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$11 Million Spamhaus Penalty Tossed
Actually looking at case often helps...
by Karl Bode 09:09AM Wednesday Sep 05 2007
Last year, Spamhaus laughed at a bizarre U.S. court ruling demanding they pay in excess of $11 million for blacklisting known spammer e360insight. The judgment was due in part to the fact that Spamhaus, a UK outfit, ignored the case, assuming U.S. legal guidelines didn't apply to their business.

It now appears that an appeals court has tossed out the injunction and the monetary award, stating that the judge in question didn't examine the case closely enough, and took the claims of e360insight at face value without digging deeper.
quote:
"While this is initially a victory for SpamHaus, it doesn't change the initial default judgment against SpamHaus -- it just sends the ruling back to the lower court to rethink what the punishment should be. So, SpamHaus may still be on the hook for certain damages and may again be told not to list e360insight."
Last year, the spammer tried to force ICANN to yank Spamhaus's domain records.

view:
topics flat nest 

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

1 edit

Wrong Ruling

You would think the Appeals Court would be somewhat more thorough in examining if the District Court had actual jurisdiction in this case.

I suppose the one thing we can always count on the court system to do in the USA is to generate more business for itself.

Also... it might be a good idea to change the word "tossed" in the headline as the legal maneuvering in this case has not yet come to an end.
--
Only SHATNER is Kirk.
matrix3D

join:2006-09-27
Middletown, CT

1 edit

Re: Wrong Ruling

I think the more important question is why is this inept (or possibly simply bought-and-paid-for and corrupt) judge allowed to keep his job? It's his responsibility to uphold the law by reading and reviewing case law, statutes and other precedents -- not to simply believe one party over another "at face value." Our legal system is such a f***ing joke.

EDIT: And is it any surprise that e360insight is based in Florida? I absolutely refuse to do business with ANY companies based out of Florida -- there are more "fly by night" operations in that state than anywhere else in the world.

calvoiper

join:2003-03-31
Belvedere Tiburon, CA

2 recommendations

Settle down, everybody....

Allright, let's review how this mess happened, and why the US Court system isn't necessarily the problem here.

When a foreign company is sued in the US, it basically has two options: First, it can stay home, say it has no involvement in the US sufficient to give the US jurisdiction, and ultimately depend on its home country to determine whether or not any US judgement was proper (i.e., if the US had "jurisdiction") and can be enforced in the foreign company's home. Second, it can appear in the US court and fight the battle here, essentially "submitting" to US jurisdiction. What a foreign company cannot do is "submit" and fight here, and then challenge the result at home--you don't get two bites out of the apple, you have to choose where to fight the jurisdictional question. And, if you choose "home" (the foreign country) and lose at home, you're stuck with whatever the US decided in your absence.

Spamhaus, however, seemed to stutter between those rules--another no-no. Initially, it picked the second route, it appeared (in fact, did more than "appear", it forced the transfer of the case from state to federal court) and it filed papers (an "answer", in legal terms) to defend itself. Then, it changed its mind, withdrew its filings, and chose to ignore the US case. Ignoring the US can be a valid (if risky) strategy, but it needs to be done from the beginning--not after you've told the court "I'm here, I'm defending myself, let's rock & roll." The court then said, essentially, (after making sure that Spamhaus's former lawyer had communicated this risk to Spamhaus) said, "OK, you showed up, started to play, and then quit. You lose." This is known as a "default".

When Spamhaus found out how big its loss was (and how much they were risking, using a late, unnecessarily timed risk) they got a new lawyer (GOOD IDEA) and started challenging the default judgement.

What the Appellate Court said was not that entry of the default was wrong, but that the court should have looked harder at how big the judgement should be. I.e., Spamhaus probably still loses, but maybe not so much money. It appears that Spamhaus will still try to challenge the jurisdiction of the US in its home (England) but it has really hurt itself in that challenge by becoming as involved as it has in the US Courts.

Again, it's a choice foreigners have--to either play ball here and accept the result, or to stay away and claim later that there was no reason they should have had to play ball here. Spamhaus's problem is that it couldn't make up its mind which path to take, and it looks like it shafted itself by choosing the wrong step on multiple occasions by becoming involved enough here to accept the result but not staying involved here enough to win when it needed to.

Believe me, my sympathies here are with Spamhaus--but they have really shot themselves in the foot on this one.

calvoiper
--
VoIP--the death knell of remaining voice monopolies!

av8r7
I'd Rather Be Flying
Premium
join:2002-06-14
Boca Raton, FL

Re: Wrong Ruling

You're really limiting yourself in some matters. Not dealing with Office Depot (Delray Beach), Sunbeam (Mr. Coffee, Coleman - Boca Raton), Piper Aircraft (Vero Beach), Outback Steakhouse (Tampa), Tupperware (Orlando), Tyco (Boca Raton), you get the idea...

Yeah, there are plenty of scammers, spammers, and assorted other lowlifes, but there are some pretty good companies as well .
Kearnstd
Space Elf
Premium
join:2002-01-22
Mullica Hill, NJ
kudos:1
unless they have a US office they cant be held for anything.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports
nozzer

join:2004-06-25
Waltham, MA

Johnny Foreigner

Just another dumb example of US Courts that think simply "being foreign" is a crime.

TechieZero
Tools Are Using Me
Premium
join:2002-01-25
Gibsonton, FL

Re: Johnny Foreigner

said by nozzer:

Just another dumb example of US Courts that think simply "being foreign" is a crime.
Oh yeah that's amazingly clear in this case.

Gotta love people who live on generalizations.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

1 recommendation

Re: Johnny Foreigner

said by TechieZero:

said by nozzer:

Just another dumb example of US Courts that think simply "being foreign" is a crime.
Oh yeah that's amazingly clear in this case.

Gotta love people who live on generalizations.
It is very common for people or businesses to sue foreign individuals and other interests in US courts and expect for those rulings to be legally binding. Unless the foreign entity has some sort of presence or asset inside the USA, these cases should be tossed immediately as they are a drain on our court system and a waste of our tax dollars.

The most egregious example of this sort of lunacy is the RIAA suing AllOfMp3.com (a Russian company with no business presence in the USA) in a court in New York for $1.65 trillion. Even if such a suit is successful, there's no way to collect on the judgement. These kinds of suits belong in foreign courts, not US courts.
--
Only SHATNER is Kirk.

ff1324
Everybody Goes Home
Premium
join:2002-08-24
On Four Day

Re: Johnny Foreigner

said by pnh102:

Even if such a suit is successful, there's no way to collect on the judgement. These kinds of suits belong in foreign courts, not US courts.
But it can set a precedent that future cases may rely on.
--
What do you want to do to the world, Ronald?
Burn it all.
See you next year, Ronald.

nothing00

join:2001-06-10
Centereach, NY

Re: Johnny Foreigner

That's just great - setting precedent when only side has been represented. sigh

phxmark
What Country Are We Living In?

join:2000-12-27
Glendale, AZ

Can't get to

e360insights website. I think their e-mail systems need to be ddos'd.
--
High speed is dangerous. Too many MP3s, not enough time.

newview
Ex .. Ex .. Exactly
Premium
join:2001-10-01
Parsonsburg, MD
kudos:1

e360insights should be made to pay . . .

e360insights should be made to pay back Spamhaus double for the money they spent defending this frivolous lawsuit. Maybe that precedent will make other spammers think twice about filing their lawsuits.
Badonkadonk
Premium
join:2000-12-17
Naperville, IL
kudos:5

Re: e360insights should be made to pay . . .

What precedent?

newview
Ex .. Ex .. Exactly
Premium
join:2001-10-01
Parsonsburg, MD
kudos:1

Re: e360insights should be made to pay . . .

The precedent that would be set IF they were made to pay double.
Surely THAT has never happened before.
Badonkadonk
Premium
join:2000-12-17
Naperville, IL
kudos:5

Re: e360insights should be made to pay . . .

The best that they (SH) could hope for would be Rule 11 sanctions, and that's not likely to happen.

brad77

@70.54.241.x

fees and jurisdiction

i'm pretty sure the article said that Spamhaus ignored the case, so i would figure their legal fees to be quite low.

and as others have said, unless Spamhaus has some sort of american office, then U.S. courts do not have jurisdiction and this is a complete waste of time.