Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘spam litigation’

Serial spam litigation backfires on plaintiff

I think it’s fair to say that serial spam litigation is less lucrative than serial ADA litigation. Walter discussed the setback suffered by plaintiff James Gordon (June 2007), in which a federal court ruled that Gordon, who makes his entire living using anti-spam laws to sue emailers, had no legitimate claims because he had not suffered any damages (and indeed, could not, since his only “business” was filing lawsuits for receiving spam).

The court was clearly disgusted by Gordon and his attempt to manipulate the CAN-SPAM act to extort millions of dollars from an emailer, because not only did it rule against him, but this week it awarded attorneys’ fees to his victim. Now, regular readers of Overlawyered know that one of my pet peeves is that even when courts order sanctions, they often award mere token amounts which are inadequate to deter plaintiffs or reimburse defendants for their troubles. That wasn’t the case here; the court awarded $110,440 in fees and costs to the victorious defendants. (This was actually significantly less than the defendants had requested — half a million dollars — but the court found that this was grossly inflated and not substantiated by the defense counsel’s own billing records. Still, $110,000 is nothing to sneeze at.)

So this case provides lessons for both sides about being greedy:

  • If you’re going to try to become a professional plaintiff, try to suffer actual damages — if possible, physical damages — rather than demanding millions of dollars for receiving emails. If you insist on suing without having been injured, at least try to be a sympathetic plaintiff in a wheelchair who can’t use public restrooms, rather than being a guy who sits around his living room in his pajamas looking at spam.
  • If you’re up against an unsympathetic professional plaintiff, don’t squander the court’s goodwill by demanding far more in legal fees than you’re entitled to. And if you’re going to pad your fee request to the court, at least make sure that the bills you submit to substantiate your demands actually match the numbers you’ve told the court. Judges don’t like it when you claim that you spent 2,000 hours and your own records show that you’ve only spent 1,500 hours. The judge was so annoyed here that after he re-calculated the legitimate bills, he determined that they were grossly overinflated and slashed them by an additional 70%.

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Suing emailers for a living

If you’re going to try to make a regular income out of suing commercial emailers alleging violations of the anti-spam laws, you may wish to be careful about your methods. Last month a federal court “threw out anti-spammer and self-proclaimed serial litigator James S. Gordon’s lawsuit against e-mail marketer Virtumundo. … Just as significantly, the judge also ruled the defendants can recover attorney fees.” Judge John Coughenour of the Western District of Washington ruled that that headers and “from” lines on the emails in question were not unlawfully deceptive, as Gordon had argued; Gordon had sought more than $2.3 million in damages over tens of thousands of Virtumundo emails. (Ken Magill, “Judge Tosses Anti-Spam Suit Against Virtumundo”, DirectMag, May 15; Venkat Balasubramani, “Can-Spam put to the test”, News.com, May 22). According to Ken Magill of DirectMag:

Gordon opted in to receive the e-mails and failed to use the opt-out mechanisms supplied in the subsequent messages, according to court records.

Also, during the trial it came out that Gordon’s sole source of income is from commercial e-mail disputes and that he’s cutting his friends in on the gig….

Gordon has testified that in 2006 he received no income that was not the result of a settlement of a dispute. . …He also admitted that his “clients” — apparently people to whom he provides e-mail accounts — supply him with e-mails they deem are spam for him to use in his disputes and that they get an unspecified percentage of the settlements.

(“Man, Oh Man, What a Racket”, May 22).

Also last month, a different federal court (Central District of California) resolved another CAN-SPAM case in a manner favorable to the defendant, Vonage; the court ruled that the emails sent by Vonage were probably not illegal under California law and that in any case such law would be pre-empted by the federal spam statute. Representing the plaintiffs: Seattle class-action firm and frequent Overlawyered mentionee Hagens Berman. (“The Tide Continues: Court Shoots Down Spam Class Action”, SpamNotes, May 28). Earlier on CAN-SPAM and California anti-spam law here.

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CAN-SPAM Act

Didn’t work very well, it seems:

While there has been some progress in the fight against spam, it’s mostly come from improving filter technology. In the meantime, however, CAN SPAM’s continued uselessness is highlighted in this new report showing that the amount of spam that “complies” with CAN SPAM disclosure rules is at an all-time low of 0.27 percent.

(TechDirt, Nov. 1)(via Jim Harper, Cato-at-Liberty).

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More on California antispam law

Reason Online (Dec. 8) has now published a longer version of my piece on California’s very bad new anti-spam law, which will spell courtroom trouble for legitimate marketers nationwide unless the federal CAN-SPAM bill, which would override it, is enacted instead. The new version goes into detail about some of the precedents that make the California law scary, including the litigation that has arisen under Utah’s one-year-old law giving individual recipients a right to sue over spam, and the record of junk-fax class actions filed pursuant to a federal 1991 law; these discussions had to be left out of last week’s Wall Street Journal version of the piece (see Dec. 3) for space reasons.

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