An Arkansas judge has put a temporary block on a law that would ban data centers with links to China in the state.

District Judge Kristine G. Baker issued a temporary restraining order as part of a lawsuit filed by Jones Eagle LLC against Arkansas agriculture secretary Wes Ward and the state attorney general Tim Griffin.

The laws in question, Act 636 of 2023 and Act 174 of 2024 cover China and several other countries considered adversaries of the US. Act 636 prohibits ownership of property by individuals or companies considered to have ties to these countries, while 174 is an amendment that specifically cites ownership of data centers and other crypto-mining-related infrastructure as being prohibited. The laws give the state attorney general the power to order landowners to sell their property.

Jones Eagle LLC, through another LLC, Jones Digital, wants to build a crypto data center on farmland in DeWitt, Arkansas. According to the court filing, it is owned by Qimin “Jimmy” Chen, a naturalized US citizen who was born in China.

The planned Jones Eagle development was referred to Griffin’s office under the act in December 2023. In a letter to the attorney general, Ward’s department wrote that “a review of Jones Digital’s ownership indicates that the entity may have significant ties to China.”

It added that it believes “individuals or entities involved in the ownership of Jones Digital LLC may also have significant ownership interest in other digital asset or crypto-mining operations in other parts of the state under different names.”

In a letter accompanying the request for the restraining order, Chen said he has provided Griffin’s office with evidence his operation will be focused on two acres of leased land, and that he has tried to meet with the AG’s staff to provide proof of US citizenship, but that his requests were turned down.

The company is seeking an injunction because it claims that enforcing the laws violates the US Constitution, denying due process, illegally discriminating based on national origin, and depriving a landowner of compensation they are due for taking property.

Judge Baker has imposed a 14-day restraining order, preventing Arkansas officials from enforcing the act. After this, a court hearing will be held to consider the company’s request for an injunction. The restraining order could be extended at this time, Judge Baker said.

Arkansas governor Sarah Huckabee Sanders said the state would fight the restraining order.

“Arkansas has the only law in the country that’s successfully kicked a Communist Chinese company off our farmland - and a judge just blocked it,” Huckabee Sanders said. “Our foreign adversaries have no right to American land. We will appeal this ruling and protect our state.”

Though Arkansas is a not a major data center market, it is already home to one crypto-mining facility operated by Sollensys in Little Rock.