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08 Aug 2010

One more round in E360 Insight vs. Spamhaus Email

Back in 2007, the Seventh Circuit sent the case back to the trial court and it's been moving very, very, very slowly, mostly because E360 repeatedly failed to respond when they were supposed to. On June 11, Judge Korcoras made his decision. He found plaintiff David Linhardt's estimates of his losses rather unpersuasive, and awarded him $1 on claims of tortious interference with prospective economic advantage, and $1 for defamation. But he also awarded $27,000 for interference with E360's existing contracts, based on one month's revenue from his three customers Smart Bargains, Vendare, and Optinbig. A few days ago, Spamhaus' lawyers filed a very clever motion to reconsider.

In the memorandum in support of the motion, the lawyers ever so politely pointed out that he blew it, and the calculation of the $27,000 was wrong both as a matter of fact and as a matter of law. On the one hand, the judge has already thrown out E360's numbers on which the amount was based, since they were produced about two years later than they were supposed to have been. (Courts have rules about timely production of evidence, so each party has time to look over the other's stuff.)

On the other hand, those numbers are revenue, and the law says the damages are calculated on profits after subtracting expenses. Since the judge himself had complained in the decision that Linhardt had only produced numbers for revenues rather than profits, he can hardly turn around and use the revenue numbers anyway.

And on the third hand, (we're looking a bit like a Hindu deity at this point), Linhardt conflated revenues among E360 and his other companies, so there's no way to tell how much of them belonged to E360, another problem the judge himself noted.

So anyway, the lawyers politely said, since you've based the $27K on alleged facts which you yourself said were bogus, how about adjusting it down to a dollar like you did with the other claims, so we don't have to appeal and make you look foolish to the Seventh Circuit again?

Were they to appeal, there is also a strong argument that 47 USC 230 provides immunity to Spamhaus, even were the damages to be real, but the lawyers didn't bring that up, just reminded him they had other arguments they'd use if they appealed.

I'm sure that Judge Korcoras is very, very, sorry he ever heard of Spamhaus or E360, but he's got to do something. He set a rather brisk schedule, with E360's answer due by August 18th and limited to 10 pages, and Spamhaus's reply to that due by Sep 1 and limited to three pages. E360 hasn't been answering anything lately and will probably fail to respond here, which might be all the excuse the judge needs to shut this case down once and for all.

Update: E360's lawyers did appear to respond. Presumably they'll get whatever E360 collects, and it's worth a morning in court to preserve the nominal possibility of $27K.

posted at: 10:56 :: permanent link to this entry :: 4 comments
posted at: 10:56 :: permanent link to this entry :: 4 comments

comments...        (Jump to the end to add your own comment)

In other Kocoras news, an FBI friend of mine was just in his court. They got the bad guy:,0,4340417.story

(by Huey 15 Jul 2010 02:13)

Love it.

(by Al 15 Jul 2010 10:30)

230 immunity probably would not work for appeal
Remember, Spamhaus was defaulted on this. Therefore there is liability.

I have not seen the argument, but it might be colorable, that the 230 immunity might apply to the amount of damages.

The other thing is to remind the Court that these people left e360 because of the spamming, not solely because of the Spamhaus lists. And even if that issue is ignored, Linhardt's credibility is questionable where he claimed he does not send spam, but he sued Choicepoint for damages because of a list which e360 bought from Choicepoint and was sued because he sent deceptive e-mails, in violation of the law, to at least one person who was marked as not to receive e-mail solicitation.

(by Bill Silverstein 15 Jul 2010 16:14)

Thanks for keeping us all up to date. Have to smile at this one :)

(by AndrewB 16 Jul 2010 20:46)

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