For more information visit the case page here.
ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.
February 23, 2024 | NCLA Wins Order Blocking Dep’t of Energy’s Unlawful Demand for Cryptocurrency Mining Data
Washington, DC (February 23, 2024) – Today, the U.S. District Court for the Western District of Texas granted a Temporary Restraining Order (TRO) in the New Civil Liberties Alliance’s new Texas Blockchain Council v. Dept. of Energy lawsuit. The 14-day TRO blocks DOE and the Energy Information Administration (EIA) from forcing cryptocurrency mining companies to hand over sensitive information about their electricity consumption through a mandatory Cryptocurrency Mining Facilities Survey. The Office of Management and Budget (OMB) had given EIA emergency permission to collect this data, despite EIA’s failure to demonstrate that short-cutting the statutory process would prevent public harm, as federal law requires. On behalf of its clients, the Texas Blockchain Council and Riot Platforms, Inc., NCLA celebrates the Court’s Order and looks forward to derailing DOE’s unlawful data collection effort once and for all.
EIA’s survey had been set to go into effect today. After a Court hearing this afternoon, the Defendants declared in legally nonbinding fashion that they would not enforce the survey until March 25 and would remove it from the OMB website. But they failed to agree with the Plaintiffs on an order ensuring these promises would be kept. Absent such an agreement, the Court issued a TRO to maintain the pre-enforcement status quo, noting that NCLA had shown the survey would irreparably harm the Texas Blockchain Council and Riot Platforms otherwise. The government estimated that the survey would take companies only 30 minutes to complete, an estimate the Court’s order called “extremely inaccurate, if not grossly misleading.” The Court also scheduled a February 28 hearing to consider a preliminary injunction against EIA’s survey and the Defendants’ unlawful actions.
OMB approved EIA’s slapdash emergency request to launch the Cryptocurrency Mining Facilities Survey just two days after receiving it. In doing so, both agencies violated the Paperwork Reduction Act and its implementing regulations. OMB and EIA’s arbitrary and capricious actions in this process also ran afoul of the Administrative Procedure Act. The Court order held that NCLA’s clients were likely to succeed on the merits of these claims.
In demanding these companies’ data, EIA appears to be responding to political pressure rather than a genuine “emergency” implicating public harm. But the Paperwork Reduction Act allows emergency exceptions only in limited circumstances—not including political pressure. So, EIA’s unlawful scheme must be set aside for good.
NCLA released the following statements:
“We are grateful for the Court’s thoughtful consideration in granting the TRO. Our clients, and miners around the country who received the survey, have been spared the impossible and unnecessary choice between responding to the government’s invasive and unlawful inquiries or risking criminal and civil prosecution. We look forward to continuing the fight on behalf of our clients.”
— Kara Rollins, Litigation Counsel, NCLA
“We’re gratified the Court has temporarily paused the Administration’s latest slapdash effort to circumvent statutory limitations on its ability to bury private industry with burdensome and invasive paperwork demands. We look forward to convincing the Court to put a permanent end to this misbegotten scheme.”
— Russ Ryan, Senior Litigation Counsel, NCLA
For more information visit the case page here.
ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.
February 23, 2024 | NCLA Suit Challenges DOE’s Unlawful Attempt to Collect Cryptocurrency Miners’ Energy Use Data
Washington, DC (February 23, 2024) – The New Civil Liberties Alliance has filed a Complaint and TRO on behalf of the Texas Blockchain Council and Riot Platforms, Inc. to stop the Department of Energy (DOE) and Energy Information Administration (EIA) from forcing cryptocurrency mining companies to hand over sensitive information about their electricity consumption through a mandatory survey. The Office of Management and Budget (OMB) granted EIA’s emergency request to collect this data, despite EIA’s failure to demonstrate that short-cutting the statutory process would prevent public harm, as federal law requires. The Texas Blockchain Council v. Department of Energy suit is pending in the U.S. District Court for the Western District of Texas.
Without following the notice-and-comment process, EIA Administrator Joseph DeCarolis requested on January 24 that OMB allow his agency to demand monthly information collections from cryptocurrency mining companies about their energy consumption, including sensitive and highly proprietary information. Carolis’s request relied on EIA’s assertion that cryptocurrency mining “potentially disrupted the electric power industry,” claiming that EIA should be allowed to skip the Paperwork Reduction Act’s required notice-and-comment process to approve such data collection “because public harm is reasonably likely if normal clearance procedures are followed.” In fact, EIA did not establish that public harm would likely result if its “emergency” request were denied.
OMB approved EIA’s slapdash Cryptocurrency Mining Facilities Survey request just two days after receiving it. In doing so, both agencies violated the Paperwork Reduction Act and its implementing regulations. OMB and EIA’s arbitrary and capricious actions in this process also ran afoul of the Administrative Procedure Act.
In attempting to seize these companies’ data, EIA appears to be responding to political pressure rather than a genuine “emergency” implicating public harm. Several U.S. Senators and Members of Congress have suggested that cryptocurrency mining has “a major impact on climate change” and determined “that federal intervention is necessary[.]” The Biden White House has put forward the possibility of taking executive action “to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining[.]” But the Paperwork Reduction Act allows emergency exceptions only in limited circumstances—not including political pressure. NCLA urges the Court to set aside this unlawful action and force DOE and OMB back to the drawing board.
NCLA released the following statements:
“It is Government 101 that agencies only have those powers that Congress has granted to them and that they are bound to follow the law. From the very outset of this process, DOE and OMB have ignored those simple requirements, harming our clients in the process.”
— Kara Rollins, Litigation Counsel, NCLA
“The Energy Department’s phony ‘emergency’ claim is a brazen attempt to circumvent the PRA’s notice-and-comment requirements and related guardrails Congress put in place to limit the government’s ability to bury private industry with intrusive information demands under threat of criminal prosecution. Shame on OMB for simply rubber-stamping this egregious abuse of its processes.”
— Russ Ryan, Senior Litigation Counsel, NCLA
“A federal agency cannot avoid the strictures of the Paperwork Reduction Act by claiming there is an unproven emergency while simultaneously admitting that it does not yet know whether there is a problem. This survey request is ridiculous. DOE wants to get away with assuming the results of the very survey it hopes to conduct.”
— Mark Chenoweth, President and Chief Legal Officer, NCLA
For more information visit the case page here.
ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.