Spamfoolery: Sucks to be You Edition

In an increasingly litigious world, it’s easy to tune out when you hear that one company is getting sued by yet another company for infringements – real or imagined. But in this edition of Spamfoolery, you’ll want to stay tuned to hear how much e360 Insight was awarded in the culmination of its long-running feud with the Spamhaus Project.

At very least, the endless litany of lawsuits in the tech world provide great fodder for blog writers. Even better, they also offer up a hearty chuckle once in a while, and the recent verdict in the long-running suit of e360 Insight LLC. v. the Spamhaus Project is no exception.

First, a little background to whet your appetite: in case you weren’t already familiar with it, the Spamhaus Project is a not-for-profit organization based in the U.K. and founded in 1998 by Steve Linford for the sole purpose of identifying and tracking spammers. All in all, pretty good stuff, since most spammers suck. I say ‘most’ because I still contend that the world needs some spammers – in much the same way I hate spiders, yet I acknowledge the need for spiders to keep other nasty vermin from spreading the way the Spanish Flu did in 1918.

Tune in for Another Episode of “As the Spam Turns…”

e360 Insights, LLC, on the other hand, is the alleged vermin in this soap opera. Way back in 2006, American Dave Linhardt, operating under the umbrella of e360, filed suit against Spamhaus for blacklisting his emailings and effectively labelling Mr. Linhardt a – you guessed it – spammer. Initially, the suit was tried in U.S. Federal District Court in Illinois, but the American law firm hired by Spamhaus petitioned the court to relocate the trial to the U.K., arguing that Spamhaus did not fall under U.S. jurisdiction. It gets more interesting from here on in, because the judge at the time ignored the request and British M.P. Derek Wyatt called for the American judge to be suspended from his post. Spamhaus also pulled out of the trial, prompting the judge to award e360 $11.7 million in damages.

Spamhaus refused to accept the judgement, stating that the court’s ruling had, “no validity in the U.K. and cannot be enforced under the British legal system.” Following the ruling, e360 filed suit to force ICANN to remove Spamhaus’ domain records until the matter was settled, inciting another interesting development. ICANN, a U.S. based entity with international responsibility for domain names, refused, stating they didn’t have the authority to cancel a British website’s domain records. In this matter, the same judge who awarded e360 the big chunk of cash sided with ICANN and Spamhaus, and poor little e360 found itself facing new problems.

It Gets Better…

In 2007, Chicago law firm Jenner & Block took Spamhaus’ case pro-bono and had the original damages overturned, thus sending the case back to district court. In early 2008, e360 filed for bankruptcy and terminated operations, citing its excessive legal costs in the matter of e360 v. Spamhaus.

Wait for it…

In 2010, another court reduced the damages from $11.7 million to $27,000, all this in the face of e360 filing for $135,173,577 (adjusted to $122,271,346 a week before trial) in damages!

Keeping in mind that: “the district court cited…Linhardt’s testimony regarding contracts with three customers who collectively paid e360 $27,000 per month for services performed,” it’s no surprise that the new judge in the case blasted e360’s counsel, stating: “this is just totally irresponsible litigation… You can’t just come into a court with a fly-by-night, nothing company and say ‘I’ve lost $130 million.’”

Wins Enough to Buy a Coffee!

Now for the really good part. On September 2, 2011, the soap opera finally came to an end, with the judge in the matter awarding e360 $3 in damages - no, that wasn’t a typo – from an asked $130 million to an award of $11.7 million, to $27,000, to (almost) enough to buy a coffee at Starbucks!

Who Said There’s no Justice for Spammers?

It sucks to be you, e360! It’s fun writing these articles, and I often find myself giggling like a schoolgirl when I write them. The case of e360 v. Spamhaus has been no exception, except that the ear-to-ear grin on my face has been accompanied by outright laughter as I sit alone by the pool, typing like a banshee. A strange sight, to be sure, and if any of the neighbors are watching, they must think me mad.

Maybe I am, but today I’m very happy.

Written by Malcolm James

0 Comments

  1. SEO_dude · September 12, 2011

    LOL. It really sucks to be e360. I think the company got what it deserved and I fully support Spamhaus all the way. In fact, we should all be thankful to Spamhaus for its contributions to the Internet.

    I’ve been following this “drama” for quite some time now. It was even featured on several mainstream news before. I’m glad it’s now all over.

  2. Jamie Campbell · September 12, 2011

    SEO_dude, my feelings exactly! Thanks for the show of solidarity.

  3. Connor Christian · September 13, 2011

    Gotta love tiny judgments, a total slap in the face to the plaintiff.

    Still, I wonder why the original judge refused to allow the case to be tried in the United Kingdom? That seems like a pretty strange thing to get hung up on.

  4. Jamie Campbell · September 13, 2011

    Connor, It was a very odd situation. The Federal judge in the case, Judge Charles Kocoras of the Northern District of Illinois, chose not to consider the jurisdiction issue brought forth by Spamhaus’ lawyers, which prompted Spamhaus to refuse to participate in the case at all. This prompted Kocoras to levy the $11.7 million judgement against Spamhaus.

    Why he refused is anybody’s guess, but it certainly brought to light the issues with modern litigation in an IT world.

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