Spam lawsuits: new and old

There’s been a bit of court activity related to spam that others have written about and I feel need a mention. I’ve not yet read the papers fully, but hope to get a chance to fully digest them over the weekend.
First is e360 v. Spamhaus. This is the case that actually prompted me to start this blog and my first blog post analyzed the 7th circuit court ruling sending the case back the lower court to determine actual damages. The lower court ruled this week, lowering the judgment to $27,002 against Spamhaus. The judge ruled that there was actual tortuous interference on the part of Spamhaus. In my naive reading of the law, this strikes me as not only an incorrect ruling, but one that ignores previous court decisions affirming that blocklists are protected under Section 230. Venkat seems to agree with me.

Spamhaus had a viable Section 230 argument here, but this argument got lost in the procedural quagmire. Section 230(c)(2) protects filtering judgments and insulates “action taken to enable or make available to information content providers or others the technical means to restrict access to material [that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable].” (See Professor Goldman’s post discussing Pallorium v. Jared, a California state appeals court case where the court held that a publisher of list of IP addresses for open relays could not be held liable. See also Zango v. Kaspersky.)

I do hope that Spamhaus appeals this ruling.
Second is Microsoft Corporation v. Mizhen et al. This is going to be an interesting case, I think. Microsoft is suing Mizhen, among others, alleging that he gamed Microsoft’s filters by opening up millions of Hotmail accounts and hitting “this is not spam” for his own mail.

The complaint details how Mizhen and his affiliates allegedly manipulated the statistics that Microsoft’s anti-spam system relies on by creating millions of new email accounts and then moving up to 200,000 of their own messages a day from “junk” files into inboxes.

This is actually the second time Microsoft has sued Mizhen. The first case was settled and Mizhen had to pay Microsoft $2,000,000 and promise not to spam MS users any longer, but I suspect that Mizhen may not get off so easy this time.

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A blast from the past

I’m sitting here watching Iron Chef (the real one, not the American version) and surfing around on SFGate.com. It’s a slow night catching up on all the news I’ve missed this week while off traveling. I see a link on the front page: “Web marketer ordered to pay Facebook $711M.” As I click I wonder if I know the web marketer in question. A former client? A name I recognize?

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The dog ate my discovery responses

When we last visited our intrepid litigants, Spamhaus’ lawyers had filed a motion to dismiss citing yet another failure by e360 to meet a court ordered discovery deadline.
Let me set the stage.
e360 misses deadline after deadline during discovery. They skip depositions. They stall and provide incomplete answers weeks or months after they are due. Finally, in mid-July the Spamhaus’ lawyers file a motion for sanctions. The judge, while sounding a bit peeved (as I detailed in my Aug 29 post), gives e360 yet another chance to actually comply with discovery at a July 30 hearing.
And how, how does e360 respond to the taxed patience of the judge? They miss that deadline, too!
With the mid-August discovery deadline missed, Spamhaus’ lawyers file for dismissal. The plaintiffs race to repair the damage and find a scapegoat.
The scapegoat turns out to be Mr. Peters, one of the lawyers working the case. At the July 30 hearing he petitioned the judge to be released from the case as he was leaving Synergy (e360’s law firm). In their response to the motion to dismiss, the lead attorney blames Mr. Peters for the most recent e360 failure to comply with the judge’s ruling. According to the response Mr. Peters was, despite being removed from the case, responsible for complying with the July 30 ruling. Oh, and the mean old Spamhaus attorneys should have known that e360 was going to comply and did not contact Synergy before filing the motion to dismiss and it is just not FAIR, your honor!
With far more patience than I could muster, the judge agrees to a hearing about the motion to dismiss on September 4. At that time, he agrees to allow e360 to file a supplement to their response to the motion to dismiss and gives Spamhaus the opportunity to respond to that supplemental motion.
Wonder of wonders, e360 finally gets their act together and manages to meet a court ordered deadline when they filed their supplemental motion. Not only that, they included answers to the interrogatories sent by Spamhaus almost a year ago. Magically, the amount of damages e360 claims has gone up by an order of magnitude and 16 new people now know about e360’s financials. Too bad that the judge closed discovery on July 30.
e360’s answers included some interesting financial details, including the fact that e360 managed to sue itself out of business. That takes some serious talent. The other fascinating factoid is that a company with gross income of, roughly, 2.7 million dollars over 5 years is worth over 95 million dollars. While they do provide a formula for how they arrived at that figure, I am deeply suspicious of their claims.
Spamhaus’ response is on point and catalogs all the e360 discovery failures. This most recent failure to meet the court’s deadline is only one in a long line of failures. They emphasized the fact that they have petitioned the court four separate times to compel answers from e360. And, really, Judge, how many times do you want us to have to come back and waste everyone’s time pointing out that, yet again, e360 did not do what you told them they had to do?
The judge will be ruling by mail. No more hearings, the man is done with this. One thing that I have wondered about is why he seems to be prolonging the pain. But, the case has already been kicked back to him from the 7th Circuit Court of Appeals and I suspect he is loathe to do anything that might prompt a successful second appeal. Recent transcripts make it clear he is getting quite peeved that this is still on his docket. Really, all e360 had to do was provide the information they used to come up with the original 11M figure when the case was filed. Their reticence and inability to show any documentation on how they came up with that figure suggests that the figure may have been more wishful thinking than a real number.

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Tagged.com and the courts

I’ve seen multiple reports of Tagged.com and their interactions on various sides of the courtroom aisle.
On the good side, Tagged.com won a judgment against a spammer sending spam to Tagged.com users. (Tagged has a post on their blog about the win, but the direct link to that article doesn’t work).
On the minus side, yet another ruling against tagged.com. They’ve been accused of sending spam, including some mail that looks like a phish. They recently settled in a CA court, agreeing to dispose of certain addresses collected during a 3 month period in 2009.

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