Accused spammer demands $135M from Spamhaus; gets $27,002

It must have seemed like a pretty good gig at first: an e-mail marketing firm called e360located just up the road from us here in Chicagoobjected to being called a "spammer" and sued UK-based Spamhaus in federal court. When Spamhaus refused to show up for the lawsuit, a judge issued a default ruling in favor of e360 and awarded the company and its main employee, Dave Linhardt, the $11.7 million he claimed in losses without forcing him to prove said losses.

When a Chicago law firm offered to represent Spamhaus free of charge and took the case to the Court of Appeals, the appellate judge was appalled; e360 had to prove damages, not just state them.

So a trial began at the District Court level, and Linhardt seems to have had stars in eyes. If getting an $11.7 million judgment was so easy, and if Spamhaus wasn't doing much to contest the case, why not go for more?

Here's how the trial judge described what happened next:

The parties then engaged in discovery as to damages. Linhardt and e360 were slow to provide information requested by Spamhaus. Several deadlines were missed without explanation, and eventually a court order commanded disclosure by a date certain. The date came and went without compliance, and Spamhaus requested dismissal of the case as a sanction. A month later, when Linhardt and e360 supplied the requested information, they claimed that the proper amount of damages was in excess of $135 million, rather than the $11.7 million that had been stated earlier. Because of the extremely tardy provision of these new numbers, any amounts stated in the discovery responses in excess of $11.7 million were stricken...

Commencing on March 16, 2010, a bench trial was held as to the amount of damages to which Linhardt and e360 are entitled as a result of Spamhauss conduct. On the eve of trial, Linhardt produced additional documentation, designated at Plaintiffs Exhibit 5(a), in support of a damage amount of $122,271,346. By the time the evidence phase of the trial was completed three days later, Plaintiffs shifted the number again, this time to $30 million. In view of e360s termination of operations in the interim, injunctive relief was no longer a relevant consideration.

Did you follow that? After asking for $11.7 million the first time around, Lindhardt then suggested his damages should be $135 million. This number was later reduced to $122 million. During the final arguments at the damages trial, it dropped back to $30 million.

The judge was incredulous. His opinion, issued a few days ago, was noted by The Register. The opinion says that "the unreliability of Linhardts approaches is unmistakably demonstrated by the profound differences in claimed damages proffered at various points during these proceedings. Finally, it strains credulity that a company that made only a fraction of the profits Linhardt asks for over the course of its five-year lifespan would have garnered profits in the amounts Linhardt set out in his testimony or documentary evidence."

e360's "overall profits" were listed at $332,000and it turned out that even this number was a conflation of several Linhardt businesses.

In his decision, the judge embarked upon pages of discussion about Linhardt's calculations, all devoted to showing just how daft each one was. In the end, the judge tossed all of them. ("None of the above amounts can be relied on or be a reasonable basis upon which to base a damage award.")

Instead, Linhardt got $27,000 on one claim and a nominal $1 on two others.

Not that Spamhaus plans to pay. The site has routinely argued that as a British company, jurisdiction was never proper, that Linhardt is indeed a spammer, and that the US justice system stinks worse than a crock of month-old blood pudding.

"The Illinois ruling shows how spammers can game US courts with ease, as no proof or due process is required in US courts in order to obtain default judgments over clearly foreign entities with no ties to the US," said Spamhaus previously. The UK, it notes, does not enforce default judgments from other jurisdictions.

As for Linhardt, his e360 is out of business. Back before it went under, Linhardt complained that " is a fanatical, vigilante organization that operates in the United States with blatant disregard for US law."

Source: ars technica

Tags: e-mail, spam

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