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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."

24 of 378 comments (clear)

  1. What's more outrageous... by Moryath · · Score: 4, Insightful

    is that e360 managed to judge-shop to find a judge so fucking stupid that he didn't simply and correctly say "fuck you, piss off and take your nuisance lawsuit with you, SPAMMER."

    1. Re:What's more outrageous... by Fringe · · Score: 5, Insightful

      He didn't have any alternative; SpamHaus didn't show. The judge isn't allowed to take sides or consider evidence that wasn't presented. If this wasn't the case, you would never be able to successfully sue for redress; the other side could simply fail to show up.

    2. Re:What's more outrageous... by Skuld-Chan · · Score: 4, Interesting

      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.

    3. Re:What's more outrageous... by corbettw · · Score: 3, Informative

      From what I remember, that's not what happened. They testified that Spamhaus was conducting business in Illinois. Which they were, since they were providing their service to people and businesses in Illinois. The judge did the right thing by applying the law and not what Skuld-Chan thinks is "common sense".

      --
      God invented whiskey so the Irish would not rule the world.
    4. Re:What's more outrageous... by Firethorn · · Score: 3, Insightful

      Which they were, since they were providing their service to people and businesses in Illinois.

      Internet breaks things sometimes, but in this case they weren't even 'conducting business in Il' any more than a mail order company would by mailing purchases there.

      No employees in the state, no physical premesis in the state.

      I think that even the reduced judgement is going to have the problem of how can you go about collecting from Spamhaus? 360 has likely spent far more on this than spamhaus. In order to collect, they'll have to go to Spamhaus, THEN they'll start with the obstructing using their native country's legal system.

      Since most countries won't extradite or hold penalties for stuff that isn't illegal in their home country, they'll essentially have to get Spamhaus retried in Britain.

      --
      I don't read AC A human right
    5. Re:What's more outrageous... by Patch86 · · Score: 3, Interesting

      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.

    6. Re:What's more outrageous... by Anonymous Coward · · Score: 3, Informative

      They did not "originally show up". Get your facts straight.

      They did to have the case moved to federal court, when the judge declined their request they walked out. Get *YOUR* facts straight. As an RBL operator I have been following the case closely since it inception, I think I know what happened as I have read all the documents!

    7. Re:What's more outrageous... by Rabid+Anti+Spammer · · Score: 3, Interesting

      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".

  2. Spamhaus was right to ignore it... by Cheerio+Boy · · Score: 5, Interesting

    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
    1. Re:Spamhaus was right to ignore it... by Cheerio+Boy · · Score: 4, Informative

      You can argue about them not showing up in court all you want but they did not show up in court because they knew the Illinois court had NO jurisdiction on their actions. Read their take on it here:

      http://www.spamhaus.org/organization/statement.lasso?ref=3

      Then read a breakdown from 2006 by Groklaw here:

      http://www.groklaw.net/articlebasic.php?story=2006102700261694

      Spamhaus is a FOREIGN company doing business on FOREIGN land. They have no need to show up for a court appearance in what amounts to a provincial court in another country.

      If e360 had been based in Upper Monrovia or some similarly remote place other than the US this would have never have flown. And even if it had flown due to judge-shopping they would still be right to ignore it due to jurisdiction. The only reason this has gotten this far is that the US court system is broken and arrogant enough to think it applies to the entire world.

      Got a problem with a foreign company doing business on their own soil? Take it up with your government. _Your_ courts have no jurisdiction to prosecute.

      --

      "Bah!" - Dogbert
  3. On the fence by Monkeedude1212 · · Score: 4, Insightful

    Well, I mean, the reason e360 got awarded anything is because Spamhaus "Didn't Bloody Care".

    So I mean, yeah, its scary that they lost a case where essentially they incorrectly identified spam (an easy mistake), for an opt in service no less. But its not that scary when you hear that they didn't do anything to defend themselves.

    If you are on a golf course, looking back at the tee-box, and someone yells, "FOOUR" at you - what do you do?

    1. Re:On the fence by eldavojohn · · Score: 5, Informative

      So I mean, yeah, its scary that they lost a case where essentially they incorrectly identified spam (an easy mistake) ...

      Who decided that they were incorrectly identified as spam? From the article:

      e360 claimed that about 3 billion of the more than 6.6 billion emails it sent on behalf of clients

      Please do tell me what kind of business (one that I've never heard of, mind you) sends out e-mails totaling the world's population and in what manner is that legitimate?

      Curiously, nowhere does e360 have to defend this action. So, yeah, you can be on the fence if you think that any spammer should be able to sue Spamhaus (a free service) in any country on the globe and expect Spamhaus to front money for representation and whatnot in all those countries. Sounds like a pretty good strategy for spammers to take out Spamhaus since it's probably a growing thorn in their side.

      As the submitter, that's where I stand on this issue.

      --
      My work here is dung.
    2. Re:On the fence by Bigjeff5 · · Score: 4, Insightful

      Curiously, nowhere does e360 have to defend this action.

      It's not curious, Spamhaus didn't show up for court. The only evidence the court had to go by was e360's. It doesn't matter if a second grader could refute the evidence, there was nobody there to refute it.

      e360 basically won by default.

      --
      Security is mostly a superstition... Avoiding danger is no safer in the long run than outright exposure. - Helen Keller
    3. Re:On the fence by russotto · · Score: 3, Insightful

      All Spamhaus would have needed to do is pay for one hour of a lawyer's time to write a motion to dismiss, and let it stand with that as their sole defense. A decent judge would have then thrown it out. I'm sure the EFF or similar would have gladly supplied a free lawyer.

      Suppose I got ticked off over something you wrote on Slashdot, and sued you in a foreign jurisdiction. Would you pay for an hour of a foreign lawyer's time to show up and deny jurisdiction?

  4. Goodluckwiththat by $RANDOMLUSER · · Score: 5, Interesting

    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
  5. All emails from e360 should be blacklisted by EmperorOfCanada · · Score: 5, Interesting

    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.

  6. eldavojohn kills babies by Timothy+Brownawell · · Score: 4, Interesting

    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.

  7. Some justification to fining Spamhaus by Anonymous Coward · · Score: 5, Insightful

    While nobody likes spammers (except *maybe* their mothers) and Spamhaus is a great project and useful tool for fighting spam, there is still a problem here: As someone who is a mail admin for several companies, it's pretty outrageous when an RBL list marks you as a spammer (and we're not, of course). It can cost serious money when business emails aren't delivered, it can take serious time to resolve the problem, and it also causes embarrassment for the business.

    I don't know Spamhaus intimately, but for most RBL's there is no accountability or appeal. They get to publicly call you a bad name (intentionally damaging your reputation and encouraging others to act on it), and expect you to just take it. They act completely irresponsibly, and assert that, effectively, accountability doesn't scale -- they couldn't possibly review all the businesses they slander via their algorithm. That doesn't cut it.

    Imagine someone created an algorithm that claimed to detect people who are frauds via their online presence, and publicly posted its output. Imagine you were on that list and people stopped doing business with you. Is it permissible for the list's owners to say, 'well, false positives are too expensive to detect, so if you're a false positive on that list, too bad'?

    While RBLs are very helpful services, they must be accountable, just like everyone else in the world. Nobody else gets to say, 'it's just too expensive to be responsible for my actions'.

  8. Re:It isn't a fine. by ledow · · Score: 4, Insightful

    Excuse me... I'm British and I want to sue you in a British court for something that isn't illegal in the US. The fact that you've never set foot in Britain doesn't matter. Get your arse over here within the next three weeks or I'll award me some of your money (which I can't force you to hand over either, and which has never been held in Britain) in your absence.

    Does that make more sense to you with the positions reversed?

    If you want to sue someone, you have to prove that they are conducting business in an area, that within that area they are breaking the law, and that they know that and can attend your court case. Otherwise, you're just making an *international* arse of yourself. It's a British company, operating in solely British territory, doing something that is perfectly legal in Britain. Why you think they should even ever have responded to the case is beyond me. It's called "jurisdiction" and never has the word applied more.

    Otherwise every crankpot will sue every foreign company on trumped-up charges, the companies might never attend the court in question because they would have to travel and/or hire representation, that the offence they are charged with might not even be illegal in their jurisdiction and yet, in their absence, you think that the case should default in your favour.

    I hereby sue Microsoft (US) for failing to offer Windows XP N (The EU edition) in their jurisdiction, or the US Customs for breaching the EU data protection laws that they never agree to abide by. If they don't appear in court, I win by default? Pfft.

  9. Doesn't matter if users opt-in by kindbud · · Score: 4, Insightful

    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.

    People proactively buy the newspaper too. Doesn't mean the newspaper publisher can't be held liable for libel and slander. Spamhaus publishes a news report in DNS about which IP addresses are trustworthy. If they get it wrong and that harms someone, there is ample cause for a tort.

    That people opt-in to Spamhaus is not relevant.

    --
    Edith Keeler Must Die
  10. you'd have a point, except that you don't by Anonymous Coward · · Score: 3, Informative

    You'd have a point, except that in this case you don't.

    Spamhaus did initially show up, which was an acknowledgement that the US court has jurisdiction. Had Spamhaus either entirely ignored the suit or stayed to convince the judge that they were a wholly foreign corporation with no US presence, that'd be fine. But they half-assed it, and so the judge had to provide a ruling; absent any representation for Spamhaus, a default damage award was entered.

  11. Where the action is aimed. by www.sorehands.com · · Score: 3, Informative

    Part of the theory is that you direct harm to a jurisdiction, you are subject to that jurisdiction. See Calder v. Jones, 465 U.S. 783 (1984). http://en.wikipedia.org/wiki/Calder_v._Jones

    Now if you are in Spam, hijack a system in Korea to send spam to China, where should you be liable?

  12. and regarding your analogy ... by khasim · · Score: 5, Insightful

    And finally, what does the fact that other RBL's have behaved worse have to do with anything? "Yeah, Bob punched someone in the face, but Bill over here beat people with lead pipes! Why should we worry about Bob?"

    No. That's wrong. Because SpamHaus does not block anything.

    The more correct analogy would be if you ask SpamHaus what their opinion is of Bob and they say "I don't like Bob".

    Then when you don't do business with Bob, Bob gets mad and sues SpamHaus for damages.

    And you ask someone else and they say that they don't like Bob OR his family.

    Yes, that is what this is about. People asking other people what their opinion is of the people trying to send them email.

  13. distasteful and counterproductive corpspeak by Onymous+Coward · · Score: 3, Informative

    I think it is important to note that Spamhaus is a service that people proactively utilize.

    If we're inventing new terms, let's have them be sensible? "Proactive" and "utilize" (in this sense) are both pretty bad.

    Proactive is just about redundant and doesn't exactly convey the sense that's intended. A person being proactive isn't "in favor of being active", they are "taking initiative". It's nice to have a simple term to express this, but let's invent something other than "proactive".

    When one "utilizes" something they cause that thing to become ("-ize") useful ("util-"). They're not merely using it. They are converting or applying something so that it can be productive or effective where in its former state (unconverted or not thus applied) it was not. Spamhaus lists? Already useful.

    It is important to note that Spamhaus is a service that many people take the initiative to use.

    I know these terms have been around and aren't being invented here at this moment. I'm saying they're neologisms (or maybe in utilize's case a "neosemantism") that are best not promoted. The more you conflate meaning or get vague with meaning in language, the stupider you make us all. If you're going to change language, do it in an intelligent way. Please don't push us towards an idiocracy.