Citizens Concerned About Wolf Hollow v. Marathon Digital Holdings, Inc. — Entry #37: ORDER ACCEPTING FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE: The Court determines that the Findings, Conclusions, and…

Case 4:24-cv-00983-O         Document 37        Filed 03/27/25      Page 1 of 5      PageID 907


                            UNITED STATES DISTRICT COURT
                            NORTHERN DISTRICT OF TEXAS
                                FORT WORTH DIVISION

 CITIZENS CONCERNED ABOUT                        §
 WOLF HOLLOW                                     §
                                                 §
      Plaintiff,                                 §
                                                 §
 v.                                              §   Civil Action No. 4:24-CV-00983-O
                                                 §
 MARATHON DIGITAL HOLDINGS,                      §
 INC.                                            §
                                                 §
      Defendant.                                 §

  ORDER ACCEPTING FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF
               THE UNITED STATES MAGISTRATE JUDGE

         The United States Magistrate Judge made findings, conclusions, and a recommendation in

this case. ECF No. 29. Defendant MARA Holdings, Inc. filed objections (ECF No. 31), and

Plaintiff Citizens Concerned about Wolf Hollow responded (ECF No. 35). The Court has

concluded a de novo review of those portions of the proposed findings and recommendation to

which an objection was made. The Court determines that the Findings, Conclusions, and

Recommendation (“FCR”) in this case (ECF No. 29) should be and is hereby ACCEPTED, and

Defendant’s objections OVERRULED.

         I.        LEGAL STANDARD

         Federal Rule of Civil Procedure 72 provides that “a party may serve and file specific

written objections to the proposed findings and recommendations” of a magistrate judge related to

a dispositive motion. FED. R. CIV. P. 72(b)(2). An objection must be “sufficiently specific to put

the district court on notice of the urged error.” Williams v. K & B Equip. Co., Inc., 724 F.2d 508,

511 (5th Cir. 1984). A “district judge must determine de novo any part of the magistrate

judge’s disposition that has been properly objected to.” FED. R. CIV. P. 72(b)(3).


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          II.    ANALYSIS

          Defendant contests the Magistrate Judge’s conclusion that Defendant has not established

the requisite amount in controversy by a preponderance of evidence to confer diversity jurisdiction.

Specifically, Defendant objects to (1) the finding that “[Plaintiff’s] Petition does not show on its

face that the claims at issue exceed $75,000”; (2) “the conclusion that the amount Plaintiff pleads

as loss of property value—which [Plaintiff] says justifies a permanent injunction—is not the

‘object of the litigation’ under Hunt v. Washington State Apple Advert. Comm’n, 432 U.S. 333,

347 (1977)”; and (3) “the finding that the pecuniary consequences to the Defendant cannot be

considered when determining the value of the object of litigation.”1

          “In actions seeking declaratory or injunctive relief, it is well established that the amount in

controversy is measured by the value of the object of the litigation.” Hunt v. Wash State Apple

Advert. Comm’n, 432 U.S. 333, 347 (1977). The “amount in controversy is ‘the value of the right

to be protected or the extent of the injury to be prevented.’” Hartford Ins. Grp. v. Lou-Con Inc.,

293 F.3d 908, 910 (5th Cir. 2002) (quoting Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir.

1983)). The Fifth Circuit follows the “plaintiff-viewpoint rule,” in which “[t]he value to the

plaintiff of the right to be enforced or protected determines the amount in controversy.” Alfonso v.

Hillsborough County Aviation Auth., 308 F.2d 724, 727 (5th Cir. 1962); see Garcia v. Koch Oil

Co. of Texas Inc., 351 F.3d 636, 640 n.4 (5th Cir. 2003); see Vraney v. County of Pinellas, 250

F.2d 617, 618 (5th Cir. 1958).

          Defendant’s first and second arguments are two sides of the same coin, so the Court

addresses them in concert. In sum, Defendant argues that the Magistrate Judge overlooked

evidence in Plaintiff’s Petition stating an amount-in-controversy.2 The Petition cites “a complete


1
    Def.’s Objections to Recommendation for Remand 2–3, ECF No. 31.
2
    Id. at 5–8.

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loss in market value of their homes” as one example of harm to the individual Plaintiffs and

includes an affidavit that cites one Plaintiff’s property value as $650,000.3 There is no precedent

for what the “object of the litigation” is in a private nuisance case. Accordingly, the Magistrate

Judge concluded, “[s]ince the Fifth Circuit has yet to decide this precise issue, the Court is not

persuaded that the value of the property is determinative of the amount in controversy for a

nuisance claim.”4 “In cases such as this one, the ‘object’ of the litigation does not turn on the value

or decrease in value of [Plaintiff’s] members’ properties.”5

        Though the Court would not cast its holding as covering nuisance cases generally, it agrees

with the Magistrate Judge’s conclusion that Defendant has not established by a preponderance of

the evidence that the amount in controversy requirement is met. Texas law protects a homeowner’s

right to use and enjoy his property without substantial interference from conditions such as noise

and vibrations. See generally Crosstex N. Texas Pipeline, L.P. v. Gardiner, 505 S.W.3d 580 (Tex.

2016). Here, Plaintiff alleges that “the low frequency noise and vibrations from [Defendant’s]

persistent and excessively loud operating equipment are the central focus of this suit.”6 Plaintiff

seeks only “a permanent injunction enjoining [Defendant] from creating, causing, or allowing any

unreasonable noise and vibrations from its operations at the MARA Cryptomine.”7

        The issue presented here is if and how the Court can assign a dollar amount to an injunction,

where Plaintiff requests no monetary damages. Should the Court look to the money damages that

would have been available under state law if Plaintiff had sought money damages? The damage

calculations vary based on the type of nuisance, so what information should a petition include such


3
  Notice of Removal (Pl.’s Pet.), ¶ 86, ECF No. 1-6; (Lakey Aff.), ¶ 18, ECF No. 1-6.
4
  FCR, 8, ECF No. 29.
5
  Id.
6
  Notice of Removal (Pl.’s Pet.), ¶ 12, ECF No. 1-6.
7
  Id. ¶ 82.

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that the Court could make that determination at this early juncture? Id. 610–12. Defendant argues

the value of the injunction is obvious because one Plaintiff cited the value of his property and

    improvements to his land in an affidavit accompanying the Petition.8 But Defendant fails to cite

state law in support, which would explain why that amount is material in a private nuisance case.

          A private nuisance case is different than those “involving deeds of trust and equitable title

. . . [w]hen a party seeks such specific relief, [and] the litigation can call into question ‘the validity

of a contract or a right to property . . . in its entirety.’” Durbois v. Deutsche Bank Nat’l Tr. Co. as

Tr. of Holders of AAMES Mortg. Inv. Tr. 20054 Mortg. Backed Notes, 37 F.4th 1053, 1058 (5th

Cir. 2022). In those cases, the contract or property are dispositive of the value of the injunction.

But given the lack of clarity here, and that Defendant does not provide the Court a legal basis to

determine whether the amount in controversy is satisfied, Defendant fails to carry its burden.

          Two well-established rules support the Court’s conclusion. First, the “basis upon which

jurisdiction depends must be alleged affirmatively and distinctly and cannot be established

argumentatively or by mere inference.” Ill. Cent. Gulf R. Co. v. Pargas, Inc., 706 F.2d 633, 636

(5th Cir. 1983). Second, “because removal raises significant federalism concerns, the removal

statute is strictly construed and any doubt as to the propriety of removal should be resolved in

favor of remand.” Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir. 2008). Thus, the Court overrules

Defendant’s first and second objections to the Magistrate Judge’s FCR.

          Finally, the Court overrules Defendant’s third objection that the pecuniary consequences

to Defendant should be considered when determining the value of the object of litigation.9

Defendant explains that to grant an injunction for nuisance under Texas law, a court would

balance the equities and necessarily consider the defendant’s consequences in complying with the


8
    Def.’s Objections to Recommendation for Remand 5, ECF No. 31.
9
    Id. at 9–11.

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injunction.10 But because the Fifth Circuit follows the “plaintiff-viewpoint rule,” in which the

defendant’s cost of compliance is irrelevant, it is not clear this is a proper consideration.

Accordingly, the Court declines to accept Defendant’s argument. See Garcia v. Koch Oil Co. of

Texas Inc., 351 F.3d 636, 640 n.4 (5th Cir. 2003); Alfonso v. Hillsborough County Aviation Auth.,

308 F.2d 724, 727 (5th Cir. 1962); Vraney v. County of Pinellas, 250 F.2d 617, 618 (5th Cir. 1958).

           III.   CONCLUSION

           Accordingly, it is ORDERED that Plaintiff’s Motion to Remand (ECF No. 12) is

GRANTED; this Court lacks subject matter jurisdiction; and the case is REMANDED to the

335th Judicial District Court of Hood County, Texas.

           SO ORDERED on this 27th day of March, 2025.


                                                     _____________________________________
                                                     Reed O’Connor
                                                     UNITED STATES DISTRICT JUDGE


10
     Id. at 10.

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