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20 Sep 2006
Reports in the press have been saying that the Spamhaus Project lost an $11 million dollar lawsuit in Chicago to mailer e360 Insight. Technically it's true, in reality, it's not.
Courts are only supposed to accept civil cases like this one if they have jurisdiction over the defendant. The plaintiff claimed that Spamhaus does business in Illinois, which they don't, but the mere claim put Spamhaus in a difficult position. One option would have been to respond to the complaint and tell the judge that the court has no jurisdiction. Spamhaus started to do that, then realized this was a no-win strategy for two reasons: it could cost them a lot of money, since the lawyer who handles their cases doesn't work for free, and it could take quite a long time, particularly if the plaintiff appealed the case. Since the entire point of the case was to cost Spamhaus money, they decided not to play and their lawyers withdrew. In the absence of any defense, the judge had little choice other than to grant the plaintiff's proposed injunction with the $11 million, although he rejected a request for a further $15 million in punitive damages.
What effect will this have on Spamhaus? Precious little. Spamhaus says they're in England, which they are. (I've visited them there.) To enforce this judgement in England, the plaintiff would have to persuade an English court that it was valid. Unlike in the U.S., English courts use the loser-pays rule so that if they lost, they'd have to pay both their own legal costs and those of Spamhaus. There's no chance the plaintiff will do that, so Spamhaus is just ignoring them.
Adding to the confusion, an unrelated spammer was spamming out copies of the injunction to ISPs' abuse contacts with bogus threats about what will happen to them if they continue to use Spamhaus to block his mail. He's not very smart, since one of the abuse desks he spammed was his own ISP's who promptly shut him down.
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