Resisting the EIA: One Possible Playbook

The Biden Administration has intensified oversight on the U.S. bitcoin mining sector through an Energy Information Agency (EIA) emergency survey, portraying electricity usage by miners as a significant threat to national grid stability. This move, which demands detailed disclosures from miners, mirrors actions in Venezuela that led to mining confiscations, signaling a concerning trend towards a full registry of mining activities. The article advocates for the bitcoin mining community to unite against this overreach, emphasizing the positive impact miners have on grid stability through demand response programs. It critiques the EIA’s legal and procedural justifications, highlighting potential legal challenges and the necessity for industry solidarity to protect mining autonomy against regulatory encroachment.

• The emergency authorization claimed by the EIA for the mining survey is woefully inadequate, and doesn’t meet the bare minimum requirements imposed by the enabling statutes.
• There are technical defects in the EIA’s authorization surrounding the collection of Personally Identifiable Information. Also, the EIA has not done enough to clarify who the required respondents are.
• While an affected miner and an industry group can sue to block this action, there is a strong argument that a sovereign State, particularly Texas because of ERCOT, could also have standing to sue because the EIA’s action directly oversteps state sovereignty concerns.
• A lawsuit should easily meet the requirements for a preliminary injunction, and, if successful, a permanent injunction on the use of the emergency claim here.
• Speed is a top concern, as the timeframe for this survey is extremely short.

Part 1: Intro

The EIA finds itself at the center of a contentious debate due to its hurried and mandatory survey of cryptocurrency mining operations. The core issue is the EIA’s use of emergency powers to require data collection from cryptocurrency miners, justified by misplaced concerns over energy consumption and system reliability amid rising Bitcoin prices and environmental concerns.

This article explores the legal, procedural, and practical dimensions of the EIA’s actions, examining the agency’s rationale and its implications for public engagement in regulatory processes. By examining the legal frameworks that govern such emergency rulemakings, including the Administrative Procedure Act (APA) and the nuances of «good cause» exemptions, as well as the Paperwork Reduction Act (PRA), this analysis lays bare the EIA’s deficient process in pushing forward with this action. This piece then outlines a potential set of legal arguments that could be used to challenge the survey, and who can bring forth the challenge.

For further details on the EIA and the survey itself, see this piece by Charlie Spears and Storm Rund, as well as this piece by Marty Bent.

At its base, the Energy Information Agency does indeed possess the power under statute to collect the data they want to collect in this survey. 15 USC §772. (I will not argue here whether or not that power is itself legitimate, and there are good arguments that it may not be. Rather, I take aim at the process used by the EIA in order to show an expedient route to block the current action.)

Data collection like this should only be done through a traditional notice-and-comment process, where the public has adequate notice that the agency intends to take an action, and both the public and the agency isn’t forced to hurry with a response. Recall the FinCEN rulemaking which ended a few weeks ago. The public was allowed three months to examine it, and generate comments, such as the awesome one drafted by Samourai Wallet and signed by 25 other Bitcoin companies.

The APA requires that agencies follow procedures such as notice-and-comment to afford the public, including those with “highly relevant expertise in the subject,” the opportunity to participate in rulemaking through submitted comments.

Desirée LeClercq, Judicial Review of Emergency Administration, 72 Am. U. L. Rev. 143, 165 (2022-2023) (emphasis added)

As you can see, the EIA is not operating with access to “highly relevant expertise”:

Several cryptocurrencies, most notably Bitcoin, use a proof of work approach that requires cryptocurrency miners to validate blocks of transactions by solving complex cryptographic puzzles that require significant computational power.

EIA Supplemental Materials (emphasis added)

An agency may short-circuit the normal notice-and-comment process «when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest». 5 USC §553(b)(4)(B). Similarly, under the PRA, an agency may expedite certain procedures when “the agency cannot reasonably comply with the provisions of this subchapter because…public harm is reasonably likely to result if normal clearance procedures are followed”. 44 USC §3507(j)(1)(B)(i).

BUT, and it’s an absurdly massive «but», the emergency procedure they’re operating under is comically tenuous.

Agencies have a long history of invoking the «good cause» exception of the Administrative Procedure Act (APA) in order to short-circuit public involvement, and the courts have increasingly become suspicious of such extremely loose uses of emergency rules. «The need for public participation in administrative rulemaking is ‘axiomatic.'» Ernest Gellhorn, Public Participation in Administrative Proceedings, 81 YALE L.J. 359, 369 (1972).

Several cases through the COVID era have begun to show judicial impatience with agencies applying emergency powers in situations where there is no legitimate rationale to do so.

The EIA’s justifications here for their emergency data collection can be summarized as:

1. Bitcoin’s price has gone up.
2. Higher prices incentivize more mining.
3. It’s cold outside right now.
4. Something bad happened five years ago.
5. We actually don’t really know if it’s that bad.
6. But we feel like it might be, so we need to collect data NOW NOW NOW.

As evidence, the price of Bitcoin has increased roughly 50% in the last three months, and higher prices incentivize more cryptomining activity, which in turn increases electricity consumption. At the time of this writing, much of the central United States is in the grip of a major cold snap that has resulted in high electricity demand. The combined effects of increased cryptomining and stressed electricity systems create heightened uncertainty in electric power markets, which could result in demand peaks that affect system operations and consumer prices, as happened in Plattsburgh, New York in 2018. Such conditions can materialize and dissipate rapidly. Given the emerging and rapidly changing nature of this issue and because we cannot quantitatively assess the likelihood of public harm, EIA feels a sense of urgency to generate credible data that would provide insight into this unfolding issue.»

The OMB’s Statement of the EIA Justification for emergency action (Emphasis Added)

This justification is shockingly flimsy for the extraordinary power of an emergency action, and courts have blocked agencies for not having sufficient «good cause» when they had significantly stronger justifications than the EIA does here. See, i.e., Chamber of Commerce of the United States v. U.S. Department of Homeland Security, 504 F. Supp. 3d 1077 (N.D. Cal. 2020).

If challenged, a court should block the EIA’s data collection action (ie: grant an injunction preventing the EIA from enforcing it). Below we go into greater detail as to how such a challenge could look, and who can bring it.

Part 2: Standing

The initial component of any case analysis is a determination of who can bring a lawsuit. The basic requirements for standing are that a plaintiff must personally have:

1. suffered some actual or threatened injury;
2. the injury can fairly be traced to the challenged action of the defendant; and
3. that the injury is likely to be redressed by a favorable decision.

See Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992).

Clearly, any miner that has received a letter from the EIA falls within that category. According to their OMB statement, the EIA has a list of 82 miners in mind that they intend to demand information from, and any of those 82 would be able to sue here.

What about a miner that is not part of those 82? That’s a harder case. First of all, at present the list of 82 miners has not been made available, so a miner might not yet know if they are required to respond or not. Furthermore, it’s not immediately clear if a miner who doesn’t receive the letter and is not on the list of 82 target miners is required to respond. The EIA form itself states that those «who are required to complete this form are all commercial cryptocurrency mining facilities in the United States.» (emphasis added). A «commercial cryptocurrency mining facility» is not clearly defined, so a miner operating on a commercial site could reasonably believe that they are required to respond.

Another level of standing is organizational and associational standing. Here, an industry group can assert organizational standing when its mission is directly impacted by the agency action. See, i.e. PETA v. USDA, 797 F.3d 1087 (D.C. Cir. 2015) (holding that the USDA’s challenged non-action plainly impaired PETA’s activities in a non-speculative manner by requiring PETA to divert and redirect its limited resources to counteract and offset the defendant’s unlawful conduct and omissions.) Alternatively, an organization can assert associational standing «to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted, nor the relief requested, requires the participation of individual members in the lawsuit.” See Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333, 343 (1977); see also Ass’n of Am. Physicians & Surgeons v. Tex. Med. Bd., 627 F.3d 547, 550 (5th Cir. 2010); and Ctr. for Biological Diversity v. EPA, 937 F.3d 533, 536 (5th Cir. 2019).

It is conceivable that an organization which represents miners could potentially have both components of standing, but clearly associational standing will be met. The most contentious element would be where a specific member need not be directly involved with the lawsuit, however as this is an action to ensure that a regulatory agency follows proper procedure, and that the relief is to enjoin the agency from proceeding, it seems unlikely that a specific miner would be required to be a party here.

But there is one additional litigant that could bring this suit, and it would be an extremely interesting one: a State. Under the doctrine of parens patriae, a State has the ability to maintain a lawsuit on behalf of its citizens if it can meet additional burdens. See Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez, 458 U. S. 592, 607 (1982) («In order to maintain [a parens patriae action], the State must articulate an interest apart from the interests of particular private parties, i.e., the State must be more than a nominal party. The State must express a quasi-sovereign interest.»). In Massachusetts v. EPA, the Supreme Court elaborated on parens patriae by extending Massachusetts special solicitude to sue, based on that state’s quasi-sovereign interest in protecting its environment. 549 U.S. 497, 518 (2007) (“Well before the creation of the modern administrative state, we recognized that States are not normal litigants for the purposes of invoking federal jurisdiction.”). See also, Lexi Zerrillo, Who’s Your Sovereign?: The Standing Doctrine of Parens Patriae & State Lawsuits Defending Sanctuary Policies, 27 Wm. & Mary Bill Rts. J. 573 (2018); Tara L. Grove, When Can a State Sue the United States, 101 Cornell L. Rev. 851 (2016).

Using the State of Texas as an example, I believe there is a reasonable argument that Texas itself, and perhaps other states, would be able to achieve standing in this specific situation under parens patriae and special solicitude. ERCOT is a Texas quasi-governmental agency which is tasked with regulating the energy sector within the State of Texas. Indeed, in 2023, the Texas Supreme Court recognized ERCOT as having sovereign immunity, holding «that ERCOT is entitled to sovereign immunity because PURA «evinces clear legislative intent» to vest it with the » ‘nature, purposes, and powers’ of an ‘arm of the State government’.» CPS Energy v. Elec. Reliability Council of Tex., 671 S.W.3d 605, 628 (Tex. 2023).

The EIA’s action here, using emergency powers as they have, represents a specific insult to Texas, as it deprives ERCOT the ability to engage with the agency process as experts in their domain. Indeed, ERCOT leads the country on the use of Bitcoin miners as large flexible loads, and so not only has the EIA’s emergency action deprived Texas of the ability to comment on the thrust of the action, it has deprived the rest of the country the benefit for ERCOT’s expertise in this field.

Furthermore, the EIA’s emergency action also impacts the ability of Texas to engage in the proper regulation of their internal grid, through ERCOT, which being entirely internal to the State of Texas, is not covered by the Commerce Clause, and is outside of much of the jurisdiction of the Federal Energy Regulatory Commission. When a State’s regulatory framework is at risk due to a Federal regulation, such as it is here, the special standing of a State has been upheld. See, i.e., Wyoming v. United States, 539 F.3d 1236, 1241-42 (10th Cir. 2008)(«In light of the «special solicitude» the Massachusetts Court afforded to states in our standing analysis, id., and because our discussion below demonstrates that Wyoming’s stake in this controversy is sufficiently adverse, we conclude that Wyoming has Article III standing.»).

The State of Texas has a unique and specifically identifiable quasi-sovereign interest here, and we believe that they would be an ideal plaintiff or co-plaintiff on this matter.

Part 3: General Background on «Good Cause» Emergency Rulemaking

The Administrative Procedure Act (APA) governs the process by which federal agencies develop and issue regulations, including a critical mechanism known as «emergency rulemaking.» This process allows agencies to implement rules without adhering to the typical notice-and-comment requirements under certain circumstances, notably when there is «good cause.» However, the invocation of this exception has been a contentious issue, particularly when agencies’ justifications are deemed insufficient.

Understanding APA’s Emergency Rulemaking and the «Good Cause» Exception

The APA aims to guarantee public participation, transparency, and accountability in federal rulemaking. Under 5 USC §553. agencies are generally required to provide notice of proposed rulemaking and allow the public to comment. However, §553(b)(4)(B) articulates a «good cause» exception, permitting agencies to bypass these procedures if they find that notice and comment are «impracticable, unnecessary, or contrary to the public interest.»

«Good cause» is predicated on the necessity for swift action by the agency under emergency circumstances or when the rule’s immediate implementation is critical to the public good. The exception is meant to be applied narrowly, reflecting Congress’s intention to maintain the participatory nature of rulemaking while acknowledging the need for flexibility in genuine emergencies.

Legal Standards for «Good Cause»

The APA’s requirement of notice and comment is » ‘designed to assure due deliberation of agency regulations’ and ‘foster the fairness and deliberation of a pronouncement of such force.’ » E. Bay Sanctuary Covenant v. Trump, 932 F.3d 742, 745 (9th Cir. 2018)(quoting United States v. Mead Corp., 533 U.S. 218, 230 (2001), quoting Smiley v. Citibank (S.D.), N.A., 517 U.S. 735, 741 (1996)). The good cause exception, in turn, «is essentially an emergency procedure[.]» United States v. Valverde, 628 F.3d 1159, 1165 (9th Cir. 2010) (quoting Buschmann v. Schweiker, 676 F.2d 352, 357 (9th Cir. 1982)). The exception also is «narrowly construed» and «reluctantly countenanced.» California v. Azar, 911 F.3d 558, 575 (9th Cir. 2018) (quoting Alcaraz v. Block, 746 F.2d 593, 612 (9th Cir. 1984)).

Chamber of Commerce of U.S. v. U.S. Dep’t of Homeland Sec., 504 F. Supp. 3d 1077, 1080 (N.D. Cal. 2020)(Some internal citations omitted)

The courts’ interpretations of what constitutes «good cause» have varied, leading to an evolving jurisprudential landscape. The determination of good cause hinges on the agency’s ability to convincingly demonstrate that the circumstances necessitating the rule are urgent enough to justify forgoing the usual procedural requirements. This justification must be more than mere assertions; it requires substantial evidence that adhering to the normal rulemaking process would be impracticable, harmful, or contrary to public interest.

Historically, courts have applied a deferential arbitrary-and-capricious review to agency assertions of good cause. Beginning in 2014, and cemented by cases related to COVID, courts began adopting a significantly more stringent de novo review standard. De novo review entails a thorough examination of the agency’s justification without deferring to the agency’s expertise or discretion. This evolution in judicial scrutiny underscores the growing concern with increasingly perfunctory and pretextual emergency determinations. «The declaration of emergency becomes a ‘self-fulfilling prophecy’ in which the executive has judged a situation an emergency and frames its response in such a way as to construct a new emergency reality. Emergency administration, if left unchecked, becomes the norm.» Desirée LeClercq, Judicial Review of Emergency Administration, 72 Am. U. L. Rev. 143, 170 (2022-2023) (emphasis added).

Going back to Chamber of Commerce, there the court found that even considering the extreme situation of the COVID pandemic, and its undeniable impact on domestic employment, the Agency could not justify using an emergency rule to make changes to the H1-B visa program.

Another case, Ass’n of Cmty. Cancer Ctrs. v. Azar, 509 F.Supp. 3d 482 (D. Md. 2020), found that an agency’s justification for an emergency action, which attempted to regulate allegedly runaway drug prices during COVID, fell far short of the requirements needed here:

The purported justification for invoking the good cause exception in this case falls flat. First, like the factually deficient justifications cited in Tennessee Gas Pipeline and Sorenson Communications, CMS here relies more on speculation than on evidence to establish that the COVID-19 pandemic has created an emergency in Medicare Part B drug pricing sufficient to justify dispensing with valuable notice and comment procedures.

…

While it may be that the anticipated benefits of the rule eventually would be borne out by empirical study, CMS’s conclusory and speculative assertions do not provide, particularly in the short term, a reasoned basis sufficient to justify denying to the public the beneficial requirements of the sixty-day notice and comment period. An agency may not rely solely on its own expertise to establish good cause; findings of fact are required.

Ass’n of Cmty. Cancer Ctrs. v. Azar, 509 F.Supp. 3d 482 (D. Md. 2020)(citing Sorenson Commc’ns Inc. v. Fed. Commc’ns Comm’n, 755 F.3d 702, 706 (D.C. Cir. 2014) and Tennessee Gas Pipeline Co. v. FERC, 969 F.2d 1141, 1145 (D.C. Cir. 1992))

Finally, in ITServe All., Inc. v. Scalia, the court didn’t apply the de novo standard because the agency was so deficient in its evidence and analysis that there was no need even to consider the standard. “For these reasons, even under the arbitrary and capricious standard, Plaintiffs are likely to succeed in showing that no emergency existed in the context of the H-1B program, and therefore, that the Department’s argument that it was impracticable to comply with the standard rulemaking procedure was insufficient. ” ITServe All., Inc. v. Scalia, Civil Action No. 20-14604 (SRC), 14 (D.N.J. Dec. 3, 2020)

The PRA Angle

The EIA might argue that the Paperwork Reduction Act (PRA) is the only aspect that controls here, and attempt to frame the argument solely in that realm. As I stated above, the relevant standard under the PRA is when an “agency cannot reasonably comply with the provisions of this subchapter because…public harm is reasonably likely to result if normal clearance procedures are followed”. 44 USC §3507(j)(1)(B)(i). This power is explicitly invoked by the EIA under 5 CFR §1320.13.

While there’s essentially no case law that interprets this section, looking broadly at §3507 you see that it mirrors the APA in many ways, requiring that the agency engage in a similar notice-and-comment procedure. The emergency standard isn’t explicitly the same “good cause” standard of the APA, it’s not so different as to need a completely different analysis. The first argument here would be for the courts to apply the “good cause” de novo review to this emergency action, based on the analogous situation and purposes of the PRA and APA.

However, like the situation in ITServe above, even if the courts were to apply a weaker “arbitrary and capricious” standard, the total bankruptcy of the EIA’s evidence as laid out in Part 4 below, their unwarranted delay, and the plain language of their “justification” does not rationally approach a finding of “public harm is reasonably likely” required by that statute.

The EIA may also attempt to argue that 44 USC §3507(d)(6) blocks judicial review of the information collection action. This argument fails as that section is narrowly construed. “For example, it does not prohibit judicial review of an OMB decision to approve collections that are not contained in an agency rule.” Hyatt v. Office of Mgmt. & Budget, 908 F.3d 1165, 1171 (9th Cir. 2018). Furthermore, “the statute precludes judicial review only of a decision by the OMB to approve, whether through express approval or a failure to act upon, a collection within an agency rule. Any other decision remains subject to judicial review.” Id. Finally, the judicial review bar is constrained further in that it “shall apply only when an agency publishes a notice of proposed rulemaking and requests public comments.” 44 USC §3507(d)(5).

Associated Rulemaking Information

RIN: Stage of Rulemaking: Federal Register Citation: Date:

Not associated with rulemaking

Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? No

The OMB’s Statement of the EIA Justification for emergency rulemaking (Emphasis Added)

By their own admission, the EIA’s collection is neither incidental to a parallel or prior rulemaking, nor was a notice issued or public comments received.

Furthermore, the use of the emergency power of §3507(j) lies outside the scope of §3507(d), so the (d)(6) bar does not apply. See Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881, 885 (9th Cir .2005) (en banc) (‘‘The doctrine of expressio unius est exclusio alterius ‘as applied to statutory interpretation creates a presumption that when a statute designates certain persons, things, or manners of operation, all omissions should be understood as exclusions.’ ’’ (quoting Boudette v. Barnette, 923 F.2d 754, 756–57 (9th Cir. 1991)).

Part 4: The EIA’s Overreach

Returning to the EIA’s justifications, there are several avenues of attack.

Attack 1: Unwarranted Delay

Plaintiffs argue that Defendants unduly delayed in taking action and forfeited the ability to rely on the good cause exception. «Good cause cannot arise as a result of the agency’s own delay[.]» Nat’l Educ. Ass’n, 379 F. Supp. 3d at 1020-21 (internal bracket omitted, quoting Nat’l Res. Def. Council v. Nat’l Highway Traffic Safety Adm’n, 894 F.3d 95, 114 (2d Cir. 2018)); see also Nat’l Venture Ass’n v. Duke, 291 F. Supp. 3d 5, 16 (D.D.C. 2017) (quoting Wash. All. of Tech. Workers v. U.S. Dep’t of Homeland Sec., 202 F. Supp. 3d 20, 26 (D.D.C. 2016), aff’d, 857 F.3d 907 (D.C. Cir. 2017)). «Otherwise, an agency unwilling to provide notice or an opportunity to comment could simply wait until the eve of a statutory, judicial, or administrative deadline, then raise up the ‘good cause’ banner and promulgate rules without following APA procedures.» Nat’l Res. Def. Council, 894 F.3d at 114-15 (quoting Council of S. Mtns. v. Donovan, 653 F.2d 573, 581 (D.C. Cir. 1981))

Chamber of Commerce of U.S. v. U.S. Dep’t of Homeland Sec., 504 F. Supp. 3d 1077, 1087 (N.D. Cal. 2020)

The only actual datapoint that the EIA cites in their «justification» is an incident in Plattsburgh, New York, in 2018. The EIA doesn’t cite any details, except to state that the mining «could result in demand peaks that affect system operations and consumer prices, as happened in Plattsburgh, New York in 2018». Ignoring the fact that it is unclear if there was actually any appreciable negative impact to either system operations or consumer prices in that case, the simple fact that the Agency has delayed six years in seeking to address the situation shows that there is absolutely no need to avoid a few month notice-and-comment period to provide for robust and complete public input.

Attack 2: Insufficiency of Evidence

The combined effects … could result in demand peaks that affect system operations and consumer prices … [and the] EIA feels a sense of urgency to generate credible data that would provide insight into this unfolding issue.

The OMB’s Statement of the EIA Justification for emergency action (Emphasis Added)

In Sorenson, the court took a rather dim view of such a speculative harm. We’ll just leave this here:

Curiously, however, there were no factual findings supporting the reality of the threat. Instead, the agency speculatively stated «absent Commission action, there could be insufficient funds available … to meet the needs of the Fund.» Interim Order, 28 FCC Rcd. at 707 (emphasis added) … Cause for concern? Perhaps. But hardly a crisis. … Lacking record support proving the emergency, we hold the Commission erred in promulgating the Interim Order without notice and comment.

Sorenson Commc’ns Inc. v. Fed. Commc’ns Comm’n, 755 F.3d 702, 706 (D.C. Cir. 2014)

Attack 3: Disconnect Between Cause and Effect

The EIA has provided no specific evidence regarding the connection between higher bitcoin prices and how that translates into the intensity of mining (and the subsequent power use). While we don’t dispute that such a connection exists, the short term impact is much more complex than the EIA’s assumed «Number Go Up therefore Mining Go Up!» conclusory statement. As any professional bitcoin miner knows, adding significant capacity is a complicated industrial construction process, involving permits, international shipping, supply chains, local electric workers, and many other aspects which add a significant delay to the NGU -> MGU equation.

Further, every miner also is aware that the halving is imminent, and that will likely cause a retraction in mining intensity, unless NGU fully overwhelms the halving of the block subsidy. The EIA makes no mention of this, and actually appears to want to rush the review while they know the data will be skewed high, pre-halving.

Attack 4: Technical Defects

On the OMB’s announcement, the OMB and the EIA make the following disclosure:

Does this ICR request any personally identifiable information (see OMB Circular No. A-130 for an explanation of this term)? Please consult with your agency’s privacy program when making this determination. No

The OMB’s Statement of the EIA Justification for emergency rulemaking (Emphasis Added)

In the cited OMB Circular No. A-130, “‘Personally identifiable information’ means information that can be used to distinguish or trace an individual’s identity, either alone or when combined with other information that is linked or linkable to a specific individual.”

On the survey form itself, in Schedule 1 the survey clearly asks for the name and contact information for a survey contact and that individual’s supervisor’s name and contact information. Under 2 CFR §200.79, PII “includes, for example, first and last name, address, work telephone number, email address”. While §200.79 defines that as so-called public PII, the OMB Circular No. A-130 does not make that distinction, so the disclosure is deficient as to how that PII will be managed. It’s just more evidence that the EIA and the OMB rushed this survey through without proper vetting, and is one more example that proper notice-and-comment procedures should have been followed.

Additionally, the EIA, in their rush to push this out NOW NOW NOW, created uncertainty in the public as to who is actually required to respond to their action. Are only the entities who receive a letter required to respond, or are “all commercial cryptocurrency mining facilities in the United States” covered, as they state in their authorization? If the latter, who specifically qualifies? Are off-grid miners included, even though they don’t have any interaction with grid infrastructure under the EIA’s purview? If the EIA had simply engaged in the proper notice-and-comment procedure, again, these plain confusions would have been caught and addressed by the process.

Part 5: Standard for an Injunction

A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.

Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)

We believe that an injunction is clearly warranted, and likely to be granted. But for completeness, we’ll analyze all four elements. The detailed injunction analysis present in Azar is quite thorough for our purposes here. See Ass’n of Cmty. Cancer Ctrs. v. Azar, 509 F.Supp. 3d 482 (D. Md. 2020).

Prong 1: Likely to Succeed on the Merits

This is where all the action will be, and essentially is covered by the above analysis in Part 3. But in sum, the EIA’s attempt to employ an emergency process here is clearly and facially illegitimate, and so the EIA is likely to lose on the merits, either under the de novo standard or the arbitrary and capricious standard.

Prong 2: Likely to Suffer Irreparable Harm in the Absence of Preliminary Relief

The specific harm here is the fact that the EIA has avoided the required notice-and-comment provisions of the APA and/or the PRA. If the agency is allowed to proceed with their data collection, there will be no way to remedy the agency action. As discussed in detail in Azar, a «violation of the APA cannot be fully cured by later remedial action.» Azar, 509 F.Supp. 3d at 501.

Prong 3 & 4: The Balance of the Equities Support The Injunction, and it is in the Public Interest

Again we look to the excellent language in Azar, stating that «Of course, Congress has also determined, in passing the APA, that it is in the public interest to allow the public to comment on proposed regulations prior to their promulgation. And given the limited duration of a temporary restraining order, it would be more accurate to say—at least at this stage of the proceedings—that the court would be delaying the implementation of the rule rather than preventing it. The court acknowledges and gives weight to CMS’s desire to lower drug prices to benefit seniors, but CMS has adduced no evidence that any harm will result if its seven-year test does not commence on January 1.» Azar, 509 F.Supp. 3d at 502 (internal citation omitted).

Similarly, given the six year delay that the EIA has already tacitly condoned, there is no serious additional harm to the EIA here by delaying the data collection, while there is significant harm to those affected by their actions. And the public interest is clearly served by forcing them to hew to proper APA procedure.

Part 6: Conclusion

We submit that a properly crafted lawsuit has a strong chance of success in at least delaying the EIA’s survey, compelling them to initiate a proper notice-and-comment process that promises a narrower, more thoughtfully designed survey. This action is not only a legal recourse but a necessary step towards ensuring a fair and transparent regulatory process. We provide these citations with the hope that members of our industry can swiftly move to secure a preliminary injunction against the EIA.

At this pivotal moment, it is crucial for legal professionals, miners, and bitcoin industry experts to unite against the EIA’s intrusive survey. This collective effort is essential as we confront this regulatory overreach and advocate for the principles of transparency and due process. Legal experts can dissect the EIA’s emergency survey’s foundations, ensuring compliance with statutory requirements, while miners offer firsthand accounts of the survey’s impact, highlighting the real-world implications of such regulatory measures.

As we stand together, our unified response can champion the cause of Bitcoin and protect our industry from undue regulatory burdens. Bitcoin professionals, with their deep understanding of the ecosystem’s nuances, are instrumental in shaping public discourse and influencing policy. Now is the time to leverage our collective expertise, influence, and passion to advocate for regulation that nurtures innovation and growth. Our industry is currently seen as a softer target, but others will be next, and showing that we can and will fight, while also scoring a victory against regulatory malfeasance, benefits not only Bitcoin, but all Americans. By engaging with policymakers and contributing to public commentary, we can forge a future for our industry that is both prosperous and fair.

The author would like to thank Storm Rund and several anonymous contributors all of whom provided significant assistance in editing and finalizing this article.

This is a guest post by Colin Crossman. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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