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Spamhaus Fine Reduced From $11.7M To $27K 378

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."
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Spamhaus Fine Reduced From $11.7M To $27K

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  • by Moryath ( 553296 ) on Wednesday June 16, 2010 @11:38AM (#32591022)

    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."

  • by Anonymous Coward on Wednesday June 16, 2010 @11:39AM (#32591034)

    I hope they continue to ignore the judgement. In fact, I'm a bit disappointed the original judgement was even dignified with an appeal.

  • On the fence (Score:5, Insightful)

    by Monkeedude1212 ( 1560403 ) on Wednesday June 16, 2010 @11:41AM (#32591068) Journal

    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?

  • by Fringe ( 6096 ) on Wednesday June 16, 2010 @11:41AM (#32591074)
    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.
  • by Anonymous Coward on Wednesday June 16, 2010 @11:43AM (#32591084)

    Just another example that the American Civil court system has lost all touch with reality and is just a bunch of lawyers working the system to make a buck for themselves.

  • My Support (Score:3, Insightful)

    by DaMattster ( 977781 ) on Wednesday June 16, 2010 @11:43AM (#32591086)
    Spamhaus has my ultimate support. What a colossal waste of the taxpayers money by e360 trying to sue a foreign, non-profit company for allegedly interfering with commerce. All Spamhaus has to do is tell e360 to go piss up a rope, which they in effect, did. Did e360 stop them, hell no!
  • It isn't a fine. (Score:3, Insightful)

    by John Hasler ( 414242 ) on Wednesday June 16, 2010 @11:48AM (#32591134) Homepage

    It is a damage award, and probably less than the plaintiffs paid their lawyers. It also isn't a "scary precedent". It isn't a precedent at all: it's what normally happens when you fail to show up and present your case.

    > ...foreign judge...

    So you feel that a USA court should refuse to hear a case brought by a USA plaintiff just because the defendent is foreign?

    If Spamhaus had bothered to show up and present a defense they could have gotten the case dismissed with prejudice and had a good shot at being awarded fees and expenses.

  • Wow, impressive. (Score:3, Insightful)

    by seebs ( 15766 ) on Wednesday June 16, 2010 @11:55AM (#32591220) Homepage

    I want a job where I get $27k for a month. ... But not if I have to be an OBVIOUS SPAMMER to do it, like e360, because I have ethics, unlike e360.

  • by Anonymous Coward on Wednesday June 16, 2010 @11:58AM (#32591268)

    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'.

  • by ledow ( 319597 ) on Wednesday June 16, 2010 @11:59AM (#32591274) Homepage

    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.

  • Re:On the fence (Score:5, Insightful)

    by Bigjeff5 ( 1143585 ) on Wednesday June 16, 2010 @12:03PM (#32591300)

    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.

  • by kindbud ( 90044 ) on Wednesday June 16, 2010 @12:14PM (#32591394) Homepage

    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.

  • by $RANDOMLUSER ( 804576 ) on Wednesday June 16, 2010 @12:28PM (#32591516)
    That is a good argument, and you spin it pretty effectively. The one thing you fail to mention is that Spamhaus, for one, is an opt-in service, meaning that the individuals and businesses who decide to accept the false positives of Spamhaus' "slander via algorithm" have decided to do so on their own - no one is forcing them to take Spamhaus' word for it. Secondly, being a "spammer" isn't like pregnancy, it's not a binary option. Certainly there are people out there who think they're "informing the public", where others think the same people are worthy of being boiled in oil. If you look at the eternal flame war that is the newsgroup, you can see both sides of this argument - the outraged sleazy spammers (on whatever sliding scale you choose to believe) vs the oh-so-noble (again on a very sliding scale) list maintainers. As the Bard said: "A pox on both their houses".
  • by Firethorn ( 177587 ) on Wednesday June 16, 2010 @12:58PM (#32591850) Homepage Journal

    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.

  • Re:On the fence (Score:4, Insightful)

    by russotto ( 537200 ) on Wednesday June 16, 2010 @01:11PM (#32592014) Journal

    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?

  • by khasim ( 1285 ) <> on Wednesday June 16, 2010 @01:13PM (#32592036)

    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.

  • by gdr ( 107158 ) on Wednesday June 16, 2010 @01:26PM (#32592196)
    Newspapers are "opt-in" (you don't have to buy them) and they can still be sued for libel.
  • by jabbathewocket ( 1601791 ) on Wednesday June 16, 2010 @01:26PM (#32592210)
    How bout this.. You wanna sue me for selling you something over ebay and not providing the goods as promised.. You goto your local small claims court, you give them my information and address, They WILL issue me a summons to appear in court in the UK, if I do not show, you can take your judgement that you will doubtless win, and file it in my home jurisdiction and they WILL accept it, and they WILL attach a lien against my real property in your name, which will screw up my credit, and force payment to you before I can sell that property with clear title.

    The same happens in reverse .. which is why spamhaus still owes 27,000$ to e360, because rather than showup, and defend themselves, they chose to mock the court and not show up.. Tell me how do judges in the UK take it if you fail to appear? I am betting they are not very happy either.
  • by Sleepy ( 4551 ) on Wednesday June 16, 2010 @01:51PM (#32592526) Homepage

    Your analogy about newspagers is a fail - it is constructed wholly to support your argument, but it is ridiculous. If you would just READ the article you would know this was not a libel OR slander case.

    SpamHaus does not CAUSE anything. Spamhaus is a fact-based list which publishes addresses which send Unsolicited Bulk Email. You can not escape or spin your way past this fact (what planet are you from, anyways, where you would even TRY?)

    Next, SpamHaus has not control or access to my servers.

    If you are looking for someone responsible, it is the sysadmins (like me) who chose to use Spamhaus and then chose a policy. Most admins could use SpamHaus as a "block list" or a "tag list", and then there are the bright bulbs like yourself that maybe use SpamHaus as a white-list.

    It is the admin's call to set policy, and arguably it is my free speech right to choose whatever list I want.

    If you still claim to not understand, you either are an old Luddite who uses an assistant to read through all your email, find the non-spam items (and print them for you).. or you are being *deliberately* obtuse..

  • by Anonymous Coward on Wednesday June 16, 2010 @02:30PM (#32592982)

    > I don't know Spamhaus intimately, but for most RBL's there is no accountability or appeal.

    In that regard, the only thing you need to know about Spamhaus is that they are based in the UK, which has one of the strictest libel laws in the developed world, and which requires the losing party to pay the winner's legal costs.

    If e360's complaint was valid, they would have sued in the UK. They would have stood more chance of winning (than if the US case had gone to trial), they would have actually been able to collect the judgement (they aren't going to be collecting on this one), and they wouldn't now be out of pocket for their legal fees.

    The reason they didn't sue in the UK was that the case wasn't designed to be won, but to inconvenience Spamhaus by trying to force them to incur legal costs which they wouldn't be able to recover even when they won (i.e. vexatious litigation). Had the case gone to trial in the UK, they wouldn't have won (even given UK libel laws), and they would have had to pay Spamhaus' legal costs (which would defeat the entire purpose of the suit).

  • by Joe U ( 443617 ) on Wednesday June 16, 2010 @04:20PM (#32594422) Homepage Journal

    Incidentally, if you run a business that mails purchases to IL, that means you have customers there, ergo, you conduct business in the state. Not a complicated concept.

    No, I disagree completely. The law should follow the physical location of the server, not the client.

    Using the same test, if I visit a hotel in Colorado, and I live in NY, are they conducting business in NY? I was able to call them from NY, I was able to place my reservation in NY, my credit card bill came to NY. So, are they subject to all the laws of NY now?

  • by AK Marc ( 707885 ) on Wednesday June 16, 2010 @05:59PM (#32595936)
    Then the service wasn't delivered in Illinois. The person in Illinois "went" outside Illinois on the Internet to collect the service. That they can do so without physically leaving Illinois is the part that confuses old people. The Spamhaus list wasn't "delivered" to Illinois, but collected by the Illinois buyers from the Spamhaus servers, wherever those are located.
  • by Roger W Moore ( 538166 ) on Thursday June 17, 2010 @12:25AM (#32598724) Journal

    Even the officers of foreign corporations can be held in contempt of court.

    If contempt of a US court were enforceable outside the US then your entire legal system is going to collapse trying to prosecute the 5.7+ billion people outside the US most of whom probably hold the US court system in contempt if they care about it at all.

    If they Spanhaus does not want to be subject to the laws of the United States they should remove all US companies from their database.

    Spamhaus IS NOT subject to US law. It provides a European based service which US companies decide they want to use. Effectively those companies are coming to Europe and using a service provided by Europeans. You might want to think about this in reverse since it helps remove any nationalistic bias. Suppose you have a US company (based entirely in the US and nowhere else) offering search services to, oh lets say, Chinese nationals. Now by your logic that company would be subject to Chinese law unless it prevented all Chinese nationals from accessing it even though it has no physical presence in China.

    Do you really think that is a sensible way for all our different legal systems to work? If so then you can forget about companies existing online since they will now have to comply with all countries' laws, no matter how insane or restrictive, because it is impossible to prove that you are not a national of a given country (a passport proves nationality but there are a lot of people with dual citizenship and you cannot prove that you do not have a passport!).

COMPASS [for the CDC-6000 series] is the sort of assembler one expects from a corporation whose president codes in octal. -- J.N. Gray