e360 v. Comcast: part 3

A couple weeks ago I posted about e360 suing Comcast. The short version is that e360 filed suit against Comcast to force Comcast to accept e360’s email. Comcast responded with a motion for judgment on the proceedings. This motion asked the judge to rule on e360’s case without going through the process of discovery or depositions or all the normal wrangling associated with a legal case. Comcast appears to be saying to the judge even if everything e360 alleges is true, we have done nothing wrong.
The judge asked for each party to prepare full briefs on the motion. e360’s response is due tomorrow and the Comcast reply to that is due on March 27.
Comcast does not appear to be content with just having the case dismissed. Today they filed a counterclaim and third-party complaint. The counterclaim is against e360, the third-party complaint incorporates David Linhardt, Maverick Direct Marketing, Bargain Depot Enterprises, Northshore Hosting, Ravina Hosting, Northgate Internet Services and John Does 1-50. Docs are up over on SpamSuite.
Comcast states the nature of the action in 4 short paragraphs.

1. Defendants operate a business designed to facilitate the e-mail marketing of products and services through, among other things, the sending of unwanted, unauthorized, unlawful and/or otherwise objectionable commercial e-mail messages (generally referred to as “spam”).
2. Internet service providers (“ISPs”), such as Comcast, with the assistance of others, filter e-mail messages to prevent spam from reaching consumers. It is essential to the operation of its ISP services that Comcast utilize the tools at its disposal, tools sanctioned by federal and state law, to protect its subscribers from receiving spam. About 90% of all e-mail sent to Comcast’s subscribers is spam. Comcast filters about 500,000,000 spam e-mails per day.
3. Spammers, on the other hand, try to mask their identities, the origins of their emails, and the nature of their services in order to deliver spam to consumers and to remain profitable. Defendants here utilize a variety of illegal and fraudulent activities to pursue their objectives, and have undertaken various efforts to obscure the nature, scope, and participants in their activities. Indeed, the filing of this action and pursuit of a preliminary injunction and expedited discovery are part of Defendants’ attempts to pressure and harass those who protect consumers from Defendants’ objectionable e-mails.
4. Comcast brings this counterclaim and third-party complaint to prevent Defendants’ ongoing assault on Comcast’s business and to hold Defendant liable for its unlawful acts.

The complaint alleges a lot of bad behaviour on the part of e360 and the third party defendants, and having followed various bits of the e360 saga for the past few months, it appears the Comcast lawyers did their homework on this one. They mention the counterfeit goods marketed by Bargain Depot (1:06-cv-01169-MMM-JAG Maui Jim, Inc. v. Bargain Depot Enterprises, LLC – which Bargain Depot lost), the falsification of opt-in records, advertising “free” services that are not really free and more.
In paragraph 34, Comcast states that Dave Linhardt called Comcast and “fraudulently represented” that all the intended recipients had signed up to receive the mail. It will be interesting to watch this particular argument play out in court. I have no doubt that Comcast has e360 email sent to non-existent users, spamtraps, role accounts and/or employees that will swear under oath that they did not sign up for the mail. e360 will provide data that shows someone opted in that email address on some website at some time. At that point, the judge will have to decide who is telling the truth and who is providing correct data. This is complicated by the chance that anyone could have really entered the email address into a website. What responsibility do mailers have to verify that they are sending mail to people who asked for it and what steps do mailers need to take in order to protect themselves from bad data entered into websites?
In the next paragraph Comcast states that after the initial suit was filed, Comcast reached out to e360 in order to work through e360’s process and why the e360 mail is being filtered. “e360 refused the offer, asserting that it would learn how to circumvent Comcast’’s Filtering System through discovery.” To my non-legal eye this seems to me to be a sign of bad faith on e360’s part.
Comcast goes on to point out e360’s abuse of the legal process, from the suit against Spamhaus, through the multiple suits against individuals. They also mention the “IP Protection Service” sold by e360.

The IP Protection Service entails modifying the third-party marketers’ IP addresses to appear as if they are e360’s IP addresses, or providing the third-party internet marketers access to e360’s servers for use in sending mass e-mail marketing messages through e360’s servers that have been de-listed with Spamhaus pursuant to the Court Order. e360 describes how it plans to use the Court Order to mislead Spamhaus:

“As you know, the American Registry of Internet Numbers (ARIN) assigns all IP address in the U.S. ARIN maintains a registry of all IP addresses on www.arin.net which acts as a kind of phone book for the Internet. When Spamhaus investigates the originating IP address for an email message, they rely heavily on the information provided by ARIN. E360’s IP Identity Management Solution effectively modifies the ARIN listing for your existing ip addresses and points them to one of our legally protected entities. The result is immediate protection against Spamhaus listings as provided by the federal injunction. This solution protects against future listings, and also forces Spamhaus to remove any existing
SBL listings.” [Emphasis Supplied]

Attached as Exhibit B are marketing materials issued by e360 advertising the IP Protection Service.
43. Once the third-party e-mail marketer enrolls in the IP Protection Services, Defendants use the Court Order to request that Spamhaus de-list the third-party marketers’ IP addresses from the ROKSO and/or SBL lists on the basis that the third party is now an “affiliate” of e360 within the meaning of the Court Order.

There are 7 Counts in the filing.
Count 1: Violation of the Controlling the Assault of Non-Solicited Pornography and Marketing Act (“CAN-SPAM”) of 2003 – 15 U.S.C. § 7704(a)(1). Comcast alleges that mail sent to Comcast subscribers contained false or misleading information about the origin of the email. Comcast asks for statutory damages of $100 for each violation (numbered in the hundreds of thousands or millions) and aggravated damages.
Count 2: Violation of CAN-SPAM – 15 U.S.C. § 7704(a)(2). Comcast alleges that mail sent to Comcast subscribers contained false or misleading subject lines. Comcast asks for statutory damages of $25 for each violation and aggravated damages.
Count 3: Violation of Illinois Electronic Mail Act — 815 ILCS 511/10. Comcast alleges that mail sent to Comcast subscribers contained false or misleading subject lines. Comcast asks for statutory damages of $10 per email message or $25,000 a day.
Count 4: Violation of the Computer Fraud and Abuse Act – 18 U.S.C. § 1030(a)(5). Comcast alleges that the volume of mail sent by e360 significantly degraded the Comcast quality of service. Comcast states damages aggregate at least $5000 in 2007.
Count 5: Trespass to Chattels. Comcast alleges that e360 has intentionally accessed and used Comcast’s servers and networks for their own benefits. Additionally, when Comcast took action (blocking emails) to protect their network, e360 continued to send large volumes of email, thus depriving Comcast and its subscribers of legitimate use of the network and servers.
Count 6: Unjust enrichment. Comcast alleges that e360 has profited by spamming through Comcast’s network at Comcast’s expense and have been unjustly enriched. Comcast asks for disgorgement of all profits from the sending of unsolicited emails to Comcast subscribers.
Count 7: Abuse of process. Comcast states e360 knew that Comcast was protected under the Communications Decency Act when e360 filed the original lawsuit. And e360 knew that Comcast is not a state actor and not liable under the First Amendment. Comcast states the purpose of the lawsuit is to discover how to circumvent ISP filters and undermine the ability of 3rd parties, like Spamhaus, to provide reliable data to ISPs. Comcast also points to the misuse of the Court Order in the Spamhaus matter and repeated suits against people who identified e360 as a spammer as supporting evidence for e360’s abuse of process.
Comcast requests the following:

1. A preliminary and permanent injunction enjoining Defendants, their officers, agents, servants, employees, attorneys, and any persons or entities in active concert or participation with any of them, from:
   1. directly or indirectly sending unsolicited or unauthorized commercial emails, including but not limited to any such e-mails that reference or use in any way Comcast’s property, computers, domains, servers, networks, or users;
   2. directly or indirectly circumventing Comcast’s Filtering System for the purposes of sending commercial e-mails to Comcast’s subscribers;
   3. directly or indirectly sending any commercial e-mail messages, whether or not lawful, unless and until each Defendant has certified to the Court andComcast, and confirmed the certification at periodic intervals, that it andall their affiliates and business partners comply with the best practices setforth by the Messaging Anti-Abuse Working Group (“MAAWG”) SenderBest Communications Practices, attached hereto as Exhibit D, or suchother practices as this Court may deem appropriate to order; and
   4. directly or indirectly profiting from any of the acts prohibited by paragraphs 1(a), (b) and (c).
2. Within ten (10) days of entry of any injunctive order, Defendants be required to file and serve an affidavit detailing the form and manner in which each has complied with the terms of the injunction;
3. An award of statutory, compensatory, and aggravated damages to Comcast;
4. Disgorgement of the Defendants’ profits and imposition of a constructive trust on all moneys received and all profits generated by Defendants’ illegal activities;
5. An award of Comcast’s attorneys’ fees and costs; and
6. An award of such other and further relief as may be just or equitable.

Generally, I think that the Comcast legal team is determined to win this and are not messing around with the facts. The rumors about e360’s precarious financial situation make me wonder if Dave is going to be able to afford this legal wrangling or if he has found some angel investors with a lot of money to throw into the US court system.