Spammer's $11 Million Win Against Anti-Spammer Spamhaus, Reduced To $27,000

from the that's-a-bit-different dept

Wed, Jun 16th 2010 3:12pm — Mike Masnick

Many years back, an "email marketing" company called e360 Insight got upset that the anti-spam advocacy group Spamhaus included e360 on its list of biggest spammers -- a list that many service providers used for spam filtering. So, it sued claiming defamation. What followed was a bit silly, as Spamhaus (based in the UK) initially responded, but then started ignoring the lawsuit, claiming that a US court meant nothing to the UK-based operation. Because of that, a court awarded a default judgment to e360, and simply took its word on how much "damage" being on the list had caused. The end result? An award of $11 million for simply putting e360 on a list of spammers.

Spamhaus initially ignored the whole thing, again claiming US courts had no jurisdiction over it. However, after e360 sought an injunction to get Spamhaus shut down for failure to pay, Spamhaus got involved. Thankfully, a judge refused to shut down Spamhaus, and while an appeal didn't buy many of Spamhaus' arguments, it did throw out the $11 million award, and send it back to the lower court to recalculate the damages.

So, now, four years after the initial $11 million ruling, the court has reduced the damages award to $27,002. Quite a difference, huh? I would have to guess that e360's legal bills cost a hell of a lot more than $27k. It turns out that there were a bunch of problems for e360, and once it had to actually prove how much damage being on the list had done, suddenly it wasn't so interested in giving a straight answer or, at times, answering at all. As Venkat Balasubramani notes:

Despite litigating the case vigorously up to this point, when it came to damages, e360 seemed to muster a lot less energy. According to the court, e360 was "slow to provide information requested by Spamhaus . . . [and] missed several [d]eadlines." I'll spare readers a detailed discussion on damages, but the court's take can be summed up as follows:
The unreliability of [e360's] approaches is unmistakably demonstrated by the profound differences in claimed damages profferred at various points during these proceedings. Finally, it strains credulity that a company that made only a fraction of the profits [e360] asks for over the course of its five-year lifespan would have garnered profits in the amounts [e360] set out in [its] testimony or documentary evidence. The profit and loss statement [e360 provided] sets out the company's overall profits at $332,000. . . . .

At the time of default judgment, the damages claimed were $11,715,000. During discovery, Exhibit 5 was proffered reflecting damages of $135,173,577. At trial, proffered Exhibit 5(a) showed damages of $122,271,346. During final argument, the claimed amount was $30,000,000.

Yeah, if you've made a total of $332,000 in profits over the course of five years, perhaps don't claim $11 million in damages just because some company (most likely accurately) put you on a list of spammers.

As for that big question of whether or not the company was involved in spamming. Well, others have certainly thought so. In the past, we've noted that the company had been sued for violating CAN SPAM, and in another lawsuit e360 filed (against Comcast for filtering its spam), the judge stated pretty clearly that e360 fit the description of a spammer. On top of that, in the blog post above, Venkat points out that, just in going through this lawsuit, e360 appears to have now put on public record an awful lot of evidence that its activities fall under the definition of what most people would consider spam:

Ironically, through litigating this dispute, e360 caused to be memorialized in a court order, facts about its email practices (and the email marketing industry in general) that I'm guessing it would prefer not be in the public eye. Two facts jumped out at me from the order. First, e360 sent out 6.6 billion (!) emails through the course of its five year existence. Second, there were some familiar faces among the list of its customers: SmartBargains and Optinbig.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: awards, defamation, spam
Companies: e360, spamhaus

20 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 16 Jun 2010 @ 3:27pm

the problem at $27,000 is the same as the jammie thomas decision: the judges ruling stands, only the amount is in question. what is not in question is that there is a judgment about spamhaus methods which indicate that they can create harm and have been found liable. the dollar amount of the settlement changes little, and in fact reinforces the earlier ruling as valid.
[ link to this | view in chronology ]
- Anonymous Coward, 16 Jun 2010 @ 3:33pm
  
  Re:
  Exactly, if the U.S. government really wants to suppress spammers why are they encouraging more spammers by allowing them to force others to remove them from their spam lists or else face retarded judgments.
  [ link to this | view in chronology ]
Anonymous Coward, 16 Jun 2010 @ 3:27pm

On top of that they should still refuse to pay the $27,000 because the U.S. court doesn't have jurisdiction and U.S. courts are retarded anyways and tend to favor the parties that keep judges and lawyers employed by filing more frivolous lawsuits. After all, if frivolous lawsuits were tossed out or shot down you would have fewer people filing for lawsuits which would mean you need fewer judges and this isn't good for judicial employment.
[ link to this | view in chronology ]
- Johnny Acosta, 17 Jun 2010 @ 2:55pm
  
  Re:
  Oh yeah, judicial employment is quite an issue these days.
  [ link to this | view in chronology ]
Anonymous Coward, 16 Jun 2010 @ 3:30pm

We have users at our company that actually like getting e360's e-mail. I personally find it spammy, but I've had to whitelist them because of it.
[ link to this | view in chronology ]
- senshikaze (profile), 16 Jun 2010 @ 6:12pm
  
  Re:
  .....
  you changed your Spam list based on a few users opinions? you can't do that! now they all will want IT to actually work for them. You ruined it for all of us!
  
  ;)
  [ link to this | view in chronology ]
- Anonymous Coward, 17 Jun 2010 @ 9:19am
  
  Re:
  Anonymous Coward wrote on June 16th:
  >We have users at our company that actually like getting
  >e360's e-mail. I personally find it spammy, but I've
  >had to whitelist them because of it.
  
  That's a neat trick. e360 (domain name e360insight.com ) -- the spammer
  mentioned in this suit -- hasn't sent any email in more than two years.
  
  Unless you mean some other business, that is. :)
  [ link to this | view in chronology ]
Skeptical Cynic (profile), 16 Jun 2010 @ 4:50pm

I hate spammers but...
i also hate Spamhaus. Go ahead and see how much time is wasted to get a company removed that happens to run afoul of them. Because when you are called a spammer by them you are automatically added to 15 other lists.
[ link to this | view in chronology ]
- Anonymous Coward, 16 Jun 2010 @ 5:29pm
  
  Re: I hate spammers but...
  Well I don't know. Just as a suggestion maybe don't send out bulk, unsolicited advertising email? That's a great way to not get put on a spam list, is all I'm saying.
  [ link to this | view in chronology ]
- Anonymous Coward, 16 Jun 2010 @ 6:21pm
  
  Re: I hate spammers but...
  The government wants to force the Internet to turn into the same spam filled nonsense that everything outside the Internet has turned into by regulating it in favor of advertisers and big corporations at the expense of the public at large.
  [ link to this | view in chronology ]
- Johnny Acosta, 17 Jun 2010 @ 2:57pm
  
  Re: I hate spammers but...
  Who cares what happens to annoying advertisers.
  [ link to this | view in chronology ]
abc gum, 16 Jun 2010 @ 5:50pm

I don't see how they are entitled to anything.
e360 should go pound sand.
[ link to this | view in chronology ]
JeroenW (profile), 16 Jun 2010 @ 10:46pm

fairly typical
American company sues for insane damages amount. Court case drags on for years, settlement ends lower with a judge finding someone guilty everyone normal person on the street would find innocent.

I don't see the news value here, sounds perfectly normal american behaviour.
[ link to this | view in chronology ]
- Any Mouse, 17 Jun 2010 @ 4:40am
  
  Re: fairly typical
  Hey, now! American COURT behaviour. Do not lump us normal citizens in with the courts. We've got at little control over our stupid idiotic courts as you have over your stupid idiotic courts.
  [ link to this | view in chronology ]
DotcomNote, 17 Jun 2010 @ 6:03am

Why everyone is against Advertising
If the company violated CAM SPAM act, it should be an easy case. So, there was other issues.

Lots of people hate advertisement in the Internet. How many of those haters will pay a monthly fee to access Google or for that other sites that they visit regularly?

People want free stuff on the internet without realizing the cost involved in running a site that offers good content.

Also, from my experience I can tell you that many geeks take it to themselves to police the Internet. They assume that it is their solemn duty to protect people from the hazard of the unwanted emails.

They will arbitrarily decide who is a spammer (in spite of clear definitions in CAN SPAM act) create software to block them. Harass ISPs and block ISPs IPs they don't comply to their demands.
[ link to this | view in chronology ]
- BBT, 17 Jun 2010 @ 7:19am
  
  Re: Why everyone is against Advertising
  The CAN-SPAM act defines what is criminal spam.
  
  The Spamhaus filters merely describe what they feel their customers don't want. If their customers disagree with their assessment, they can choose not to use Spamhaus's filters. But mostly their customers agree, and don't want to receive anything from people on Spamhaus's lists.
  
  What you are doing is akin to complaining when a secretary doesn't route your call through to someone else, because your call is clearly not illegal harassment. It's true that it's not illegal, but that doesn't mean that the recipient can't choose to refuse to take your call.
  [ link to this | view in chronology ]
Dave, 17 Jun 2010 @ 2:12pm

No understand
I really don't comprehend what's been going on here. If Spamhaus are not located in the States, why has public money and the court's time been wasted? There's no way the judgement can be enforced. I also understand that the owner of the alleged spamming company may have made false statements, saying that Spamhaus DID have a United States presence, which is clearly untrue, so why was HE not prosecuted?
[ link to this | view in chronology ]
Ioanni Aureus Romeo, 1 May 2011 @ 10:14am

USA = NO dignity, NO self-respect, Disgusting
Disgusting, ridiculous, retarded, ugly, repulsive, lacking-any-dignity, united states' courts! Spammers must pay, spammers must be taken to court, then to prison, what "damages"? Are "ameriKKKans" crazy? They are known to be repulsive, obnoxious, disgusting, loud folks with the wqorld's freakiest women, unhappy, repulsive nation. Yuck. [throw up]. Spammers - CRIMINALS! USA = Fascist Corporate Shithole full of disgusting, stupid retards!
[ link to this | view in chronology ]
Ioanni Aureus Romeo, 1 May 2011 @ 10:20am

USA = greedy corporate cultureless classless shithole
"9/11" was an INSIDE JOB! USA causes CHEMTRAILS all across the world! USA "(sw)army" shopot innocent people in Iraq (they call it "UHRAECK"!!!) and in Afghanistan! BEWARE of these issues! Disgusting "ameriKKKa" must be ignored and confronted and thrown out of all treaties. It's going DOWN fast anyway. Their women cause families fail, and ameriKKKan men are unhappiest in the world, because their women are ignorant slutty slovenly APARTHEID WHORES.
[ link to this | view in chronology ]
Ioanni Aureus Romeo, 1 May 2011 @ 10:22am

Look up GOOGLE and YOUTUBE for "LARRY SILVERSTEIN" who involved in 11th September events in U.S.A. AmeriKKKa and their RETARDED Bush etc. and now they are spraying all across earth their disgusting WHITE TRASH called CHEMTRAILS. Check and test your soil and rain water, you will see it has hundred times hiugher aluminium and barium levels than it is allowed! BEWARE! Ameriscum is killing us all!
[ link to this | view in chronology ]