Spamhaus Rejects $11.7M Court Order

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Spamhaus has no plans to comply with an order to pay $11.7 million in damages to Chicago marketing firm e360insight and its CEO, David Linhardt, issued by the U.S. District Court for the Northern District of Illinois.

The London-based spam-blocking firm said the Sept. 13 ruling, which involves the blacklisting of e360insight's e-mails to British consumers, did not occur in a British court. U.S. judge Charles P. Kocoras granted e360insight's motion for a default judgment and issued a permanent injunction barring Spamhaus from listing e360insight without clear, convincing evidence.

"If we were seen to pay money to lawyers to defend these cases, spammers all over the U.S. would be queuing up at their local courts to sue us," said Steve Linford, CEO of The Spamhaus Project.

Spamhaus is a British-based firm that helps block unsolicited marketing e-mails to consumers.

"We have spammers in Italy, Brazil, Nigeria and other countries all also hoping to sue us in their local courts to get default judgments when we don't show," Mr. Linford said. "The only place they never file in is our country, the UK, because the UK has loser pays costs."

The order also stated that "Spamhaus is no longer allowed to block, delay, alter or interrupt e360insight's mailings in any way."

Spamhaus was ordered to publish an apology on Spamhaus.org for six months stating that Mr. Linhardt and his company are not spammers. No apology has appeared on the site.

Other default judgments have been obtained against Spamhaus in U.S. courts over the years that the firm has not paid. Spamhaus was ordered to pay $2 million by a Louisiana court in 2004 when it did not appear. Mr. Linford claims that his firm was never served and that it never knew about the case until months after the judgment.

E360insight claims that Spamhaus uses its technology to wrongfully block more than 2,000 of the marketer's IP addresses. Mr. Linhardt, e360insight's president/CEO, said that his firm follows best practices and participates only in legitimate e-mail. He claims that blocking is not a careful tactic and said his home office cable modem connection was among those blocked.

Mr. Linhardt also claimed that the Spamhaus e-mail blocking technologies are used illegally by about 65 percent of U.S. Internet service providers.

His company hosts e-mail file building with custom permission databases as well as operate an e-commerce firm that sells sunglasses, handbags and licensed sports merchandise at http://www.bargaindepot.net/.

"We get more calls into our 800 number for customers who did not receive our order messages," he said. "These blocking technologies do not distinguish a difference between order confirmation, and that is pretty concerning for legitimate marketers."

Spamhaus sticks by its defense.

"Samples of his spam we have on file from last year show them originating from computers on ADSL lines like innocent users with hijacked computers all over the world, with most sent from China, Korea, Vietnam, etc," Mr. Linford said.

Shar VanBoskirk, senior analyst at Forrester Research, thinks that legislation is not the answer.

"Precisely for the reasons this case indicates - it is just too hard for governments to manage, and legislation isn't much of a threat to spammers," she said. "Also as this case shows, Spamhaus (an organization trying to do the right thing) is the one getting sued ... for preventing their messages from going through. I think the ultimate answer to the spam question is an economic one, one which involves senders paying a postage fee for each message over a certain volume threshold send."

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