e360 sues a vendor

As if suing themselves out of business by going after Comcast and Spamhaus weren’t enough, e360 is now suing Choicepoint for breach of contract and CAN SPAM violations. As usual, Mickey has all the documents (complaint and answer) up at SpamSuite.
This may actually be an interesting case. On the surface it is a contractual dispute. Choicepoint sold e360 40,000,000 data records containing contact information including email addresses, snail mail addresses and phone numbers. Some of the records were marked “I” meaning they could be used for email. Some of the records were marked “O” meaning they could not be used for email.
Despite these terms being reasonably well defined in the contract, e360 sent email to addresses in records marked “O.” Some of those addresses resulted in e360 being sued by recipients. During the course of the suit, e360 contacted Choicepoint and asked for indemnification. Choicepoint refused for a number of reasons, including the fact that Choicepoint told e360 the addresses were not for mailing. In response, e360 filed suit.
The interesting and relevant part of this case is the CAN SPAM violation that e360 alleges.

9. In her September 10, 2008, letter, Ms. Meredith Sidewater on behalf of ChoicePoint declined to indemnify e360 for the expenses and damages incurred by e360 in the three (3) disputes. See Letter attached hereto as Exhibit B. She claimed four (4) of the six (6) emails at issue in the disputes were “Optin Status of O,” which she contended means that the records were approved only for direct mail and not email.
10. If Ms. Sidewater’s assertion is true, this assertion constitutes an admission of violation of the CAN-SPAM Act of 2003, which provides that if a recipient requests not to receive commercial email, then it is unlawful for the sender to release, sell, or transfer such person’s email address to a third party. Thus, ChoicePoint admits that it breached ¶ 12(a)(ii) of the Agreement. But for this breach, e360 would not have sent any emails to the complainants and would not have been sued.

CAN SPAM does indeed state that once someone has opted out from email that the address cannot be sold, transferred, leased for any purpose. If e360 prevails in this case it will have far reaching implications for a lot of senders and data brokers. I’ll be watching this one closely.

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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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Fingerpointing all around

Mickey has copies of affidavits filed by David Linhardt and his lawyers all denying they were responsible for missing the court’s deadline.

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Two reasons not to buy a list

Ken Magill, celebrity, has two articles today that highlight the issue with buying lists from vendors. The first is yet another article about EmailAppenders selling bad data. In this case, it is not the buyers who are complaining. According to Ken EmailAppenders are sending out email advertising they can sell Internet Retailer’s list of 2008 conference attendees. Internet Retailer is disputing this and has sent EmailAppenders a cease and desist. EmailAppenders is currently dodging Ken’s attempts to get their side of the story.
The second is an article about Zoominfo, a new group in the list selling business. Zoominfo has long been harvesting information from other sites. Now, they are offering to sell their scraped and harvested list. Their only requirement is that the buyer sign an agreement to comply with CAN SPAM. And, yes, if someone is dumb enough to buy this harvested list, they should comply with CAN SPAM as sending mail to a harvested list triggers additional penalties if or when the FTC decides to go after the sender.
Not only are Zoominfo harvesting data, they are harvesting from ancient and obscure sources. They have no current information for me, but they managed to find an email address for a job I left in 1993. They have Steve listed as an employee of “postgreSQL INC” because they harvested the postgres mailing list archives. Mickey pointed out one of Zoominfo’s sources is http://free-personal-ads-wanted-sex-partner-near-hays-kansas.themasterwithin.ca/arch/4/. You do not even need to visit that site, just look at the URL!
Zoominfo’s VP and general manager claims they send emails to people regularly, offering them the chance to opt-out. First of all, I have never received one of these, have any of you? Secondly, some of the addresses are so old opt-outs are not relevant. Finally, unless they are monitoring their delivery, which I strongly doubt given their business model, anyone buying addresses from them is going to buy lots of dead addresses. And spamtraps. Lots of spamtraps.
I am sure that people who buy and sell lists regularly will tell me that these are outliers and that most companies who sell lists have higher data collection standards. My experience suggests that these are middle of the road list brokers. They are companies who are willing to sell anything with an @ sign in it and do not care about how sending to that data affects their customers.

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