7th circuit court ruling in e360 v. Spamhaus


Mickey has some commentary and the full ruling up on Spamsuite. In short the appeals court affirmed the default judgment, vacated the judgment on damages and remanded the case back to the lower court to determine appropriate damages.
There are a couple bits of the ruling that stand out to me and that I think are worthy of comment.
Spamhaus made a very bad tactical decision by initially answering and then withdrawing that answer. The appeals court ruled that action signaled that Spamhaus waived their right to argue jurisdiction and that they submitted to the jurisdiction of the court. Based on this, the appeals court upheld the default judgment against Spamhaus. Not necessarily the outcome any of us wanted, but that doesn’t set any precedent for future cases unless defendants answer and then withdraw the answer. Specifically on page 12 of the ruling the court says:

We perceive no error in the district court’s conclusion that Spamhaus intentionally elected to abandon its available defenses when it withdrew those defenses from consideration by the court and indicated that it was prepared to accept a default. Spamhaus’ then-counsel confirmed that it wished to “participate in the defense no further” and “do absolutely nothing.” See R.56-1 at 3, 5. It was not erroneous to treat this kind of voluntary abandonment of defenses, raised but not pursued, as a waiver.

Score one for e360. The judgment against Spamhaus stands. Disappointing for them I’m sure, and frustrating that it was bad legal advice and judgment that resulted in them submitting to a foreign court’s jurisdiction.
The appeals court determined that the lower court erred by accepting e360’s statements on damages and that more investigation should have been done by the lower court before the 11.7 million dollar award. Thus the appeals court charged the lower court to revisit the question of damages.
I would call this a win for Spamhaus, particularly given the decision says, “Generally, this court will not reverse a damages award in a default judgment unless it is clearly excessive.” Clearly the court thinks the damages were excessive. I expect there is going to be significant legal wrangling around the real damages. Discovery should be an interesting process, clarifying business processes of both e360 and Spamhaus.
Perhaps the most important ruling, for other DNSBLs, is found in this quote:

According to the complaint, however, Spamhaus lists entities on the ROKSO for violating ISP terms of use, not “United States law.” The complaint does not allege that Spamhaus defamed e360 by claiming that e360 operated in violation of law. The facts supporting the default judgment, therefore, show only that e360 improperly was listed as a “spammer” by Spamhaus, applying Spamhaus’ own criteria. There is no basis in the judgment for an injunction that modifies Spamhaus’ generally applicable criteria for determining what entities qualify as spammers.

This affirms that Spamhaus can list spammers and spam sources even if the mail complies with CAN SPAM. As long as listings follow the published guidelines of a DNSBL, then the DNSBL can list mailers who comply with CAN SPAM. Even better the court sees no basis for the lower court modifying Spamhaus’ listing criteria. Definitely a win for Spamhaus.
Overall I think the ruling is generally what we could have expected. I’m quite pleased that the court affirmed that Spamhaus may legally list senders that comply with CAN SPAM. I am also eager to see what happens during discovery for damages.

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  • That was no victory, in any sense of the word, for spamhaus. Nor should it be.
    e360 sued spamhaus not knowing exactly who spamhaus is, nor who, and what, they represent. Their assumption was that spamhaus was a legitimate entity operating in a normal manner to accomplish a defined mission. Of course, it is not.
    Spamhaus is a constuction of “volunteers” whose personal interests guide spamhaus policy. Those volunteers are unknown to the general community, so the interests they promote are also unknown.
    Spamhaus’s treatment of the general public is abusive, to say the least, and there are absolutely no standards for policies or enforcement. Each case is up to the “whim” of the volunteer, and since the volunteer operates secretly, from behind the internet equivalent of a “white sheet with eyeholes,” there are no restraints on their activities, nor the methods they use to accomplish those activities.
    In other words, there is no transparency.
    From the user standpoint, assumptions must be made that those “volunteers” have the worst of motives, and represent the worst type of people, least qualified to make decisions – for the US society is based on transparency and balance.
    e360’s next move is to expose, and single out, the US volunteers.” There, I think, will be found the real reason spamhaus operates – the personal interest of the volunteers.
    Then a whole new game will be on.
    Tim Bolen

  • If spamhaus can create their own list of what Spam is or isn’t, Then what is to stop us applying this rule in the real world. A joy rider can carry a mission statement declaring that in his terms car theft is ok (a over the top compression but does give the idea).
    There are a lot of companies that go out of their way to allow people to opt out and try to target to the best of their abilities the marketing campaign. In my opinion Spam in the true sense of the word is mail server hacking and sending out horrific mailings to children these protectors of the internet do not in anyway stop these people instead they target marketing companies that fly the flag and say please unsubscribe here, and try never to email these people again.
    If you want to fight SPAM then set guidelines between marketing companies and so called Spam filters (stop lists). To make sure everyone is fighting for the same thing.

  • The “right” to send email ends at the demarcation of the internet and the beginning of an individual private network. The operator of the private network is free to block any email that operator deems to be unacceptable for any reason; their servers, their rules. Some network operators use heuristics or a dedicated appliance to determine which emails are permissible or not. Others *choose* to use a list or lists developed by outside sources. An analogy would be, you do not have the right to harangue me in my living room. Spammers send their advertising POSTAGE DUE. Spam is theft. Spam wastes bandwidth. Commercial speech has been found to be NOT subject to the First Amendment.

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