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7th Circuit Opinion in e360insight v Spamhaus
7th Circuit Opinion has been released in e360 Insight, LLC’s case against Spamhaus.
I’m calling this one pretty much a victory for Spamhaus. Here’s why:
From page 18:
“Generally, this court will not reverse a damages award in a default judgment unless it is clearly excessive.”
So, it appears that any damages awarded will need to be at a pretty steep premium.
From pages 18-19
“Mr. Linhardt’s affidavit is a conclusory statement of the lost value of his business, based largely on his calculations of lost future profits. It provides a list of businesses involved in “actual and pending contracts” and a total calculation of his calculation of loss, but says nothing about the status of his relationship with those businesses before e360 was listed on the ROKSO. That is, the affidavit claims profit loss in absolute numbers, but provides no information whatsoever to support a finding that such future profits were certain prior to Spamhaus’ act. Particularly given the difficulties that Illinois courts have acknowledged in proving non-speculative amounts of lost future profits, [citations omitted], this affidavit alone cannot provide the requisite “reasonable certainty” for a damages award without the necessity of a hearing. We therefore vacate the damages award and remand to the district court for a more extensive inquiry into the damages to which e360 is entitled.”
Linhardt will actually have to prove his damages and not just speculate about how much he lost or might have lost.
From page 24:
“According to the complaint, however, Spamhaus lists entities on the ROKSO for violating ISP terms of use, not “United States law.” The complaint does not allege that Spamhaus defamed e360 by claiming that e360 operated in violation of law. The facts supporting the default judgment, therefore, show only that e360 improperly was listed as a “spammer” by Spamhaus, applying Spamhaus’ own criteria. There is no basis in the judgment for an injunction that modifies Spamhaus’ generally applicable criteria for determining what entities qualify as spammers.”
Any potential judgment cannot dictate policy decisions to Spamhaus. That leaves “follow your own policies” pretty much as the extent of injunctive relief available to Linhardt. And, as Laura points out, “As long as listings follow the published guidelines of a DNSBL, then the DNSBL can list mailers who comply with CAN SPAM.”
That’s not to say that it was a total win for Spamhaus. From page 12 we have:
“We perceive no error in the district court’s conclusion that Spamhaus intentionally elected to abandon its available defenses when it withdrew those defenses from consideration by the court and indicated that it was prepared to accept a default. Spamhaus’ then-counsel confirmed that it wished to “participate in the defense no further” and “do absolutely nothing.” See R.56-1 at 3, 5. It was not erroneous to treat this kind of voluntary abandonment of defenses, raised but not pursued, as a waiver.”
You’ll note that I’ve mentioned above that things are going back and what might happen in the future. This was the loss that Spamhaus suffered. They didn’t get the default judgment overturned, so liability stands and they’ll likely have to pay something when all is said and done.
Still, all told, this smells like victory to me.
MickC @ August 30, 2007