When UK based, not for profit anti spam campaigner Spamhaus branded US emailer David Linhardt and his business e360 spammers, it may not have expected to face an $11.7 m damages award. But can Spamhaus sit tight and ignore the ruling?
Topic: Digital marketing
Who: Spamhaus, David Linhardt and e360
Where: US District Court for the Northern District of Illinois
When: October 2006
UK based not-for-profit spamfighter Spamhaus operates a Spam Advisory List called the Spamhaus Block List which according to Spamhaus regularly blocks 50 billion non compliant marketing emails. Included on that list is US email marketing business e360Insight LLC and its chief David Linhardt, both allegedly well known to be spammers.
On 21 June 2006 Linhardt and e360 filed suit in the US District Court, Northern District of Illinois against The Spamhaus Project. The suit sought an injunction and damages, alleging that Spamhaus "erroneously and repeatedly placed Plaintiffs on its register of Known Spam Operations, and then wrongfully coerced Plaintiff's business partners to refrain from doing business with Plaintiffs."
To support the allegation that the Illinois court had jurisdiction, Linhardt claimed that Spamhaus (spookily founded and headed by the similarly surnamed Steve Linford, no relation) "operates a business in Illinois." Spamhaus denied this, began defending the case but then pulled out, disputing that the US court had jurisdiction.
In light of this, default judgment was entered against Spamhaus on 13 September for $11.7 m damages and $1.97m legal costs. Judge Charles Kocoras also ordered that Spamhaus be debarred from causing any email sent by e360 or Linhardt to be "blocked, delayed, altered or interrupted in any way" and required to post a message on the Spamhaus website announcing that e360 and Linhardt were erroneously listed on the website as spammers.
"US court bamboozled"
Spamhaus did not comply with the order, claiming the US court had no jurisdiction and "had been bamboozled with ease." It also held firmly to the position that Linhardt was a spammer, citing use of false routing information, many complaints from Internet users and numerous examples of previous spam from Linhardt sources.
Linhardt countered with an email to CNETnews.com claiming "This ruling confirms e360Insight's position that Spamhaus.org is a fanatical, vigilante organisation that operates in the US with blatant disregard for US law."
ICANN drawn in, then drawn out
Not content with this, on 29 September Linhardt filed a further motion with the Illinois court seeking an order suspending www.spamhaus.org until Spamhaus complied with the original order. If granted the order would call for Spamhaus's domain name registrar Tucows and/or ICANN to suspend operation of the website www.spamhaus.org
ICANN responded by saying that even if such an order were granted, it would not have either the authority or the ability to carry it out. Only the relevant Internet Registrar, ICANN said, and in some instances the Registry, has a contractual relationship with the registrant which might lead to suspension of an individual domain name.
Tucows simply commented: "Nobody's asked us to do anything." This continued to be the case after the judge's ruling on Linhardt's motion, which was to reject it. There was no indication that either ICANN or Tucows had acted in concert with Spamhaus, so no basis on which they could be drawn into the suit.
Then Court refuses to suspend Spamhaus.org
At the same time as letting ICANN and Tucows off the hook, Kocoras J. denied e360's motion to suspend the Spamhaus.org domain name. The grounds were that the relief was too wide-ranging to in its effect, cutting off all lawful online activities of Spamhaus as well as those which were allegedly unlawful.
Why this matters:
Spamhaus is right to say that e360Insight/Linhardt would have great difficulty enforcing the original default judgement. There are two reasons.
First a judgment based on the merits, rather than a default judgment without both sides being heard, is the only type of ex UK judgment that the UK courts will normally recognise and enforce.
Secondly assuming Spamhaus did not at any time voluntarily submit to Illinois's jurisdiction and does not operate any business in the US, with no office, agent or employees in Illinois or any other US state, the Illinois court can have no jurisdiction over Spamhaus in respect of the matters raised in the suit. Though maybe Mr Linford is postponing plans to travel to the US anytime soon given the recent fate of certain online gambling company executives who ventured over the pond.
However, Spamhaus is clearly more concerned by the Illinois judicial moves than it first let on: After the perhaps ill-advised initial acknowledgement of the e360 proceedings, Spamhaus is now being assisted pro bono by Chicago law form Jenner & Block and is appealing the default judgment so as to "stop further nonsense with this spammer."
In spite of this, Linhardt certainly seems to have the bit between his teeth and one senses we have not heard the last on this spam saga.
Free speech and privacy clash?
But is Spamhaus entirely blameless in its activities?
Many are concerned by the huge de facto power it wields and as previously reported on marketinglaw, EC data privacy institutions such as the Article 29 Working Party have recently expressed privacy related concerns over mass interception and blocking of emails.
What cannot apparently be stopped is the seemingly inexorable rise, despite opt in and opt out laws and the activities of organisations like Spamhaus, of email as a proven, high-response marketing channel, particularly in the B to B arena, where in the UK and many other EU states the US "opt out" model has been preferred.
The Linhardt case is an extreme and probably meretricious example of the worm turning, but this may be the first of a line of cases where countervailing privacy and free commercial speech interests clash before the courts.