Spammer Spanked By Court, Award Slashed From $11 Million To .. $3

If you’re going to miss deadlines and make stupid legal arguments, it’s probably better not to have your case wind up in front of one of the smartest judges in the country. Illinois direct marketing firm e360 learned that lesson the hard way today

The case began in 2007, when e360 sued The Spamhaus Project, a UK-based non-profit that helps Internet providers weed out spammers. The direct marketer then obtained an $11 million default judgment after Spamhaus did not bother to defend itself against claims of defamation and business interference.

A Chicago law firm volunteered to help Spamhaus challenge the award and a court then reduced it to $27,000. The amount represented what e360 had received every month from three clients before it went out of business — allegedly because Spamhaus told Internet providers to block the company’s email address.

Not wishing to quit while it was ahead, e360 appealed the reduced amount. On July 30, the famous judge Richard Posner berated e360’s attorney as “incompetent” and described the firm as a “fly-by-night nothing company.”

As legal rules prevented it from throwing out the judgment altogether, the influential 7th Circuit in Chicago today reduced the damages to $3 — $1 for each of e360’s three legal claims. In the decision, the court scolded e360 and its lawyers for “playing with fire,” and wrote that legal incompetence had caused the firm to “snatch defeat from the jaws of certain victory.”