Court tosses $11 million judgment against Spamhaus

At least for now, Spamhaus, the popular British spam-blacklisting organization, won't have to cough up $11.7 million as part of a spat with an Illinois e-mail marketing company.

The U.S. Court of Appeals for the Seventh Circuit on Thursday vacated a lower court's decision last fall to award the damages and to impose an injunction, which required the organization to cease causing any e-mail sent by e360insight or Linhardt to be "blocked, delayed, altered, or interrupted in any way" and to publish an apology (click here for a PDF of the opinion).

(Credit: spamhaus.org)

The three-judge panel concluded the lower court's action was "overbroad" because it had not conducted an "extensive" or "substantial" enough inquiry into the situation before calculating its damage award and imposing other conditions on Spamhaus. The district judge based the damages solely on a sworn statement from Linhardt about his estimated lost future profits, which contained "no information whatsoever to support a finding that such future profits were certain prior to Spamhaus' act," the appeals court opinion said.

By sending the case back to the district court for further proceedings, the court did not, however, seem to take issue with the lower court's ruling that Spamhaus was liable under U.S. law. That runs contrary to the U.K.-based organization's position.

Here's a little history: e360insight and Linhardt sued Spamhaus early last year, accusing the organization of wrongly placing the company on its "Register Of Known Spam Operations," a list reserved for people or businesses that have been knocked off at least three Internet service providers for violating their terms of use, according to the appeals court opinion. Spamhaus has steadfastly maintained it has ample evidence that Linhardt is a spammer, although neither his name nor his company's name seemed to show up on that list at press time. (The official e360insight Web site wasn't loading.)

But the case never got to that point. The multimillion-dollar judgment came about by default after Spamhaus voluntarily dropped its defense--largely on the grounds that it was a British company and therefore wasn't subject to U.S. laws or court orders.

"As spamming is illegal in the U.K., an Illinois court ordering a British organization to stop blocking incoming Illinois spam in Britain goes contrary to U.K. law which orders all spammers to cease sending spam in the first place," Spamhaus wrote in a lengthy explanation posted to its Web site at the time.

The case took on a new twist last October, when e360insight asked the federal judge presiding over that case to order the Internet Corporation for Assigned Names and Numbers, or ICANN, and registrar Tucows to suspend Spamhaus' domain name registration. But ICANN, for one, said it couldn't grant that request.

Attempts to reach Linhardt were unsuccessful. Spamhaus representatives did not immediately respond to requests for comment.

Wired News first reported the opinion on Thursday evening.

Update at 12:30 p.m. PDT: In an e-mail interview with CNET News.com Friday, Spamhaus CEO Steve Linford said the organization was still finalizing its response to the ruling. As for e360insight's allegations, he said the company and its proprietor have never been on its "Register Of Known Spam Operations" list. Rather, the company is listed on its Spamhaus Block List, a free database available to e-mail administrators, which is currently employed in the management of some 1.2 billion mailboxes.

[rcrusoe]

Spamhaus doesn't block anything

Spamhaus only provides access to a list of senders that they consider to be spammers.

Any email administrator can then choose to use that list to block, delay, or tag email messages sent to his servers.

We've been using the Spamhaus list for over 5 years and have never had a single false positive (i.e we have "agreed" 100% with their list).

But Spamhaus is just one tool that we use to block the spam messages that comprise 99+ percent of all our email traffic.

[georgescott]

Spamhaus does block

Spamhaus knows by adding an ip address to there list that the mail will get blocked. They are in fact blocking, they pretend that they are under the delusion that they do not know what they are doing but Spamhaus knows exactly what happens. Spamhaus setup there website with the intention that people will be able to block mail from senders Spamhaus believes are spam sources.

The entire intent is to block mail.

[stlwest]

Why doesn't the US have a similar law to the UK?

Isn't that the real question? Like the previous poster said email administrators can use spamhouse if they so desire. Since I have no vested interest in making sure some marketing companies emails get through and have users complaining that thier email boxes are filling up with junk they never requested I'm gonna come down on the side of my users and block the Spam.

I use a few dns lists in my fight against Spam, now going on about 8 years. Spam costs companies money because they have to deal with it. From my point of view having a law would go a long way to stemming the flood of Spam, yes it is a flood, for example in a 300 person company today we blocked 96.3% of all incoming email which comes to 107,600 spams blocked in just 1 day.

Yes once again the US Congress is failing the business community at large by not acting. The fcc has a do not call list, why not a do not spam list?

To bad the US Post Office has a vested interest in sending out bulk rate junk mail. They have the capability to block it but only offer that service for people who change addresses. Go figure.

[KlondikeWolf]

From the home of grunge ...

... and the mass consumption of caffeinated drinks, there is one corner of the U.S. that has such a law anyway: the state of Washington has an anti-spam law. Unfortunately, it appears to conflict with the U.S. Congress' "CAN-SPAM" act which actually removes the stronger protections of Washington State's anti-spam law ... not sure what the status is on that fight, but I do know that a couple spammers have been forced to cough up $$$ to spam victims under our state law here.

[Seaspray0]

US court has no authority in this issue

Spamhaus is an entity of the UK. The US court has no jurisdiction.

[www.sorehands.com]

It will be hard for Linhardt to get damages

Linhardt has claimed (under oath) in my case against him (to avoid California jurisdiction) that he did not personally suffer damages in the Spamhaus case.

More details on my case against him, for illegal spam:
http://www.barbieslapp.com/spam/e360/timeline.htm

[ColdMast]

SPAMHAUS ROCKS!

I don't want spam

I hate spam

I hate all junk mail.

[jlmckittrick]

Spamhaus sheds light...

...on what the spammers do in secret. They'd like us to just give up and accept their "right" to bombard us at will. Thank you to Spamhaus for their community service in providing information that most of us have no time to gather and maintain.

It's ironic that organizations like Spamhaus who give information away spend so much time and money defending themselves from legal (and network) attacks by people who give nothing to the community, but leach onto the Internet infrastructure to try to suck money from it (and their hapless "customers") by any means possible. Alas, this is the nature of human depravity: "Everyone who does evil hates the light, and will not come into the light for fear that his deeds will be exposed."

The only thing that makes this case notable is the absurdity of suing a British organization in U.S. federal court. I'd like to see some reform that would result in a summary "this is stupid" dismissal of cases like this. Perhaps in this case there should be intervention from the State Department when our legal system causes national embarrassment.