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Bookmark and Share Case Answer: e360Insight vs. The Spamhaus Project
Statement

Category: Legal
Updated: 2013-06-13
Statement Ref: S03

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A SLAPP lawsuit filed in an Illinois (United States) court by a Chicago-based spammer against The Spamhaus Project Ltd., a British non-profit organization, went to default judgement when UK-based Spamhaus refused to defend the case until the judge examined Spamhaus's objection to the US court's jurisdiction. No jurisdiction enquiry was ever made by the judge therefore Spamhaus withdrew from the US case on the advice of its UK lawyers.

To get the lawsuit case into a US court, instead of correctly filing in a British court, David Linhardt owner of e360Insight, an Illinois bulk email marketing outfit that sends high volumes of spam to Spamhaus's users, simply fabricated a claim that Spamhaus "operates a business in Illinois".

Despite Spamhaus filing an Answer strongly contesting jurisdiction, declaring it was a British organization that was based solely in the UK and conducted no business outside of the UK, a US court judge took the Plaintiff's false claim at face value, declared the British organization to be in Illinois jurisdiction and issued a default judgment in Spamhaus's absence. The Spamhaus Project in fact operates no business in the United States, has no US office, agents, employees or presence in Illinois or any other US state. The US court had neither Personal nor Subject Matter Jurisdiction over Spamhaus.

The default judgement issued by Illinois Judge Charles Kocoras awards Linhardt/e360, a one-man 'bulk email marketing' firm based in Chicago, compensatory damages for ficticious 'lost contracts' totaling US$11.7 million, orders Spamhaus to delete all evidence of illegal spamming by e360, orders Spamhaus to lie to the public by posting a notice on its website stating that Linhardt/e360 "is not a spammer" and orders Spamhaus to cease filtering spam sent by e360 to Spamhaus's users. Spamhaus can not obey such absurd orders.

Spamhaus firmly stands by its position that David Linhardt is a spammer (i.e: "a sender of unsolicited bulk email") and e360 Insight LLC is a spam outfit. Spamhaus has a large evidence archive of spam sent by e360 and spam advertising www.bargaindepot.net (owned by David Linhardt), sent to Spamtraps and non-existent users, including spam sent by e360 to a number of Spamhaus' own investigators. In addition Spamhaus has numerous complaints from Internet users ready to testify they never 'opted-in' to any mailing list and were being spammed by e360.

Spamhaus additionally has samples of spams advertising Linhardt's www.bargaindepot.net website sent with false routing information in flagrant violation of the US CAN-SPAM Act from compromised (hijacked by malware) personal computers on home ADSL lines in Vietnam, China, Korea, Taiwan and Norway.

The Illinois ruling shows how spammers can game US courts with ease, as no proof or due process is required in certain US courts in order to obtain default judgments over clearly foreign entities with no ties to the US. Additionally, as spamming is illegal in Europe, a US judge ordering a British organization to not reject incoming spam sent illegally from Illinois into the EU goes contrary to European law which orders all spammers to cease sending spam in the first place.

The obtaining of a US default judgment against a UK organization did not however have the expected outcome for the spammer, as default judgments from US courts are not recognized in the United Kingdom. A Plaintiff seeking to have a US default order enforced in the United Kingdom has no choice but to re-file the case in a British court of law and fully prove jurisdiction as well as the merits of the case under British law. Spamhaus had advised Mr Linhardt from the start that a US judgement would be invalid outside of the United States and that he would need to re-file his case in the United Kingdom. Spamhaus understands that David Linhardt did not wish to file in the United Kingdom because his spam activities were illegal here.

Spamhaus withdrew from this US case because of serious failures of the US legal process which Spamhaus deemed to be unacceptable. These included (A) the lack of even basic enquiry into jurisdiction by Judge Charles Kocoras despite Spamhaus's obvious foreign status and its objections to jurisdiction, (B) the ignoring by Judge Charles Kocoras of US Supreme Court instructions on the handling of cases involving foreign litigants, which resulted in the US court breaking the Hague Convention by attempting to carry out illegal pre-trail fishing expedition discovery in the United Kingdom [1].

Spamhaus is however concerned at how far a US court will go before asking itself if it has jurisdiction or evidence to back up an allegation of jurisdiction before issuing orders to foreign entities, and is intending to appeal the absurd Illinois ruling in order to stamp out further attempts by spammers to abuse the US court system in this way.


Update: September 2007

On learning of this case, Chicago's leading Internet law firm Jenner and Block LLP took on Spamhaus's case, Pro Bono Publico, and filed an appeal on Spamhaus's behalf.

On reviewing the case, the US Court of Appeals quashed both the absurd injunction and the $11.7M award and remanded the case back to the District Court, instructing Judge Charles Kocoras to require the Plaintiff to actually prove his damages claims. Since the Plaintiff's damages claims were wholly fictitious, Spamhaus is pleased with this result as it means the case simply ends once the Plaintiff is required to produce proof he can not produce.


Update: April 2008

Illinois Federal Judge Zagel declares e360insight LLC is "a spammer".

e360insight/David Linhardt filed an equally meritless case against US Internet service provider Comcast, lost the case, and was countersued by Comcast for spamming. In e360Insight, LLC. v Comcast Corporation (08 C 340), Illinois Judge James B. Zagel stated in his order finding for the Defendant Comcast:
    "Plaintiff e360Insight, LLC refers to itself as an Internet marketing company. Some, perhaps even a majority of people in this country, would call it a spammer."
    - Judge James B. Zagel
In addition to losing the Comcast case, e360insight/David Linhardt has now had to settle 3 further spam-related lawsuits.


Update: June 2010

(... three years of discovery-dodging by the Plaintiff later ...)

At the trial ordered by the US Court of Appeals requiring proof for the Plaintiff's wild $11.7M claim, Spamhaus's US law firm Jenner & Block LLP successfully showed the court that all of the Plaintiff's figures for his $11.7M claim were fabricated. On June 11 the court then issued a revised ruling awarding the Plaintiff instead $1 (one dollar) for his claim of 'defamation' and $1 (one dollar) for his claim of "tortious interference with prospective economic advantage".

However, for reasons unclear to all, in the same ruling Judge Charles Kocoras surprisingly invented a new award of his own, unasked for and based on fictitious figures the judge himself had previously ruled were inadmissible - awarding the Plaintiff $27,000 for non-existent 'lost contracts'. Fictitious contracts the Plaintiff claimed to have had with other notorious internet spam outfits and which were never disclosed during discovery.


Update: July 2010

On July 9, 2010, Spamhaus filed a motion asking Judge Charles Kocoras to reconsider his new $27,000 ruling, pointing out the serious legal errors in his new ruling. The judge did not reconsider, therefore Spamhaus took the case back to the Court of Appeals for a second time.


Update: September 2011

On the 2nd September 2011 Spamhaus won its final Appeal to reduce the baseless $27,000 award down to a token value of $3 (three dollars). The US Court of Appeals for the Seventh Circuit has now twice vacated judgments made by Judge Charles Kocoras in the Spamhaus case.

The Final Judgment by the US Court of Appeals for the Seventh Circuit for the second time vacates the District Court's ruling and remands the case to the District Court with instructions to reduce the default judgment to the token amount of three dollars. Costs on appeal are granted in favor of the Spamhaus Project.


References:

Spamhaus answer to US Temporary Restraining Order:
http://www.spamhaus.org/organization/statement.lasso?ref=1

Spamhaus evidence examples for e360 Insight LLC spam in 2007:
Evidence Document for SBL listing SBL51828
Evidence Document for SBL listing SBL52363


[1] Noting that both pre-trial discovery and US-style fishing expedition discovery are impermissible in the United Kingdom, the US Supreme Court has cautioned that United States courts "must exercise special vigilance to protect foreign litigants from unnecessary or unduly burdensome discovery" and should "supervise pretrial proceedings particularly closely to prevent discovery abuses". The danger is that "foreign discovery will be used for an improper purpose, such as to burden or harass". Objections to abusive discovery advanced by foreign litigants should therefore receive "the most careful consideration".

Statements Index

Case Answer: e360Insight vs. The Spamhaus Project

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Spamhaus IPv6 Blocklists Strategy Statement

Fake DNSBL uncovered: nszones.com

Report on the criminal 'Rock Phish' domains registered at Nic.at

TRO Answer: e360Insight vs. The Spamhaus Project

DDoS and Virus Attacks on Spamhaus

Spamhaus Position on CAN-SPAM Act of 2003


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