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08 Sep 2007
If there were a lifetime achievement award for losing lawsuits for being annoying, Sanford Wallace would be a shoo-in. Fifteen years ago, his junk faxing was a major impetus for the TCPA, the law outlawing junk faxes. Later in the 1990s, his Cyber Promotions set important legal precedents about spam in cases where he lost to Compuserve and AOL. Two years ago, he lost a suit to FTC who sued his Smartbot.net for stuffing spyware onto people's computers. And now, lest anyone think that he's run out of bad ideas, he's back, on the receiving end of a lawsuit from MySpace.
According to the injunction, the facts of the case are similar to but more egregious than the ones in MySpace vs. theglobe.com which was settled a few months ago by theglobe paying MySpace all the money they had, about $2 million. Like theglobe, Wallace signed up for large numbers of MySpace accounts with fake info, and used them to send junk messages to MySpace members, over 11,000 accounts in Wallace's case. But, not willing to leave bad enough alone, Wallace also phished the login info for over 320,000 real MySpace accounts and used them to send spam, too. (We leave it as an exercise for the reader what it says about MySpace users that over 300,000 of them fell for Wallace's phish.)
Since the facts of this case are so similar to theglobe, and the case is before the same court, it is not surprising that the judge came up with the same answers to the questions presented. One of the questions was whether CAN SPAM applies to messages within MySpace, which both judges firmly answered in the affirmative. Despite some comments to the contrary (see my comments and the response in this blog), MySpace messages meet the definition of e-mail within CAN SPAM, which is basically a message sent to an address. If Congress wanted to restrict CAN SPAM to SMTP mail, or mail between different providers, they could easily have done so. But they didn't.
This is just a preliminary injunction, but in view of what happened with TheGlobe, this case should be a slam dunk for MySpace, with the main question being how much money they can get Spamford to disgorge. Should be fun to watch.
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