Judge refuses to block Arkansas news reporting on Google data center energy documents

An Arkansas federal judge on Wednesday denied a request by an energy company to temporarily block the Arkansas Democrat-Gazette from publishing additional details from confidential documents that the newspaper obtained about the company's involvement in building a facility that will supply power to a $4 billion Google data center in that state, a court filing showed.

The company, Entergy Arkansas, also had asked Judge Lee Rudofsky to order that the Democrat-Gazette remove from its website information in an article published on Monday about the documents.

"I think you have a strong case here," Rudofsky told a lawyer for Entergy at a hearing Tuesday in U.S. District Court in Little Rock, according to a report in the El Dorado News Times. "But the First Amendment gives me pause here."

The judge said, "It would take a lot to get me to do a prior restraint," the News Times reported.

The Freedom of the Press Foundation has noted that "The Supreme Court has made clear time and again that prior restraints" — barring a media outlet from publishing certain stories — "can be justified in only the most extreme circumstances."

Rudofsky, who was nominated to the bench by President Donald Trump, in his order Wednesday denied Entergy's request for a temporary restraining order against the Democrat-Gazette and other defendants. A court filing showed he plans to set a briefing schedule on Entergy's request for a preliminary injunction in the case at a later date.

The Arkansas Times media outlet, which was a defendant in the case, reported that during a hearing Wednesday, Rudofsky said the case involved an issue of "significant public concern."

"Public utility companies' special arrangements with a large data center may very well have repercussions across the state, presumably, or at least potentially, in both very positive and potentially, or presumably, negative ways," the judge said, according to the Times.

He also said that Entergy was a utility that could be considered a monopoly "and the details of its business arrangement, especially with large users of power, for example … Google, are matters that an ordinary Arkansas citizen may very well want to be aware of"

CNBC has requested comment from Entergy about the order.

Lee Wolverton, executive editor of the Democrat-Gazette, in a statement Wednesday, said, "This case is first, foremost and in its entirety about the First Amendment. Our duty as a news organization and the duty of all news organizations is to inform the public as fully as possible about issues of high public interest."

"Any attempt to impede that effort by using the courts to apply prior restraint to any news organization's First Amendment rights represents an attack on the very freedoms that define our country," Wolverton said. "That must not stand."

Entergy said in a court filing Tuesday that the documents, which contained "trade secrets" and "highly sensitive protected information," were "disclosed in error" by the Arkansas Public Service Commission to a woman, Jessica Kivell, who had requested them under the state's Freedom of Information Act.

Kivell then gave the documents to a reporter for the Democrat-Gazette, which published a story on Monday under the headline "Google to pay Entergy Arkansas $526 million for solar facility to feed West Memphis data center."

The reporter, Sydney Sasser, wrote that the $526 million payment will cover "about one-third of the $1.6 billion price tag of the facility known as Cypress Solar," a 600-megawatt solar field and 350-megawatt battery facility that will "feed the grid from which Google's West Memphis data center will draw massive power."

Sasser noted that the state's Public Service Commission in December approved a special rate contract between Google and Entergy, the details of which "have been mostly kept secret."

"In June, Entergy residential customers began paying an added $5.77 monthly increase to cover three new power generation projects, one of them being Cypress Solar," Sasser wrote.

Entergy Arkansas, in a civil complaint filed Tuesday in U.S. District Court in Little Rock, asked Rudofsky to issue a temporary restraining order barring the Democrat-Gazette, Sasser, Kivell, and a second newspaper, the Arkansas Times and its editor from further disclosing what it said were the trade secrets disclosed by the Public Service Commission. The Times has reported that neither it nor its editor Byron Tate has the documents in dispute.

Entergy also wanted Rudofsky to order that the Democrat-Gazette and the other defendants remove from their websites any disclosure of information from the documents "that has already occurred."

Tate, in an interview Wednesday with CNBC after Rudofsky ruled against Entergy, said, "I'm grateful that press freedom and the public's right to know won."

Rudofsky, a former assistant general counsel for Walmart, was nominated by Trump in August to the 8th Circuit U.S. Court of Appeals.

In a statement to CNBC before Rudofsky's ruling Wednesday, Entergy said, "Entergy Arkansas takes customer privacy seriously because it's both the right thing to do and is required by law."

"We protect all customer information — whether for a household, a local manufacturer, or a global company — and yesterday's media publication of incomplete confidential details from Google's electricity contract violated laws protecting confidential business information and make it harder to attract new businesses to our state given the uncertainty of properly treating confidential business information as such," the company said.

"Despite the improper release, the article made one fact clear: Google's addition to Arkansas's power grid is a major benefit to all customers," Entergy said. "Google is paying its full cost of service and is fully funding the grid upgrades required for its project through a combination of up-front payments and its monthly bills for service — reducing future bills for existing customers by more than $1.1 billion over the next two decades."

A spokesperson for Google, which is not a party to Entergy's civil action, in a statement, said, "Google is fully committed to covering 100% of the power and infrastructure costs for our West Memphis data center."

"While upfront payments total $526 million, our ongoing monthly rates over the 20-year agreement will completely fund our operational footprint," the spokesperson said. "Entergy's regulatory filings demonstrate that this project will actually lower overall system costs, providing more than $1.1 billion in net benefits to Arkansas residents."