Hawkins County Mayor Mark DeWitte was right when he warned commissioners they were welcoming a lawsuit when they put the kibosh on ExoticRidge’s cryptocurrency mining program planned for property of State Route 66 in Bulls Gap.

This week, the Beacon Center of Tennessee filed a lawsuit in federal court on behalf of ExoticRidge Crypto Company LLC against Hawkins County, claiming the commission’s ban on data centers and cryptocurrency mining operations as unconstitutional, arbitrary, and enacted in violation of Tennessee law.

ExoticRidge bought the land – within 1,000 feet of several homes and a church – with the intention of developing a data center, commonly known as a crypto mine.

However, community protests followed and in September, the Hawkins County Commission banned crypto mines and data centers despite having no zoning regulations that would prevention such classification.

At that time, DeWitte indicated that ban exceeded the commission’s authority, saying the commission cannot ban one type of industry.

DeWitte subsequently worked with ExoticRidge on an agreement that would ostensibly answer some of the community’s concerns but allow the project to move forward.

The proposed contract would have left ExoticRidge exempt from any future regulations made by the county.

It only addressed the first phase of development. It did not leave a mechanism for the county to impede expansion.

However, in other public statement company representatives have indicated that the opportunity for expansion is limited because it will not be hooked up to the power grid, instead powered by an onsite ethane flare-off fueled generator.

The only enforcement arm given to the county in the contract – that did not include taking the company to court – would be a $50 fine for noise being over 80 dBA for more than 30 minutes over the course of four hours.

The Environmental Protection Agency recommends a 55 dBA outdoor limit and a 45dBA indoor limit.

Exotic Ridge CEO and Founder William Daugherty told the commission at a February meeting that the issue really boiled down to property rights.

When the proposed agreement failed, it appeared likely the issue would go to court. Now that has happened.

The lawsuit argues that Hawkins County’s resolution unlawfully singles out data centers and cryptocurrency mining for prohibition without any legitimate connection to public health or safety, while allowing other industrial uses to proceed.

“Government cannot simply ban a lawful industry because it is unpopular,” said Ben Stormes, attorney at the Beacon Center of Tennessee. “When a county draws a line like this without evidence or legal authority, it crosses well outside the bounds of the law.”

ExoticRidge planned to operate a self-sufficient cryptocurrency mining data center on the site of an existing natural gas processing facility in Hawkins County. The site already produces excess ethane gas as part of its ongoing operations, which is currently burned off. ExoticRidge’s project would capture that surplus ethane and convert it into electricity to power its operations entirely on-site—eliminating waste without drawing from the local electrical grid.

Despite securing the necessary state permits, ExoticRidge was blocked after the Hawkins County Commission adopted the blanket ban on data centers and cryptocurrency mining.

The complaint identifies several core legal issues in the county’s action:

• Lack of authority: Hawkins County has no county-wide zoning and limited power to regulate land use and yet imposed a sweeping restriction anyway.

• Failure to follow the law: The county bypassed required notice, public input, and procedural safeguards before adopting the resolution.

• Improper zoning by another name: The resolution functions as zoning without complying with Tennessee zoning statutes.

• No evidence of harm: The ban targets a self-contained, on-site powered operation with no demonstrated impact on the public or surrounding properties.

• Contradiction of prior commitments: County leadership previously represented that it would not exercise broad land-use authority, which property owners relied upon.

“Hawkins County didn’t just get the policy wrong—it ignored the process and the limits of its own authority,” Stormes added. “You cannot impose zoning without zoning, and you cannot ban a business that poses no harm simply because of political pressure.”

The Beacon Center purports to be a nonpartisan, 501(c)(3) nonprofit research institution that advocates for free-market solutions, limited government, individual liberty, and property rights.