Bitcoin Mining Company Allowed to Add Property Manager as Individual Defendant in Utility Dispute Case

News | June 26, 2024 By:

On Thursday, June 13, 2024, the US District Court for the Eastern District of Michigan granted a motion allowing a bitcoin mining company to amend its lawsuit to include the property manager as an individual defendant.

Cheetah Miner USA Inc. filed the original lawsuit in April 2023 against 19200 Glendale LLC, which owns an industrial property in Michigan. Cheetah Miner leased space from 19200 Glendale to conduct cryptocurrency mining, which requires large amounts of electricity to power specialized computer hardware and software. In February 2023, Cheetah Miner claims 19200 Glendale cut off the electrical supply by moving the account from Cheetah Miner’s name to the property owner’s name without permission.

Without power, Cheetah Miner was unable to continue running its bitcoin mining operations. The company alleges 19200 Glendale violated Michigan’s anti-lockout law, which prohibits property owners from unlawfully interfering with a tenant’s possession, including terminating essential utilities like electricity. Cheetah Miner also accused 19200 Glendale of breach of lease.

During a deposition in December 2023, Joe Caradonna, the manager of 19200 Glendale, said he personally disconnected Cheetah Miner’s power supply because he believed the bitcoin mining company was stealing electricity. Caradonna claimed if Cheetah Miner was receiving power without proper permits or submetering, it was an illegal connection.

In response, Cheetah Miner filed a motion in June 2024 seeking to amend its original complaint to add Caradonna as an individual defendant to the anti-lockout law claim. The company argued Caradonna mistakenly thought he could cutoff the power and his actions directly resulted in interfering with Cheetah Miner’s possession of the leased property.

In her ruling, Judge Linda Parker of the US District Court for the Eastern District of Michigan granted Cheetah Miner’s motion, finding the amendment would not be “futile” or invalid. The judge noted Michigan law states corporate officers can be personally liable for tortious actions, even when committed on behalf of a company. Since unlawful interference under the anti-lockout statute is considered a tort, Caradonna could be individually accountable.

The lawsuit will now move forward with Caradonna included as a defendant. If successful, Cheetah Miner seeks damages of at least $200 per violation under the statute or recovery of possession of the leased property.

Please contact BlockTribune for access to a copy of this filing.