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Spamhaus Fine Reduced From $11.7M To $27K
eldavojohn writes "In 2006, anti-spam crusader Spamhaus was sued for 'defamation, tortious interference with prospective economic advantage and interference with existing contracts' after blocking 'promotional e-mails' from e360. What with the case being in Illinois and Spamhaus being a British outfit, Spamhaus didn't bloody care. So, e360 was awarded $11.7 million in damages, which was later thrown out in an appeals court with a request for the lower court to come up with actual damage estimates instead of the ridiculous $11.7 million. (e360 had originally stated $135M, then $122M, and then $30M as sums of damages.) As a result, the actual damages were estimated to be just $27,002. While this is a massive reduction in the fine and a little bit more realistic, I think it is important to note that Spamhaus is a service that people proactively utilize. They don't force you to use their anti-spam identification system — it's totally opt-in. And now they're being fined what a foreign judge found to be 'one month of additional work on behalf of the customers' to a company they allegedly incorrectly identified as spam. Sad and scary precedent."
Spamhaus, like any other RBL, has a removal procedure that e360 could have used. Provided e360 could prove they weren't spammers Spamhaus likely would have removed them from the database without issue and without cost.
So why didn't e360 try that? I see no info that they tried that at all. (Likely because they couldn't prove they weren't spamming people.) Instead they just sued Spamhaus in an effort to dry them up and get them out of the way.
As the summary pointed out Spamhaus is a voluntary service. Nobody is being forced to use Spamhaus. So why on earth should Spamhaus be forced to pay any damages at all? It's just insane that upon going through the court system _twice_ someone didn't ask "Well e360 can you prove you aren't spamming people?".
Anecdotal note: Many many moons ago there used to be an RBL named the BLARS Block List.
What Blars (yes it was a handle for an actual person) would do is block whole netblocks and then anybody who would complain he'd charge $250/hour to get removed IF he chose to do so. And you would be charged the fee even if he chose not to unblock you. So looking at that right there shows you what I consider the openly worst of behavior for an RBL service. Spamhaus is definitely not that.
"Bah!" - Dogbert
Spamhaus is as likely to pay $27K as LimeWire is to pay $1.5 trillion.
No folly is more costly than the folly of intolerant idealism. - Winston Churchill
After reading about this law suit we need a new blacklist category for people to opt into. Dirtbag companies who sue too much. e360 can then top the list. Who wants to do business with a company that sues like this? Personally I would be happy to opt into a blacklist containing the likes of MPAA, RIAA, e360, patent trolls, and other companies who abuse the legal system. Regardless of the lawsuit I would want my email service to block e360 emails.
I think it is important to note that Spamhaus is a service that people proactively utilize. They don't force you to use their anti-spam identification system — it's totally opt-in. And now they're being fined what a foreign judge found to be 'one month of additional work on behalf of the customers' to a company they allegedly incorrectly identified as spam. Sad and scary precedent.
I have it on very good authority that eldavojohn kills babies and eats them for breakfast. He also drove his last 5 employers/clients to insanity resulting in their bankruptcy, and in 2 cases suicide. He is a horrible evil person, and you should never associate with him or employ him.
Remember, nobody's forced to listen to me so I should be allowed to say whatever the hell I want.
Actually the judge could have taken a side when e360 Insight got the case admitted by falsifying the record that Spamhaus was in fact an Illinois company. He/She could have easily thrown it out right there.
They were suing in the wrong flipping jurisdiction.
Spamhaus is a UK organisation. They do not have any business presence in Illinois, or the US in general, as far as I know. Suing them in Illinois is about as useful as suing them in North Korea.
If they really wanted damages then they would have sued them in the UK (a country which incidentally has notoriously strict defamation laws). The fact Spamhaus "didn't bloody care" was because it was a frivolous lawsuit 1000's of miles from home.
I'm guessing the reason they didn't is because the UK legal system isn't so easy to shop for an easy win.
No.
No the problem was they initially turned up and then walked out.
"Spamhaus didn't mount a defense in the case; the ruling was a default judgment in absence of counterarguments." That's a little grey, but it sounds to me like Spamhaus didn't initially show up. If you've got a citation that suggests otherwise, please post it.
Judgement made in default != default judgement. Default Judgement = the defense is a no show. Judgement made in default = defense showed but stayed silent (or in the case of Spamhaus, walked out (= refused to answer) when the judge ruled that the court had jurisdiction)
Spamhaus/their lawyers f**ked up
How do you figure? Spamhaus (wisely, IMHO) looked at the case, decided they could spend boatloads of money fighting a frivolous lawsuit which they would *probably* -- but NOT necessarily -- win, or since they are not in the U.S.' jurisdiction, they could save themselves the worry and the stress by ignoring the lawsuit. The court that awarded the win to the spammer has no jurisdiction in the U.K. so as long as Spamhaus' CEO doesn't come to the U.S., what difference does it make to him? It's not like he's going to be extradited for this. If somebody sues me in a foreign country that I never intend to visit, the odds of me spending any money or effort to fight the lawsuit are somewhere between zero and none. Spamhaus did likewise.
Problem is Spamhaus originally appointed lawyers to go to the court. This was the mistake, when the lawyers appeared for Spamhaus, Spamhaus effectively 'appeared in court' (even if to contest jurisdiction). They should have, as you indicated you would (and as I would) not even appeared. If they had not appeared, then the CEO visiting the USA or not would have no effect as the case was heard in the Illinois court, and not in the federal court.
...the result was they had to pay a spammer for the f**kup.
Ummm, no. The result was a judge ordered them to pay a spammer for their strategic decision. It may be subtle, but there is a difference between a judge ordering you to do something and actually having to do it. As long as you are not in the judge's jurisdiction, you don't have to do anything they order.
Second issue in point, and a second mistake to make if you don't consult a lawyer. There is this little treaty with the UK, USA, Canada, Australia and most of Europe, known as the 'cross border enforcement treaty'. If you hold a judgement from a US court in your favour (not a default judgement - note the difference I mentioned above) against a UK entity you can apply to the UK High Court to have your judgement enforced, the ONLY defense against it is that the court where the case was heard did not have jurisdiction. Problem is Spamhaus worked out when it was too late that 'judgement in default' is not a 'default judgement' and therefore cross border enforcement would be applied. This is why they first tried to appeal the judgement (and were refused because they 'appeared') then appealed the amount of damages.
The simple facts were, they screwed up (they even admit it themselves that they "had advice which was incorrect") a judgement which is enforceable was made against them, they appealed on the only option - the amount of damages, and they won their appeal by having the damages reduced to $27k.
Net effect, they lost the case, they will pay or risk copping significantly more costs when/if it is brought to the UK high court for enforcement. That said, rumor has it, the game is not over, but only time will tell.
Note: this has been discussed to the death on NANAE where someone reportedly from Spamhaus responded with "please don't give the spammer ideas".