E360

Appeals court rules in e360 v. Spamhaus

On August 30, 2007 I wrote my very first blog post: 7th Circuit court ruling in e360 v. Spamhaus. Today, 4 years later (almost to the day) that case may finally be over.

e360 and the appeals court

Oral arguments in Spamhaus’ appeal were held last week. Mickey blogged about it on Thursday. I heard from him and a bunch of the Spamhaus folks about it at MAAWG, but was busy enough that I didn’t get a chance to listen to it. Mickey is not exaggerating on how badly the judges, particularly Judge Posner, beat up on e360’s lawyer. More quotes are available at Appeals judges berate spammer for “ridiculous,” “incompetent” litigation.

Spamhaus motion to reconsider

A few weeks ago, Spamhaus filed a motion to have the judge reconsider his recent $27,002 award to e360. Their brief hangs on three arguments.

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.

Mickey's take on e360 settlement

Mickey has the full docs of the settlement, and talks about the implications of the confession of judgment.

Comcast and e360 settle lawsuit

e360 initially filed suit against Comcast early in 2008. They asserted a number of things, including that Comcast was fraudulently returning “user unknown” notices and that they were certified by ReturnPath. Comcast filed a countersuit alleging violations of CAN SPAM, violations of the computer fraud and abuse act, as well as a number of other things including abuse of process. In April of 2008 the judge ruled in favor of Comcast and dismissed e360’s case, while allowing the countersuit to proceed.
Over the last 18 months, the suit has moved through the courts. There have been significant delays in the case, and e360 seems to have been dragging their feet based on some of the motions filed by Comcast asking the judge to compel e360 to follow through on discovery.
Today, only weeks before the trial date, a settlement agreement was filed. The settlement agreement prohibits the defendants and any group associated with them from transmitting email to any domain owned by Comcast without affirmative consent (as defined by CAN SPAM). All mail sent by the defendants must comply with the Comcast Terms of Use or AUP. The defendants must not attempt to circumvent Comcast’s spam filters, must comply with CAN SPAM and must not help anyone else violate any of the provisions of the agreement.
The agreement also prohibits mail from defendants that:

More on e360 v. Choicepoint

Venkat has a longer analysis of the e360 v. Choicepoint case I commented on last week. He’s predicting a quick finding in favor of Choicepoint. I’m not a legal expert by any means, but I can see both sides of this particular case. And I am not sure there is good case law to guide the judge. Definitely one to keep an eye on.

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.

e360 v. Comcast

Mickey has new docs up at Spamsuite in the case between e360 and Comcast.

Email news

ReturnPath sold its email change of address division to Fresh Address and spun off its email marketing division. Full announcement at the RP Blog and a copy of the press release at EmailKarma.
e360 petitioned the court earlier this week to compel Spamhaus to expand on their answers to e360’s interrogatories. Today the court denied the motion. Text of the motion at Mickey’s place.
There has been a noticeable increase in registrar phishing over the last week. This may be related to ICANN de-accrediting ESTHosts, a registrar well known in the anti-spam community for registering domains used in phising and spam. UPDATE from ICANN.

The judge in e360 v. Spamhaus has denied Spamhaus’ motion for dismissal. However, the judge also ordered that the 16 new witnesses be stricken and capped damages at the original $11.7M. Mickey has the order.
Tuesday the FTC announced it had shut down a major spamming operation. I am not sure the results are visible yet, yesterday there were 2041 spams in one of my mailboxes yesterday versus 2635 a week ago.
The FBI announced today it had infiltrated and shut down a international carding ring. While not directly spam related the phishers and carders work together and some of them use spam.
Rumor has it that many mailers are seeing problems delivering to AOL the last few days. It seems that AOL is making adjustments to their filtering system. As when any ISP changes filter rules and weights, some of the people just skirting by see delivery problems. What people are hearing is that if they are seeing delivery problems at AOL they need to improve their reputation.
Last week Yahoo had another online workshop with the mail folks. They have published a transcript of the talk. I was at the talk and there were only a couple spam related questions.

donhburger: Why does Yahoo sell our email addresses to spammers?
YMailRyan: We absolutely don’t sell your addresses to spammers. No IFs, ANDs, or BUTs about it.
imintrouble: My mom keeps emailing em but I never get it and usually it ends up in my spam box. Why? How do I make this stop? She’s getting pissed that I’m not replying.
YMailTeam: Oh no! Be sure your Mom is on your contact list– this should help keep mom out of spam box and put her back into your inbox.
buergej: Just why do I keep receiving the same kind of spam from a series of what appear to be women day after day after day?
YMailCarl: Spam is, unfortunately a constant problem for anyone using email. The reason you are receiving these emails is because spammers have somehow gotten a hold of your email address and are mailing you their lovely messages. There are several things you can do to assist with this. First, continue to report these messages as “Spam” by clicking the button at the top of the email labled “Spam”. Note that you don’t need to actually look at the message to do this. When you report items as spam it lets Yahoo! know that messages originating from that person are likely spam. This not only helps you, but helps other Yahoo! users as well.
YMailCarl: Second, if the emails are from similar names, you can set up filters in your email account to block those names and send them to your trash or spam folder.
YMailCarl: Obviously these messages you are receiving are not from women trying to sell you products personally – the messages are typically generated by a script which will try to forge or “spoof” the originating address.
YMailCarl: We agree that Spam is a serious issue and have many resources dedicated to fighting this problem.
YMailCarl: You can find some additional information about fighting spam here: http://help.yahoo.com/l/us/yahoo/mail/original/abuse/index.html
donhburger: Why when I mark Emails as Spam do I continue to get emils from the same persons?
YMailMaryn: When you mark a message as “spam” from within your Inbox that moves the message to your Spam Folder. And all subsequent messages that are sent from that particular sender will not be delivered to your Inbox, but will be delivered to your Spam Folder.
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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.

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.

Spamhaus files for dismissal of e360 case

Spamhaus filed a motion today asking the judge to dismiss the e360 v. Spamhaus case for contempt. Mickey, as usual, has the docs up.
I have not posted much on the case recently, as there was only legal wrangling about discovery going on. The biggest problem being that e360 has dragged their feet, stalled and avoided discovery for the last 8 months. They have missed deadlines, turned over incomplete documents and ignored depositions. Since I last wrote about this case, discovery has been extended multiple times, the judge has compelled e360 to turn over docs and information and he sanctioned e360 for their failures to comply.
From my perspective, Spamhaus’ lawyers have been setting the stage for this motion for the last 4 – 5 months. Their interactions with e360’s lawyers, their motions to compel and their motion for sanctions have all formed a narrative of how e360 is stonewalling discovery.
This particular motion is only about 8 pages long, but references a 125 page exhibit. The very large exhibit is mostly documents that have been published before in the “Motion for Various relief due to Persistent Discovery Defaults” filed in July.
In the July motion, Spamhaus’ lawyers detail their repeated efforts to get discovery from e360, and the utter lack of cooperation. One of my favorite bits is that e360 responded (weeks late) to some of the initial interrogatories with (paraphrased), “It is too hard to write all this down, but we will tell you about it in the depositions.” My understanding of the law is that this is, in and of itself, a bit of a no-no. What really puts the icing on the cake, though, is that e360 then skipped 2 properly noticed depositions. They just did not appear, thus making their answers to the interrogatories utterly meaningless.
Spamhaus requested that the Judge impose sanctions on e360 for failing to appear at 2 depositions, not complying with the judge’s previous orders and generally being unable to actually produce any documentation that is complete or on time. Even better, when e360 did manage to produce a thumb drive it contained multiple email conversations between Mr. Linhardt and his lead counsel. This little oops happened because no one at the law firm bothered to actually examine any of the files before handing over the thumb drive. In fact, they only became aware of their error when opposing counsel notified them of the files. When e360 asked for the information back, Spamhaus’ lawyers refused pointing out that they handed over all the information willingly and that their failure to actually examine the files does not constitute an inadvertent disclosure.
The judge did sanction e360, although not with the severity that Spamhaus’ lawyers requested. He also ordered full discovery and documents turned over by August 15th. Based on my reading of the transcript (exhibit 4) the Judge sounds like he is tired of having to tell the e360 lawyers to do their jobs. The judge lectured e360 on their failure to get thing resovled.